Predatory Lending Perishing Families: Human Rights Protection in the Field.
Human rights is not an abstraction. It is a very real thing that happens every day that we have to defend and advance and deliver. The hallmark of the achievement of NCHRO is recognising the human rights of people. Although the poorest in the world are treated unjustly by those who can well afford to help and choose not to do so, the concept of human right is not necessarily well suited to express this claim. In our country, downtrodden communities appear to be more saddled with predatory loans, most come with sky-high interest rates that can trap borrowers in an endless cycle of debt.
Anuradhayamma from Palakkad, southern state of Kerala, India, had taken a loan of Rs 2 lakh and repaid Rs 1 lakh with interest. Poor Anuradhayamma had borrowed money for daughter’s marriage and husband’s medical treatment and despite paying the interest, she was evicted from her house by the loan sharks. After the death of her son and husband; Anuradhayamma failed to remit the interest to blade mafia and her 16 cent land and house worth 75 lakh came to mafia’s hand. Lending money at exorbitant interest rates and looting the land and property of people who failed to pay the interest is the modus operandi by predatory lenders.
Despite the aggressive threats and reprisals from Money lenders who have deep pockets and strong connections with lawmakers and had a gang of musclemen to threaten victims and force them part with their property, a team of human rights activists intervened in the case of poor Anuradhayamma. The team led by Vilayodi Shivankutty, President- NCHRO Kerala Chapter and human rights defenders Suresh Kannadi, K.Karthikeyan, Rajan Pulickode and S Ramesh Kumar etc, remain steadfast in their struggle for justice to Anuradhayamma. Finally the loan mafia given 4 cent land and a house to Anuradhayamma, which is extremely rare in predatory lending. Unwavering belief in human dignity and the rule of law, these human rights defenders involved in this case never gave into despair although the mafia they faced, indulged in extortion and strong-arm tactics. Enhancing the space for civil society to promote and defend human rights is one of the current key human rights challenges faced by NCHRO and other human rights groups.
Systemic predatory lending is abundant in our country which takes advantage of absence of state-owned banks in the hinterland. Private money lenders operate at their own will, charging abnormally high interest rates ranging from 75 to 350 per cent per month. For generations, money lenders have monopolised the rural credit market, stripping the victims of their land, family and lives. In many cases, wives of victims have been forced into prostitution to pay the debts. The money lenders never incur any loss, they force people to sell almost anything and everything. Studies done by government bodies show money lenders have a stranglehold—almost 70 percent—over rural credit across India despite all measures to control, suppress or supplant them.
To protect citizens from predatory lending, the government must maintain their power to enact and enforce laws as necessary. Government should regulate high-cost lending, improves financial literacy skills, and provides the vulnerable poor with better access to fair, non-exploitative, credit facilities. State must ensure that debtors can exercise meaningful rights and have access to legal recourse and regulatory protection against unsound lending. Vulnerable populations need active protection from exploitative debts and unsound finance.