Debt at My Doorstep

In light of concerns regarding rising indebtedness and multiple borrowings, micro-credit lending and its effects on women has garnered much attention in the public discourse. This unprecedented focus has led the Government of Sri Lanka to consider varied options to mitigate these negative effects. This study, using data collected through in-depth interviews with female borrowers of the districts of Monaragala, Batticaloa and Mullaitivu, focuses on underlying microcredit practices to better understand how the process of accessing such credit affects female borrowers. Evidence points to how financial institutes that are already registered with the Central Bank of Sri Lanka, use shortcuts to reach out to the same pool of borrowers at the community level, leading to multiple lending. The absence of background checks and monitoring of borrowers inadvertently leads women to borrow for reasons other than income-generation. This has resulted in an inability to service the loans, the erosion of savings and assets and, discontent within the family and community.