It has been revealed that more than three million people in Sri Lanka have been affected by the issuance of microfinance loans. Through this business, which runs as a racket, the debtors charge high interest rates and oppress, and the lack of formal intervention by the government and related institutions to kerb this racket has also led to this growing into a crisis.
The Department of Population and Statistics also points out that more than two hundred people who got stuck in the microfinance loan trap have committed suicide recently. However, other sources indicate that the number of people who committed suicide due to the debt mafia could be more.
Most of the victims of the mafia are women
It is a fact that the Department of Population and Statistics shows that about 2.8 million people in Sri Lanka are stuck in the microfinance debt trap, and 2.4 million of them are women. Microfinance institutions have given loans of 38 to 48 per cent at high-interest rates.
This has been revealed in the Sectoral Monitoring Committee on Mitigation of the Impact of the Economic Crisis. It has confirmed in the observations that have been made so far that more women join domestic work in Middle Eastern countries, which has also caused the microfinance credit crisis.
43 organisations are linked to the mafia
It has been reported that around 3 million people have fallen victim to the online loan mafia or microfinance lending business, which has been identified as a major scam in Sri Lanka. There are currently 43 organisations operating in Sri Lanka that offer online loans.
This illicit business has been running in the country since 2019, according to the organisation’s chairman against online loan mafia, Damith Perera, as reported by Linefournews.
The reluctance of the authorities and the expansion of the mafia
In this regard, the government authorities, including the President and the criminal investigation department, have taken steps to inform the institutions that should act on this matter. Still, they have not taken proper action in this regard, which has caused concern for the affected people.
On 04.01.2024, I submitted a complaint to the President in this regard. At that time, the officials there promised me that they would take immediate action in this regard. This complaint was submitted to disclose information regarding this trafficking and get justice for the oppressed people.
But after about a month, I again enquired about this over the phone. An officer contacted me. But he does not even know that he has filed a complaint. The official replied that he said a complaint had been submitted, but no such complaint had been received. So how can we trust the authorities working for the people… said Damit Perera.
The opposition leader’s intervention
However, opposition leader Sajith Premadasa has strongly intervened against this racket. Damit Perera also mentioned that he paid particular attention to the people who have been wronged and that, due to his intervention, he could contact the Governor of the Central Bank and the Minister of Public Security.
Accordingly, Star VIP is involved in the racket. He also said that the organisation could be caught in the law. He also mentioned that because the opposition leader discussed this widely in the parliament, a strong dialogue regarding this loan mafia was created in the society and was a tremendous strength for this struggle.
Starting from 5000 rupees, the mafia brings the creditor to his knees
It has been observed so far that these organisations are preying on people by advertising through social media that they will give 5000 rupees as an interest-free loan. The strategy of the racket is to make the people pay interest on interest by targeting the people who get the 5000 rupees loan amount by implementing a strategic program of giving more loans.
This creates a situation where the people cannot pay their debts, and this racket oppresses the people in the face of methods such as giving another loan to pay off that debt. According to the organisation against online loan mafia, which comprises people who have been victims of this racket, the interest charged for such loans is as high as 300% to 803%.
Accordingly, it has become very difficult for a person who receives an amount of 5000 rupees to repay this loan, which is a dangerous situation here.
Personal information on social media if the loan is not paid
The other obscene and evil activity of the related trafficking organisations is to scare people who are affected by not being able to pay their debts by posting personal information and fabricated statements on social media.
When the borrowers cannot pay the instalments, their personal information is released on social media and harassed. Also, these racketeers defame creditors by making false accusations and have taken steps to publicise creative matters such as casual relationships.
In this situation, the collapse of family institutions and school children being oppressed, insulted and marginalised are identified as severe social crises created in this way.
A situation has arisen where children cannot even go to school
Some women who were victims of trafficking said that they even had to withdraw their children from school. They also emphasised that it is the government’s responsibility to immediately curb this trafficking, which has created a situation where children cannot go on the streets.
Photos of some women who cannot pay their loan instalments and presenting them on social media as a casual relationship by linking them with the images of another person she does not know have led to severe social problems.
When the authorities remain silent in the face of such situations, the only option left to the affected people is to commit suicide. The fact that more than 200 people have committed suicide in this way shows the true nature of this crisis and its seriousness.
