For women in Mumbai slums, micro-finance loan repayments compound COVID-19 lockdown-induced cash crunch
'If we get a hundred rupees somehow, should we feed our children first, pay rent first, or deal with loans?' a resident of a slum in Chembur said
A few days after the nationwide lockdown began on 24 March, 33-year-old Anita Salve, heard a knock on her door.
Authorities from Jana Small Finance Bank arrived in Chembur’s PL Lokhande Marg, where Salve lives, demanding that she repay her personal loan of Rs. 40,000.
She called up Yogini Pagare, another resident of her neighbourhood, to seek advice.
Pagare fields about ten calls a week from women like Salve. She is associated with Nirdhar, a grassroots organisation that tackles various issues faced by women who live in the slums of Chembur and Govandi.
Pagare, in the conversation with Salve, asked her to put her on the phone with the bank employees who had arrived at her doorstep. Salve recalled, "Then, the employees fled. They knew that we would cite the rules laid down by the Reserve Bank of India (RBI)."
The RBI issued a circular on 23 May stating that borrowers do not have to repay loan installments till 31 August. Despite this, some creditors have been making weekly rounds in different bastis across Mumbai.
Pandemic-induced income crunch
Many women at the basti on PL Lokhande Marg are employed as domestic workers, and their employment is uncertain in the present circumstances. To supplement their income, they usually undertake tailoring, or other such work that can be done from home. The COVID-19 pandemic has put a stop to most of their extra income.
Before the pandemic, Salve ran a small tea and coffee stall at the Lokmanya Tilak Terminus at Kurla. Her husband has abandoned her, making her the sole earner of the house, and caregiver to their two children. As she can no longer continue her business, she worries about the cash crunch she faces. She has been forced to borrow meagre amounts from several neighbours in order to make ends meet.
“If we get a hundred rupees somehow, should we feed our children first, pay rent first, or deal with loans?” Salve said.
While Salve's income took a hit during the lockdown, her landlord continued to demand that she should pay her rent. This was despite directives by the Maharashtra housing department on 17 April stating that landlords cannot evict tenants and must defer rent until 16 July.
The monsoon has made it even harder for her, as she also has to spend nights emptying her home of flood water. Poor drainage systems and blocked pathways make it difficult for her to move around in her neighbourhood.
A few weeks ago, Salve developed a cold and fever. She was turned away from the local government hospital, and so, she went to a small private clinic and was prescribed medication. Her cumulative debt to the clinic’s doctor has crossed Rs. 3000 till date.
“Where can I get the money from?” she asks.
Under the Prime Minister’s Garib Kalyan Package, the third and last installment of Rs. 500 was supposed to be transferred to Jan Dhan account holders on 6 June. However, Pagare said that the majority of women in her neighbourhood are yet to receive even the first installment, that was due in April.
Demands for loan repayments against government orders
Under microfinance loan regulations, loans are given out to groups of women, where each woman takes on the risk and surety of completing repayments on behalf of the rest. Pagare explains that since many people, especially migrant families, have returned to their villages in different parts of the country, the burden of repayment has fallen on the women who have not been able to leave.
On 26 June, Pagare and Salve, along with five other women, visited the Mumbai Suburban Collector's office at Bandra. They were assured that microfinance companies threatening debtors will have their licenses cancelled if found guilty. But the fight hasn’t stopped.
“Recovery officers threaten that they will fine women who haven’t repaid loans and seal their houses,” claimed Pagare.
Pagare further explained, “Different companies mark out their territories, so you’ll find 100-150 families in one section of a mohalla who have loans from the same company." This means that one’s neighbourhood determines whom one can get a loan from. Women have difficulties approaching other lenders.
Pagare asserts, “We want companies to stop sending representatives to threaten and intimidate us. It’s very harmful to our self-respect.”
Salve and Pagare also say that loan moratoriums be extended until 1 January, given the deteriorating economic condition of poor families. They also demand that if a woman has repaid 70 percent of her loan, the rest should be waived. They want this to be extended to all women in their mohalla, regardless of whether they took loans from banks or microfinance companies.
Pagare and some others now travel across neighbourhoods in Chembur and Govandi to raise awareness about their demands. They have also been educating women about the directives of the RBI. They allege that microfinance company officials consciously chose to not inform women that they did not need to repay loan installments until 31 August. Pagare has conducted meetings in her own neighbourhood, and in surrounding areas such as Bainganwadi in Govandi and PMGP Marg Colony in Mankhurd. In these meetings, she advises women to refrain from taking micro-loans in the future.
For women in Mumbai's slums, means of ensuring financial stability are now especially scarce. With the loan moratorium period nearing its end, they have been left even more vulnerable. Health and financial crises loom ahead of them. Many believe that starvation is more likely to kill them than COVID-19.
Indeed, Salve remarked, "The company officials have been asking us why we could not repay loans if we had enough to eat. But now, we have no money even for food."
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