 "Debt, loans")
The second wave of COVID-19 has pushed vulnerable groups such as trafficking survivors and sex workers into debt traps with 60 per cent of 335 such people surveyed in West Bengal, Chhattisgarh and Andhra Pradesh stating they had to take loan to cope with financial constraints, according to a study.
Of the 201 out of 335 survivors who had to borrow money, 123 have taken high-risk loans which is much beyond their paying capacity and family income, according to the study done by Tafteesh, a consortium of anti-trafficking activists, lawyers, social workers and survivor leaders.
"The average monthly minimum requirement reported by the study respondents was about Rs 6,300, while more than 30 per cent (or 102) families reported that they had no income during the second phase of the pandemic," the study found.
A comparison was also drawn in the study of the loans taken during the first and second waves of COVID-19.
According to the analysis, of the total 335 survivors surveyed in the second wave in 2021, on an average 60 per cent of them took loans that ranged from Rs 5,000 to Rs 5.5 lakh at an interest rate which is at times as high as 23 per cent.
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During the first wave of COVID-19 in 2020, of the 236 survivors surveyed, on an average 72 per cent of them took loans that ranged from Rs 1,000 to Rs 4.3 lakh at an interest rate which is at times as high as 20 per cent.
The study said the reason it is more stressful this time is the fact that they did not get the ration support or cash transfer as they got during the first wave which led them to spend more on food and thus resort to more loans.
The analysis also showed that the pandemic and accompanying restrictions have aggravated the economic condition of women in sex work who have been in already precarious situation being outside of the social protection mechanism.
During this period, their debt amounts have increased exorbitantly. Out of the 142 survivors of commercial sexual exploitation and women in sex work analysed for the research, 99 have taken loans ranging between Rs 5,000 and Rs 5,50,000 during the second wave.
Furthermore, the study revealed that banks or microfinance institutions have not relaxed the repayment schedule or set any moratorium period for their repayment at this time of cash scarcity among the vulnerable groups.
The study also revealed that a significant proportion of them took new loans to repay the existing loans, which indicates debt traps, which has in turn increased their risk of becoming indentured labour and victims of trafficking.
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