Nayagarh: Lending by private financial institutions and local money lenders at high interest rates to poor people has resulted in a debt trap for the latter.
Such way of fleecing the poor and impoverished people caused a concern in this district, a report said. Many of these firms do not have the permission to sanction loans and do it illegally.
The business of illegal lending has been going on unabated due to lack of any strict measures in place. It is a vicious circle in which the poor and common people suffer the most and end up losing everything they had earned in their lives.
This often leads to fight and results in loss of lives. The murder of two persons recently over payment of interests on their loans at Gobindpur village under Itamati police limits and in Sathiapalli village under Nayagarh Sadar police limits is a case in this point.
The rate of interest these private firms charge varies from 3-5 per cent as well as 10-12 per cent in villages and town.
Many of these firms gives loan without any mortgage while some keep the gold ornaments, house pattas of the applicants as mortgage before sanctioning the loans It is alleged two persons lost their lives due to payment of less interest on their loans, police said.
However, despite these increasing cases of violence and murders over illegal loan business the state government and the district administration are yet to take any measures to safeguard the poor loanees.
It is alleged that banks have also failed to come to the rescue of these poor people.
Reports said that poor persons and people living below the poverty line often take loans from the private chit fund firms, women self-help groups, local money lenders and money lending societies to meet the expenses of their children’s marriage, to spend on their agricultural works and to meet other requirements.
The poor people often seek the help of these moneylenders, chit fund firms and women SHG groups as borrowing from is quite simple while that from a bank involves a lot of formalities which is not possible for them to fulfill.
A woman Sabita Pradhan of Gania said that taking a loan from a bank involves a lot of paperwork which is very hard for them to fulfill.
However, if they seek a loan from private finance company they easily get a loan within a very short period of time and that too with or without any mortgage.
The hassle-free process of loan payment lures people to take loans from these firms despite the interest rate being much higher, she said. However, a slight delay in payment of loan or interest often results in violence.
Reports of bloodshed and murder have become a quite normal. Another woman Urmila Das of Nayagarh said that the state government should frame laws to protect the common people from the unscrupulous money lenders.
Urmila Dakua of Ranapur said that exploitation of poor and common people in villages and town by the private money lending firms and the local money lenders has become rampant. The poor and common people suffer the most.
Sandhya Dei of Daspalla said that the private finance firms give loans within a very short time and often without any mortgage. However, the higher rate of interest on loans makes it difficult for people to clear their loans.
She said that the state government should take steps to keep the interest rate within Rs 1.50- Rs 2 which will be of great help for these poor people.
PNN
