In the absence of an appropriate law, loan sharks are having a field day

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ungulate As there is no effective law in force to control unethical lenders and loan applications in Andhra Pradesh, victims of these loan sharks end lives unable to withstand the pressure from them.

On Sunday, a youth committed suicide in Chintalapalem village near Kanigiri in Prakasam district. He used to play online games and earn money. To earn more, he borrowed an online money lending app associated with the gambling platform and ended up in debt of Rs 2 lakh in just a few days.

After his parents found out, they borrowed around Rs 1.60 lakh from a local pawn shop and paid on the online loan application. But the loan application staff pressured the borrower and blackmailed him for the remaining 40,000 rupees, prompting him to take the extreme step. He ended his life leaving behind his elderly parents with a loan burden of another Rs 2 lakh. This is not an uncommon incident. For the past two years, almost every few weeks, such incidents have been reported somewhere in AP. The reason: No law to regulate money lending.

After the overnight money scandal rocked the state in 2015, the state government wanted to have a powerful law to control money lending. In 2018, it passed the Andhra Pradesh (Andhra Region) Debtors Protection Act 1934 and passed the AP Money Lenders Bill, 2017. But, since then, it has not failed to obtain presidential assent to this bill.

The Covid pandemic has affected the financial situation of several sections, especially the vulnerable sections. A research study, ‘Comparative Analysis on Money Lenders Act’ conducted by Goranbose Gram Bikas Kendra, NGO HELP, Partners for Anti-Trafficking and Sanjog, and updated recently reveals that 99 percent of their respondents among survivors of trafficking , victims of exploitative sex trade, sex workers in Andhra Pradesh took an average loan of Rs 52,350 for maximum interest of 20% after the first wave of Covid. Similarly, about 70% of respondents took an average loan of Rs 33,531, after the second wave of Covid. About 88% of these debtors had taken out loans beyond their ability to repay, the study found.

Chandragiri Radha Kumari, former Women’s Secretary of the Bezawada Bar Association and a lawyer for the Mandal Legal Services Authority group, said there is currently no mechanism for tracking money lenders in the state, due to which borrowers cannot benefit from certain protections provided by lending money. legislations. She said the Andhra Pradesh Debtor Protection Act 1934 contained provisions to restrict the maximum simple interest that can be charged by lenders to 9% per annum for secured loans and 15% per annum. for unsecured loans, but now it is no longer in effect. She said that unless the government enforces the Money Lenders Act, money lenders and apps continue to harass their victims.

The secretary of the NGO HELP, NVS, Ram Mohan, called on the government to broaden the definition of “lenders” to include those who lend money, even occasionally, and not only in the normal course of business, and to set the maximum interest rate. He said licensing money lenders through a uniform process that will allow the state to track and hold them accountable for harassment, providing appropriate protection for borrowers.

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