'I had nothing left': Loan sharks target Indian sex workers hit by pandemic
Paying the price
When Indian sex worker Baji lagged on her repayments to a loan shark during lockdown, her house was ransacked and her only belongings of any value taken - a new low in a terrible year.
"I had nothing left in my kitchen the day the lender approached me with a loan offer. He had a polite and assuring manner and said there was no urgency to repay the money," Baji, 26, who goes by this alias, said by phone from Krishna district.
"But he returned week after week. I repaid 1,200 rupees (about $16.50) from the loan itself, but when I stopped they ransacked my home and took all my utensils," the mother-of-two told Reuters. "It was traumatic."
Before COVID-19 swept through India, Baji earned up to 1,000 rupees a day, enough to feed, clothe and shelter her children, but 2020's lockdown pushed her and other sex workers to the brink.
There are approximately 800,000 sex workers across India according to government figures but campaigners estimate much higher numbers.
More than 100,000 are registered in Andhra Pradesh alone, figures from campaigners show.
Reflecting concern about the plight of India's informal workers, the nation's human rights panel asked state governments in October to formally recognize sex workers, a step that would have granted them benefits from a $23 billion state aid fund.
However, after initial approval, the order was reversed after detractors said such a move would be illegal and risked legitimizing sex trafficking.
While sex workers did receive some food aid, their lack of income left many open to abuse by loan sharks, especially in Andhra Pradesh where authorities have been trying to rein in widespread usury for years.
'Call money'
Authorities in Andhra Pradesh, a state once known as the center of India's microfinance sector, have attempted regulating usury - widely known as the "call money" racket for the ease of borrowing over the phone.
A decade ago, the state government curbed microfinance activities after a spate of suicides by borrowers, and in 2015 it banned moneylenders from operating without a license after arresting about 200 people due to harassment allegations.
But industry analysts said shylocks - who charge high interest rates and resort to extreme means to collect debts - are partly the result of inadequate legitimate credit sources in the state.
A collective representing 6,000 sex workers in the state said more than three-quarters of its members were in debt. Many live under the constant threat of abuse from moneylenders.
"They're drawn to these lenders as they aren't required to give any collateral or proof of identification. They start with small amounts that the women can repay. The women feel confident [and] borrow more," Devi said.
"That's how they get trapped."
"These are unsecured loans. There is nobody else to borrow money from," said Harsh Shrivastava, former head of Microfinance Institutions Network, a self-regulatory organization for the microfinance sector.
Lenders routinely deduct 10 to 20 percent from the loan principal even before handing over the money, sex workers and police officials said.
But because they give loans without requiring collateral or documentation, they are like "god," said Ram Mohan, cofounder of anti-trafficking charity HELP.
"Women borrow from one to pay another. They are trapped in this debt cycle," Ram Mohan said.
Officials at the state's criminal investigation department (CID) said complaints against moneylenders were common, though no specific complaints from sex workers had been received.
Many of those who fall behind on their debts are too scared to go to the police if the moneylenders become abusive or violent, campaigners said.
"Institutional lending is difficult to approach and this is informal money lending and very flexible, despite outrageous interest rates," said P.V. Sunil Kumar, additional director-general at the CID.
Baji entered sex work at the age of 17 when she was a single parent, having recently been deserted by her abusive husband, but she had some optimism about the future until her debts spiraled at the height of the lockdown.
After the burglary, she was forced to work at a brick kiln, earning a paltry 400 rupees for a 12-hour day.
That too was halved after a mound of bricks fell on her leg, requiring surgery costing a staggering 20,000 rupees.
Her employer lent her the money but deducts repayments from her wages.
"We had problems in sex work, but I was earning and was able to survive and there was hope. I have nothing to look forward to now," she said.
Indian sex workers wearing protective face masks worship Hindu goddess Durga at Sonagachhi, a red light district, in Kolkata, India, on October 21, 2020. Photo: AFP
As COVID-19 hit their incomes, hundreds of penniless sex workers in southern Andhra Pradesh state turned to unscrupulous moneylenders to survive the pandemic - most of them lacking documentation necessary to qualify for formal bank credit, campaigners said."I had nothing left in my kitchen the day the lender approached me with a loan offer. He had a polite and assuring manner and said there was no urgency to repay the money," Baji, 26, who goes by this alias, said by phone from Krishna district.
"But he returned week after week. I repaid 1,200 rupees (about $16.50) from the loan itself, but when I stopped they ransacked my home and took all my utensils," the mother-of-two told Reuters. "It was traumatic."
Before COVID-19 swept through India, Baji earned up to 1,000 rupees a day, enough to feed, clothe and shelter her children, but 2020's lockdown pushed her and other sex workers to the brink.
There are approximately 800,000 sex workers across India according to government figures but campaigners estimate much higher numbers.
More than 100,000 are registered in Andhra Pradesh alone, figures from campaigners show.
Reflecting concern about the plight of India's informal workers, the nation's human rights panel asked state governments in October to formally recognize sex workers, a step that would have granted them benefits from a $23 billion state aid fund.
However, after initial approval, the order was reversed after detractors said such a move would be illegal and risked legitimizing sex trafficking.
While sex workers did receive some food aid, their lack of income left many open to abuse by loan sharks, especially in Andhra Pradesh where authorities have been trying to rein in widespread usury for years.
'Call money'
Authorities in Andhra Pradesh, a state once known as the center of India's microfinance sector, have attempted regulating usury - widely known as the "call money" racket for the ease of borrowing over the phone.
A decade ago, the state government curbed microfinance activities after a spate of suicides by borrowers, and in 2015 it banned moneylenders from operating without a license after arresting about 200 people due to harassment allegations.
But industry analysts said shylocks - who charge high interest rates and resort to extreme means to collect debts - are partly the result of inadequate legitimate credit sources in the state.
A collective representing 6,000 sex workers in the state said more than three-quarters of its members were in debt. Many live under the constant threat of abuse from moneylenders.
"They're drawn to these lenders as they aren't required to give any collateral or proof of identification. They start with small amounts that the women can repay. The women feel confident [and] borrow more," Devi said.
"That's how they get trapped."
"These are unsecured loans. There is nobody else to borrow money from," said Harsh Shrivastava, former head of Microfinance Institutions Network, a self-regulatory organization for the microfinance sector.
Lenders routinely deduct 10 to 20 percent from the loan principal even before handing over the money, sex workers and police officials said.
But because they give loans without requiring collateral or documentation, they are like "god," said Ram Mohan, cofounder of anti-trafficking charity HELP.
"Women borrow from one to pay another. They are trapped in this debt cycle," Ram Mohan said.
Officials at the state's criminal investigation department (CID) said complaints against moneylenders were common, though no specific complaints from sex workers had been received.
Many of those who fall behind on their debts are too scared to go to the police if the moneylenders become abusive or violent, campaigners said.
"Institutional lending is difficult to approach and this is informal money lending and very flexible, despite outrageous interest rates," said P.V. Sunil Kumar, additional director-general at the CID.
Baji entered sex work at the age of 17 when she was a single parent, having recently been deserted by her abusive husband, but she had some optimism about the future until her debts spiraled at the height of the lockdown.
After the burglary, she was forced to work at a brick kiln, earning a paltry 400 rupees for a 12-hour day.
That too was halved after a mound of bricks fell on her leg, requiring surgery costing a staggering 20,000 rupees.
Her employer lent her the money but deducts repayments from her wages.
"We had problems in sex work, but I was earning and was able to survive and there was hope. I have nothing to look forward to now," she said.
