Rajhmundary, October 18: Housewife Karri Ammaji (48) of Katheru village in Rajahmundry rural mandal committed suicide last Sunday night. It created a sensation in the village.
She had borrowed Rs 2 lakh from four micro finance companies (MFIs) at 10 per cent interest, and had stood surety for a loan of Rs 2 lakh taken by her relatives.
She had been under enormous pressure to cough up repayment instalments, and was due to pay one of Rs 4,000 on Monday.
Of the total amount she had borrowed, she had only repaid a meagre amount. Her comembers in the SHG mounted pressure on her to pay up.
In the grip of panic, she reportedly jumped into a well near her house. Wife of a labourer, she is survived by four daughters.
Her family first reported that she had accidentally slipped and fallen into the well. Later, with the support of local people and political leaders, her family said she had been overcome by fear of the consequences of not paying up.
Her death has plunged her husband and children into depression.
Other women village who had also borrowed from MFIs are in tension, apprehending the next weekly meeting with repayment collectors.
Several of them have stood surety for other members’ loans and fear that they would have to be pay up in case of a default.
MFIs have been insuring loans such as the one given to Ammaji and naming themselves as beneficiaries.
Collection agents are widely reported to use abusive language against defaulting borrowers. MFIs tend to appoint agents locally to make collections.
Some have been reported to ask women to take up prostitution to be able to pay their instalments.
This is in contrast to what they say when they come to your doorstep to offer loans. They promise that there will be no harassment.
There are 380 SHGs in Katheru village. A majority the members have borrowed from MFIs such as Spandana, Aware, Share, Trisha, Asmita, Swayamkrushi financed the women in the village.
In East Godavari district, banks have lent to 25 MFIs something of the order of Rs 1,250 crore.
The turnover of MFIs in the district is about Rs 2,000 crore. But the banks or the government has no power to take action against the MFIs as they are registered with the RBI as nonbanking financial companies.
–Agencies