Govt Moves To Crack Down On Usury

The victims of loan-sharking may get justice this time around as the government has agreed to take necessary measures, including the formation of a high-powered commission, to settle their problems. As demanded by the agitating victims of usury, the government seems to be quite concerned about dealing with this form of economic exploitation once and for all. Officials at the Ministry of Home Affairs (MoHA) and representatives of victims of loan-sharking inked a five-point deal on Saturday (April 1). As the previous governments had failed to take those poor people into confidence, the latter agreed to sign the document only after incumbent government assured them of addressing their problems by amending laws and forming a commission. With this new development, the unfortunate lot has become hopeful that their difficulties will be settled. The government also needs to ensure that no one will have to fall into the trap of loan sharks even in the future. 

Desired steps

A number of loan shark victims had arrived in Kathmandu from some Terai districts a couple of days back. They had travelled for 11 long days on foot to make their voices heard. Immediately after their arrival, they had begun staging a sit-in to put pressure on the government for taking desired steps to resolve the protracted issue of loan-sharking. In September last year, the victims had returned home from Kathmandu by calling off their protests after having signed an agreement with the then government. As per that arrangement, a taskforce was formed to probe into the hardships faced by the victims. But the government failed to implement the recommendations made by the taskforce due to lack of a strong political will.   

As per the new agreement, a commission will be formed by the subsequent Cabinet meeting. And the infuriated usury victims will revoke their protests. Hundreds of others who have suffered from the loan-sharking were also planning to visit Kathmandu to join hands with the agitating committee. The loan shark victims were resolute to return home only after the new laws were devised and published in Nepal Gazette. They had called for invalidating the loan deed system and harsh action against the committers.

The officials at MoHA and the victims’ committee also agreed to ask the government to intensify the process of amending the laws in order to criminalise unreasonable lending. A meeting of the Council of Ministers held last week had also decided to forward the process of formulating laws regarding the loan-sharking. Dubbing usury as a crime, the meeting had decided to bring the perpetrators to justice with the formulation of required laws. Such a decision is considered as a milestone for reining in the problem of loan-sharking. 

Anyway, the government has now shown its firm commitment to cracking down on the issues of loan-sharking. The inking of the new agreement has been possible, thanks to the initiative taken by Prime Minister Pushpa Kamal Dahal Prachanda and Deputy Prime Minister and Home Minister Narayan Kaji Shrestha. Both of them have vowed to root out the usury as a remnant of feudalism from country. On Saturday itself, Prime Minister Prachanda held a discussion with the representatives of the usury victims. He promised to establish a powerful commission to deal with the problems of loan shark victims. He also revealed that the government had been working on revising laws in order to find a permanent solution to the problem. 

The issue has remained very complicated across the country, especially in the Terai districts where the cases of loan-sharking are rampant. Since the poor and needy people still do not have an easy access to banking and financial services, they are forced to approach the traditional moneylenders. But such lenders charge so high interest rates on loans that the borrowers can hardly return the money to the former on time. The creditors prepare a mortgage deed and make the lenders sign it. This document allows lenders to use the property (land or home) as a security against the loans. As the mortgage deed is a legally binding paper, it becomes an important evidence for loan sharks to produce in the court of law. The debtors are on the receiving end of a lawsuit as per the existing laws. Thus, the practice of usury renders many people landless and homeless. It exacerbates social and economic inequalities in the society. This is definitely a mockery of the constitutional provision which mentions that Nepal is a socialism-oriented nation.

Awareness

Besides, the government officials and the representatives of the usury victims were unanimous to recommend the government for forming a district-level coordination body under the coordination of Chief District Officers (CDOs) to address the grievances associated with usury. The proposed committees will include police personnel, district government attorneys, heads of land revenue and survey offices, representatives of banks and financial institutions and representatives of loan-sharking victims as members. These panels are expected to support and coordinate the works of the commission, gather complaints from the sufferers, contribute to collecting necessary evidences, ease free legal aid and carry out awareness campaigns against the ill practice of usury.  

As the incidences of utter exploitation of the destitute have come to the limelight, more individuals and organisations have kept on expressing their solidarity to the agitating lending victims. All the political parties have also demanded that the usury issue be settled immediately, providing justice to the victims. As the saying goes — strike while the iron is hot, the government must not make any delay in tackling the issue of usury.

(Dahal is a deputy executive editor of this daily.)