: Nalgonda (Andhra Pradesh): When Korvi Salaiah killed himself by swallowing pesticide, he had unusual mourners. Amongst them, K. Mallesam and B. Bhiksham who deeply regretted the passing of the small farmer. Both Mallesam and Bhiksham are landless. Both are from G. Edavalli, the same village as Salaiah. Each had a decent equation with the dead farmer. The two are even poorer than he was.
Both are also tiny money lenders. And amongst Salaiah's creditors.
Agricultural workers as money lenders? It's not unknown. But there are, in their own count, nearly 75 of them in this village. And similar numbers in others. That's new. These `lenders' are often as vulnerable as their loanees. Sometimes more so. They operate at extremely high risk.
They are little-known casualties of the debt-driven farmers' suicides in Andhra Pradesh. The new state government has launched some steps to hold off predatory creditors. Something necessary and vital. But, as local ex-MLA Narasimha Reddy points out: "Debt relief is a complex thing. It is essential to protect the farmer and retrieve the situation. Yet, it also has to be nuanced so these little `lenders' are not destroyed."
"What do I do?" asks Mallesam. He and Salaiah were from the same community and bore the same surname: Korvi. He loaned out every single paisa of the Rs. 27,000 his family had slaved for years to save. This, to Salaiah and other small farmers here. With Salaiah dead, Mallesam is in deep trouble. So is Bommakanti Bhiksham.
"Salaiah borrowed Rs. 5,000 from me," says Bhiksham. "His daughter-in-law needed urgent medical
help. And who can predict a medical emergency? I myself spent Rs. 45,000 getting my mother
treated for cancer." Salaiah took the cash "for a month" but took his own life within the year.
Bhiksham might never see his money.
So how did these very poor people get any money in the first place? Why did they choose to lend it? Who did they lend to and why? What mechanisms do they have to recover the tiny sums they loan out?
"My family and I have cut sugar cane in Krishna district for 30 years," says Bhiksham. "Each season, I scrape together a little bit, maybe Rs. 3,000. I have no land, no cattle, no poultry. Not one solitary chicken. Any cash I've made comes from sweating on the cane plantations as a migrant worker for months at a time."
Mallesam's story is similar. His whole family migrates to Krishna district in season. They cut "around 1.5 tonnes of cane a day. We try saving every bit of the roughly Rs. 150 a day we earn there. When we return, we pay off our own debts and are left with a little money."
Why loan it out, we asked the several little lenders who had agreed to a meeting with us here. "What options do we or our debtors have?" asks Lingaiah. "Most of us in this village are from the same backward caste (Muddhiraju). No bigger lender will touch us. Nor will any bank. We have no land, no assets. So we have to do such lending and borrowing within ourselves."
"I saved Rs. 30,000, sir," says Mallesam. "Some 3,000 I needed for my own family for the year. I also needed Rs. 40,000 within 12 months to get my daughter married. So I loaned the remaining Rs. 27,000 to four persons including Salaiah. How else could I raise cash for the wedding?" Mallesam is losing more money as he has not gone out to cut cane this year. "Only because of the Salaiah debt. It will finish me."
"What investment can people make on Rs. 20,000?" asks Parsanaboyanna. "That's too little to open a small shop. You can't keep that money lying in your hut. No business starts on that sum. No bank will back those without land or assets. Nor can you buy a single acre with it. And who would put that money in agriculture, the way things are? Even the sahucars are not buying land here. They invest in plots in the district headquarters." "So we lend," says Mallesam. And at rates lower than those of the village moneylender. While the sahucar's rates go upwards of 36 per cent, theirs range from 18-24 per cent a year. And often a bit of the interest is dropped by negotiation. In many cases, both lender and loanee are from the same social group.
Mallesam's daughter's wedding is now on hold. Salaiah owed him Rs. 21,000 - a huge sum by the standards of these lenders. Otherwise, their loans mostly range between Rs. 1,000 to Rs. 5,000. Crucially, the money these landless workers give out is everything they have. As a percentage of total credit, their share would be miniscule. But their exposure to risk is not. If a single venture misfires, they are destroyed. And there are quite a few of them now in villages, plus.
Theirs is not the classic money lender-peasant equation. There was no coercion in Mallesam's dealings with Salaiah. Only desperation. The sahucar might have been a role model, but these workers do not have any of his mechanisms of pressure. Their little cash has been lent out mostly within the same community. Only, perhaps, to those a step above in the class ladder. Salaiah owned two acres and a buffalo. Typically, several of them gave him small loans ranging from Rs. 2,000-5,000.
"Their lending has come up in a vacuum of credit," says ex-MLA Reddy. "The banks have done nothing. There is no other source for many. They are not to be equated with the sahucar or other creditors." He tells this `meeting of lenders' that they too should and will be protected by any new laws. And patiently explains that the `moratorium' on debt does not write off their money.
Mallesam and Bhiksham are nowhere as traumatised as Yadamma, Salaiah's widow. But they too, are very vulnerable. The larger crisis, of which the suicides are one outcome, grips them firmly. The state, as Reddy says, will have to separate them from other lenders. "Otherwise," as one of them grumbles as the meeting breaks up, "some of us might join Salaiah." (Courtesy: The Hindu)
