Shark Loans

One major curse that is entangling Naga society and family over many years now is the innumerable problems brought about by the lacunae in the informal money lending system and the dismal world brought about by greedy lending practices of illegal moneylenders, more commonly known as Loan Sharks. This has very often led to pitiful situations arising out of excessive debt that drains wealth from families and in the process this has destroyed many Naga families. In most cases borrowers who are mostly vulnerable to such traps are not allowed to seek legal remedies in court and find that their homes or properties are threatened because of their inability to repay. 

The real life accounts of some of the people caught in this quagmire is nightmarish to say the least. The recent shocking episode in Dimapur where a brother was shot following a dispute over family property on account of a debt crisis is only a drop in the ocean of despair arising out of this grave problem which has now become a serious threat to the well being of Naga society. 

More than anything else it is a human problem arising out of the innumerable wants that life itself demands. The equation is pretty simple; everybody needs a loan. And the easiest way to get it is by way of borrowing—not from the bank but from the unlicensed lender. It’s a quick, no hassle way for consumers to secure small, emergency loans, with little or no red tape. The only problem though is that the interest or fee one pays for the use of this money is exorbitantly high. With rate of interests very high it is often difficult to keep up the repayments forcing one to get a second loan to pay off the first, and so on and until debts are out of control. The harassment after that is usually nasty. 

It is obvious that the absence of any legal framework to regulate informal money lending allows many loan sharks to proliferate, devouring families and homes. Contrary to what many may think such loan sharks are not in business to help one through a one-time financial emergency but in reality, the ignorant borrower is their bread and butter. The public needs to be educated on this aspect of dealing with finances wisely and not to go in for loans that are expensive or unrealistic for repayment. 

Though long overdue, the government has done the right thing by enacting the Nagaland Money Lenders Bill 2005. This will hopefully bring some form of sanity to the otherwise unhindered and free for all unlicensed money lending market. The government would do well to put into place a fair, competitive market that responsibly provides credit to consumers; while allowing access to justice for families caught in abusive loans. The church on its part can rope in experts and educate the public through seminars and workshops in order to encourage responsible lending practices.