Over the last year, the All India Democratic Women’s Association (AIDWA) conducted a survey of women who have taken high interest loans from microfinance institutions (MFIs) including non-banking financial institutions, small finance banks and private banks.

The aim of the survey was to understand the extent and impact of these loans on their lives and build a national level campaign against their oppression. The survey was undertaken by the state committees of the organisation and covered 9,000 women in 21 states. Its preliminary findings from 6,685 women in 15 states have been consolidated into an initial report that was presented on the first day of the National Public Hearing on Women’s Rising Indebtedness and MFI loot which took place in New Delhi on August 23-24 2025.

The survey highlighted that the outreach of the NBFCs-MFIs had grown amongst rural areas because of the deregulation of the sector by the Government of India and the Reserve Bank of India. Because of this public sector banks were refusing direct loans to women and focusing on giving loans to the NBFCs-MFIs for onward lending to women at high interest rates of more than 22-26%.

This has increased the outreach of these loan sharks. Sixty percent of the surveyed women are from rural areas who belonged to the most vulnerable sections of the society. More than 40% are Adivasis and Dalits, approximately 21% belong to minority communities and 15% are single or widowed women.

Moreover, 70 % of the women surveyed have a household income of less than Rs. 10,000 per month, and 90% earn less than Rs. 30,000 per month. More than 40% of these women were refused loans from public sector banks and were forced to take high interest loans from private companies and banks, despite their vulnerable status.

The second significant finding of the report is that most surveyed women have taken multiple loans: 32% have taken loans from more than three companies whereas approximately 60% of the women have taken loans from more than two companies. More than 40% of the women have taken loans to repay either their own or their husbands loans. Such multiple loans have increased the debt burden of the women significantly even though their capacity to repay is limited because of low incomes.

About 40% of the women debt have burden of more than Rs. 50,000 and another 40% a debt of Rs. 1 to 2.5 lakh rupees. This means that debt burden of women is far beyond their capacity to repay their monthly instalments. Further, the terms of these loans violate all RBI guidelines as 50-60% of the women are forced to keep their jewellery, house papers, aadhaar cards or other personal belongings as collateral for getting loans.

Failure of the government to meet the basic needs of the women and their families

The third important aspect of the report is with respect to the reason for which loans have been taken. The findings highlight the failure of the government to meet the basic needs of the women and their families. For example, even though almost all the surveyed women have BPL and ration cards, approximately 20% of the women take loans for meeting their daily needs including food.

Further, barely 20% of the women get any financial assistance from the government for health and the same is true of 30% in the case of education. Therefore it is not surprising that more than 30% of the women are getting loans for health and education. Moreover, only 25-26% of the families are getting take loans for making houses, even though the government boasts of helping crores of people under the PM Awas Yojana.

Further, 30% of the surveyed women take loans for their own or their husband’s businesses, while only 5% are enrolled in the MUDRA scheme. This means that women are forced to take distress loans because of cutbacks in public spending for social programmes.

One of the most important findings of the report concerns the verbal, physical and other forms of harassment of women by MFIs when they are unable to meet their monthly EMIs. Five out of every hundred women have faced physician or sexual assault, whereas 1 out of every 10 women have had their household goods removed forcibly. More than 30% of the women across all states have faced verbal abuse and repeated harassment through phone calls. All these are criminal offences and violate even the most diluted rules of the RBI.

In sum, the survey finds that the pro-corporate policies of the Central Government and the RBI are squarely responsible for the debt trap in which the women find themselves. The RBI’s deregulation of NBFCs-MFIs and its system of self-regulation is leading to unhindered malpractices by these institutions and the growing oppression of women.

(This article is based on the preliminary findings of the survey done by the AIDWA state committees and the preliminary report prepared by the team at the AIDWA Centre in Delhi.)

Archana Prasad is a professor at Jawaharlal Nehru University and an assistant secretary at AIDWA.

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