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The social meaning of over- indebtedness and creditworthiness in the context of poor rural South Indian households (Tamil Nadu)
DOI link for The social meaning of over- indebtedness and creditworthiness in the context of poor rural South Indian households (Tamil Nadu)
The social meaning of over- indebtedness and creditworthiness in the context of poor rural South Indian households (Tamil Nadu) book
The social meaning of over- indebtedness and creditworthiness in the context of poor rural South Indian households (Tamil Nadu)
DOI link for The social meaning of over- indebtedness and creditworthiness in the context of poor rural South Indian households (Tamil Nadu)
The social meaning of over- indebtedness and creditworthiness in the context of poor rural South Indian households (Tamil Nadu) book
ABSTRACT
High levels of indebtedness amongst Indian rural households have long been a matter of concern. Official British field reports regularly express surprise and concern about high levels of debt in villages (Breman 2007; Cederlöf 1997; Hardiman 1996). Many Christian missions have also sought to encourage the poor to save and to get out of chronic debt (Cederlöf 1997). While “financial inclusion” policies (i.e. policies aiming at providing formal financial services to all) are at now central to the political agendas of Indian public policy makers (Garikipati 2008), private stakeholders such as NGOs and banks (Srinivasan 2009), and international organisations (World Bank 2007), this concern remains extremely pressing. Tragic cases of Indian cotton producers being condemned to despair, and sometimes suicide, over unmanageable debts are well known (Government of India 2007; Mohanty 2005). More recently, microfinance client overindebtedness has also been highlighted. In various areas of Andhra Pradesh and Karnataka, it has been reported that thousands of clients have become trapped in vicious cycles of cross-debt from multiple microfinance institutions, which has led to worrying problems of extreme financial vulnerability and sometimes suicide (see Joseph in this volume). This paper deals with other forms of over-indebtedness, examining the daily indebtedness of poor rural households in Tamil Nadu. In the villages examined, debt does not necessarily lead to the dramatic situations observed amongst cotton farmers or microfinance clients, but it can be nevertheless a source of impoverishment, pauperization and dependency. Census data indicates that Tamil Nadu is one of the states where household debt is the highest (NSSO 2003). Over the second half of the last century, debt sources have evolved and diversified. “Traditional” forms of rural debt based around extreme dependency between landlords and labour are fading away (Cederlöf 1997; Marius-Gnanou 1993), as also observed in other parts of India (Breman 1974; Breman et al. 2009). Labourers now have a wide range of borrowing options. Empirical studies in the early 1980s highlighted the dynamism and diversification of the rural financial landscape (Bouman 1989; Harriss 1981). In rural Tamil Nadu for instance, professional lending, which had historically been the preserve of specific castes, has
opened up to other communities. Many local elites also used their cash surpluses to invest as loans (Harriss 1981). More recent studies underline that the ongoing diversification of Tamil Nadu’s rural financial landscape is still going on (Ramachandran and Swaminathan 2005; Polzin 2009). Indian microfinance, having long been overshadowed by its Bangladeshi neighbour, has been growing exponentially since the 2000s. Tamil Nadu is, moreover, one of the states where microfinance has developed the most (Fouillet 2009). In March 2010, it was estimated that Tamil Nadu state had 12,641,706 clients (Sa-Dhan 2009), with a penetration rate ranging from 0 to 20 per cent (Fouillet 2009). On the demand side, even if inequalities remain remarkably intractable (Harriss-White and Janakarajan 2004), the poorest and lowest castes are expressing a growing desire for social mobility. In Tamil Nadu, the increased importance of non-agricultural income and the implementation of wide set of social policy measures have clearly contributed to this (Harriss-White and Colatei 2004; Djurfeld et al. 2008; Vijayabaskar et al. 2004). Such desire for social mobility creates an increasing culture of consumerism, including in rural areas (Kapadia 2002). This is incited and perpetuated through massive advertising campaigns (largely through television), and facilitated by urban commuting and public welfare policies (such as bringing electricity to the countryside and the distribution of free televisions). Consumerism brings about genuine social competition between households and communities (Kapadia 2002). These social mobility aspirations serve to loosen and reconfigure ancient bonds of dependence, or at least alter expectations, bringing about the desire for a better position within existing local hierarchies (Djurfeldt et al. 2008; De Neve 2005; Heyer 2010; Gorringe 2010).2