Getting Rid Of Usury

People’s right against exploitation is one of the 31 fundamental rights guaranteed by the Constitution of Nepal, 2015. Article 29 of the national charter clearly mentions that every person shall have the right against exploitation. As per this provision, exploitation on the basis of custom, tradition and convention or in any other form is prohibited. But many poor, uneducated and other underprivileged people belonging to different communities have continued to suffer from various types of exploitation in one way or the other. Loan usury has been a major source of economic exploitation in different parts of the country, with most cases recorded in the Terai region. This is a practice of lending money at irrationally high rates of interest. As loan sharks are found operating their business illegally, they are unable to sensibly use the legal system in order to recover their debts. This is the major reason why they mostly resort to blackmailing, threats and violence while recovering loans.

The prevalence of usury has left many unaware and needy people landless in several Terai districts. Moneylenders are seen recovering their loans from defaulting individuals with the help of district courts. Such creditors register cases at the courts in order to get back the principal along with interest amounts. Their charges are strong enough to justify their claims as they produce the original copy of the loan agreement document. Since the law recognises the documents with legal value, the courts issue rulings in favour of the moneylenders. There is an illegal practice of charging as much as three times the actual money lent in case of non-payment of loan or default. Because no government authorities have been found looking for income sources of the loan sharks, it has been easier for the money lending business to thrive. However, borrowers have now started protesting against the practice of usury in different Terai districts in an organised manner.  

According to a news report published in this daily on Thursday, the debtors have staged a sit-in against the loan sharks. More and more victims of usury have been coming out. In Sarlahi district alone, well over 700 usury victims have already come in contact with a committee that has been struggling against this form of exploitation. Last year, as many as 631 complaints were registered with the Sarlahi District Administration Office by the victims. The office has kept on receiving such grievances on a regular basis. This indicates the extent of the loan shark problem in the district. Even the locally elected people's representatives, including the Mayor of Hariwan Municipality, have shown their solidarity to the protest launched by the victims with the problem of loan sharks becoming intolerable.

The borrowers take loans by keeping their houses and lands as collateral. Even after having paying loans back to the lenders, the latter are reluctant to return the loan documents to the former. So, the victims continue to go through a painful situation. Bearing this problem in mind, the previous government had formed a taskforce to study problems facing loan shark victims throughout the country and submit a report. The needy people are forced to approach the loan sharks for an easy loan as they do not have better access to banks and other financial institutions. The responsible authorities must find a permanent solution to the problems confronted by the usury victims.