money lenders

I’m reacting little late, but then, I thought experts would have their opinion first on this potentially important and a never-ending issue.

When broadly no one, not a single edit barring the superb quick-edit in mint and a report by Reuters (again, that appeared in mint only) put his mouth in this issue, I thought its time to set the ball rolling at my own way. My apologies in advance if I have missed out any more article on the issue.

The issue is about moneylenders. After the Rs 60,000 crore farm loan waiver announcement, state politicians including Sharad Pawar, R R Patil and Uddhav Thakeray realized that the it's not going to help Vidarbha farmers much. So they began barking against the moneylenders. These politicians then threatened private money-lenders of possible attacks from their party cadre. They also appealed farmers to stop re-paying their dues without worrying the consequences.

Minutes back in another post I tried to recount a grouse expressed by a senior government official while I was doing a story on farmers suicide crop reaching to prosperous western maharashtra. The officer told me that loan taken from the bank by farmer is not even half than the one come from private money lender.

Of course anyone who wants money for his personal needs will find money lender a viable option than bank. Because latter require all the documents and formalities which farmers often can't fulfill while former only see collateral. Villagers do offer either gold or land as collateral to borrow money.

Another thing is in rural parts people require more money to meet their personal expenses like managing houses, marriages and maintaining their addictions, than taking out crop. And to pamper all such needs only money lender can come to the rescue. Farmers and villagers too don’t mind it.

So, I think in any rural village of India, people must be finding money lenders more close to them than bank official who go by rules.

Doesn’t it indicate that money lenders are an integral part of Indian rural economy and can't be separated till government improves the whole system?. The system where rural Indian doesn’t find need to go out demanding money. The system where he can meet all his expenses on his own and rely little on financial institution.

I think one can even try and think option like grameen bank .

So far as politicians like Pawar, Vilasrao or Thakeray goes, I don’t think they have guts to beat money lenders. Because their party in rural parts are mostly run on the money coming from these private finance providers. Also many a times politicians themselves play money lender.

In such case who will beat whom ?.