System rigged against poor women here, says UN expert



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Some Sri Lankan women have tried to sell their kidneys to repay the micro-credit loans they have obtained, United Nations Independent Expert on the effects of foreign debt Juan Pablo Bohoslavsky said yesterday in a statement after his nine day visit to Sri Lanka.


Bohoslavsky urged the government to establish a National Action Plan on Business and Human Rights as well as for the financial sector, including all types of institutions and organizations engaged in financial businesses regardless of whether they are officially registered or not.


He said that micro-credit companies deliberately targeted women in poor and war affected areas. These institutions charge their loans with up to 220 per cent interest rate and apply compound interest. Because these lenders do not follow any particular guideline to assess the credit risks of these loans, combined with usurious terms, a very high number of women in the country default on their debts and get trapped in an exploitative financial system.


Although most women take these loans to start a business, most of these efforts fail because the game is rigged against them, the UN Expert said. "This is unsurprising in the context of the absence of an enabling environment for micro and small enterprises (such as extremely high interest rates) coupled with very modest economic growth."


He added that collectors go to their houses to get paid, sometime on a daily basis. These individuals can stay in the houses of the borrowers for hours until they get repaid. Women are at times exposed to psychological and physical violence by these collectors. "It was brought to my attention that, in some cases, women were pressured by collectors to exchange "sexual favours" for installments. I have learned of cases of borrowers who tried to sell their kidneys to repay the loans. Some leave their villages, suffer domestic violence as a punishment for the "contract breach," or have to work much harder and more hours to earn sufficient money to repay the debts. Suicides committed by borrowers have been associated to this abusive micro-credit dynamic."


 
 
 
 
 
 
 
 
 
 
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