Tears roll down her cheeks as she recalls the humiliation.
At this, Bommakka pipes in.
“Ayya…my relative...she had a daughter…the girl was to be married soon. But she didn’t repay two successive instalments and the agents went to her house and started abusing her publicly. They spoke ill of her family and her character, and because of that, the marriage was cancelled. The girl was heartbroken, and my relative could not bear the shame, so she committed suicide…because she blamed herself for what had happened.”
Bommakka sighs before continuing.
“They had also taken loans for the wedding….and had already spent a lot of that money. She knew she was going to default on the loans, so she thought she would kill herself and maybe that way her family would be spared.”
There is a long silence, before Bommakka speaks again, this time in a low voice.
“I was the one who got her into SAMMAAN. Sometimes I feel like I killed her myself.”
Her mumbled words pierce through the thick silence in the room.
“Bommakka, trust me when I say this—if they say you were greedy for taking multiple loans, they are far greedier. They issued loans to you without giving any thought to your capacity to repay. And then resorting to coercion to get you to pay money that you simply don’t have! For all their talk of altruism, they have behaved worse than loan sharks. They exploited your weakness and, in the process, made far more money than you can even dream of. ...We have to do something about this, and you need to stand with us—all of you. Without your voice, we will be helpless!”
A short silence ensues although the weight of Veena’s impassioned plea hangs heavy in the air. The ringing of Vishal’s phone breaks the silence. He seeks Veena’s permission to take the call.
His conversation ends in just a few seconds, after which he turns to Veena and says in an undertone.
“Ramaiyya’s post-mortem report has come in. The cause of death has been established as asphyxiation...but it also says that the bruises on his body indicate extreme physical torture.”
CHAPTER 18
DISTRICT MAGISTRATE’S BUNGALOW, RANGA REDDY DISTRICT, 8 OCTOBER 2010
Veena looks at the piece of paper in her hands. She cannot resist feeling victorious. It took a lot of hard work but they eventually managed it! It was not often that “icons” get taken into custody. Named among the most influential minds in the country, féted by the international and national media alike…yet no one is above the law of the land.
She hands over the arrest warrant to a beaming Vishal.
“All the best, Vishal!”
“Thank you, madam, but for your initiative this would not have happened.”
“We owe it to them—to each of those fifty plus people who have been robbed of their lives, and to the hundreds of thousands of others whose trust has been violated.”
Vishal nods before taking her outstretched hand in a firm grip.
“I will take your leave now. We want to be in Hyderabad before noon.”
He salutes her smartly and strides out of the room.
Veena wonders how Prasad Kamineni will react when he is served with an arrest warrant. She recalls her first meeting with him almost a decade earlier, when both of them had been honoured for their achievements by a citizen’s forum. He had come across as a smooth and charming man, keen to impress her with his vision for financial and social inclusion of the poor. Yet she had been left with a vague feeling of disquiet. After the Krishna crisis, she had begun to question some of the microfinance models that were in place. While their avowed aim was to release the poor from the clutches of usurious money-lenders, many MFIs themselves charged interest rates that were no less exploitative. Moreover, their coercive tactics and blatant flouting of established norms, coupled with the absence of any proper monitoring mechanism had made them even more dangerous than informal moneylenders. The blatant commercialization of the microfinance sector over the last five or six years had only aggravated the existing lacunae in the models.
Subba Rao had also secured an arrest warrant for Kumudini and a police team was on its way from Warangal to apprehend her. Veena hopes the double strike will have a significant impact on the working of the sector. The case of Mylaram Kavala had received state-wide attention; even a national television channel interviewed her hapless daughters as part of a news report on debt-related suicides in the state.
Veena cannot but help feel grateful to Vijaya as well. Despite her personal tragedy, she had worked hard to convince the family of the girl abducted from the village to testify against SAMMAAN. Although they did not yet have enough evidence to act against her husband’s killers, she had kept her side of the bargain. And despite the fact that her husband had been one of the abductors, his death erased any hatred or ill will the family bore towards him. Strangely, they even sympathised with him, possibly because of the goodwill Vijaya herself enjoyed. Whatever their reasoning, they had helped strengthen the case against SAMMAAN. Their testimony, along with those of Bommakka, Renuka and a few others, had meant that a strong case of financial fraud, criminal intimidation and kidnapping could be built against SAMMAAN and Prasad Kamineni, its founder-promoter.
While the police had managed to interrogate Bhava Reddy’s nephew, Chiranjeevi, on the Ramaiyya murder case, they had no strong evidence to proceed against him and his cohorts. They were yet to establish Bhava Reddy’s support to the debt-recovery operations of SAMMAAN and other MFIs. While a few underlings had been rounded up for questioning, there was no breakthrough yet. Veena hopes that they will be able to persuade at least one of the men to testify to the politician’s association with SAMMAAN, and Ramaiyya’s murder in particular.
Feeling satisfied, even if momentarily, Veena goes back to her desk, where a large pile of files awaits her attention. She has hardly begun work when her mobile phone rings. Veena’s face brightens as she sees that the call is from MR.
“Good morning, sir, are you back? I called your office the day before since your phone wasn’t reachable. They told me you were in Delhi. I needed to talk to you about something important...”
“I wish you had, Veena. Then maybe both of us could have been spared this embarrassing conversation.”
Veena feels deflated.
“I’m sorry sir, is there an issue?”
She hears a heavy sigh at the other end.
“What is this joint operation with Subba Rao?”
“Sir, I already mentioned to you that we are collaborating on the issue, since our districts are the worst affected.”
“You told me you were working together to build a strong case, not that you were sending men out to arrest Prasad and Kumudini!”
“Sir, isn’t that the logical conclusion? Given the rising death count and charges of financial fraud and coercion, the move against the head honchos of the MFIs was but inevitable!”
“I wish you had consulted me before issuing the warrant, Veena. I would have saved you the trouble.”
“Sir, I am confused...”
“I have just spoken to Subba Rao and given him the same instructions—call your men back, Veena. Prasad and Kumudini are above the law and cannot be touched.”
CHAPTER 19
HYDERABAD, 15 OCTOBER 2010
“The presence of globally recognized microfinance playerslike SAMMAAN has, of course, contributed significantly to the success of the financial inclusion campaign in the state.” The completely unintended irony in the statement does not escape Chief Minister Sudhakar Reddy. As of last count, the said success has claimed close to sixty lives. He wonders if Thomas Warner, the $400-a-day development consultant deputed by the international donor, knows this.
The meeting in progress at the CM’s chambers is on the Universal Financial Inclusion Project, an international donor funded initiative implemented in collaboration with an apex development bank in India. After a pilot phase in three districts in Tamil Nadu and Maharashtra, they seek to expand to Andhra Pradesh and Karnataka. Besi
des Thomas Warner, there is his Indian counterpart, Rajesh Sharma, who probably gets paid half of what the American consultant does. Maybe in deference to that, he lets Warner do most of the talking. Principal Secretary Maruti Rao waits for the consultants to go through their pitch before offering his comments.
While Warner continues to highlight the Andhra Pradesh success story, the chief minister wonders how he should break it to them that they are planning to pull the plug on it. Ever since coalition politics has caused him to put a halt to the legal proceedings against the MFI top bosses, Sudhakar Reddy has been smarting. He has had to go through the ignominy of requesting MR to put on hold proceedings that he himself had authorized.
“Mr Warner, the state administration is trying to resolve some issues that have cropped up at the ground level, issues that you may have encountered yourself during your field visits. We will study in detail the approach paper that you have so kindly shared with us, so we can arrive at an understanding on the ways forward.”
The chief minister gathers his meandering thoughts as Maruti Rao smoothly brings the meeting to a close. Even as the consultants take their leave after a round of polite handshakes, the CM’s PA, Lokesh steps in with a rather harried expression.
“Sir, you are scheduled to meet the representatives of the employees’ union after lunch. But the collectors of Warangal and Ranga Reddy districts are already here, along with the CEO of TERP, Mr Rashid. They say it is imperative that they meet you at the earliest.”
Sudhakar Reddy looks at the Principal Secretary questioningly but the latter seems equally unaware. After instructing his PA to send in the bureaucrats right away, the chief minister sips from the fresh cup of coffee that has just been placed on his desk. It is close to lunch hour but obviously this meeting must take precedence over all else.
All three bureaucrats have almost identical expressions at this point—a mix of tension and nervous excitement. They greet the chief minister and principal secretary with due deference before Rashid takes the lead and apologizes for requesting a meeting without prior notice. “When Subba Rao Garu met me at my office earlier and shared the information with me, I thought it important to apprise you of things at the earliest,” he offers in explanation.
“I assume this has something to do with the microfinance sector?”
Maruti Rao’s question is more an observation, since the presence of Subba Rao and Veena Mehra is a clear pointer in that direction.
“Yes sir, it appears that Prasad Kamineni and company are not going to be spared after all!”
The chief minister looks closely at Veena Mehra as if to detect any hint of underlying sarcasm, but her face is wiped clean of any expression. He wonders if it is his imagination after all, prompted by the sense of failure that he has been grappling with.
Meanwhile, Maruti Rao prefers to get straight to the fact of the matter.
“Let us have the details.”
Subba Rao clears his throat, pulls out a sheaf of papers from a folder, and hands it to Maruti Rao.
“A copy of The New York Post article that is to be published tomorrow. Chandresh Rajan sent it for our information.”
Maruti Rao quickly scans the sheets before passing them on to the chief minister. Silence prevails for a while as everyone waits for him to read through the piece. Although his expression remains impassive throughout, the slight shift in body language is telling.
Finally he looks up and remarks to Subba Rao.
“They’ve left Prasad and Kumudini with nowhere to hide. Meticulously and thoroughly taken them apart! This is bound to raise a stink back in the US financial markets too. And the highly placed source that they have cited—is that you by any chance?”
Subba Rao hastily shakes his head. “I’ve known Chandresh for almost a decade now, sir. I did share the goings on at the ground with him, but certainly nothing else. The article is an eye opener for me as well!”
The chief minister nods in response before getting back to reading the report. After a few moments of silence, Maruti Rao clears his throat before addressing the chief minister.
“Do you anticipate some kind of political fallout? The article is clearly meant to expose Kamineni’s political connections and the money laundering that has been taking place in the name of foreign investment.”
The chief minister ponders over his question.
“I don’t think we can afford any kind of political fallout. And there are ways to explain away the political connections. I am sure you understand this very well, given your decades of experience in the government.”
There is a pause before the chief minister addresses Subba Rao again.
“When did you say this piece was coming out?”
“Tomorrow, sir.”
The chief minister turns to Maruti Rao.
“It is a good thing that this is an international publication. I guess we must be thankful for small mercies, Rao garu!”
Maruti nods in agreement.
The chief minister turns to Rashid.
“So, Rashid garu, what is the status on the draft report that I had requested?”
Rashid looks nervous.
“It is more or less ready, sir. I was planning to discuss it further with Subba Rao garu and Veena Mehra garu...then this matter came up.”
The chief minister notices the exchange of glances between Subba Rao and Veena Mehra.
“Political expediency might limit our power but it does not completely negate it!”
That is as candid a statement that the chief minister could have made while acknowledging the blockade on legal action against the MFI bosses.
The chief minister continues to address them in a resolute tone.
“Given that your districts have been the most affected by the crisis and given your intimate knowledge of the whole issue, I would like you to work closely with Rashid on this. Maruti Garu will then hold discussions with the law ministry and other relevant experts to ensure that we do not hit any kind of legal roadblock.”
It is apparent to Subba Rao and Veena that the chief minister has an ace up his sleeve. Meanwhile, Maruti Rao can sense the questions racing through their minds and smiles to himself. He is only too aware of the chief minister’s penchant for drama, how he likes to milk a situation for what it is worth before revealing any information he has.
“Should we go ahead and share our plans with them, Maruti Garu?”
Maruti Rao nods his assent, silently acknowledging the courtesy extended to him.
With an expression of utmost earnestness, the CM addresses his officials.
“The Government of Andhra Pradesh intends to promulgate an ordinance to regulate microfinance institutions. Every MFI in the state shall be mandated to register itself with the authorities in the districts of its operations. Henceforth, each of their transactions will come under scrutiny and will need to be cleared by the authorities. MFIs that use coercive methods of recovery will be made to face the music and violators will be imprisoned. No longer will the sector be allowed to fleece the poor of this state in the name of commercial microfinance, inclusive growth or any of the other pretty jargon that they’ve been peddling!”
Subba Rao and Veena exchange glances. Every single transaction? In the last couple of years alone, the top six MFIs in the state had disbursed a mindboggling 3.7 billion US dollars to as many as 30 million clients. They probably still have outstanding loans worth over 2 billion dollars in their collective kitty. The sheer volume of transactions that would come under scrutiny was staggering, to say the least!
“So, what do you think? We’ve got them on their knees, haven’t we?”
Veena would have chosen a more colourful expression but for present company. She looks at MR but his expression is inscrutable. She wonders if he is thinking what she is.
Does this mean the end of the microfinance sector in its present form? Is it really Game Over for the Kaminenis, Kumudinis and their ilk?
EPILOGUE
PADERU VILLAGE,
VISAKHAPATNAM DISTRICT, 23 AUGUST 2011
“They’re back!” Chandresh stares blankly at the laptop screen. He has typed one measly line in the last hour. His deadline is just a few hours away, and he is still struggling with the direction his article needs to take.
Chandresh had been working on a story on the challenge posed by the Maoists to the state, and has travelled to districts in Madhya Pradesh, Chhattisgarh and finally Andhra Pradesh. The editor of one of the papers he writes for had called him and specifically requested him to do a story on the microfinance sector in the aftermath of the Andhra Pradesh MFI Moneylending Ordinance 2010. Chandresh had been one of those who had strongly endorsed the ordinance in the belief that it would put an end to the impunity with which the MFIs had gone after increased profit margins and investments at the cost of the lives of the very clients they had pledged to serve. The article he had written along with Bob had earned him the ire of the microfinance sector bosses, who had considered it to be the trigger for the enactment of the ordinance. On his part, Chandresh knew it would be both presumptuous and juvenile if he actually bought into the view. The ordinance may have followed soon after the article, but the legislation had already been a long time coming.
And yet, what a travesty it had all turned out to be!
Chandresh stares moodily at his computer screen as he recalls the elation that he had felt following The New York Post article. It seemed that Kamineni and his ilk stood completely exposed. There had been political repercussions that went beyond the ordinance. There was an uproar in the parliament over the matter and Nageshwara Reddy had been forced to resign. Prasad Kamineni too had been made to quit the SAMMAAN board. When Chandresh’s sources informed him that the IPO plans of a couple of other MFIs, including Kumudini’s DevEx, had been indefinitely postponed, he had felt most gratified. It seemed that justice had been served. Nothing could make up for the lives lost but maybe their efforts would at least prevent further attempts at subverting the financial inclusion agenda and deriving extraordinary benefits from the disadvantaged and the poor. The stringent provisions of the ordinance and the increased state control and monitoring of the microfinance sector had effectively choked ground level operations. In all, it seemed that stories like that of Mylaram Kavala were a thing of the past.
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