Skip to main content

Nationwide survey of 15 states exposes microfinance debt trap for women

By Jag Jivan 
A nationwide survey has exposed the growing debt crisis faced by women borrowers in India’s microfinance sector. The study, conducted by the All India Democratic Women’s Association (AIDWA) across 15 states and covering 6,685 women, reveals how non-banking finance companies (NBFCs) and microfinance institutions (MFIs) have become sources of distress rather than relief.
According to the survey, more than 60% of women have taken loans from at least two lenders, and nearly one-third are indebted to more than three. Many are compelled to take fresh loans to repay older ones, with between 40% and 50% trapped in this cycle of indebtedness. Almost half of those surveyed reported debt burdens ranging from ₹50,000 to over ₹2.5 lakh, even though most households earn less than ₹10,000 a month.
The social impact is equally troubling. Over 30% of respondents reported harassment and verbal abuse from recovery agents, while 5% said they had faced physical or sexual violence. Women are also being forced to pledge jewellery, Aadhaar cards, or even house papers as collateral—practices that go against Reserve Bank of India (RBI) guidelines.
The Centre for Financial Accountability (CFA), which released the report From Credit to Crisis: India’s Women in Debt, blamed government policy for enabling this situation. The report notes that public sector banks have steadily withdrawn from direct lending to poor women, instead channeling funds to NBFCs and MFIs that charge interest rates as high as 22–26%. With shrinking state support for food, health, housing, and education, women are being pushed to borrow simply to survive.
“This is not financial inclusion but financial exploitation,” the CFA said in a statement. “When institutions meant to empower women push them deeper into debt and expose them to harassment and violence, the model must be rethought. The government and the RBI can no longer shield NBFCs and MFIs—they must ensure accountability in lending.”

Comments

Post a Comment

NOTE: Hateful, abusive comments won't be published. -- Editor

TRENDING

The “Dr” debate masks a larger crisis in allied-health education

By Dr P K Gupta*  India’s allied-health professions have long operated in a fragmented landscape of universities, hospitals, State authorities and private institutions, each with its own nomenclature, curriculum and standards. The National Commission for Allied and Healthcare Professions Act, 2021 was meant to correct this by creating a unified national framework for education, professional regulation and institutional recognition. Few dispute the need for such oversight. The real question is whether standardisation is quietly becoming synonymous with longer courses, additional internships and new professional titles—changes that risk masking deeper gaps in clinical training, institutional capacity and affordability.
Post a Comment
»

Pilgrimage or pollution? The waste crisis of Indian faith

By Raj Kumar Sinha*  In today's times, there are certain issues that are constantly talked about and discussed, yet no visible impact seems to be made. Beyond water, soil, and pollution, one crisis that continues to be overlooked is waste. Like other life-threatening problems, waste too is gradually moving toward burying and obliterating us. After the Kanwar Yatra in Haridwar, approximately 8,000 tonnes of waste were left behind on the riverbanks, including bottles filled with urine. 
Post a Comment
»

Can cow dung become a source of income? Durga Maida shows the path to self‑reliance

By Vikas Meshram*  In the Sailana block of Ratlam district lies the small village of Govardhanpura. This is where Durga Maida lives with her husband and four daughters. Their livelihood depended on just one bigha of land—far too little to feed a family of six. Growing enough grain for the year was impossible, and even meeting daily expenses was a constant struggle. Alongside farming, Durga kept livestock and took up wage labour whenever she could. Hard work was never lacking, but income always was. Month after month, the accounts failed to balance, forcing her to borrow. Looking back, Durga says those days felt heavy and hopeless; farming offered no promise, and there was no sign of change. Her story mirrored the reality of almost every small farmer in the area.
Post a Comment
»