Where MFIs, belt shops meet in misery

Guntur, October 31: Pondugula village in Guntur district has eight unofficial liquor vends, popularly called belt shops.

The village falls in the cement and limestone belt of the state, with dozens of companies, big and small, coming up in the last decade. Most of the 9,000 villagers of Pondugula work in the cement companies.

They have money in their pockets after a day’s hard labour.

After the closing siren in the evening, returning workers head to the belt shops. The vends are happy.

Pondugula stands at the intersection of two thriving industries in AP: liquor and microfinance. It is not the only village that has been caught up in the spiral of working, drinking, borrowing and dependence.

Apart from Pondugala, several other villages in Dachepalli mandal are caught in the same spiral.

They too are people by workers in the quarries and factories, all returning home with their daily wage of Rs 200 and stopping over the belt shop. By the by, the liquor burns a hole in the pocket and only small monies borrowed from microfinance institutions can fill it — for just a few weeks.

Speaking to express, V Mariyamma of Pondugula said that belt shops in the region have been doing at least Rs 2 lakh business per day in her village as most of the men in the village are addicted to liquor.

She says the other tormentors of the village are the microfinance agents sent to collect repayments.

Seventy-five 75 per cent of the villagers have borrowed money from MFIs at one time or other.

Mariyamma has a curious solution to the microfinance problems that’s worrying policy men in the state: close all the belt shops.

‘’If the government is running the wine shops only to fill its pockets, we are ready to pay Rs 5,000 per from every family if the prohibition is declared in the state,’’ she says.

She says consumption of liquor is not only effecting the economic status of a family but also impacting the health of family bread winners. Addiction of liquor is forcing these families to approach the MFIs for credit, which they give but at exorbitant rates of interest.

As many as 50,000 workers worke in the cement factories, granite quarries and allied industries in Dachepalli mandal.

Most of these workers were addicted to liquor. Most of them are borrowers from MFIs and other private money lenders.

It’s a downward spiral for most of them. As they sink deeper into debt, the breadwinners pull children out of school and put them to work in the quarries.

In a recent study by district administration, they found 7,664 school dropouts in Guntur district. Over 80 per cent of them were from Palnadu region. And 70 per cent of these dropouts were girls.

Excise deputy commissioner V G Katakam sees none of this.

He says there are no belt shops in the district since they closed 481 shops in September alone during their raids.