Women self-help groups in Punjab struggle to repay loans - ECAS Punjab

Women self-help groups in Punjab struggle to repay loans

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Kulwinder Sandhu

Tribune News Service

Moga, September 1

Dreams of lakhs of rural women in Punjab, who developed entrepreneurship skills to start their own businesses, have been shattered amid the lockdown due to Covid pandemic. They have been pushed into a debt-trap, with hardly any scope in the near future to come out of the financial crisis.

Manjit Kaur, a resident of Rajeana village in the Moga district, took loan of Rs 1 lakh from three microfinance institutions by joining a self-help group (SHG) of 10 women to start a departmental store. But her business failed to take-off as the lockdown was imposed in March.

The economic meltdown during the lockdown restricted the purchasing power of rural folk only to essential items. Therefore, Manjit did not find any customers for weeks. Ultimately, she had to shut her shop for the time being, waiting for the situation to normalise. Now, employees of the microfinance institutions are harassing her to pay the loan. "I have paid the principal amount and only four or five installments are left but the institution employees are threatening to slap a civil suite for recovery," she said. "My business has almost collapsed amid the pandemic. How can I pay the installments," she asked, while requesting the state government to help her.

Over 1,000 women of this village in Baghapurana sub-division of the Moga district had taken loans for various works from such institutions by forming SHGs but none of them could repay the installments due to the economic meltdown.

Karamjit Singh, president of the Punjab Students' Union, who has extended support to the SHGs, said the microfinance institutions were charging an interest at 24 per cent to 36 per cent per year from these women and that too on compound interest, which was against the RBI guidelines."



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