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Savitha – A Habitual Borrower

Borrowing from loan sharks and how to avoid repayment

Savitha, around 42, is a widow. She has two boys and a girl. One of the boys is a daily wage earner. He goes almost all days for work and earns Rs 300 to Rs 350 a day and entrusts his mother almost all the amount. The other son goes for some light jobs which fetches Rs 100 a day. He never gives a single penny at home. He spends it for himself. 

Savitha feels unhappy if no cash is borrowed regularly. The easy source for borrowing is from Tamil Nadu migrants. These migrants give Rs 500/- to Rs 10,000/- for weekly repayment on simple verbal assurance for pay back for a period of one year. The interest they charge is called “basket interest” meaning basketful of interest. It works out to over 200%.

Savitha borrows Rs 2,000/- to Rs 10,000/- regularly from 4 to 5 creditors. In the initial one/two months she manages to pay without any default. Thereafter the pay back is random. When the creditors come for collection on stipulated day and time she hides. She will either go for cloth wash in the nearby canal or go to the back courtyard of the neighbour. The poor creditors go back as there will be no response on calling.

The migrant creditors tolerate all such hoodwinking by the borrowers for their kit is full with over-interest even if they get half of the instalments. The funny is that all the defaulters will again and again be obliged with loans.

Savitha’s is not an isolated case. Thousands of such Savithas exist in the villages.

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