The bitter realities behind the Hingurakgoda satyagraha

2 April by Amalini de Sayrah


On International Women’s Day (IWD) 2021, in a small tent located at the Polonnaruwa Raja Sabha Mandapaya, women sat down to begin a satyagraha [1] against the microfinance debt that has crippled rural economies and left them helpless. Current statistics say that more than 2.8 million people are victims of predatory lending, a majority of whom are women. Nearly 200 have taken their own lives as a result of this debt; some, mere days before the protest began.

For the women and their allies gathered at the protest, this action is the last in a line of attempts to get successive governments to recognise their suffering and offer sustainable solutions to the debt. They protested and waited for the relief promised by the previous United National Front (UNF)-led Government, only to find that a majority of them were not eligible for the debt write-off that was offered in 2018. They voted for politicians in the current Government solely because they promised to cancel the debts, only for them to turn a blind eye afterwards to the satyagraha and its demands.

Gathered regularly at the protest are women from Polonnaruwa, Mullaitivu, and Vavuniya. Women from Anuradhapura, Matale, Hanguranketha, Jaffna, Trincomalee, Kandy, and Nuwara Eliya have joined in batches over its course, indicating the islandwide spread of the issue of debt.

On 8 March, International Women’s Day, In a small tent located at the Polonnaruwa Raja Sabha Mandapaya, women sat down to begin a satyagraha against the microfinance debt that has crippled rural economies and left them helpless

Targeting of women by finance companies

The women here feel that the companies target women specifically for these loans, selling them fairy tales. Because they have a better understanding of the needs of the home and will not hesitate to borrow money to purchase items or to contribute to the family income, lenders hone in on rural women. They convince them that the loans are fair and that repayment is simple enough, often having them sign blank pieces of paper or documents in English that the women do not understand.

These promises soon fall apart as women find themselves paying up to three times what they borrowed in the original loan. A woman attending the protest showed a notice she had been sent by the company; for a loan of Rs. 150,000, she was now paying back up to Rs. 500,000.

Microfinance companies, some of which are unregistered and unregulated, arbitrarily increase the interest Interest An amount paid in remuneration of an investment or received by a lender. Interest is calculated on the amount of the capital invested or borrowed, the duration of the operation and the rate that has been set. amounts in between payments. Therefore, even though they brief some women on what their total payment amount would be, the notices and letters the women receive a few months down the line carry numbers that they are absolutely unable to pay.

Inhumane debt collection

The Sinhala word that many women use when referring to the debt collectors who visit their homes and villages is amaanushika (inhumane). The way in which collectors intimidate and exert their power over these women drive many to take desperate measures.

Collectors in effect invade villages and homes in search of debtors. If the parents are out of the house and have payments due, the collectors will harass their children. When the parents return, they will berate them in front of the kids. The men (those at the protest say debt collectors are always men) will arrive in the village at dawn. In cases where many people in the village owe them money, they will sit in a public area so that the people cannot go about their daily routines without passing them. This weighs on the emotions of those who are unable to pay.

When targeting individual houses, collectors will arrive and sit in the garden. In the afternoon, they will move into the home and later on in the evening, if the person still has not paid, will sometimes go into the bedroom, in particular to intimidate women and demand sexual favours to allow a late payment.

The practice of repayment and how ingrained microfinance is in the rural economy, bleeds into all aspects of the lives of women. As a region with a high occurrence of the Chronic Kidney Disease of Unknown Aetiology (CKDu), patients are eligible for a relief payment that they would usually use for treatment. Families affected by debt find themselves giving that payment in full to the debt collector and foregoing the medical attention they need. Women arriving at courts to claim their monthly maintenance payment for their children, find debt collectors waiting outside the courthouses to claim the payment from them because they know that they have just received money.

Some villagers chase collectors off, as they do not want to pay more than they already have. In other cases, a village resident will tell the collector that they will assist in the collection, take the list of debtors and amounts owed, and casually let it slide after the collector has left. On the other hand, entire villages have gone into hiding to avoid debt collectors, vacating their homes and hiding in jungles for days. Others who are unable to pay but are also terrified of going to court are among those who take their lives.

There are women present at the protest who are being harassed by debt collectors for being unable to make payments of Rs. 6,000. Barely making ends meet for their families and often going hungry, they still do not have enough to pay an amount that many would not think twice to spend in one transaction.

Experiences of the protest for women

Choosing to participate in the satyagraha, especially for women who do so for long periods at a time, comes with several costs. For some, coming to the satyagraha means bringing their kids along and having to keep an eye on them until the little ones fall asleep inside the protest tent. For others, their older children who are sitting for important national exams are studying and keeping house by themselves, and their mothers say that they feel bad for not being with them. These women make journeys to and from their home villages to the protest site every few days. The bus fees amount to much more than they can spare, and travelling repeatedly in public transport during the pandemic puts them in the line to face another type of risk.

Many women who are struggling with debt have already been made to feel like outcasts in their villages, as collectors’ practices ensure that shame surrounds an individual. They worry that their kids will also be shamed for their mothers’ debt, especially when they are left alone.

There remains the concern for many of the women that their husbands do not like that they attend actions such as this. Those women will come to the protest site while they know the husbands are out working, and return home before they get back. For the women whose husbands benefit off the loans they have taken without contributing towards repayment, this choice is clear cut – they are both bearing the burden and entering the fight by themselves. For those whose husbands are helping them pay off the mounting debt, they feel conflicted to attend alone.

Inadequate solutions

Several signs at the protest tent read “hands off the Samurdhi”. These refer to plans the Government has made to give loans at small interest rates Interest rates When A lends money to B, B repays the amount lent by A (the capital) as well as a supplementary sum known as interest, so that A has an interest in agreeing to this financial operation. The interest is determined by the interest rate, which may be high or low. To take a very simple example: if A borrows 100 million dollars for 10 years at a fixed interest rate of 5%, the first year he will repay a tenth of the capital initially borrowed (10 million dollars) plus 5% of the capital owed, i.e. 5 million dollars, that is a total of 15 million dollars. In the second year, he will again repay 10% of the capital borrowed, but the 5% now only applies to the remaining 90 million dollars still due, i.e. 4.5 million dollars, or a total of 14.5 million dollars. And so on, until the tenth year when he will repay the last 10 million dollars, plus 5% of that remaining 10 million dollars, i.e. 0.5 million dollars, giving a total of 10.5 million dollars. Over 10 years, the total amount repaid will come to 127.5 million dollars. The repayment of the capital is not usually made in equal instalments. In the initial years, the repayment concerns mainly the interest, and the proportion of capital repaid increases over the years. In this case, if repayments are stopped, the capital still due is higher…

The nominal interest rate is the rate at which the loan is contracted. The real interest rate is the nominal rate reduced by the rate of inflation.
via the Samurdhi banks so that the people can settle the debt. The protesting women see this as a bad solution. Firstly, Samurdhi banks and collections are made up of people’s savings, so the money is not the Government’s to distribute. Secondly, many of those in debt have taken loans to settle other loans, and they do not see loans – even at a lower interest – as a solution.

There was temporary relief from repayments for six months during last year (in 2020) due to Covid-19, a measure imposed by the Government. However, companies expected people to pay back the full accumulated amount, along with punitive interest for it, in some cases. This was all at a time when people in debt had been without work due to movement restrictions that hindered their access to daily wage work, and when crops had also failed.

For those at the protest, as they have paid back the original amounts they took and more, a complete write-off of the debt is their first and strongest demand. In addition, the people do not want the State to bail out the finance companies, as that would be from the taxpayers’ money which could be put to much better public use than subsidising multi-million rupee finance companies.

The people’s struggle is best illustrated in the protest chants written by M.K. Jayatissa, a farmer from Kaudulla who was the first to mobilise people around the issue of predatory microfinance debt. The rhymes talk about how the cycle of loans and never-ending repayments mean that villagers do not even have money to buy poison with which to take their own lives. They ask as to who the richest people in Sri Lanka are, and the answer is that it is a thief who got rich by destroying the villages with microfinance. Perhaps the most haunting is an indictment of the Government’s inaction on the issue of debt, and the lives it has claimed so far; “200 have been sacrificed – haven’t you taken enough of our blood? How many more sacrifices are needed to cancel debt, Sir Gota?”




Source : The Morning

Footnotes

[1a peaceful sit-in demonstration

Amalini de Sayrah

is a Member of the Liberation Movement.

CADTM

COMMITTEE FOR THE ABOLITION OF ILLEGITIMATE DEBT

8 rue Jonfosse
4000 - Liège- Belgique

00324 226 62 85
info@cadtm.org

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