The Ministry of Health and Family Welfare, Government of India, and Medical experts of the country brought a temporary but effective solution to tackle covid 19 virus pandemic in India, before could coverage minimum 2 doses covishelid and co vaccine, ordering to follow every citizen of India mandatory COVID -19 protocols and time to time full ( pan India) or partial lock down from 2020 February to 2022 December specially in all containment zones.

The protocol was strict social distancing, using masks, frequent hand sanitising with alcohol or soaps, self soap bathing and washing of cloths, once used outside. Obviously the Microfinance sectors should get hit by this pandemic and should face a big financial crisis. But the picture was different for MIFs or NBFCs.  Micro loan disbursement jumped suddenly about 20% in the December 2022 quarter to Rs 77,877 crore over Rs 65,392 crore in the December 2021, backed by 14% rise in the numbers of new women borrowers.This helped the microfinance industry to grow 25% year-on-year to Rs 3.31 lakh crore at the end of December 2022, data released by Microfinance Institutions Network showed.The industry served 6.4 crore unique new borrowers through 12.6 crore new loan accounts.

The number of active loan accounts grew almost 19% as compared to 14% rise in the number of borrowers. In.terms of regional distribution of gross loans, east & northeast and south accounting for 63% of the total portfolios. Bihar is the largest state in terms of portfolio outstanding followed by Tamil Nadu and West Bengal with high amount of loans,  nine districts -North 24 Parganas,  South 24 Parganas, Bankura, Murshidabad, Jalpaiguri, Nadia, Bardhhaman, Hooghly, Howrah and Cooch Behar- are from West Bengal where these microfinance companies operated through their loan field officers,  targeting illiterate, semi literate, poor married men/ women of any locality in name of services, social or families welfare,  women empowerment, poverty upliftment, education, health care, employment generation by micro loan through a group system of 12/25/40 married women.

According to a report published in Business Standard "it was observed that average outstanding per unique borrower is highest in West Bengal and in Assam, and this has been the case at least for the past three years (2019-2023)". 40-50 per cent of the microfinance loan portfolio in both Assam and West Bengal are from one or two institutions. (SIC,  Bandhan, Ashirbad ). According to SIDBI and Equifax's Microfinance Pulse, Vol VII, November 2020 report on microfinance showed that during the Covid- 19 pick lock down times, when many people in India were dying from the virus, in the second quarter (Q2) of the FY 2020-21, 300% more micro loans were disbursed in india of -worth Rs 323.75bn-vis-à-vis Q1 of the same FY in terms of volume and 393% more in terms of value. Around 70% of the loans are in the buckets of Rs 30,000 to Rs 50,000

Small and micro loans distribution by MIFs and NBFC-MIF/LC with very unusually high interest to a large segment of the Indian population in unorganised sectors with poor livelihood domains with ulterior motives for the company's commercial interests,  profits and nothing else. These legal or illegal money lending companies ( against PMLA laws, section 4) played a key role between nationalised or commercial lending banks taking a mild to moderate risk for their better returns through EMIs.  This sector now plays a strong position, when it comes to return on their investment in monetary terms by loan collectors efficiency.

MIFs works on a crude principle of 'Close Contact with client borrowers to generate false trust on them regarding social, economic upliftment of poor family when accepting their loans hiding the I'll effects of such loans putting overworks, various illness, indebtedness,  absconding, suicide, on the family in near future. In 2020, the lockdowns necessitated by spread of COVID-19 virus (alpha, beta, delta and omicron VOC) brought almost every business to a halt, (except essential services).The worst affected were small enterprises with little or no reserves and high liquidity turnover operations, which was the case for typical micro and small businesses. This, in turn, adversely impacted their lenders.

Microcredit loans,flagship products of microfinance companies,shifted their motivation from a not-for-profit approach to neoliberal model dominated by capitalistic commercial private banks.

All MIFs/ NBFs MIF motivated today to expand their high profitable business through legal / illegal money lending during covid period, targeting new illiterate/ semi literate married women borrowers who required liquid cash money to sustain their life, for medical expenditure, to run their micro enterprises during pandemic and It is estimated that during pandemic, this sector employed more than 6 lakh individuals working at field with salaries of RS 7000 per month and extra commissions on recovery of loan from defaulters.

Complete or partial lockdowns brought halt to almost every business, but worst affected were those with small or no reserves and operating in a high liquid model. Most micro and small businesses were impacted except the ones engaged in activities coming under essential goods and services as announced by the government from time to time.

To operate smooth financial business, earning profits from disbursed loan, MFIs nów have to rely on frequent personal interactions of loan officers and Recovery Agents and had to put illiterate, semi literate loan borrowers at very high level pressures threats nuisance to ensure their traditionally high repayment rates. Loan officers (God's sent Jam doots ) all these acts to be considered as a criminal offence done in the eyes of Indian laws and human rights and necessary action to be taken by local administration or police station under PMLA

Diminishing earning capacity of MFIs or NBFCs clients is now becoming a threat to MFI clients, although the government is trying to smooth out its operations through rescheduling of loans. RBI a regulator of financial sector announced various steps to limit macro effect of pandemic on overall financial system of country, including increase of moratorium period for loans for next 2 years, rebate of interest rate, special package etc; but most of these announcements from RBI are focussed on commercial banks and remained vague for MFIs and its customers in particular.

To help MFIs, to address their liquidity issues, the government of India offered them near zero interest loans through its financial arms - the Small Industries Development Bank of India, the National Bank for Agriculture and Rural Development, and the Reserve Bank of India's Targeted Long-Term Repo Operations.

At the regulatory level, this allowed them to operate - albeit with very limited staffs. While MFIs quickly transitioned to remote and safe working environments for their employees, they are also directed to be most conscious of their borrowers' wellbeing. They are ordered adhering to industry code of conduct set by their own Self-Regulatory Organisations (entities with the power to create and enforce industry standards) requiring fair interactions, suitability, loan transparency, interest rate and addressing customer grievances officially. MFI/ NBFCs customers must be offered the opportunity to take advantage of the moratorium on their loan repayments with lowest EMI based on the monthly income of the family. And wherever necessary, MFIs worked to create awareness about the implications of the moratorium on interest/repayments, so that customers could make informed decisions.

Introduction
Microfinance is a category of financial services targeting individual men or women or a group of married women and small business people (Microfinance company CEO's own profit is their basic motivation) who lack access to conventional banking systems or post offices and related services. Microfinance includes microcredits, provision of small loans to poor clients (through Self Help Groups of women / men or SHG or a group of people); savings and checking accounts; microinsurance; and payment systems, among other services.

Microfinance services were designed to reach excluded customers, usually poorer population segments of Indian society, mostly targeting socially marginalised, unemployed, or geographically more isolated, and in convincing a false belief of helping them to become self-sufficient in their crisis times. Proponents of microfinance company owners often claim that such access helps poor people out of poverty, including participants in the Microcredit Summit Campaign.

For many bankers,  microfinance is a way to promote economic development, creating employments and growth through the support of micro-entrepreneurs and small businesses; for some others, it is a way for the poor to manage their finances more effectively and take advantage of economic opportunities while managing the risks of taking loans. Many critics of microfinance companies and NBFC -LC/ MFIs often point towards many of the ills of micro-credits that can create indebtedness of borrowers of loan once taken and to face consequences of such indebtedness.  Many studies have tried to assess its impacts on microcredits.

MIFs / NBFCs MIF why at a very high interest rate ??
One of many principal challenges of MIFCs and NBF-Lc/MIFs companies is for providing small loans at an affordable cost or at Indian Nationalised Bank's interest rate as per Reserve Bank of India's guidelines 2022 for interest to be charged on a yearly basis never more than 15%.

But the Indian average interest rate of micro loans and interest rate is estimated at 37%, with rates as high as 50% to 120% interest in many markets, that the laws of the country do not permit at all for money laundering. The reasons for such high interest rates by MFIS or NBFIs was never clarified to borrowers of loans or ever justified to their clients in their official documents or to regulatory authorities like RBI or Ministry of commerce,  government of India, except that their own profit form their money lending business in the Indian market. Indeed, the local microfinance organisations or non financial banking organisations that receive zero-interest loan capitalsl from the online microlending platform or from the National Banking system also charge average interest and fee rates of 35.21%.

Why such a high interest rate if their aim is really to alleviate poverty of Poor's ?? It remained a big unanswered question for all citizens of India. Rather, the main reasons for the high cost of microfinance loans is the high transaction cost of traditional microfinance operations relative to loan size and their high profit earning strategy as other businesses operating in the open market of India.

Microfinance and covid 19 pandemic lock down:
With over 180 million borrowers worldwide,  the microfinance loan sector provides access to financial services to low-income poor households who are not served by traditional banks but they are with very high interest rates, at least in Indian states. The Covid-19 pandemic has created substantial new challenges for work environments in general and for the microfinance sector too.

Beyond the immediate health and economic consequences, the pandemic has totally reversed recent trends of lowering poverty rates and has exacerbated pre-existing inequalities, leading to severe challenges for microfinance companies in India for running their huge profitable business. Collapsing household incomes during the pandemic and in post pandemics periods, especially in the low-income population as documented,  have drastically reduced the repayment capacity of a typical microcredit borrower, threatening the collapse of the entire microfinance sector ( Reference 1 ).

To operate smooth financial business and so called services towards the poor households,  microfinance institutions (MFIs) had to rely on frequent personal interactions of their officers and Recovery Agents ( to West Bengal loan borrowers or clients they are rather termed as "jam doot" or sent angels from God of Death to take life, in villages,in sub urbans and sir in slums areas of towns or city ) had to put illiterate, semi literate loan borrowers at very high level (both social and economic) pressures to ensure traditionally high repayment rates.

These tasks were / are now carried out by MFIs' NBFC- MFIs key personnel: loan officers. Loan officers or (God's sent Jam doots ) use to travel to a locality in suburban or urban or slums areas of cities or in villages/ remote villages locations to interact with their existing borrowers and further target to acquire more potential new economically poor borrowers to complete targeted quota, (making them convinced, lured to take easy loan without any collaterals, bonds, creating a false sense of borrower's belief that their company's loan will be rather much helpful for the families to up lift from their poverty state and they are friends to them, not the hungry wolves to kill them by indebtedness ), assess to borrowers' credit worthiness, ( they call it cibil score )

Disburse loans, provide often wrong advices in their financial matters, as they are trained to speak by company before client's, and collect loan repayments weekly or monthly as jamdoott ( sent angels of God death, -all common Indian people call them in this language). Hence, loan officers link the lenders to its borrowers and try first to establish trusted(???) relationship which is very useful to accept loans by those illiterate or semi literate poor people. Despite their crucial role in the functioning of an MFI, little is known about how loan officers or jamdoots organise their works, their fixed office address,  their police verified identity as loan officer or as recovery agents of a company and juggle these different tasks in general.

Loan officers must now be facing new challenges for covid 19 lock down and COVID protocol
With the covid 19 pandemic, loan officers of MFI and NBFC -MFI ( jamdoots) may be now facing new challenges: In addition to the natural reductions in loan borrowers' repayment (EMI) capacity. Lockdowns COVID virus of various VOC/ subtype strains like alpha, beta, delta, omicron and it's all subtypes strains etc spreaded through out India and government of India's official restrictions order to social gatherings and to strictly follow COVID 19 protocol by Ministry of Health and Family Welfare of Govt of from 2020 early March to 2022 December,  posed some limitations on the usual operations of collection and distributions of loan and additional adverse effects towards loan borrowers in terms of being infected by the virus, health care out of pocket expenditure and death of family members from the virus during the pandemic:
If pre-pandemic works incentives are still in place that tie up loan officers' earnings to borrowers' repayment of EMI, and if the loan officers or recovery agents ( jamdoots) of MFIs when may be putting much pressure already to economically vulnerable loan borrowers to repay their loan EMIs or in one time settlement, that must be considered as a criminal offence done by RA in the eyes of Indian laws and human rights.

This will then be a risk factor for destroying the hard-to-built, trusting relation with the lender and borrower and compelling law conscious loan borrowers to file FIR against the loan officers or jamdoots RA in their local police station, if any untowards situation arises for their pressure including deterioration of physical and mental health of borrowers for their pressure or making nuisance before or in residential premises of borrowers as per law.

COVID 19 and microfinance loans -was it really helpful at all for Poor's or villagers. Was it a blessing or a big curse for them ??( Reference no 26)
Covid‐19 pandemic in India ( it lasted from January 2020 to December 2022 ) in the pandemic state and till now is being continued in India in endemic phase in 2023 end of March onwards,  had caused unceasing damages to the Indian economy, the economist says it often. In an attempt to rescue or revive the Indian economy from the slump, the nationalised and other private banking sectors seem to have received special attention I presume.

Ironically, there was hardly any discussions over the worst and most devastating role of and the challenges to the microfinance institutions (MFIs) and NBFC- LC / MFIs companies in India and in the state of West Bengal, which is now focused towards the most vulnerable poor loan borrower sections of the society. In India, the MFIs have played in fact the worst role in achieving the much talked about primary objective of financial inclusion by giving microcredit loans to vulnerable populations but that was with their high interest rate for the loan.

They however worked during this period as the supplementary institutions to nationalised or privileged banks for the outreach to the financially excluded sections of the Indian society with the ulterior aim of their business and nothing but to exploit poor borrowers financially and that was just for their company's own profits.  As per the Sa‐dhan (2019) report,( Sa‐dhan 2019).

The Bharat microfinance report (p. 2019) the only MFIs had an outreach to 50 million Indian borrowers with an outstanding loan portfolio of USD 12.76 billions. Just one may rethink,  in reality, how much money these MFIs earned through their business strategy as their profit at the cost of poor people's families since the 2012 microfinance company bill passed in the Indian parliament.In 2019,  there had been a 22% increase in client outreach and a 34% increase in loan disbursements over the previous year 2018, indicating a very high growth rate of microfinance companies based on Indian illiterate, semi literate, needy and poor marginalised sections of Indian population at rural Village, suburban urban, city slums

Revaluation and Re-arrangement of Indian MFIs NBFC-LC/MFI is so needed?
In this author's opinion the MFI operations in Indian all states and in the perspectives of financial services towards the poor need now extensive re-evaluation and re-arrangement by the government of India / state government, and court of laws in the wake of the pandemic related lockdown measures which was in force across the country from 2020 March to 2022 December.  To prevent the spread of Covid‐19 virus, the government of India administration mandated social distancing,  ordered complete lock down and closed and restricted all kinds of market activities. As majority of the MFIs' / NBFCs -MIFs financial services were directed towards low‐income households whose earnings were either stopped or were much irregular and to a larger extent,on daily basis to sustain their life.

The lock down restrictions on the economic activities had visibly & adversely affected the earnings and the hard cash‐flows to these households. The poor families seemed to be more severely affected than the rich,  upper, upper middle income and middle income households or those who are in the government or semi government or in corporation sectors or in big manufacturing companies and in essential services sectors as employees with fixed monthly salaried income.

A significant numbers of MFIs' NBFCs loan borrowers are still unemployed in 2023 April or employed now in low income‐generating jobs such as street and train hawkers, labour, maid servants in houses, cooks, drivers, ayas,  auto rickshaw, rickshaw and van pullers, startup small business holders ( may faced loss in business in lock down ),  small shopkeepers, vegetable and fish vendors, daily labourers, porters, artisans and others informal sector activities.

In times of COVID- 19 pandemic, full or partial lockdown crisis, when the sources of income were much restricted, the poor households were most vulnerable to approach unscrupulous money lenders for their financial needs. To tackle that crisis, these households were likely to adopt unfavourable survival mechanisms such as liquidation of assets, a decline in food consumption, and abortion of healthcare services.  Amid the crisis, the unavailability of adequate financial services exacerbated their economic hardships.

The inaccessibility of financial services to the poor and informal sector workers may lead these households into a poverty trap from unscrupulous moneylenders or MIFs or NBFCs.  In such situations, these authors think that the registered MFIs might play a great hope to these people for the financial support to maintain, start and explore available economic opportunities keeping aside their huge profits though interest they charged just for their profits. It was to be regulated by the Indian government not with such a high percentage of interest rate for microcredits loan from ( 26% to 35%) with processing charges and with ulterior motivation of huge profits from poorer households.  This is in human and human rights commission must look after the issue these authors consider it so.

What these author considers that the current post COVID -19 unfavourable circumstances, ( till date covid- 19 is not over in india and daily new infection with new omicron VOC in India 67,806 active cases as on 22 nd April 2022) the central government of India / State government/ court of laws/ RBI / SEBI must enforce the MFIs NBFCs to re-think about whether to continue or temporarily suspend their recovery operations or waive the interest.

We do understand that there are some compelling factors for this big dilemma.

1. The administrative instructions on pandemic already hampered some operations of the MFIs.and NBFCs companies for recovery of loan
2. As the borrowers of microcredit loans are themselves struggling still to make their livelihoods, making periodic EMI repayments for them was and is now difficult and consequently, the loan portfolios seem to have been deteriorating their living standard pushing from poor to further poor state.
3. In response to their deteriorating portfolios, the MFIs NBFcs must stop or restrict their financing activities by order from the ministry of commerce or home ministry of the government of India or RBI.

The RAs ( jamdoots) overt behaviour to recover due EMIs creates a wrong impression among the loan borrowers and also to the whole population of India that MFIs NBFCs seem to be running away when they are most needed and that MFIs are purely driven by their commercial objectives and interest for their own profits compromising the social objectives they once promised and the bill for microfinance was passed in 2012 on their promises.

COVID 19 is not over yet in India in 2023 in end of April and dilemmas
As the virus did spread( total 4,48,91,985 active cases and resulting death 5,31,330 since 2020 in India ) and the omicron subvariant is still spreading in India like XBB1.16. 1 VOC subtype ( throughout India and the death toll was on the rise up to 2022 ), ( on 22.04.2023 the 7 days average, as per day new cases 12,193 cases and per day 29 to 42 deaths in COVID 19 when in West Bengal state till date total active cases number is 1,127 and death 2, average new cases 53 daily as on 22.04.23 ) and there was then no certainty about how long the covid crisis would prevail and how much time the Indian economy would take to revive from the slump Till today some countries are seeing increases in number of Covid 19 XBB. 1.16.1, and over the past four weeks, 14,000 people lost their lives to this disease throughout world," And, as the emergence of the new XBB.1.16

1 variant illustrates, the virus is still changing, and is still capable of causing new waves of disease and next many deaths. According this authors,  one in approximately 10 infections of XBB 1.16 must result in Long Covid Syndrome if this strain continues to flourish in india, specially in poor people who have less immunity due less nutrition for their indebtedness and overworks to repay their due EMIs to MIFs.

However "With negative growth rate persisting over the last two and half years and the fear of a slow growth rate continuing in the post‐pandemic period in the short‐ and medium‐run, the MFIs arguably would have to face the most difficult time in terms of credit loss and poor liquidity. This is inevitable for them too.

On the other side, the economic slowdown has direct adverse effects on productive economic activities, thanks to both demand‐ and supply‐side constraints. Consequently, not only does it refrain the MFIs borrowers clients from venturing into enterprises due to lock down, death of near ones, but it also created the problems of indebtedness to borrowers.

Hence, the dilemmas are multipronged, needing further scrutiny from both MFIs' and clients' perspectives. There must be different dilemmas and real challenges that the MFIs borrowers' clients may face during the pandemic and the post‐Covid period.  I must analyse it from the perspectives of the two key stakeholders in MFI lending namely the MFIs and the clients. In this respect, I also examine the government initiated schemes to revive the economy and their possible impacts on the MFIs and their clients.

FROM THE MFIS' PERSPECTIVES-:
The resilience of registered MFIs to the pandemic and now on-going endemic depends largely on the extent of cash inflows to MFIs companies, their operational sustainability, and their governance. The cash inflows to MFIs comprise primarily by loan repayments by the borrower clients followed by the borrowings from financial institutions like nationalised banks and investors.

However, the loan repayment capacity of the borrower clients must have fallen to zero during the pandemic period and in post pandemic but in the endemic period now too.  The borrower clients are now struggling enough to engage themselves in economic activities and make earnings of their best even with overworking both day and night for the repayments under conditions of restricted market activities.

This overworking will result them in various disease states like infections, malnutrition, hunger, cardiovascular hypertension, heart attack or Acute myocardial infarction, brain stroke,T2DM, depression, Tuberculosis, further and will increase their out of pocket health care expenditures ( as they won't find real time to attain free govt health care systems due to overtime works) and will plunge them to further loans and indebtedness in private for visiting private health care hospitals.

There is still pressure on financial institutions banks and social investors NGOs to fund the operations of MFIs. From the perspective of operational sustainability, several factors may now affect the normal operations of the registered MFIs. The MFIs' financing mechanism involves group gatherings/meetings among their clients and their regular interactions with the loan officers, which for long two and half years stopped, thanks to the imposition of restrictions.

Looking at the upsurge now in the endemic spread, if MFIs companies plan to halt their recovery operations partially,  it may impact the MFIs' cash generation process and target huge profits.  This may lead to some financial burden on them in terms of payment towards fixed expenses such as their employees' salaries, commission of recovery agents and office rent, electricity bills.

In such a scenario, the MFIs companies are left with two sweeping measures either (a) to reduce its current and fixed expenses, which may include reducing salaries or laying off employees. 2) to reduce their strategy of earnings of their huge percentage targeted profits from the Poor's loan borrowers and give them time to repay in easy EMIs rather harassing them for repayment by (jamdoots ) recovery agents, if necessary waving accumulated interest In case,or in the SB interest rate of nationalised banks in India. If the MFIs companies consider laying off some of their employees, it can spoil the employees' loyalty towards the organisation.

Such steps can have other repercussions as well. First, the MFIs companies will lose contact and information about the borrower clients and consequently, the MFI‐client relationship may break. Second, after the covid -19 crisis will be over, the MFIs companies will have to incur the costs of recruiting and training new employees. However, the problems of tracing back and building a relationship with the borrower clients may turn out to be a tough task All these may result in poor repayments from the clients and rising non‐performing assets. Third, in the case of retaining the employees on payroll without paying them salaries, the feeling of demotivation and detachment is bound to crop up leading to rising inefficiencies in delivering microfinance services.

The borrower clients of MFI must not go into indebtedness
The MFIs are expected now to face the problems of low repayments for some other pressing reasons as well. Amidst minimal market activities and the restrictions on movement, the clients keep struggling to make earnings and repay their debts. In such situations, they may search for credible sources to borrow bigger loan amounts and clear their older debts. These borrowings can have cascading effects and can drag the clients into indebtedness.

Restructuring the existing loan contracts by MIFs and NBFC MIFs is the way out?
One way‐out for the MFIs companies in such a situation could be to consider restructuring the existing loan contracts instead of closing off the operations what this author thinks.  They may provide an interest rate subsidy as told earlier or they can extend the loan moratorium for next two or three years.

These measures will provide flexibility in repayments of principal loans at least and improve loan portfolios in India. One may, however, argue that such measures on the part of the MFIs may send a wrong signal to the clients about the possibilities of future loan waiver, disturbing their credit discipline (reference no 2 ). To make the condition worse, loan non‐repayment can have a contagion effect leading to mass loan default.

The problem of poor repayment behaviour may invite the phenomenon of moral hazard (reference no 2 ). On the one side, mass loan delinquency may pose a serious threat to MFIs' financial solvency (reference no 2 ). On the other side, the loan officers may exert coercive measures towards ensuring better repayments which are criminal offences as per IPC

( reference no 2). Consequently, many genuinely vulnerable clients would be into dual problems of poverty and debt trap. Besides, the possibilities of a mission drift( if at all it exists in any MIFs) on the part of the MFIs cannot be ruled out whereby the MFIs should shift their client base from the low‐income households to the relatively wealthier upper middle class conscious families as their business targets.

Given such complex challenges, the sustainability of operations and continuity of microfinance services largely depend upon the skill set of its management and the experiences of its employees. The MFIs having a good governance structure and employees with technical skills in banking and finance may perform better compared to their counterparts lacking the same. These organisations may overcome the crisis by adopting vigilant and robust lending and risk management practices.

FROM THE BORROWER CLIENTS' PERSPECTIVES-:
Needless to say, due to the slowdown of the economic activities, earnings and cash‐flows across the country have been adversely impacted. In adverse economic situations, the borrowers' resilience to the challenging pandemic depends on the types of economic activities they are engaged in, rescheduling of principal payments, subsidisation of interest rates, and extension of moratorium period (Reference 3).

The impact of the COVID 19 pandemic does not seem to be uniform across different sectors, regions and household types. The households which are engaged in big business activities related to essential commodities like big groceries, medicines, medical shops,  nursing homes private health care workers,  home cooked food suppliers, big restaurant, wholesale market of fish, fruits and vegetables, milk and milk products houses,  newspapers houses, four or two wheeler car business, electronic products, etc. are reported to be less affected.

However, a large pool of activities in the informal sector including start up small business,  eateries, tourism, saloons, rickshaw pulling, auto drivers,  daily wage labour and even contractual labour in the formal sector is severely hit. The MFI clients from the latter categories, in the absence of income generation, are expected to utilise loans primarily for household consumption purposes or medical purposes. They are prone to multiple borrowings, poor repayment behaviour and concomitant over‐indebtedness ( reference no 4). The risk of migration of the clients from the urban to rural areas seems to be making the problem of default far worse.

The clients who have fewer instalments left are more likely to clear their debts compared to those who have most or all of their instalments left.  Particularly, those who have recently availed of credit are expected to be greater defaulters as their loan utilisation may not provide them expected earnings. This would create a double challenge, both to the clients in terms of their ability to repay and to the MFIs to issue fresh loans.

Interestingly, the agricultural sector seems to remain less affected by pandemic (references no 3 ). This is perhaps good news for both the MFIs in particular as well as the economy at large. In India, about 46.1% of the households have their livelihood dependence on agricultural and allied activities (reference no 5 ). A better harvest from this sector may help the economy recover the losses elsewhere and revive faster. From the perspective of the MFIs, apparently, the demand and repayments of microfinance credit are robust in this sector. This may help the MFIs sustain their operation at least in the rural economy in the medium and long‐run, if not in the short‐run.

THE WAYS FORWARD:

Atmanirbhar Bharat/Pradhan Mantri Garib Kalyan Yojana"/Pradhan Mantri Street Vendor's AtmaNirbhar Nidhi (PM SVANidhi/ Deen Dayal National Livelihood Mission scheme/ Pradhan Mantri Jan‐Dhan Yojana

Considering the MFIs as instrumental in providing financial services to the poor families, and that the MFIs are currently finding it difficult to raise capital from the debt market, the government of India has introduced certain useful measures to improve their liquidity needs. A special liquidity scheme of USD 4.06 billion has been launched for the registered NBFC companies, housing finance companies, and the MFIs (reference 6).

This is expected to ease the MFIs operation and in turn, help the needy avail of much‐needed credit to let go of the business. If the clients can resume their economic activities, the demand for and repayments of the MFI loans are likely to improve.

Under the recently launched scheme of the Indian government "Atmanirbhar Bharat" or "Self‐Reliant India", a financial package of USD 270.42 billion was announced to revive the economy (reference no 7 ). The economic package has the provision of financial assistance to the small‐scale industries namely home industries, cottage industries, small‐scale industries, and MSMEs that are sources of livelihood and earning for a majority of poor and low‐income households.

Under this scheme, there is a provision for collateral‐free loans to these industries to meet their operational liabilities, to buy raw materials and to restart the production processes. Besides, under the scheme of "Pradhan Mantri Garib Kalyan Yojana" a special package of USD 23.66 billion was also announced for the poor, which would provide some relief from the pandemic. Further, to provide financial aid specifically to the street vendors to resume their livelihood, Pradhan Mantri Street Vendor's AtmaNirbhar Nidhi ( PM SVANidhi) scheme was launched.

Under the scheme, economically weaker people engaged in vending of articles, goods, and food items of daily use on a street, footpath, or pavements, etc. are facilitated with a loan amount of USD 135.21, which is repayable in one year (Reference no 7 ).  Under the Deen Dayal National Livelihood Mission scheme, to boost the economic activities among women self‐help groups, the limit of collateral‐free loans was increased to USD 27,041. Besides, all women having their bank accounts opened under Pradhan Mantri Jan‐Dhan Yojana (a financial inclusion scheme) are being provided one‐time ex‐gratia of USD 6.76 per month for three months ( reference no 8 ). These initiatives were expected to support the MFI clients in terms of supplementing their financial aid for income generation and for setting up micro‐enterprises.

Also, all India financial Institutions such as Nabard, Sidbi and the National Housing Bank had been provided with special refinance facility of Rs 50,000 crore at the repo rate, Of this, the National Bank for Agriculture and Rural Development had been allocated Rs 25,000 crore to enable refinancing of regional rural banks, cooperative banks and microfinance institutions.

The Small Industries Development Bank of India had been given Rs 15,000 crore for on-lending and refinancing to scheduled commercial banks, non-banks and microfinance institutions. The National Housing Bank will receive Rs 10,000 crore to support housing finance companies. Besides, the central bank cut the reverse repo rate by 25 basis points to 3.75 percent. That, according to Keki Mistry, vice-chairman and chief executive officer at HDFC Ltd., should encourage banks to lend money.

From the study at grass-root level with 54 cases,  these authors personally felt that very few people had actually benefited from this initiative of microfinance loan in the west bengal state of Indian context i

During COVID 19 period.  It was rather few( three) trillion dollar business of companies based on poor families of india who needed cash money

Below are a few examples of what happened for microfinance loans that destroyed families. Most of these microfinance companies are not however licensed or registered or have permission under Reserve Bank of India for operating their business in a state which is mandatory ( except Recently Utkarsha microfinance,  Bandhan Bank after deposition of 5 crores in 2015.

Bandhan Bank however started its business in 2001 with RS 2 lakh INR and three staff in 2009 as a small MFI unit and now owner of 43,232 crores INR as total,  and 44,786 cores of disbursed loan and where from and how that huge profits money came to Bandhan Bank owner Mr Chandra shekhar Ghosh? (86% came from microfinance loans interest but No ED or CBI investigation targeted these MFIs companies ?? Why ?? ) and doing all illegal transactions of money with NGO licence or NBFC licences under section 8 of company act 2013 or under 1956 company act which do not at all permit for money lending business in India.

Micro loan disbursement jumped about 20% in the December 2022 quarter to Rs 77,877 crore over Rs 65,392 crore in the year ago period, backed by 14% rise in the number of new borrowers.This helped the microfinance industry grow 25% year-on-year to Rs 3.31 lakh crore at the end of December last year 2022, data released by Microfinance Institutions Network showed.The industry served 6.4 crore unique borrowers through 12.6 crore loan accounts. The number of active loan accounts grew almost 19% as compared to 14% rise in the number of borrowers.terms of regional distribution of gross loans, east & northeast and south account for 63% of the total portfolio. Bihar is the largest state in terms of portfolio outstanding followed by Tamil Nadu and West Bengal.

West Bengal is one of the top five states in Micro loan disbursement jumped about 20% in the December 2022 quarter to Rs 77,877 crore over Rs 65,392 crore in the year ago period, backed by 14% rise in the number of new borrowers.This helped the microfinance industry grow 25% year-on-year to Rs 3.31 lakh crore at the end of December last year 2022, data released by Microfinance Institutions Network showed.The industry served 6.4 crore unique borrowers through 12.6 crore loan accounts. The number of active loan accounts grew almost 19% as compared to 14% rise in the number of borrowers.terms of regional distribution of gross loans, east & northeast and south account for 63% of the total portfolio. Bihar is the largest state in terms of portfolio outstanding followed by Tamil Nadu and West Bengal.

with high amount of loans, nine-North 24 Parganas,  South 24 Parganas, Bankura, Murshidabad, Jalpaiguri, Nadia, Bardhhaman, Hooghly, Howrah and Cooch Behar- are from West Bengal where these microfinance companies operate through their salaried feild people or agents loan field officers,  targeting illiterate semi literate poor married women of any locality in the name of social or families welfare,  women empowerment, women upliftment with their loan through a group system of 12/25/40 women.

According to a report published in Business Standard ( Reference no 9), "In its state-wise ticket size and macroeconomics analysis, the agency said it has been observed that the average outstanding per unique borrower is the highest in States of West Bengal and in Assam, and this has been the case at least for the past three years (2019-2023)". It also reports that "40-50 per cent of the microfinance loan portfolio in both Assam and West Bengal are from one or two institutions. (sic, Bandhan, Ashirbad )" And it indicates the monopoly of 2/ or 3 institutions in the microfinance sectors.(reference no 9).

According to the SIDBI and Equifax's Microfinance Pulse, Vol VII, November 2020 report on microfinance showed that during the Covid- 19 pick lock down time when so many people were dying from the virus, in the second quarter (Q2) of the FY 2020-21, 300% more micro loans were disbursed in india of -worth Rs 323.75bn-vis-à-vis Q1 of the same FY in terms of volume and 393% more in terms of value.

Around 70% of the loans are in the buckets of Rs 30,000 to Rs 50,000, which means the poor villagers of Bakali village of jalpaiguri districts West Bengal like Firdousi Begum,  Russel ( suffering from calcium deficiency and low back pain),  Bablu or Saira took those loans from Bandhan Bank microfinance and ASA India.  The Microfinance Pulse also shows that West Bengal is in the category of states with more than Rs 100 billion loan distribution during covid 19 period of 2020-2021. Such a huge amount of money these MFIs companies possess and where from all this money come from since 2012 ??

Tamil Nadu State has displaced West Bengal to emerge as the largest State in terms of the outstanding profit portfolio of microfinance loans ( Reference no 10). According to MFIN Micrometer Q4 of FY 2021-22, a quarterly report published by Microfinance Institutions Network (MFIN), the gross loan portfolio (GLP) of Tamil Nadu was as of March 31, 2022 stood at ₹36,806 crore. It was followed by Bihar (₹35,941 crore) and West Bengal (₹34,016 crore). At the end of Q3 of FY2022, West Bengal however topped the chart with the highest outstanding profit portfolio of loans at ₹32,880 crore, followed by Tamil Nadu (₹32,359 crore).( Reference no 10)

The top 10 States (based on total microcredit universe) constituted 82.4 per cent of total GLP of the industry. West Bengal was followed by Karnataka, Uttar Pradesh and Maharashtra. According to the report, around 64 per cent of the microfinance portfolio is concentrated in the East, Northeast, and Southern regions of India.

The 41st issue of the Micrometer report said the microfinance industry served 5.8 crore unique borrowers, through 11.3 crore loan accounts. The overall microfinance industry has a total GLP of ₹2,85,441 crore as of March 31, 2022, an increase of 10 per cent year-on-year (YoY) from ₹2,59,377 crore as of March 31, 2021. ( Reference no 10)

Lender-wise distribution of microfinance loan-:( reference no 10)

Lender-wise distribution of micro-loans shows that 12 banks in India held the largest share of the portfolio in micro-credit with a total loan outstanding of ₹1,14,051 crore, or 40 per cent of the total microcredit universe. NBFC-MFIs are the second largest providers of micro-credit with a loan amount outstanding of ₹1,00,407 crore, accounting for 35.2 per cent of the total industry portfolio. Small finance banks (SFBs) have a total loan amount outstanding of ₹48,314 crore, accounting for 16.9 per cent, followed by non-banking finance companies (NBFCs) at 6.9 per cent share. Other MFIs account for 1 per cent of the universe.

The report noted that the proportion of NBFC-MFI portfolios in the universe portfolio increased by 4.1 per cent to 35.2 per cent as of March 31, 2022, though banks continued to be the main contributors. The geographical distribution of the portfolio also witnessed a change with a decrease in the share of the east and northeast region of India by 3.3 per cent, while the share of the south and north regions increased by 1.3 per cent each.

"The microfinance industry has shown good progress during COVID -19 times at Q4 of FY 2022, building on the monumentum profits created in Q3 of FY 2022. The portfolio quality has improved significantly as compared to the end of Q1 FY2022, when the third wave of Covid-19 with omicron voc had caused widespread stress across the country," Alok Misra, CEO & Director, MFIN said, in a statement. "The announcement of harmonised regulations for microfinance, near normalisation of collection efficiency and recent verdict of the Supreme Court stating that NBFC regulation is brought under the sole purview of the RBI are hugely positive trends, which will see good growth of MFIs in 22-23," he added

Foreign portfolio investors (FPIs) were seen trimming stakes in most private lenders in the quarter gone by, data compiled from corporate database AceEquity suggests. Out of seven private lenders, whose shareholding data is out so far, six saw a cut in FPI holdings in the March quarter. They included IndusInd Bank, Kotak Mahindra Bank, RBL Bank, Bandhan Bank, Axis Bank and YES Bank. FPI holdings in these six private lending stocks stood in 23-49 per cent range for the quarter. The top Microfinance institutions operating in India and in West Bengal (may be these are officially registered with RBI with papers but many may not be often registered for money lending business by laws in India still in illegal operations in Indian market).

These are companies operating in west bengal state during covid periods are "Swayam Krishi Sanstha", "Janalakshmi Financial Services" "Ujjivan Small Finance Bank", 'Bandhan Bank", "Utkarsh Small Finance Bank', "Arohan Financial Services","Fusion Microfinance", 'Equitas Small Finance Bank", "Grameen Koota Financial Services", "UGRO Financial Services.( Reference no 11).

Others are mostly NBFCs LC or MIFs like " Ashirbad Microfinance Ltd,  "Nigam Sudha Microfinance Ltd ", "Progoti Microfinance company Ltd,( considered officially as fraud company, now) " " Lokenath Trusts", "Dishari'", "Grameen Shakti microfinance services Ltd", "Adani Financial Services", "Small Finance Bank". "ASA international India microfinance Ltd ", "Sarala", "Mohor, "SKS Microfinance Ltd", "Village", "Share Microfinance" "Annapurna Finance" ' poonawalla fin corp, etc to name a few such ( there are about 96 or more big Microfinance institutions operating in India and 35,473 NBFC companies in India with or without RBI permission to carry on money lenders business as up to 2013 records and 46 MFI companies working in the state of West Bengal ) and many such MFI / NBFCs are operating presently in the West Bengal State of India and in other provinces of India too

Microfinance companies shifted their motivation as social tools to up lift poverty to commercial buisness and profits making industry and a slipary slope

Microfinance is today on a slippery slope, moving from once good aims turned bad for long past years. It is facing trouble because the purity of its mission has been totally lost. When it started in the 1990s,  and a microfinance bill passed in the Indian parliament in 2012, microfinance was probably a financial tool being used for social good. For a long past especially during and after covid 19 lock down in endemic period of virus, it has increasingly become a social tool used as a way to generate money for microfinance companies itself,  which is why it has lost a lot of its original sheen. This is one reason why microfinance often runs into heavy weather and hits periodic roadblocks and many default cases

Microcredit loans, the flagship product of microfinance companies,shifted their motivation from a not-for-profit approach to a neoliberal model dominated by capitalistic commercial private banks. While previously loans were tightly regulated in terms of amounts, interest rates and collateral, and often underwritten by states when necessary, now lending has expanded to allow more unstable borrowers to take part without state protection or relief in times of crisis.

Microcredit has been a victim of three forces: overhyped rhetoric, imprudent lending, and the profit-focused nature of capitalism. Thus, microcredit requires a delicate and ongoing balancing act between undesirable extremes. It's no wonder then that accusations fly when balance is lost. MFIs have placed their clients in debt peonage by bombarding them with loans.

Microfinances institute are putting Poor's people in constant debt Traps/ depression/ over works/ many disease/ suicide ?

Many of critics say that microcredits of MFIs or NBFCs had never increased any ones incomes and did any good,  but it had driven poor households into a constant debt trap, in some cases even leading to depression followed by suicide as we described above. They add that most of the money from loans are often used for repaying the EMI interest of the loan once it was taken, instead of being used for any productive investments, thus it failed to empower women at all ever, and that it has neither improved health nor the education of family members of borrowers.

Moreover, as the access to micro-loans is widespread, borrowers tend to acquire several loans from different companies, making it nearly impossible to pay the debt back as Mrs Sapna Bhattacharya from 7/51 Purbapalli sodepur district 24 parganas North described her below. As a result of many such tragic events like domestic violence, homicide, suicides happening.

More than 25,000 Indians committed sucide during the period 2019 to 2022 for loans related with microfinance or NBFC loans. Microfinance institutions in India once agreed on setting an interest rate ceiling of 15 percent,though these MIFs and NBFC however never followed that 15 percent yearly interest of loans and take much higher interest, unethically,in unlawful ways in the real worlds. This is an important to take care off by the local state government to regulate legal MIFs

Several previous studies conducted all over the world concluded, wherever microfinance has been applied, showed that microfinance companies' microcredit loan was not as effective as it was expected in getting poor people and their families out of poverty.  Rather it submerged many family members in tremendous financial curse and destroyed families who took MFI/ NBFC / private loans.  According to the American Economic journal: applied economics

( reference number 15); microfinance benefits were rather oversold to the public in relation to their risks,ills, dangers, in India, Pakistan, Bangladesh and sri lanka. The research on psycho-social impact on microfinance was not given however enough attention, instead they get out of poverty quickly get a loan to run a small business project was overemphasised, such that negative repercussions of MIF loans were unforeseen.Therefore according to these authors microfinance seems to benefit more to the givers of loan ( ie owner of the MIF companies) than to the receivers or borrowers.

Many people who have evaluated the impact of microfinance have based it on( ?)financial success,  not its social, familial and psychological impact i.e. the pressure of work individuals are under to ensure they pay back the interest of loan. Not enough assessment is done to ensure balance in recovery as it undermines emotional trauma and pressure. Introduction of debt to those with a stable income is such a burden; now imagine introducing debt to vulnerable, overwhelmed individuals facing masses of challenges such as food security and uncertainty. The impact can only be estimated as devastating.

Few real world cases studied ( Total case 54 ) and Real Worlds scenario of MFIs and NBFC- MFI micro loan women borrowers from Bandhan Bank and Ashirwad Microfinance company and others MIFs during COVID -19 lockdown periods in West Bengal state Districts

Case no: 1 From Sodepur, North 24 Parganas District at Panihati constituency of West Bengal assembly-:(Reference no 26)

" …I had to sell off our wedding ornaments as my in law's gift, my 20 years old unmarried daughter's gold ornaments,(with Sodepur

Muthoot Fin Corp Gold LoanNear Sodepur Post Office ),  keeping on taking loans after loans to pay only interest part from one to another private money lenders to clear up my MFIs loan interest- Mrs Sapna Bhattacharya -wife of Mr Ritwick Bhattacharya - a married 49 years semi literate women,- mother of a 20 years old daughter, a woman borrower of present residence- 7/51 Purbapalli Village,  Post office- Sodepur,  District -24 parganas (north ), PS -Khardha,Kolkata -110, said us over telephone with a sad smile and next bursting into her tears.  " ….I had to take microfinance loan ( RS 60,000/INR) from "Bandhan Bank,First Floor, A 55, Amrabati, Sodepur, North 24 Parganas, West Bengal" first,  then from Ashirwad Microfinance Ltd ( 35000/),  first time, in 2019 Oct with only knowledge of my husband Ritwik, but others members of my in laws family were then in total darkness, after being members of a ( 22 married women group where my both elder sisters are members too ) self help group goshthi of our own locality "Bankimpally "at, Sodepur, under Panihati municipality constituency, being lured for easy to get loans without collateral and being highly convinced by loan officers as field agent's of Bandhan Bank microfinance and Ashirwad Microfinance Ltd, operating in sodepur and khardah, panihati and by gosthi members,to feed and for medical treatment expenditure purpose of my 84 years old mother ( Mrs Shanti Adhikari, wife 85 years old widow of late Anil Adhikari, who is living alone in one room small flat at Ghola, sodepur ) and to support and look after my two younger sister's (Savita Chakraborty wife of krishnendu chakrabarty & Bandana Dey wife of late Raju Dey, living in slum areas of Agarpara ) family, during lock down periods of COVID- 19 ( 2019 nov -22 December) and to meet up MFI company's interest, i had to borrow loan successively from Mr. Tapan Saha of Loknath microfinance trust, Mr.  Chandan Saha of "Nigam Sudha Microfinance Trust ", "Unity Welfare Society ', 'Progoti microfinance "," Beraberi Deshari," 'jiban Utthan Microfinance Ltd " operating ( I didn't knew that these MFIs/ NBFC MIFs companies / and usurious money lenders are illegal money lenders or fraud companies by Indian laws, without any RBI permission or ROC to operate in the field ) operating in Sodepur,  24 parganas

( north), Kolkata-110, West Bengal. I am now a debt trapped (uncontrolled diabetics) woman of around Rs 14 lakh INR- I don't know where to repay this amount.  My husband Ritwik Bhattacharya of same address with a B.Com ( Calcutta University) degree, 50 years old, a diabetic ( he suffered in 1999 to 2005 from bipolar psychiatric illnesses- schizoid bipolar mood disorders and was treated at Institute of Psychiatry at SSKM hospital Kolkata -20, with antipsychotics drugs lithium,risperidone,  valproate, SSRI drugs by his eldest MD pathology doctor brother ) also was trapped by convincing the social welfare programmes of MFIs and did loan from others non financial banking companies/ organisation when in 2020-2021 his small trade- a start up business units ( his woking shed was within our home premises as his rehabilitation program -once set by his eldest doctor brother in 2007 for him to sustain our life and to get him engaged in working) ran in losses during the COVID -19 pan and partial lockdowns period in 2020 March to 2022 October and he had to pay salaries and bonus to his four marginal labours in lock down times and compensation money settlement to a labour for loss of part of his right hand index finger in a sudden machine accident, etc, though Ritwik could not sell his finished products in local markets for covid 19 lockdown of market and his loan status to these NBFC companies now reached to another Rs 10 lakh ( as he stopped EMI since 2020 and now he was summoned by court of laws for a settlement on 20th March, 2023 by a company he borrowed 3 lakh rupees loan ).  We both are now in great financial trouble for only MFIs and NBFC loans as their recovery agents and recovery field workers ( we use to call them jamdoots) are almost daily knocking the door and we became ill doing overworking both day and night times since October 2022 to repay the loan.  What we realised now is that we did a great blunder in our life, trusting the field agents, loan officers of "Bandhan Bank" and Ashirbad microfinance ltd trusting that Microfinance loans are helping for empowerment of poor women and their families.  Rather it is a big curse for many poor families. I had to sell our kitchen utensils,  all machines my husband Ritwick once purchased for his business and sometimes I had to deny our food, my antidiabetic oral hypoglycemic medications for days, and for last five months unless we had some kind of monthly financial support of Rs 23,000/ per month from my husband's eldest brother-, a MD Pathology doctor by his profession ( now a WB state govt. pension holder ) to feed us by sending his bank interest part of money ( he had as his superannuation benefits in march 2021), to sustain our life,  so that we can make these loan repayments ….".  And.." I had to steal every month (from January 2019), average rupees 10,000/,  even from his sent money too, to pay up interest to my personal private money lenders through my sister's,  without knowledge of any one in my in-laws house. A great sin i had to commit to meet up loan interests to look after my mother and elders sis family during COVID time (reference no 26)

case -2,  as it was reported by Mr Madhusudan chatterjee from Bankra district of West Bengal,india….…( reference no 27)
Dulali Bauri and Reba Barui of Bankura district, West Bengal,  borrowed Rs 70,000 INR from a MFIs on convincing by loan officer. She was scheduled to pay a weekly instalment of Rs 1,300 INR for 104 weeks. For a principal loan amount of Rs 70,000, Dulali Bauri's total payment would be around Rs 1,35,200 over two years; this amounts to an interest rate of over 50% by MFIs which is illegal claim by MIFs

Case 3-: Bankura district
Mithu Nioyi, a borrower who had loaned Rs 30,000/ from Bandhan Bank Microfinance institution. She received Rs 27,500; the rest was deducted as insurance. As per the loan terms, Nioyi has to pay Rs 2,000/month for 18 months. She paid the first 10 instalments but is unable to pay anymore. Nioyi, a widow, said she had to leave her home due to alleged threats from loan collectors or Recovery agents officer

case 4,5,6 from Bankura district
Nasima Bibi and Ayesha Bibi borrowed Rs 40,000 from MFIs in 2020 in covid -19. They could not pay instalments during COVID- 19 lockdowns for several months. After that, their instalment amounted to Rs 2,000/month. However, the collector RA said they still needed to pay Rs 30,000. When the reporter Mr Chatterjee looked at the document, he found that the document showed an interest rate of 24%.However, more money was taken from them. This amounts to a clear case of cheating and fraud by MIFs.

MFIs companies in India and in the state of West Bengal often use illiterate or semi literate needy women of the same group to collect their loans from group members too. The group members are allegedly threatened that if one member fails to pay instalments, the loans of all others will be terminated. As a result, when a group member struggles to pay instalments, other members often pressure them to do so. This is called straining interpersonal relations. Moreover, the alleged inhumane and criminal behaviour of debt collectors

( jamdoots) has led to disastrous situations in the family. Some women have reportedly even attempted to die by suicide in the district, while many are absconding. "We have several cases of women trying to die for these types of loans."".... We have several cases of women attempting to die by suicide in recent months; however, no actual suicide has come to our notice. If we get a report, we will then conduct a fact-finding inquiry and take appropriate actions against MIFs….," said an Additional Superintendent of Police, Bankura district of West Bengal to Mr chaterjee. However police authorities SP / ASP must be aware of unauthorised illegal unregistered with RBI or with ROC MFI /NBFCs /usurious money lenders are operating in districts in West Bengal or in the country and they must be also aware that provoking any person either by threat or by any mental,  physical or social pressure for attempting for sucide or homicide is criminal offence for any loan recovery agents,  for MIFs loan officials and local police station often denies to take even a GD or FIR against microfinance loan collectors or officials or companies.

The home secretary of all states must look after this issue and issue necessary government orders.  MFIs NBFc -MFIs have started other methods recently to keep women trapped in debt during COVID- 19 period. After a borrower woman paid five to seven instalments, women are told they are again eligible for another loan. After deducting the money for the old loan and re-insuring the new one, very little money is given to these women under the new loan. After that, women are forced to pay more money with much higher interests. If they want to repay these loans, they often have to borrow from another money lender at a higher interest rate, as no other MFI will loan these women.

MFIs seem to have a tacit understanding amongst themselves for exploiting women in the name of self help groups -In Bankura district, several private banks run MFIs, such as HDFC, Axis Bank, Bandhan Bank Ashirbad etc. Along with that, there are entities like L&T Aasha Finance. When Mr chatterjee, the reporter contacted Nasiruddin Altamas,an Assistant Manager, Bandhan Bank Microfinance, about its high-interest rate, He said that banks fix these rates, and the women are also paying."..

We really do not infact care what borrowers do with this money. Our work gets done when we get the instalment money,..." he said.Suman Karmakar (name changed), a debt collector of Aasha Finance in Bankura, said it is easy to collect money from women as they cannot stay outside for long.They must bring money from somewhere. We get a daily based commission on the collected money. This is important for recovery agents because we only get Rs 7,000/ to 10000/ INR as our monthly salary," he said. Debt collectors of microfinance companies are often from outside temporarily appointed by the company; women are rarely informed by papers about the offices of these MFIs,NBFC and whether they are legal, registered or not with RBI or ROS.

"..We change our office addresses almost every six months so that no one can trace us later.  We do not think it is necessary to tell members of groups about this. They need money; and we give it…." said Mr Buddhadeb Bairagya, manager of Village Microfinance, Bankura branch, "..we know well that we are doing illegal money laundering but no one dares to complain to police against us.  They won't get loan next ( reference - 27 )

Assam state of india and Microfinance loans in 2020 COVID times

In year 2020 February, at Dibrugarh of Asam state, Women of Moran, under Dibrugarh district and Mahmara under Charaideo district of Assam submitted a memorandum to the Magistrates of the concerned areas to allow them to commit suicide if microfinance companies there are not shut immediately by enforcing laws. The women accused that recovery agents of the microfinance companies did all sorts of harassment over interest rates on the loans provided." Our families are below the poverty line. We took the money as we needed it. (Who doesn't need money?)

We just took the loans but we have been repaying the loans. However, if one of us was unable to pay the money on time, the recovery agents harass her and extract money in other ways. We request the government to take stock of these situations and help us," said one of the protesters.( Reference no -24) They also demanded that they must be relieved from the interests of the loans that they had taken in the first or 2nd places.

It may be mentioned here that several organisations had earlier staged a protest against the functioning of microfinance companies with competitive ways with another MFI or with NBFCs, which they alleged had ruined the rural economy too. They thereafter sought a ban on the microfinance companies and non banking financial organisations in Assam state. If it is so in Assam why no ban order be passed by the West Bengal State govt?? Case 7 in Beldanga village of Burdwan District of West Bengal (reference no 12,19)

Bamdeb Malik (35), a sharecropper, breathed his last after allegedly consuming poison in East Burdwan district's Beldanga village. He was burdened with an unmanageable debt of microfinance after a lean harvest. Being a poor marginal farmer, he had taken a loan of Rs 50,000 from microfinance institutions (Bandhan Bank) and Rs 1,40,000 from local money lenders.Most of the loans accrued by the villagers in Beldanga village were from Bandhan Bank microfinance, and the infamous loan with more than 48% interest rate given to sharecroppers is termed "wife mortgage loan" The desperation that led Malik to end his life is also being felt by marginal farmers of the village like Nakur Malik, Achin Modak, Sunil Ghosh, and others in groups.  All of them are now standing on the brink of economic devastation of their family. In many cases, the poor, marginalised farmers and people had alleged that microfinance organisations have made the farmers sign in white paper bonds.  Even after making payments regularly, many alleged they were suffering even if they have faltered on a single instalment to repay their loans during the COVID -,19 lockdown period.( reference no 19)

Case -: 8 in Bindupara Village of Murshidabad District, West Bengal (Reference 21)
Another woman who has demanded From West Bengal,in 2021, Mr Sadhan Sinha 40 years old (who used to earn Rs 15000 to 20000 a month) of Bindupara Village of Murshidabad District, West Bengal ( Ref no- 12, 21) is another victim example in 2021. He took a loan of Rs 1 lakh from a MIF operating in Murshidabad and had been unable to pay his monthly instalments of Rs 3,400 for May and June 2021 and he begged for a few days' time but recovery agents did not listen.

The recovery agents sat down outside the house, using abusive languages and saying they would not leave without collecting the dues. "...My husband felt so humiliated that he killed himself…," said weeping Mamoni, mother of two sons, aged 18 and 15.( Ref no 21) Sadhan's decision to take the loan in January 2021 and his subsequent suicide underline the fact that how millions of ordinary Indians were taken unawares by the covid- 19 pandemic's second wave, blamed partly on the central government's short-sightedness in prematurely declaring victory over the virus and letting its guard down.

Reserve Bank of India ordered debt recasting, increase the moratorium period minimum by another two years with minimum EMI as Relief but which MIFs NBFC cares -:

The Reserve Bank of India however tried to give all kinds of loan borrowers relief by instructing all banks and all financial institutions to consider a debt recasting, provided EMI dues have been cleared before February 2020 i.e. before the first state or pan India lock down announced for COVID-19 by government. But, as Mr Sadhan's death suggests, not every borrower had access to the relief by these MFIs companies, only because of lack of knowledge and information, as they are mostly less educated and poor people. While the debt recasting is a prerogative of banks or the micro finance companies or NBFCs,  the problem is that most people who are in dire need of the facility don't know about RBI directions on this issues

There was relief to those borrowers who had opted for loan payment restructuring under the RBI scheme as well. The RBI permitted the MFIs, NBFCs, Banks and to all lending entities to modify the plans of repayment of loans and increase the moratorium period minimum by another minimum two years with minimum EMI. The RBI said that after all MFI,NBFC banks, receive a restructuring proposal from any borrower to repay principal loan, they must have to take a decision on the application of borrowers within 30 days and in favour of borrowers. This will happen when the lending institutions and the borrower will agree to work out a resolution plan according to the capacity of borrowers to repay the loan after maintenance of his family at minimum daily wages he or she earns. After this, the resolution plan must be finalised and implemented within 90 days from the date of invocation( reference 22,,26)

Hyderabad suicides for MIFs ( reference no 13)
When these authors looks back at past in 2010s in Hyderabad, Andhra Pradesh districts 30 to 45 pepole committed suicide due to microfinance loans, due to coercive method of repayment of microfinance loan by MFIs. These suicide were reported from different districts of Andhra Pradesh within 45 days from January 2010.  The story was that MFI companies charged exorbitant interest on the principal amount and borrowers were caught in a situation where they were forced to borrow from another money lender to repay the existing loan.  The borrowers were caught in vicious cycle of loans which they can not repay this forcing them to end their life (Ref no 13)

The Union Ministry of Home Affairs India informed the Indian Rajya Sabha in the Budget Session 2020 that unemployment and indebtedness claimed at least 25,000 lives in India, between 2019 and 2020 period ( Refrence no 14). Union Minister of State for Home Affairs,  on February 9th,2020,told that a total of 9,140 people died by suicide due to unemployment, while 16,091 people ended their lives due to indebtedness to MIFs and NBFCs companies loan indebtness during this COVID 19 periods.

Also at least 5,213 people died by suicide due to bankruptcy or indebtedness in 2020, 5,908 in 2019 and 4,970 in 2018.With 19,909, the majority of suicides were reported in Maharashtra followed by Tamil Nadu (16,883), Madhya Pradesh (14,578), West Bengal (13,103) and in Karnataka (12,259). These states accounted for 13 per cent, 11 per cent, 9.5 per cent, 8.6 per cent and eight per cent of the total suicides, respectively.Bankruptcy or Indebtedness', and unemployment accounted for 3.4 per cent and 2.3 per cent of total suicides in the pandemic year 2020 -2021.( Refrence 14)

There are many such stories ( at least 54 studied cases by these authors) with us in Kolkata, Howrah,  Coach Bihar, Nadia, North 24 Parganas, South 24 Parganas, Murshidabad ( ref no 26 ),  Nadia, Jalpaiguri districts of West Bengal state. 

Microfinance was once meant propaganda to lift up people out of poverty, but the women of Howrah, ( in Shibpur Constituency ( ref no -11), in Panihati constituency, in Beldanga Village of East Burdwan ( reference no - 19) say it's become now a big curse for many families even of entire village,  who are in microfinance or NBFC -MIF debt Trap now

Debt may be good but never in the state of indebtedness (Reference no 26)
Debt may be good but never in the state of indebtedness! It has both qualitative and quantitative implications. Propensity to debt, especially "indebtedness" is a matter of big concern. Impact of indebtedness varies both in degrees and dimensions. The state of being in debt (indebtedness) covers both personal and behavioural finance and is blended with positive and negative outcomes. On the minor positive end,  people who have easy access to money to debt from the bank,  MFIs may have some chances for temporary financial wellness, provided the money is used for productive,  gain business.

The negative outcomes of money lending are desertion, huge distress and depression of the indebted consumers. Many times, such incidence results in forced migration as observed in the cases of absconding. The extreme end of indebtedness leads to suicidal tendencies often culminating at self-killing! Such unpleasant incidents potentially affect the present as well as the future of a person. Sometimes the shock of indebtedness cascades down to a couple of generations. Recent agitations of the Tamil farmers, protesting for the announcement of a drought relief package and loan waiver, are evidences to what debt-distress is and what it can do!(reference no 10)

PMLA laws: what the Indian government is doing for MIFs, NBFCs and unsurious money lenders??

The people who are working as CEOs / Directors/ owner or staffs or loan officers or loan recovery agents of NFBC and non RBI or ROC registered MFIs must be put under the lenses of The Prevention of Money Laundering Act, 2002 ("PMLA") and the rules issued thereunder ("PML Rules") in India,  provide the key legislative framework for the prosecution of unsurious money lenders, money laundering business and gaining huge, unbelievable profits out of it from market.

The primary legal authority responsible for investigating and prosecuting usurious money lending / money laundering offences under PMLA at the national level is the Directorate of Enforcement ("ED"), under the aegis of the Department of Revenue, Ministry of Finance. In addition to the above, regulators such as the Reserve Bank of India ("RBI"), Securities & Exchange Board of India ("SEBI") and the Insurance Regulatory & Development Authority of India ("IRDAI") are also empowered to deal with issues relating to usurious money lending / money laundering activities and lay down guidelines on anti-money lending/ laundering ("AML") standards. These guidelines, read with PMLA and the PML Rules, form the core of the legal framework for AML law and enforcement.

Under PMLA, the offence of money laundering arises from the commission of any offences mentioned in the PMLA schedule of offences and proceeds of crime arising thereof. "Money laundering" is defined as any act where a person directly or indirectly attempts to indulge, knowingly assists, or knowingly is a party to or is actually involved in any process or activity connected to the proceeds of crime, including its concealment, possession, acquisition or use and projecting or claiming it as untainted property; such acts shall be treated as a money laundering offence. Further, where any property is derived or obtained directly or indirectly by any person as a result of a criminal activity relating to an offence specified in the schedule to PMLA, including the value of any such property or where such property is taken or held outside the country, then the property equivalent in value held within the country or abroad amounts to proceeds of crime and, hence, amounts to money laundering.

Therefore, by the very nature of its definition, money laundering involves obtaining/deriving proceeds arising from the commission of a criminal offence. Section 4 of PMLA criminalises the offence of unauthorised lending of money with high interest.  Along with the PML Rules, PMLA as framed thereunder prescribes certain compliance and reporting requirements of reporting entities that include, inter alia, banking companies and financial institutions registered with Reporting Entities such as RBI (viz. non-banking finance companies ("NBFCs"), payment system operators, etc.), intermediaries (viz. entities registered with securities market regulators, pension fund regulators, etc.) or persons carrying out a designated business or profession as may be prescribed (viz. a person carrying out activities for playing games of chance such as casinos, dealers in precious metals, precious stones and other high-value goods, and persons engaged in the safekeeping and administration of cash and liquid securities on behalf of other persons, etc.).specified in Parts A–C of the PMLA schedule, the commission of a Scheduled Offence attracts the provisions of PMLA.

Conclusion:
In conclusion, to me and for Poor's,  job less people,  illiterate, semi literate people, people of urban, semi urban, rural villages MICROFINANCE COMPANIES IS NOT AT ALL A BLESSING IT IS RATHER A BIG CRUSE. IT SHOULD BE STOPPED IMMEDIATELY and MFI company owners/ their agents ( Money landers ) to be punished for illegal money lending to borrowers with exorbitant high interest rate beyond nationalised bank interest rate or RBI Bank interest rate fixed for Microfinance registered companies with RBI. Government of West Bengal and Govt of India should take interest in sensitising people about the curse of microfinance loan otherwise the poor people will go more poorer and borrower families will be destroyed.

References:

1. Malik K., Meki M., Morduch J., Ogden T., Quinn S., Said F. COVID-19 and the Future of Microfinance: Evidence and Insights from Pakistan. Oxford Review of Economic Policy. 2020;36:S138–S168.
2. Chakma, H., Coppel, E., Diallo, A., Dubitsky, R., & Whisson, I. (2017). Financial inclusion and resilience: How BRAC's microfinance program recovered from the West African Ebola crisis. Global delivery initiative case study. 7(7), 1–22.https://www.findevgateway.org/
3. Singh, A., & Sharma, M. K. (2020). Fate of MFIs post the COVID‐19 lockdown ‐ will they prove resilient again?. Microsave Consulting.
4. Sangwan, S., Nayak, N. C., & Samanta, D. (2020). Loan repayment behaviour among the clients of Indian microfinance institutions: A household‐level investigation. Journal of Human Behavior in the Social Environment, 30(4), 474–497.
5. Government of India. (2016). Report on fifth annual employment – Unemployment survey 2015–16. Ministry of Labour and Employment Government of India.
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9. Moumita Alam "Microfinance debt trap exploits Bengal villagers" People's Review Friday June 25 2021
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10. BL Chennai bureau "Tamil Nadu pips West Bengal to become the largest State in terms of outstanding microfinance loan portfolio" The Hindu business line June 15,2022
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24. Assam Women Seek " Suicide Permission" Citing Harassment by Microfinance CompaniesIndia Today NE 06.2 2020
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25. Sangwan S, Nayak NC, Sangwan V, Pradhan AK. Covid‐19 pandemic: Challenges and ways forward for the Indian microfinance institutions. J Public Affairs. 2021;21:e2667. 10.1002/pa.2667
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26. Bhattacharya, Professor Dr. Pranab Kumar, Microfinance Companies in India Are not at All a Blessing, It Is Rather a Big Curse: It Should Be Stopped Immediately by Law (April 20, 2023). Available at SSRN: https://ssrn.com/abstract=4412233 or http://dx.doi.org/10.2139/ssrn.4412233)
27. Madhu Sudan chatterjee Ground report : Microfinance institutions in West Bengal a death trap Women from low-income families in Bankura district find themselves trapped in a circle of debt with never-ending instalments to be paid and high-interest rates. News click, 8th April 2023
    https://www.google.com/amp/s/www.newsclick.in/ground-report-microfinance-institutions-west-bengal-death-trap%3famp )
    
    
    Written By:
    1. Professor Dr Pranab Kumar Bhattacharya MD (University of Calcutta), FIC Path,  WBMES ( retired) Ex Retired Professor and Head of Pathology Department, Calcutta School of Tropical Medicine, 108,Chitta Ranjan Avenue, Kolkata -700073, West Bengal, india, Department of Health and Family Welfare (WBMES wing) Government of West Bengal, Equivalent officiating Rank he retired -: "Special Secretary " to the Government of West Bengal
       **Ex- Principal of JMN Medical College, JMN Educational and Research Foundation, pounchpota, Chakdaha, District- Ranaghat, West Bengal, India
       ***At present - (since 6.02.2023): Posted :
       Professor and Head of Pathology Department ( every year renewal contractual post but full time),JIS School of Medical Sciences and Research ( Under JIS University,  Nilgange, Agarpara, 24 parganas North )santragachi, Howrah District, West Bengal
       Email [email protected], Ph no: 9231510435
        
    2. Rupsa Bhattacharya, BA honours student in journalism and Mass communication (4th semester student ) APC college, sodepur road, MadhyamGram north 24 parganas West Bengal India under West Bengal State University, Barasat, North- 24 parganas, West Bengal, India