It is commendable that the government has already taken steps to criminalize loan-sharking practices, but more needs to be done to discourage people from turning to loan sharks.
The agreement signed by the government and loan-sharking victims on Saturday is a step in the right direction, but it is not enough. To prevent similar incidents from happening in the future, the government must take concrete measures to tackle the problem. Given the complexity of this issue, it is now clear that a multi-pronged approach is needed to do away with the scourge of the loan-sharking problem. This includes expanding the reach of commercial banks, promoting financial literacy, providing special loans for foreign employment without collateral, criminalizing the practice of loan sharking, investigating and prosecuting loan sharks who engage in illegal activities, and ensuring that the coordination committee set up at each district level to address complaints of usury victims is effective.
It is worth noting that the government had earlier formed a task force to recommend measures to stop loan sharks from exploiting the vulnerable. The task force submitted its report to the then-home minister on August 12, 2022, which included several practical suggestions such as criminalizing loan-sharking practices, encouraging banks and financial institutions to increase their access to the poor and the marginalized communities, introducing revolving funds in villages for borrowers, and setting up a separate Marginalized and Dalit Upliftment Fund. These measures would go a long way in preventing needy individuals from approaching loan sharks. The government should consider these recommendations seriously as it tries to eradicate the scourge of loan sharking from society. It is commendable that the government has already taken steps to criminalize loan-sharking practices, but more needs to be done to discourage people from turning to loan sharks. Many individuals who receive loans at exorbitant interest rates are those going abroad for work, and it is essential for the government to make special arrangements to provide loans for foreign employment without collateral. The victims of loan sharks have been seeking the government's intervention to cancel Tamsuk, return the money overcharged by loan sharks, take action against them, and investigate illegally seized assets. The government has promised to address these issues, and it must act swiftly to keep its promise.
Expanding the reach of commercial banks to remote and rural areas is one way to prevent loan sharking. Commercial banks can provide loans at lower interest rates, making it less attractive for people to turn to loan sharks. In addition to this, promoting financial literacy among people, particularly those in remote and rural areas, can make them aware of the dangers of loan sharking. These measures would go a long way in preventing individuals from falling prey to loan sharks. Furthermore, it is crucial for the government to take action against loan sharks who exploit the poor and the illiterate. While the criminalization of usury is a step in the right direction, more needs to be done to deter loan sharks. The government should investigate and prosecute loan sharks who engage in illegal activities, seize their assets, and use the proceeds to compensate their victims. Above all, political commitment is necessary to resolve the issues of the poor. Party leaders must stop relying on loan sharks for donations during elections and refrain from giving them election tickets. By doing so, they can send a message that loan sharking is unacceptable, and the government is serious about tackling the issue. The victims of loan sharking have suffered enough, and it is time for the government to act swiftly to prevent similar incidents in the future.