Caught in the waves of COVID, Chennai’s sidewalk vendors are drowning in a vortex of debt – Reuters

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Express press service

CHENNAI: Three years of the pandemic have ended a three-generation dream for 50-year-old R Alamelu. The flower seller, who lives on the streets of Broadway, had longed for her surviving daughter to marry well, to live in a house unlike her parents and grandparents.

Instead, she, like 30 other small town vendors The new Indian Express whom she had spoken to, found herself cutting her meager expenses, losing her savings, and taking on more debt.

For Alamelu, the savings of 10 gold sovereigns she had accumulated for her daughter’s wedding were the first to disappear. “When the lockdown was announced I couldn’t work and we couldn’t afford to eat. So I took out an informal jewelry loan, pledging all the gold for Rs 1.05,000,” she said.

Then she reduced her food intake. “During the lockdown, my two grandchildren (from her deceased eldest daughter) ate two meals a day. I only ate one meal,” she said. Then skyrocketing inflation quickly followed the easing of restrictions. “I still only eat one meal a day, but if possible, I give the children three meals,” Alamelu said.

Finally, it was the difficult bond of debt that kept the family afloat, all from the informal thandal money lending system. Its total debt in May 2022 stood at Rs 3.70,000 and above. In total, she had to make daily payments, including interest, of Rs 1,400 per day to various debtors.

To meet the payments, she took on extra seasonal work, selling umbrellas in the monsoon and bottled water in the summer. Even then, she earned only 800 to 1,000 rupees, which she handed over entirely to her debtors – if she missed a payment, she would have to pay double the next day.

Alamelu’s plight resonated with informal sector workers and vendors near Central Station, Parrys Corner, Pondy Bazaar, Kasimedu, Kannagi Nagar and Marina Beach. All had taken out loans to survive the pandemic: voucher schemes, daily thandal, banks, microfinance institutions, pawnbrokers or neighbours.

“According to the Tamil Nadu COVID Pulse survey conducted from June 2020 to February 2021, around 52% of respondents in their sample of around 10,000 households reported job losses. Of the 17% who had lost their jobs during of the third round of the survey, 69% came from the informal sector,” said Kripa AnanthPur of the Madras Development Institute.

The survey, a joint initiative of MIDS and the State Department of Economics and Statistics (DoES), assessed the impact of the pandemic in Tamil Nadu.

“Around 13% of respondents took out loans in the first round and that figure rose to 13.8% and then fell to 11% during the pandemic. Around 12% took out gold loans,” he said. she explained, adding that although the economy is recovering, jobs are not coming back.

However, Isabelle Guerin, an associate researcher at the French Institute in Pondicherry who studies debt, pointed out that indebtedness was high even before the pandemic. “The state doesn’t keep records and there has always been an understatement of debts,” she said.

“When everything stops, workers in the informal sector are hit hard and it plunges them into abject poverty. As they have no social security or pension benefits, they are more vulnerable to external shocks,” AnanthPur said.

Many have fought off these external shocks like Alamelu through a combination of loans, jewelry mortgages, dipping into savings and reducing food consumption, she added.

What is Thandal?

“Thandal is a collateral free loan. Borrowers can repay Rs 100 daily or weekly, it’s flexible. Unless you are a regular or there is some faith, borrowers must repay the loan in 100 days. The only real consequence of not paying is being blacklisted. The thandalkaaran withhold 10% of the loan amount when they lend,” Guerin explained.

At the Kasimedu fish market, P Vanja explained a crueler form of thandal that many have turned to during lockdown – thandal with speed vatti. “There was no income. People borrowed 1,000 rupees a day and had to pay it back in the evening with 20% interest. As people cannot repay, the interest doubles every day,” she said. declared.

Under the Tamil Nadu Prohibition of Charging Exorbitant Interest Act 2003, the speed vatti is prohibited along with a host of other types of usury including the hourly vatti and the kandhu vatti. Yet wear and tear is part of life.

“Thandal is inevitable. After the lockdown, I had to pawn my relative’s jewelry and take the thandal to buy my stock,” said Kannagi Nagar resident S Manimuthu, who borrows regularly to run his business. vegetable store and pay for her sons’ education. .

Stronger safety nets

In the first year of the pandemic, the Tamil Nadu government provided Rs 1,000 and free rations to certain categories of ration card holders. In the second year, he provided cash assistance of Rs 4,000.

Everyone The new Indian Express spoken had received these benefits. “The government did well in reaching out to people. At the local level, the zonal committees would identify who needed help,” said Preetha Krishnadas, deputy director of The Banyan, an NGO working on mental health and people. homelessness.

However, many remain bitter. Eshwari S, a fruit vendor from Parrys Corner, said that apart from the aid, the company’s eviction campaigns had hurt her business. Meanwhile, fish vendors have complained that the annual fishing ban from April to June has once again toppled them.

AnathPur said safety nets such as financial stability, savings, food security and assets needed to keep people afloat have broken down during the pandemic. “We failed them, the state failed them, and urban society failed them.”

“Moving forward, the government needs to start documenting the informal sector. The panchayats can capture this data. Then we need to make sure migrant workers have access to programs for state residents,” a- she declared.

Sujata Mody, president of Penn Thozhilalar Sangam, urged the government to set up registration centers in areas with high density of vendors to verify and track the type of loans taken by people in the informal sector. “This can ensure that appropriate help is extended,” she added.

Guerin said that instead of repeatedly forgoing loans, the government should create fair credit policies to extend loans to this vulnerable community.

(This is the first part of a series on debts incurred during the pandemic under the Narender-Revelli Fellowship conducted jointly by the Turaga Foundation and the University of Hyderabad)

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