Microfinance Institutions in West Bengal: A Death Trap?

Madhu Sudan Chatterjee

The word ’Sir’ in some areas of West Bengal represents officers of microfinance institutions (MFIs) who come to collect money from low-income families. If these families cannot pay, they are allegedly met with continued threats.

In some ways, this was depicted in a 2017 movie by Nila Madhab Panda called ’Kadvi Hawa’. The debt collector in the movie was called ’jamdoot’ (God of Death); in villages and urban areas of West Bengal, they are referred to as ’Sir’.

Unemployment has become a severe issue in West Bengal. Despite that, families are also concerned with running households and having money for events like marriage, burial ceremonies, etc. Since it is a patriarchal setup, women get assigned the gender role of running the household. Coupled with unemployment, the need for money creates a circle of debt. That’s where MFIs come into the picture. Predominantly, MFIs give loans to women in West Bengal. This is especially true in Bankura and Purulia districts. The authorities know how MFIs have set up their shop across these districts, but nothing is done to stop it.

Can the families who took loans from MFIs never escape its trap? This apprehension is emerging from several villages and urban areas of the Bankura district.

Which loophole has helped MFIs? How do they give loans to women? Why are only women given loans? Why are men not entitled to get such loans? This writer talked to several borrowers to get answers to these questions….