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Despite harsh terms, Punjab’s poorest sections rely on loan sharks for moving abroad

These revelations have been made in a report on international migration from Punjab which has been compiled by the Centre for Research in Rural and Industrial Development (CRRID), Chandigarh in association with Institut National d'Etudes Demographiques (INED), Paris.

Written by Man Aman Singh Chhina | Chandigarh | Published: December 4, 2015 9:57:38 am
 moneylenders, loan, borrowers, punjab moneylender, poor households in punjab, loan policy, immigrants borrow, friend moneylenders, punjab loan, loan taking in punjab, NRI, NRI punjabi, NRI groom, NRI marriages, travel agent, NRI grooms in punjab, The lure of foreign shores is so strong that emigrants from Punjab do not hesitate to take loans at exorbitant rates of interest from moneylenders.

The lure of foreign shores is so strong that emigrants from Punjab do not hesitate to take loans at exorbitant rates of interest from moneylenders in order to finance their move abroad. Most such loan takers are from the poorest sections of the society and are more often than not from the scheduled castes (SCs).

These revelations have been made in a report on international migration from Punjab which has been compiled by the Centre for Research in Rural and Industrial Development (CRRID), Chandigarh in association with Institut National d’Etudes Demographiques (INED), Paris.

The report says that little more than half of the emigrants borrow from friends and relatives and 15 per cent of emigrants each borrow from money lenders for meeting expenses of moving abroad. “Lending criteria are tighter in Punjab, loans come at an exorbitant interest and the conditions of re-payment are also harsh. Yet the lure of the foreign country is so powerful that emigrants from Punjab would not hesitate to beg or borrow,” says the report authored by Dr Aswini Kumar Nanda and Jacques Veron.

Stating that the borrowing largely depends on the socio-economic background of the borrowed, the study has found that the lack of productive assets among SCs restricts their access to commercial banks to take loans at a relatively lesser cost and risk as compared to money lenders. “When it comes to taking loans from money lenders, emigrants from poorest households and the SCs are in the forefront (35 per cent and 7 per cent respectively).

Besides the monetary cost, borrowings also have psychological and social costs, particularly, when, in the absence of a decent income abroad, the emigrants take years to pay-off the debt or are not able to pay it at all. The data put out by the report says that personal savings are more relied upon by small and large landowners (46 per cent and 45 per cent respectively) and female headed households (44 per cent) wheras parental and sibling savings are very common in Majha region (68 per cent). Mortgage and sale of agriculture land and other assets are also resorted to by relatively small share emigrants for obtaining necessary funds to organise travel abroad.

The study relies on data compiled in the year 2010. However, there have been many changes in the global scenario in the intervening years, particularly in countries like Iraq and Syria from where migration has dropped due to security situations. Similarly, in stricter internal laws regarding foreign workers have also made Saudi Arabia less viable as a job market for Indian migrants.

Travel agencies remain popular

Another important revelation made by the study is that despite the fact that there are widespread incidents of cheating by travel agents and immigration consultancy firms, yet these remain the most popular sources for assistance to go abroad. The study found that 62 per cent of the respondents to the survey had chosen travel agencies while 29 per cent had taken the help of family members and friends. ‘The elevated popularity of immigration consultants in Punjab is somehow linked with the umbrella services they claim to provide. The services of professional immigration agencies come at a huge financial cost, yet agencies providing such services are popular in Punjab,” the report says.

Yet, 20 per cent of households found that the services provided by such agents were highly deficient amounting to cheating or deceiving. Overcharging of fees, making false promises, issuing fake documents and grossly deficient services were some of the complaints against the agencies. The report says that the perspective from immigration agencies is that a large chunk of potential emigrants is unrealistic about immigration procedures and believes that it can buy its way into preferred destinations countries and provide fraudulent documents.

Desire for international groom

he data shows that 17 per cent of households were ready to get their daughter married to a groom abroad if they had chance. The study finds that the desire for an NRI groom was most widespread among the prosperous households. Sikh households (21 per cent), households in Malwa region (20 per cent) and female headed households (19 per cent) also showed a higher prevalence for the desire for a foreign groom. A better future, comfortable living standards and attractive provision of social security were some of the incentives cited for marrying the daughter abroad. “Marriage abroad as a window to facilitate migration of other family members is most prominent among households with lowest standards of living (25 per cent) followed by the Malwa region (24 per cent) and SC households ( 20 per cent).

Foreign remittances used for running household and debt repayment

The data indicates that four-fifths of the households used the remittances sent from abroad for day to day household consumption and debt re-payment rather than for investments. The money was also used for seeking health care and education (34 and 21 per cent). Caste status indicates that a larger share of SC households (84 per cent) tend to diver money for daily consumption than their OBC and general category counterparts (80 per cent). Data indicates that around half of the returning migrants came without any savings.

Preferred destinations

The study finds that the pattern of emigration shows that those from the upper and lower sections have different destinations. UAE is the most favoured country for emigration from Punjab and is more popular with those who are from rural areas (30 per cent), Majha region (31 per cent), Hindus (35 per cent), SCs (52 per cent), educated upto middle school (55 per cent0 and lowest standard of living (72 per cent). In contrast, Canada, the second most sought after country, is preferred by those from Malwa region and those with highest standards of living. ‘After middle standard, emigration to UAE decreases as educational level of emigrants rises whereas emigration to Canada increases with rise in level of education,” the report states.

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