PONDA

THE GOAN SPECIAL

BOX

HOW THE SOUTH INDIAN

LENDERS' SYSTEM WORKS

* Two groups of moneylenders operate in Ponda

* Borrowers need not pledge gold ornaments to obtain loans.

* Repeat clients can borrow over Rs 1 lakh.

* Money is loaned at 10-15 per cent interest rates

* Clients get cards with organisation's name to record transactions

* Groups move in on two-wheelers, collect money everyday

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SANJAY BORKAR

PONDA

They may not have fancy branch offices or ATM machines, but an unofficial and parallel banking system in Ponda has been thriving on instant and easy cash loans to people.

This intricate system of moneylenders, mainly comprising South Indians settled in Ponda, has become a valuable source to avail of funds since the last two decades. And this well-oiled network relies on one key principle: trust.

Starting with petty shopkeepers and truck drivers in Sanvordem 20 years ago, the south Indian moneylenders have spread their network and now lend money to people from different parts of Goa. Such has been the growth in business that they have employed fellow villagers to lend and collect money from borrowers.

“This system helps us in many ways, whenever we are in need of quick and easy money,” admits a shopkeeper from Farmagudi-Ponda.

“If I need quick cash of about Rs 5000, I find it awkward and cumbersome to get this money from a bank, as there are a lot of formalities to sanction the loan. Over here, there is no documentation and the money is borrowed on a single signature. Now, isn’t that great?”

What makes the system appealing to borrowers is that they are not compelled to pledge gold ornaments, unlike the ‘Kopra’ system in villages, which is now on the decline. This has made it easy for borrowers to call on lenders whenever they are in need of quick cash.

“Though we earn from the interest on loans, the system also helps needy people. The system started in Sanvordem and we used to used to lend money to truck owners to buy tyres and spare parts. Now, our clients come from various professions and different parts of Goa,” explains Maamu, the pet name of a prominent lender from Ponda.

The moneylenders had earlier fixed a 7% interest on the loans. Now, even though the interest has gone up to 10%-15%, depending on the loan, there is no dearth of borrowers.

A record of these loans and transactions is maintained on cards printed with the organisation's name. These cards are handed over as “passbooks” to the borrowers and moneylenders record these loan transactions, which include money loaned and collected.

It is widely believed that these moneylenders get the money from the committee of a famous religious site in South India at a paltry 1% interest.

Around eight members of a group is active on this network in Ponda, while another group from Vasco also operates in Ponda.

“Group members move around in cities and villages on two-wheelers and collect the money on a daily basis. Repeat customers can even get a loan exceeding Rs 1 lakh,” says Maamu.

The system has had some bad loans in the past, but that has not deterred the moneylenders of Ponda.

“Initially, we were cheated by many borrowers. But now, we have such a strong recovery network, that we have succeeded in recovering all our loans with interest,” Maamu added.

He was, however, reluctant to disclose the nature and means to recover the loans, given the fact that it could involve unconventional and even controversial methods.

This unusual money-lending system has been a big hit in Ponda taluka.

Dheeraj (name changed), an owner of private buses, has been a frequent customer of these moneylenders. “I used to borrow money from these lenders and would repay them in installments everyday. One of the best things about this system is that you get money without any hassles.”

“Though the interest is more than public and private banks, many of us prefer this system as no document is required to borrow the money,” said Dheeraj.

According to him, many drivers and conductors employed on his buses also avail of these loans from these moneylenders and repay them in accordance with the system.

Another bus driver, Nitin (name changed), admitted that has has also regularly borrowed money from these lenders.

“I have been borrowing money from these lenders since the last many years and it helps me till I gets my salary. Apart from conductors and drivers, vegetable, fruit and fish vendors also borrow money from these lenders,” says Nitin.