Nepal | April 25, 2019

High interest loan stirs panic, suicide rates go up

Himalayan News Service

Biratnagar, August 23

The trend among entrepreneurs to opt for suicide or go into hiding after they default on the loan taken at exorbitant interest rate has increased in Biratnagar of late.

Lately, entrepreneur Bibek Agrawal of Ward No 10, Biratnagar committed suicide just a week ago after he defaulted on the loan he had taken at high interest rate. Before that, Rakesh Begwani, another entrepreneur based in Main Road, Biratnagar, had ended his life on July 2.

Similarly, Binod Dugad of Main Road has gone out of contact since June 19 after he could not pay back the loan on time.

The above-mentioned are, however, just a few representative cases.

Normally, banks and financial institutions only issue loans on mortgages and it takes considerable time to complete the required procedures before the loan is actually issued. However, high-interest loan could be anyone’s for the asking.

The debtor, however, has to be prepared for all the hazards, including the threats to life issued by moneylenders in case the former fails to square off the loan on time. As a result, most of them either go into hiding or opt for suicide if they cannot settle the loan on time due to some unforeseeable reason.

According to sources, one has to pay up to Rs 30,000 monthly in interest on a loan of Rs 100,000. Though there are many taking such loans, most of them don’t expose themselves to the public for fear of prestige.

Meanwhile, Morang Trade Association has appealed to entrepreneurs who have fallen in the trap of high-interest loan to reach out to it for help.

“We’re ready to help anyone who is in trouble,” said the association’s chairperson Pawan Kumar Sarada. “Though seeking loan from individuals is illegal, we can’t sit by and see people committing suicide due to the same reason,” he argued.

SP Arun Kumar BC of District Police Office, Morang, said his administration is committed to investigate the issue. “Though it is illegal to seek loan on interest rate higher than whatever is fixed by the government, we will investigate the issue if a complaint is lodged,” he said, conceding, however, it is difficult to find evidence of this illegal practice.

 


A version of this article appears in print on August 24, 2017 of The Himalayan Times.


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