Micro-finance loans

The Assam Government's announcements made on Friday on waiving microfinance loans of over 26 lakh female borrowers of the State must be seen from various angles. While it is amazing that over 26 lakh women took loans from 40 lenders, including banks, Non-Banking Financial Companies (NBFCs), Micro-Finance Institutes (MCIs) and small finance banks, it is equally important to finding that the total outstanding loan amount due till this date is around Rs 12,500 crore. Microfinance loans had become a major issue in the recent Assam Legislative Assembly elections. Both the BJP-led alliance and the opposition Congress party had promised to waive the loans. Given this backdrop, several questions must be asked by all sensible people at this juncture. Number one: What motivated this large number of women to take these loans? Did the lenders lure them with false promises into a debt trap? Number two: What is the demographic and socio-economic profile of this large number of women and their families? Number three: Why did these women take these loans? And, for what purpose did they utilize this loan money? Number four: Did the lenders follow the guidelines set by the government and the Reserve Bank of India while disbursing these loans? Number five: Since a section of bankers in Assam are known for taking bribes while disbursing loans, as such were there such incidents in case of these loans? Number six: Was the government of Assam aware that these banks and financial institutions had launched a loan-bazar for women of the economically weaker sections of the society? If so, did the then government take steps to ensure that the loanees – all women of poor families – did not fall into a debt trap? Number six: Since Assamese people are generally not good at repaying bank loans, as such did the government and the lending agencies launch a repayment awareness and orientation programme before releasing these loans? Number seven: Were the political parties of the state and the hon'ble MLAs aware of the fact that such a massive loan disbursement programme was being launched across the state covering a large number of women? If yes, then did they take steps to ensure the safeguard of the loanees against debt traps? Number eight: Since Rs 12,500 crore is not a small amount, what impact – positive or negative – did it have on the overall economic scenario of the state? Did it help create assets? Did it help improve the income, livelihood and living conditions of these 26 lakh families? Did it impact positively on the per capita income of the state?