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The debt-trap that comes with the usury business is a lucrative earning model for private lenders which seems to be growing aided by a post-Covid battered national economy.

Shut out from formal avenues of borrowing money, several of Rawalpindi’s poor households and small businesses reluctantly opt for these loans which carry an interest of nearly double the national average and require collateral in the form of jewellery, motor vehicles and houses.

Anjuman-e-Tajiran Sabzi Mandi President Ghulam Qadir Mir told The Express Tribune that hundreds of shopkeepers have ruined their homes by getting caught up in the debt trap. The shopkeepers are so compelled that they have no choice but to lose everything, he said.

It has also been witnessed that in some cases that if nothing is available for disposal of the defaulted credit, the lenders register fake police cases against the defaulters due to which the helpless debtors are arrested and sent to jail, where they are left with no other choice but to bargain with the lenders and have the dispute settled by handing over any of their private property.

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Senior District Bar Association (SBCA) member Masood Shah told The Express Tribune that 70 per cent of the cases of counterfeit checks registered in police stations are of private lenders, who obtain open checks of Rs300,000 to Rs500,000 against a meagre loan of Rs100,000. Shah alleged that the police are of no help because the usurers rely on the police’s help to register counterfeit checks cases against borrowers.

As if the debt-trap and collateral were not enough the usury mongers also harass defaulters. Recipient of a usury loan, Amjad Pervez, resident of Rawalpindi, made horrific revelations about the treatment given to non-payers. “Many women have to compromise on their modesty if they or their families are unable to pay back the loan. At other times, the lenders demand marriage proposals of the young girls belonging to a defaulting household,” Pervez informed.

According to sources, these private bankers have also set up a ‘jail’ in the Arya Mohalla area of Rawalpindi where the defaulters are often locked up after being frisked away from their homes.

A senior teacher of a public school in Rawalpindi, talking to The Express Tribune on the condition of anonymity, informed about his stay at this jail. “I failed to pay my instalment so the lender forcibly took me to a private jail where he detained me for two days,” he said. He was only released when his friends made personal guarantees on his behalf. “There were others like me in the jail and after my release, I went to the police station to register a complaint about this illegal detention centre but no action was taken,” he added.

The affectees lament that no government or law enforcement agency has ever taken any action to eradicate the cancer of interest in which the open markets of Rawalpindi have completely sunk.

However, Rawalpindi police spokesperson Sajjad Ahmed told The Express Tribune that the police were against usury and are actively working to root out this business model. “As far as dishonoured checks cases are concerned, a policy declaration has been issued which entails that no such case will be registered unless an SP rank officer gives his permission.”

He further said that if any policeman is found to be in favour of, patronising or supporting any usurer, immediate action would be taken against him.

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