By Easwaran Rutnam
While the naked eye sees vast development taking place – though at a slow pace – in the North, what one does not see is the plight of several families in the village and the suffering they have to endure.
Poverty is still a persisting issue in the North and women are sometimes caught in the middle, having to play the dual role of the mother and breadwinner.
In this regard, several women in the North borrow money to either start a small business or to meet their urgent needs.
Activist and politician Ananthi Saseetharan told
The Sunday Morning that women who obtain loans under special schemes in place obtain the loan saying that it is to commence a business or for farming. However, she said that some women use the money to purchase a motorcycle, new TV, mobile phone, or other household items.
Not all have been able to pay back the money, resulting in women looking for alternatives and sometimes resulting in suicides or being pressured into sexual favours.
A report by a UN expert, which will be submitted to the UN Human Rights Council (UNHRC) in Geneva during its 40th session, notes that women in poor or war-affected areas are specifically targeted by microfinance institutions.
The report prepared by Juan Pablo Bohoslavsky, the Independent Expert on the effects of foreign debt and other related international financial obligations of states on the full enjoyment of all human rights, particularly economic, social, and cultural rights, notes that some institutions charge a maximum flat rate of 30% in interest, while some levy up to 220%, and some also apply compound interest.
“Given that lenders do not follow any particular guidelines to assess the credit risks of loans, combined with the usurious terms often applied, a very high number of women default on their debts and become trapped in an exploitative financial system,” he said in his report which was based on his visit to Sri Lanka last year.
The report will be formally submitted to the UNHRC during its 40th session which begins later this month, and will be open for discussion.
Sri Lanka ratified the Convention on the Elimination of All Forms of Discrimination against Women in 1981, which includes the obligation to eliminate discrimination against women in economic and social life (Art. 13).
Women exploited
In 2017, the Committee on the Elimination of Discrimination against Women expressed its concern over the exploitation of women by private financial companies as a result of women’s limited access to credit.
It recommended that Sri Lanka introduce low interest or interest-free credit schemes for female heads of households and families living in poverty, with recovery plans adapted to their income-generation patterns.
“While the objective of the microfinance system has been to lift people out of poverty by allowing them credit to sustain their livelihoods, it has also been observed that, in actual fact, some institutions generate huge profits by putting enormous pressure on poor borrowers and on women in particular,” the report said.
Although some women seek loans to build a business, many of them do not succeed in their projects, which is not surprising, given the lack of an enabling environment for micro and small enterprises (such as extremely high interest rates), coupled with very modest economic growth, the UN expert’s report noted.
Other women seek loans to cover the basic consumption needs of their families, while some others borrow to pay off previous loans. It is common to see women owing multiple loans to different lenders at the same time.
“Some of these women have no clear idea on how the loan system works. They think that it can be paid off easily,” Saseetharan said.
Pablo Bohoslavsky noted that some collectors go to women’s houses to get paid, sometimes on a daily basis, and even stay for hours until they are. Women are at times exposed to psychological and physical violence by these collectors.
It was also brought to the Independent Expert’s attention, during his visit to Sri Lanka last year, that in some cases, women were pressured by collectors to exchange “sexual favours” for instalments, and that some women borrowers even offered to sell their kidneys to repay loans.
Reports also indicate that some women leave their villages, while others suffer domestic violence as a punishment for “contract breach”, or have to work much harder and more hours to earn sufficient money to repay their debts. Cases of suicide have also been reported.
False vs. genuine cases
However, Saseetharan said that not all women are actually forced to agree to sexual favours. She said that some women make false claims saying that they have been pressured into agreeing to sexual favours, just to avoid paying off the loan.
It has also come to light that some men in the North force their women to make false claims so as to be protected from the authorities in instances of default.
“Some of these false claims are really giving us a bad name in the North,” she said.
A consortium in Kilinochchi dealing with issues faced by the women said that they have now decided to urge banks and private financial institutions to place strict but reasonable conditions when giving loans.
Activist and a member of the consortium Leela Devi told
The Sunday Morning that some women obtain loans without the knowledge of their husbands and are then unable to repay the loans.
She said that the consortium hoped to propose that the main condition to grant the loan be the presence of the husband when the loan document is signed.
“Some women obtain loans for genuine reasons, like to build a house or fulfil other important needs. But there are a few who obtain loans just to buy unnecessary items, and they eventually fall into debt,” she said.
Leela Devi also confirmed that some women who are unable to pay their debt are pressured into agreeing to offer various favours which are not acceptable in society.
Photos Indika Handuwela