Amartya Sen’s recent remark that ‘there is not enough clarity on economics in the country’ has been clearly reflected in the exploitation of the poor by the micro finance institutions in the recent past. More by design than default, the absence of banks and/or inadequate banking services in large number of villages offered perfect setting for non-banking institutions to lay the debt-trap.
Despite the fact that banks were nationalized 42 years ago, 73,000 villages have yet to be covered by banks or banking services. Even in villages where banks have been in existence, absence of collateral has been the hurdle for the poor to access soft loans. While the ‘unbankable’ poor have been at the mercy of private financial institutions, public sector banks have been busy in bailing out the so-called ‘bankable’ clients!