On a warm January afternoon, S Muthulakshmi sat on the steps outside Karappur village’s ration shop fanning herself with the end of her blue polyester sari. A few shovels and aluminium buckets lay by her side. Along with her, around 25 women gathered to rest under the shade of a large oak tree at the entrance of this village in Tamil Nadu’s Thiruvarur district.
The women, all agricultural labourers who normally work as hired help for a daily wage, or lease small parcels of land for cultivation, were taking a break after spending all morning digging pits to plant new trees – work allotted to them under the Mahatma Gandhi National Rural Employment Guarantee Act, which guarantees 100 days of guaranteed wage employment in a financial year to every rural household whose adult members volunteer to do unskilled manual work.
There have been few opportunities for regular work this year, said the women. The region has received very little rain over the past year – both the South-West monsoon in June-September and the North-East monsoon in October-December have failed – resulting in parched fields and dying crops, leading to mass unemployment and a mounting debt burden.
Last year, the women of Karappur arranged themselves into 15 Self Help Groups that took loans from microfinance institutions to manage household and farming expenses. They are now finding it difficult to repay these loans.
“During a short spell of rains during Aadi month [July 15 to August 15], some of us borrowed loans to sow paddy,” said Muthulakshmi. “We were expecting good rains this year. We never thought things would come to this state.”
Last month, Muthulakshmi, 50, pawned the nose-ring that her parents had bought for her wedding so that she could borrow Rs 7,000 from a local money lender. She knew that there was little chance that she would ever see her nose-ring again.
Debt trap
Like many other women in villages across the Cauvery delta districts of Thiruvarur, Thanjavur and Nagapattinam in Tamil Nadu, Muthulakshmi has taken loans from multiple sources, including multiple microfinance institutions and local money lenders.
As a part of a 12-member Self Help Group, she borrowed Rs 25,000 from Grama Vidiyal Micro Finance Limited four months ago. For 10 weeks, she had to repay Rs 620 a week, after which the instalment amounts decreased.
But now that the drought has rendered her unemployed most of the time, Muthulakshmi has resorted to pawning the little jewellery she has, and even her kitchen utensils, to pay each loan instalment. She also joined two other Self Help Groups that borrow from other microfinance institutions so that she could repay her previous loans.
“We put in any silver or brass item we have into other private finance companies to scrape in enough money to pay the [installment] collector and a few necessary provisions for the week,” said Muthulakshmi.
And whenever she is in urgent need of money to repay group loans she also borrows from local money lenders.
In this complicated web of payments to multiple lenders, the added factor of drought has made matters worse.
In Parathioor village near Kudavasal town in Thiruvarur district women hardly have any jewellery left to pawn.
V Geetha had borrowed Rs 25,000 from Muthoot Finance four to five months ago to lease a plot of land to sow paddy and buy pesticides. She subsequently borrowed an additional Rs 15,000 from Gram Vidiyal Micro Finance Limited to manage her household and repay previous loan amounts.
“Loans from these financial institutions are very helpful for our daily expenses,” said Geetha. “But even though we borrow with the intention of using the money profitably, when something like this drought comes in the way it is impossible to repay the money.”
Even after her crop has failed, she has to continue paying Rs 2,500 every few weeks to the financial institutions she is indebted to.
“I am now borrowing small amounts of Rs 300 to Rs 500 from different money lenders to repay the [microfinance] loan amount,” said Geetha.
Inflexible deadlines
While most women said that they could plead with local money lenders to extend their loan repayment deadline, microfinance institutions do not grant them the same flexibility.
“Microfinance institutions usually set fixed dates when their staff members visit villages, and go door-to-door, collecting weekly, fortnightly or monthly instalments from SHG [Self Help Group] members,” said Maria Selvi, a social worker who works in women’s development across four districts in Tamil Nadu. “This way no Self Help Group member is let off without payment. The money collector does not leave until every member of the group has paid their instalment.”
In every village that this reporter visited in Thiruvarur, the villagers confirmed that the pressure of repaying their loans was high, even more so because of drought.
In several villages, the women used the same expression to explain this pressure. “Even if someone is dead in your family, you cannot go anywhere without paying your instalment,” they said.
Drought distress
The distress among these rural women is palpable. Never have they been out of work for so long, they said, and never have they had to sell or pawn so many of their possessions at one time to make ends meet.
“Over the years we have kept pawning our jewellery for money and not been able to get it back,” said V Anaimanickam, a resident of Sevakalathur village near Thiruvarur town. “Now most of us don’t have jewellery anymore. We have to go to different places to earn. But many of us do not have the skills needed for construction work, so how can we do that?”
M Natarajan, secretary of Thiruvarur’s Bharati Women Development Foundation, said that because financial institutions and banks tend not to give loans to men, women play a bigger role in the financial activities of Thiruvarur.
“Most financial institutions feel that women have a greater tendency to repay loans than men,” he said. “And so women face a larger share of the burden of paying back loans.”
Nel Jayaraman, an organic farmer and the state coordinator of Save Our Rice campaign, said that nationalised banks give loans only to well-off businessmen in agro-based industries instead of to farmers in need of loans. He added that even co-operative banks hardly disburse loans to farmers, forcing them to depend heavily on informal sources of credit.
“Even if 500 farmers in one lakh applicants get loans from these banks, it will be a big deal,” he said.
While women earn Rs 100 for a day’s work as agricultural labourerers, men earn approximately Rs 300 for the same work.
Did their husbands contribute to repaying loans taken from microfinance institutions?
The women of Sevakalathur village laughed.
“First they must bring the money home, shouldn’t they?” they said. “Our husbands spend all their earnings on liquor!”
