DEBT MISERIES
Charles Dickens in his novel David Copperfield defines debt misery as, 'Annual income twenty pounds, annual expenditure nineteen and six result happiness. Annual income twenty pounds and expenditure twenty pounds and six result misery.' In tamil movie, Bama Vijayam, Director Balachandar would have captured the essence of this in the famous song 'varavu ettana, selavu pathana, adhigam rendana, kadaisiyil thundhana'.
During this period of pandemic, everything is on-line, including money lending. There are about sixty money lending apps in Google stores. People for their urgent financial requirement download the app and apply for the loan. For Rs.6000 loan, the app holds back Rs.1500 towards interest and processing fee. It credits only Rs 4500 to the applicant's bank account within a few minutes. The loan taker had to repay Rs.6000 in seven days. If there is a default, he and his contacts start getting messages and calls, sometimes they are abusive and threatening, bringing shame to the borrower. At the time of downloading the monylending app, it gains access to all the contacts and media files of the loan taker. Due to the harassment, some loan takers go to the extent of committing suicide. The various money lending for exhorbitant rate of interest are also known in different names as, kandhu vatti, meter vatti, rocket vatti, computer vatti and so on. Some people are of the opinion that the digital lending plays the role of filling the credit need gap and caters to individuals and small companies. The Act prohibits charging of interest on exhorbitant rate.
The advent of credit card and buy now and pay later sentiment without planning land them in debt trap, derailing their financial discipline and management.
Marco Polo recorded the plight of the borrowers in some parts of India during his visit in 1293 AD. The defaulted borrower would be made to stay inside a circle marked around him, till the time he repaid the loan or someone gave guarantee for the borrowing. During his stay, the borrower would face the humiliation from the other residents of the village. The harassment by the lender for the default has been there from very old days.
Shri U.V. Swaminatha Iyer quoted two different incidents in his book on borrowing. A talented musician Narasaiyer secured a loan of sixty sovereigns from Ramabadra Moopanar of Kapisthalam, a connoisseur of music, by mortgaging his favourite Sankarabharanam ragham. After mortgage, Narasaiyer sang only other raghas except Sankarabharanam. Moopanar felt sad and apologised for arresting the Sankarabharanam ragham and paid penalty for making Narasaiyer not to sing that ragham since. It is a rare case for lender paying penalty and principal
along with release deed.
The other incident quoted by Shri U.Ve.Sa. : A poor Brahmin wanted to perform upanayanam to his son, for which he required Rs.100. He was wearing only an ear stud, worth for just four annas. He did not have any other asset to offer as security for a loan. He met a kindhearted rich man on the road, who used to help him whenever approached. The rich man received the stud and put it in his ears and went to the shop and demanded Rs. 100 against the stud as security. The shopman immediately paid him Rs. 100 without checking the value and in turn the amount was given to that Brahmin to perform the function. On the next day, the rich man redeemed the stud and returned it to the Brahmin along with another set of new stud. Here the security for the loan was not the value of the jewel, but the value of the person who held it. The jewel was just a token, but the goodwill was valued.
Debt often caused additional financial burden and social isolation further harming mental health.
Spending beyond one's means can only result in misery.
