Street vendors in Mumbai worst off in country,reeling under multiple debts: Study

There are nearly 2.5 lakh hawkers across Mumbai and BMC has asked TISS to conduct a study on their rehabilitation. The study concludes that as far as government initiatives on street vendors are concerned,there is no programme as such in Mumbai and the civic body has done almost nothing to address vendors’ needs. The study was conducted in collaboration with the United Nations Development Programme (UNDP) and Ministry of Urban Housing and Poverty Alleviation.

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“The near hostile attitude of the civic authorities appeared to be a universal feature across the 15 cities in the sample set. They are not only neglected but also hounded by civic authorities and police. In Mumbai,Patna,Lucknow and Kanpur,the government’s response has been insignificant. While the income of street vendors may not be too low,a significant portion is spent repaying interest on loans. Nearly 90 per cent of vendors take loans once a year,while 12 per cent take loans every month. This means that the demand for credit is immense,” says the study conducted by Prof Sharit K Bhowmik (TISS-Mumbai) and assistant professor Debdulal Saha (TISS-Guwahati).

The study says Mumbai and Bhubaneswar have cases of large-scale borrowing from moneylenders among various sources of credit,while cities such as Kolkata and Ranchi have cases of large-scale borrowing from microfinance institutions. Bhowmik said in the absence of formal institutions in Mumbai who are lending to vendors,“moneylenders play havoc” and the rate of interest is as steep as 400 per cent,which often leads to “acute poverty and impoverishment”.

Overall,of the 743 vendors interviewed across 15 cities,moneylenders formed the main source of credit for 49 per cent. “Mumbai is an example where moneylenders are engaged in widespread usurious practices. This is due to high demand for loans and absence of any other parallel sources of finance. Taking a loan to repay an older loan is widespread among the urban poor,so much so that they fall deeper into debt. As per the data gathered in Mumbai,Patna,Delhi and Hyderabad,a large number of vendors are found to borrow for non-business purposes,” said Saha.

The study says the linkages between the moneylender and the vendor are established through a variety of channels. “The role of fellow or nearby vendors serves as the first link and often an important one. They are less effective role in Mumbai,Kolkata,Kanpur,Vijayawada and Bhopal and play an insignificant one in Guwahati,Ahmedabad,Hyderabad and Patna,” it says.