An Alternative to High-Interest Loans

Dhoker Jhara Village, India


In Dhoker Jhara Village, we continue to work on a project to free the community from the money lenders. All the villagers in this area have been suffering for a long under the money lenders. In the season of irrigation, these people need fertilizer and seeds. For those, they used to borrow money from the money lenders with a compound interest, resulting in loans with an interest rate of 150% of the loan amount, plus the actual amount they have borrowed. The villagers are not able to understand this calculation, and thus pledged their land to pay it.


To protect these hard-working farmers from the money lenders, we have started a loan program where we give an amount of 50,000 rupees (about $750) to the villagers through the committee, asking them to only borrow money from here. They will only need to repay 10% of the amount they borrow. This money will remain with them for the next time. When their interest amount reaches up to 50,000 rupees, we will withdraw the money equal to what we gave them and use it for another purpose. This is one of the steps to helping them become self-sustaining. This month, 35 of the villagers took the loan for cultivation purposes.