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A grim new yr for debt-trapped working class girls in Sri Lanka

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M. Champa Irangani is in no temper to rejoice ‘Avurudu’, or New Year, the most important annual pageant that Sri Lanka’s majority Sinhalese neighborhood observes mid-April, whereas Tamils rejoice the Tamil New Year across the similar time.

“The New Year will dawn only the day our debts are cancelled. Until then we cannot celebrate. Surely not, when so many women have died by suicide under the pressure of microfinance loans,” she says, seated with dozens of affected girls who’ve been observing a ‘satyagraha’ off the primary highway in Hingurakgoda city, in Sri Lanka’s Polonnaruwa district, for a month now.

Seeking reduction

They need their microfinance debt abolished, and another supply of credit score that may free them from poverty, fairly than worsen it. Their expertise, shared by tens of hundreds who’ve taken microfinance loans in Sri Lanka, not solely counters standard claims in South Asia of microcredit assuaging poverty and empowering girls, but additionally highlights the devastating penalties of the individualised, high-interest microfinance loans, entangling girls in a pile of debt.

Ms. Irangani feels particularly let down since there was no reduction in over a yr after President Gotabaya Rajapaksa, whom she voted for, got here to energy pledging — amongst different issues — to abolish their loans.

Their ongoing protest is the most recent in opposition to the Rajapaksa authorities — after the farmers’ agitations within the southern Hambantota district — from amongst those that backed their get together within the 2019 and 2020 polls.

President Rajapaksa’s astute election marketing campaign in 2019 had two predominant thrusts – enhancing nationwide safety, on the heels of the Easter terror bombings that April, and bettering rural livelihoods to develop the nation. His ballot manifesto ‘Vistas of Prosperity and Splendour’, which has since graduated to a nationwide coverage framework, promised to “ensure relief of village women falling victim from unregulated micro finance schemes”, as a substitute providing “government-sponsored concessionary loan schemes and agricultural loans”.

Ms. Irangani had motive to be hopeful. “I went all out and canvassed for their candidate in the general elections [August 2020] too, asking women in my village to back their party so our fate might change, but here we are, hearing of more and more indebted women dying by suicide [nearly 200 women, according estimates]. They simply don’t care.” The authorities has spoken of potential low curiosity loans as options, however the girls are usually not satisfied but.

Drawing a circle within the air, she says: “Livelihoods have become a big zero”. If the pandemic severely affected the nation’s economic system — with exterior sector earnings dropping sharply, international reserves draining, and the Sri Lankan rupee plummeting to 203 in opposition to the U.S. greenback — daily-waged agriculture labourers like her, who have been already reeling underneath debt, have been in for even tougher occasions, amid rising joblessness, falling wages and uncertainty.

Ms. Irangani’s “debt trap” started when she returned to Sri Lanka some years in the past, after working as a home assist in West Asia for seven years. Exhausting her meagre financial savings in an sudden court docket battle, she resorted to a mortgage to outlive, and shortly, one mortgage led to a different, as firms relentlessly offered simple loans at her doorstep. The lending firms had achieved the identical with war-affected Tamil girls within the north and east, who have been struggling to rebuild their lives and livelihoods with little state assist.

Exorbitant rates of interest

“Banks refused to give loans without any collateral security. Many families had no steady income or big lands to cultivate. At a time when children in our village were going hungry, these microfinance companies offered money,” says Priyanthika Kumari, who heads the Collective of Women Affected by Micro Finance from a cluster of greater than 60 villages within the district. “There are some 1,02,000 women in Polonnaruwa district who have taken such loans.”

The girls paid exorbitant rates of interest – 40 % to over 200 % — amid harassment from assortment brokers. They signed up for extra loans to manage, to make sure their households can afford two first rate meals. But regardless of common repayments, their principal loans quantities remained undiminished, and their impoverished lives, unchanged.

When they realised that their exhausting labour was by no means going to be sufficient within the face of their mounting debt, they took to the streets, very similar to their Tamil counterparts who repeatedly agitated over the last 5 years, demanding an answer to the disaster.

In reality, it was their persistent calls that pressured the previous Maithripala Sirisena-Ranil Wickremesinghe authorities to announce some focused reduction measures by means of the Central Bank in late 2018. Acknowledging the predatory nature of microfinance loans, the administration introduced larger regulation, an rate of interest cap on microfinance loans, a moratorium, and cheaper credit score options. But the measures proved too little, too late.

“It all sounded like a dream at that time, but eventually turned out to be a mirage,” Ms. Irangani recollects. The then incumbent authorities didn’t see by means of the measures introduced in its final leg in energy.

That is when President Rajapaksa made the promise, renewing the hopes of affected girls. As that hope fades now, the ladies seated off the primary highway in Hingurakgoda say that if the federal government doesn’t meet to their calls for by the tip of the month, they are going to launch a “fast unto death”. “We want to raise this issue nationally. We cannot afford to lose this struggle, we will not give up,” Ms. Priyanthika Kumari says.

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