Meter Byaj: Economic Demise for the Poor

 

Picture from Ratopati.com 

For the past few months, the street of Maitighar has been crowded with people protesting against the meter byaji. One of the groups was of people who came walking 11 days from Mahottari to knock on the doors of Baluwatar and Singhadurbar against these “Meter Byaji”. But what exactly is “Meter Byaji”? Meter Byaji is a loan shark who gives loans to needy people in exchange for collateral. It does sound like a helping hand. But the reality is different.

The story of Meter Byaji victims mostly comes from the backward and marginalized communities of Nepal where there is no access to proper financial institutions and where not all people are educated. Due to their financial situations sometimes the people of these communities require loans. In such conditions for anyone, it is advisable to go to a bank or a financial institution. But banks have a comparatively longer procedure and a lot of paperwork. Moreover, it is not assured that they will get a loan within a day or so. And they might have to travel a long distance to reach a bank. Banks are within reachable distance in the cities but not in the villages. On the other hand, if one goes to a loan shark, he/she will provide the required loan within a day or so with less paperwork. It becomes easy and convenient for people. All they have to do is sign a paper which is referred to as the “TAMSUK”. This is where the trap begins.

Tamsuk is a signed paper by both parties where the loan amount as well as the interest rate is written. But the loan sharks, charge a higher interest rate than usual. The interest rate could be 30% instead of 10%. In fact, the interest rate clearly depends upon the Loan shark. But this can be risky at times for the loan shark as well. A higher interest rate on the paper, clearly shows that he/she is a “Meter Byaji” and he/she might come under the radar of the law. So, to escape this the loan shark changes the loan amount. This way, they will earn a lot without any legal issues. 

-Sample Tamsuk Patra (Picture from The Nepali Comment)

Recent news coverage of the victims by The Galaxy TV Nepal shows how people have fallen into this trap of “Meter Byaj” where they have lost their entire life-long earnings and assets. They have been a victim of a heinous economic crime. In most cases, they have paid an amount equivalent to 3 times their loan. One such story is of Urmila Singha (नेता र पत्रकारले चलाएको मिटर ब्याजको धन्दा | Galaxy News Report) who took a loan of 1 lakh 80 thousand from a loan shark but in the Tamsuk the loan amount was 12 lakh which now she has to pay. This clearly shows how loan sharks scam people and trick them into this financial trap. And now these people have to work their entire life and pay off this debt which in most cases is even passed down to the next generation. To clear one debt they reach out to another person but they turn out to be a loan shark too. To escape one trap they end up falling into another trap. This cycle never ends. 

People are now frustrated and devastated. All that they demand is justice. They have been protesting in the hope that the government will take action against the “Meter Byaji”. Finally, on May 3rd, 2023, President issued an ordinance defining “Meter Byaj” as an illegal transaction. But, the issue has not been completely solved as the loan sharks are denying the settlement. However, their fight for justice is ongoing, wishing to overcome this economic demise.