The law has proven incapable of meeting the objectives it was framed for – the indebted people, who are back in Kathmandu, say that the law is a damp squib and no action has been taken against any moneylender so far.

Laxmi Khanal

The lens is back on Nepal’s informal moneylending sector, or simply put, the Nepalese moneylenders. Months after the Himalayan country’s legislature okayed a law for punishing moneylenders, their debtors are protesting in the federal capital city, Kathmandu, demanding implementation of the law. This has put the government in a spot.

The protestors arrived and gathered in Kathmandu after marching for 23 days from various districts across the country last Friday.

Participants taking part in the march launched in the initiative of the Usury Victims Peasants Workers Struggle Committee set out for Kathmandu on foot – a long journey for justice.  

Nepal’s media seems divided – the nomenclature for the moneylenders varies. Some refer to them as loan sharks. Others call them usurers.

The law, put in place in July last year, has provisions like rigorous imprisonment for up to seven years for usurers engaging in ‘unfair transactions’. (The bill terms forcible transfer of the debtor’s immovable property through the use of any kind of threat or violence or exploitation for the purpose of debt recovery as an unfair transaction.)

But the law has proven incapable of meeting the objectives it was framed for – the indebted people, who are back in Kathmandu, say that no action has been taken against any moneylender so far.

The debtors are now coming out and many have staged a sit-in against the loan sharks. According to the Rising Nepal newspaper, “in Sarlahi district alone, well over 700 usury victims have already come in contact with a committee that has been working against this form of exploitation.”

Talk team formed

Earlier, the Nepal government had claimed that it addressed the problems of usury victims. But, on Sunday, the government seemed to buckle as the debtors gathered in upmarket Baluwatar, next door to the Prime Minister’s official residence, to exert pressure on the government to “sustainably resolve” their problems – the Ministry of Home Affairs has invited the protesting usury victims for talks. The ministry has written to the ‘Struggle Committee’, calling them for discussions. (The ‘Struggle Committee’ was formed by the victims of extortionate money-lending.)

A talk team has been formed, coordinated by a joint-secretary of the ministry of home affairs who will be assisted by two under-secretaries. The team has asked the protesting loan-shark victims to form a five-member talk team for a dialogue.

“Informal talks are being held with the loan-shark victims at present,” the Rising Nepal newspaper quoted Ek Dev Adhikari, under-secretary at the ministry as saying. “We have urged them to sit for talk today itself if possible,” he said, adding that “they are in touch with us and undergoing internal discussions.”

The ministry acknowledged that its attention was drawn towards callouts, sit-ins and demonstrations of the victims of extortionate money-lending.

But the lack of political will was also obvious, as Adhikaris said, the ministry appraised that efforts were underway for reconciliation between the victims and loan sharks.

On another plane, the government is also speaking of bringing in an amendment in the related laws and formation of a high-powered commission for the law to be implemented.

The Nepal Police has been entrusted with the responsibility of registering the cases that eluded consensus between the lenders and debtors in accordance with the prevailing laws, while the Chief District Officers will monitor the process. The usury victims, however, have not agreed the ministry’s statement.