Loans target Indian sex workers affected by pandemic

Usurers Offer Unsecured Money at “Outrageous” Interest, Trapping Many Sex Workers in Cycle of Debt

* Lockdown, virus fears left sex workers with no income

* Unable to get help, bank credit, many went to loan sharks

* Lenders known for their “outrageous” rates, their ruthlessness

By Roli Srivastava

MUMBAI, February 23 (Thomson Reuters Foundation) – When Indian sex worker Baji fell behind on her repayments to a loan shark during the foreclosure, her house was ransacked and her only possessions of any value – kitchen utensils – were ransacked. been stolen. It was another low point in a terrible year.

As COVID-19 hit their incomes, hundreds of cash-strapped sex workers in southern Andhra Pradesh have turned to unofficial money lenders to weather the pandemic – most of them ‘among them not having the necessary papers to obtain formal bank credit, the activists said.

“I had nothing left in my kitchen the day the lender approached me with a loan offer. He had a polite and reassuring manner and said there was no rush to pay the money back. “Baji, 26, who bears a name, said by telephone from Krishna District.

“But he came back week after week. I paid off 1,200 rupees (about $ 16.50) on the loan itself, but when I stopped they ransacked my house and took all my utensils,” he said. the mother of two told the Thomson Reuters Foundation. “It was traumatic.”

Before the coronavirus hit India, Baji was earning up to Rs 1,000 a day, enough to feed her children and keep a roof over their heads, but last year’s lockdown pushed her , as well as other sex workers in India and beyond, on the brink.

According to government data, there are around 800,000 female sex workers in India, but activists estimate the number to be much higher. More than 100,000 are registered in Andhra Pradesh alone, according to activists’ data.

Reflecting concern over the plight of informal workers in India, the national human rights panel in October called on state governments to formally recognize sex workers, a move that would have enabled them to benefit from a state aid fund of $ 23 billion.

But the order was quashed after activists said such a move would be illegal and risk legitimizing sex trafficking.

While sex workers have received food assistance, their lack of income has left many vulnerable to abuse by loan sharks, especially in Andhra Pradesh where authorities have been trying to curb widespread informal moneylenders for years.


A collective representing 6,000 female sex workers in the state said more than three-quarters of its members were in debt. Many live in fear and face threats and abuse from loan sharks on a daily basis.

“The moneylenders are standing in the streets and yelling at them, shaming them. They have started to flee their homes,” said Potluri Devi, who heads the Andhra Pradesh section of the National Network of Sex Workers.

“They are drawn to these lenders because they are not required to give collateral or proof of identity. They start with small amounts that women are able to repay. Women feel confident (and) borrow more. “Devi said.

“This is how they are trapped.”

Authorities in Andhra Pradesh, once known as the center of India’s microfinance industry, have sought to regulate private money lending – widely known as “call money” racketeering because of the ease with which it is used. which money can be borrowed over the phone.

A decade ago, the state government curtailed microfinance activities after a wave of borrower suicides, and in 2015, it banned moneylenders from operating without a license after shutting down about 200 people due to harassment complaints.

But industry analysts have said unscrupulous financiers – who charge high interest rates and resort to heavy-handedness to collect debts – are in part the result of inadequate legitimate sources of credit in the state.

“These are unsecured loans. There is no one else to borrow money from, ”said Harsh Shrivastava, former director of the Microfinance Institutions Network, a self-regulatory organization for the microfinance industry.

Shrivastava said the situation was particularly dire in Andhra Pradesh as unregistered lenders proliferated due to the vacuum left when microfinance firms offering small loans to low-income borrowers were restricted.

Officials with the state’s Criminal Investigation Department (CID) said complaints against pawn shops were common, although no specific complaints from sex workers were received.

“Institutional loans are difficult to approach and they are informal and very flexible money lending, despite outrageous interest rates,” said PV Sunil Kumar, deputy director general of CID.

Lenders routinely deduct 10 to 20 percent of the loan principal before even handing over the money, sex workers and police officials said.

But because they give loans without requiring collateral or documents, they are like a “god,” said Ram Mohan, co-founder of the anti-trafficking charity HELP.

“Women borrow from one to pay the other. They are trapped in this cycle of debt,” said Ram Mohan.

Many of those falling behind on their debts are too afraid to go to the police if lenders become abusive or violent, activists said.

Baji started sex work at the age of 17 as a single mother, recently abandoned by her abusive husband, but she had some optimism about the future until her debts melted away. at the height of the lockdown.

After the robbery, she was forced to work in a brickyard, earning 400 rupees for a 12-hour day.

It was also cut in half after a mound of bricks fell on his leg, requiring surgery costing Rs 20,000. His employer loaned him the money but deducted the reimbursements from his salary.

“We had problems in the sex work, but I was winning and I was able to survive and there was hope. I have nothing to look forward to now,” she said.

Related stories:

Ethiopian girls trapped in sex trade as COVID-19 deepens desperation

Sex workers stranded in Germany as coronavirus closes brothels

Funding crisis closes bank that gave hope to sex workers in Mumbai

($ 1 = 0.0138 Indian rupees) (Report by Roli Srivastava @Rolionaroll; Edited by Helen Popper. Please credit the Thomson Reuters Foundation, the charitable arm of Thomson Reuters, which covers the lives of people around the world who are struggling to survive freely or fairly. Visit

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