BPL families in loan trap

Borrowers have no clue about penalties

In the pre-lockdown days, Noor Mohammed Azam (40) of Jahanuma, who works as munshi in a hotel, used to earn `600 per day. This was more or less enough to run his family of five. Being confined indoors for the last 18 days, he has run out of resources and is forced to mortgage jewellery to meet the daily needs.

Speaking to DC, he said during the first lockdown many NGOs and individuals helped by providing food but this time no one is coming forward.

“They must be thinking that due to the fourhour relaxation, people are earning something. But then there are many like me, who have no source of livelihood.”

“Having lost all hopes, I feel like ending my life but who will look after my kids is a worry that is holding me back. I took a loan against the gold I have” says Irfana Begum (name changed) from Vattepally.

She said her husband is a car driver, but has been jobless for a year as his company engages cars for a multinational educational institution and no foreigner has arrived. He is doing some odd work, she said. Irfana Begum of M. M. Pahadi said she asked her daughter to give her jewellery and mortgaged it with a pawnbroker and availed a loan of `4,000 to pay rent. She said her husband is a construction labourer and has been unemployed as the site where he worked has been closed for the last few days.

Abu Aimal, a journalist and activist who is helping such people away from the interest menace, said there are many others like them, forced to opt for gold loans, just to survive. The pawnbrokers charge three per cent interest, payable at an interval of three months. Most of the borrowers do not know the rate of interest and penalties.

He said many petty traders had obtained loans against higher interest rates hoping for a good business during Ramzan, but they could not earn sufficiently. They are now unable to repay the loan.