Breaking the silence: Expert Panel discusses how women can protect themselves from loan harassment

For a large number of middle-class and lower-middle-class families in modern India, debt has become an integral part of their lives. From planning for education and purchasing consumer electronics to covering medical expenses, loans help families afford these basic necessities. However, the challenge for borrowers appears when repayment of those loans becomes impossible, especially for women, who are more vulnerable to the risk of harassment by recovery agents. This is where Expert Panel becomes relevant, as the legal and financial experts from the organisation explain how women can break the silence and safeguard themselves from coercive recovery actions.

The role of credit in middle / lower middle-class India

It's difficult to lay down the exact metrics of middle and lower middle-class families in India, since the definition of these classes varies. A few surveys have suggested that the Indian middle class includes approximately 31% of the entire population, or almost 43.2 Crore citizens as of 2020-21. Other sources are suggestive of a much higher number, as a prominent think tank reveals that the Indian middle class is expected to expand to up to 47% of the total population, or 71.5 Crore citizens by 2030-31.

A considerable portion of the Indian middle class comprises the lower middle class, and estimates reveal that about 75% of the entire middle class comes under this category. Households belonging to this category are also the most vulnerable when it comes to income shocks and debt stress.

A 2024 survey reports that the average monthly income of a lower-middle-class individual remains at INR 33,000. At the same time, household expenses in Indian urban centres are reported to be at least INR 19,000, meaning very little income is left as a buffer. This is how many households are often forced to take consumer / education / medical loans, or personal credit. And, any unforeseen health crisis or disruption of the income stream leads to a loan default.

Women’s economic dependence: Low workforce participation

One of the major pain points in this scenario is that women are often not the primary earners in these households. As per the World Bank’s gender data, only 32.8% women in India participate in the labour force, in contrast to male participation of around 77.1%. The Press Information Bureau also reveals that by September 2025, women's labour force participation witnessed an increase to 34.1%, the highest in contemporary months, while the women’s work participation rate increased to 32.3%.

The Government of India’s Ministry of Labour reports that women’s employment has increased to 40.3% in 2023-24, from a meagre 22% in 2017-18. However, the reality is that a considerable part of this increase is owing to informal, low-paid, and part time work that are not stable salaried jobs.

This reality directly translates into women relying on male family members for regular income. They remain powerless, even vulnerable, when recovery agents show up at home following an inability to repay.

Patterns of loan default and triggers

Non-repayment of loans, or defaults, is often considered a systemic risk in India. Sharing exact metrics regarding small personal loans is complicated; however, there are a few indicative figures that provide a clearer picture.

For instance, personal or non-housing loan default rates have been found to be around 5-6% in some segments. The primary reasons behind default have been identified as irregularities in income, along with medical emergencies and job losses. Furthermore, illegal loan apps have proved to be a menace, as they lend aggressively, and when payments are delayed, they tend to harass borrowers by accessing contact lists, threatening exposure, etc.

Recovery agents are sent by lenders when borrowers are late on their repayment schedule, and the latter often report home visits, frequent calls, abusive messages, threats, and public humiliation.

Why do women bear the brunt

In these scenarios, women often remain at the receiving end of the harassment. A considerable percentage of women are often non-earning household members, and are usually kept in the dark regarding loans or agreements that are signed by their family members, including spouses.

Additionally, it has been found that in many cases, recovery agents tend to make home visits without informing first. This is done mainly with the intention of cornering a family member, often women, at home and gain a psychological leverage. What keeps the borrowers from contesting these issues is social stigma, along with fear of consequences and lack of knowledge regarding their rights.

Rights under RBI guidelines

The Reserve Bank of India has issued meticulous guidelines to provide legal protection for borrowers, which includes non-signatory family members. The key rules under these guidelines mandate recovery agents to carry valid identification and authorisation from the lenders. The borrowers in such cases can only be contacted between 8 am and 7 pm (or similar hours), using civil methods. This means that the recovery agents cannot use threats, intimidation, abusive language, or physical force toward the borrowers.

As per the guidelines issued by the RBI, the agents must also maintain the confidentiality of the borrowers’ information. It also mandates banks to review their contracts with recovery agents, particularly to ensure that coercive behaviour is not incentivised.

In case the recovery agents are found to be violating these norms, the banks are deemed accountable. In this scenario, the RBI may take supervisory action against the lenders.

Steps women can take against harassment

Women must act if recovery agents overstep and harass them. The first thing that they can do is to lodge a complaint to the lender’s grievance cell, since all regulated financial institutions like banks and NBFCs have one. If no responses are received in 30 days, the complaint can be escalated to the nodal officer of the organisation. If it does not work, they can use the RBI’s grievance portal to contact the RBI ombudsman. Furthermore, they can also take their issues to social media, tag the lender there, along with the RBI’s official social media handles, to highlight it publicly.

Furthermore, the National Commission for Women can also be approached in these cases, prompting them to take local police action. If the recovery agents make threats, abuse, or stalk, women can approach their local police station or the women’s cell themselves. Additionally, they can also seek legal assistance to stop the harassment.

Empowering women through awareness

While the RBI has issued guidelines, awareness is a must to empower women against loan harassment. Structural change is required, the impact of which must go beyond legal recourse. Financial literacy and awareness should be encouraged, so women know about all active loans, EMIs, and creditor contacts in their families. They also must maintain documented records of all lender communications and recovery visits if any.

Additionally, networking with NGOs and legal aid groups that help women facing harassment can prove to be fruitful. Furthermore, women’s economic independence must also be advocated, particularly so they are not completely dependent on someone else’s borrowing decisions.

Looking ahead

In India, loan harassment is a complex reality for many families; however, it often remains hidden behind the silence and social stigma. Since women often are dependent on their family members for financial aspects, their lack of awareness leads to their victimisation.

Despite this, it must be noted that they are not powerless. They can empower themselves with the knowledge of RBI guidelines, legal rights, and complaint mechanisms such as the NCW, along with the police. In our society, to tackle loan harassment, awareness is the first line of defence. This is why empowerment and collective support are critical for women to ensure that loan distress does not lead to personal trauma.

(The writer is a Director of Expert Panel)