A passbook and a few unpaid instalments are all that remain after Gudiya Devi (35), a mother of three from Bihar’s Muzaffarpur, died by suicide earlier this week. Her husband, Pintu Goswami, alleges that relentless pressure from recovery agents of a microfinance company pushed her to consume a poisonous pesticide.
Gudiya had taken loans from four different microfinance firms, paying nearly Rs 12,500 every month in instalments. Her husband works as a construction labourer in Sheikhpura, about 164 km away, and was not at home when the incident occurred.
On Wednesday, Gudiya called Pintu, asking him to urgently send Rs 2,500. He could not arrange the money. A few hours later, she was dead.
"My wife took a loan. We were paying it back gradually. They (recovery agents) would come and harass her. This firm loans money only to women. People borrow for building homes and sending children to school," Pintu said.
According to him, the family had borrowed around Rs 1.5 lakh, most of which had already been repaid. Only a few instalments remained.
"Most of it had been paid back. A few instalments were left. But my wife consumed poison. I was in Sheikhpura. I found out that the recovery person had come. Something must have happened. We had no problems at home," he added.
Gudiya’s death is not an isolated case. Earlier this month, Amarnath Ram and his three children died by suicide in Muzaffarpur. Reports following the incident said that he too was under pressure to repay loans taken from microfinance companies.
There is no official data tracking suicides linked to harassment by loan recovery agents. Borrowers of microfinance firms largely belong to economically vulnerable communities, a factor that often leaves their complaints unheard. Over the past one-and-a-half years, at least 20 suicides across Bihar have been linked to loans from microfinance companies, though authorities have not formally confirmed the figure.
Many of these lenders are reportedly unregistered entities, allegedly run by local strongmen or politicians. Their coercive recovery practices have earned them the label “goonda banks.”
Data from Sa-Dhan, a self-regulatory organisation for microfinance institutions, shows that Bihar has over 2 crore microfinance loan accounts, the highest in the country. These loans together amount to Rs 57,712 crore, also the highest nationally, NDTV reported.
On average, this means each borrower in the state owes around Rs 28,525 to a microfinance company. Five districts from Bihar feature among the top 10 districts in the country with the highest microfinance loan exposure.
Explaining the larger pattern, Meena Tiwari, president of the All India Progressive Women’s Association, said weak regulation has allowed microfinance firms to exploit vulnerable borrowers.
"Authorities have no control over these companies. They lure women into borrowing money and tell them that they can take a loan and start their own business. But the amount is not enough to start a business. Later, these companies start harassing women to pay back. They are pushed to the edge, and some are driven to suicide."
She said cases linked to microfinance loans have been reported from Darbhanga, Saharasa, Begusarai, Patna, Saran, Muzaffarpur, and Munger, involving both men and women.
The pressure is not limited to borrowers. In March, two employees of a microfinance firm in Patna also died by suicide. One of them, Ananya, left behind a note that read: "The company is not good. It doesn't matter to them if someone dies."
Following the spate of deaths, the Bihar government has announced strict action against loan sharks. Deputy Chief Minister Samrat Choudhary had earlier issued warnings to such firms. Now, Director General of Police Vinay Kumar has likened their operations to organised crime.
"Such exploitative practices will not be tolerated. The police will take firm action against those involved in this," he said.
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