In the absence of proper law, moneylenders have a field day

Ongole As there is no effective law in force to control unethical moneylenders and loan apps in Andhra Pradesh, victims of these loan sharks are ending lives unable to withstand the pressure from them.

On Sunday, a youth committed suicide in Chintalapalem village near Kanigiri in Prakasam district. He used to play games online and win some amount of money. To earn more, he took loan from an online money lending app associated with the gaming platform, and ended up in a debt of Rs 2 lakh in just a few days.

After his parents found out, they borrowed about Rs 1.60 lakh from a local moneylender and paid to the online loan app. But the loan app staff pressurised the borrower and blackmailed him for the remaining Rs 40,000, which drove him to take the extreme step. He end his life by leaving behind his old parents with loan burden of another Rs 2 lakh. This is not a rare incident. For the last two years, almost for every few weeks, such incidents are being reported somewhere in AP. The reason: No law to regulate moneylending.

After the call money scandal shook the state in 2015, the state government wanted to have powerful Act to control moneylending. In 2018, it the Andhra Pradesh (Andhra Area) Debtor's Protection Act, 1934 and passed the AP Money Lenders Bill, 2017. But, since then it have failed to get the Presidential assent to this bill.

The Covid pandemic has affected financial condition of several sections, particularly vulnerable sections. A research study, 'Comparative Analysis on Money Lenders Act' conducted by Goranbose Gram Bikas Kendra, HELP NGO, Partners for Anti-Trafficking and Sanjog, and updated recently reveals that 99 per cent of their respondents from the trafficking survivors, victims of commercial sex exploiters, sex workers in Andhra Pradesh took an average loan of Rs 52,350 for a maximum interest of 20 per cent after the first wave of Covid. Similarly, about 70 per cent of the respondents took an average loan of Rs 33,531, after the Covid second wave. About 88 per cent of these debtors had taken loans beyond their repayment capacity, the study revealed.

The Bezawada Bar Association former women-secretary and panel advocate of Mandal Legal Services Authority, Chandragiri Radha Kumari said that there is no mechanism for tracking money lenders in the state now, due to which the borrowers cannot avail of certain protections assured by the money lending legislations. She said that the Andhra Pradesh Debtors Protection Act, 1934 used to contain provisions to restrict the maximum simple interest that could be charged by the money lenders, a 9 per cent per annum for secured loans and 15 per cent per annum for unsecured loans, but now it is not in force. She said that unless the government brings the Money Lenders Act into force, the money lenders and the apps keep harassing their victims.

Secretary of HELP NGO, N V S Ram Mohan asked the government to expand the definition of 'moneylenders' by including those who lend money even casually, and not only in the regular course of business, and fix the maximum rate of interest. He said that licensing of the money lenders through a uniform process that will allow the state to keep track and hold them accountable for the harassment, by providing proper protection for the borrowers.