A tragic incident in Balua village, of Banka district, has brought the predatory practices of microfinance companies that exploit the poor. On the night of 15 November, five members of a family consumed poison after being trapped in a cycle of debt. Three of them, including the family head Kanhaiyalal Mahto, his wife Geeta Devi (35), and their son Dheeraj Kumar (12), succumbed to the poisoning, while their daughter Sarita Kumari (16) and youngest son Rakesh Kumar (8) are in critical condition at the ICU of Jawaharlal Nehru Medical College and Hospital, Bhagalpur.
The CPIML Bihar State Secretary, Kunal, has squarely blamed the microfinance companies for the deaths and demanded adequate compensation for the bereaved family, proper medical care for the surviving children, financial support for their upbringing, filing of murder charges against the responsible microfinance companies, waiver of all group loans, and the provision of interest-free loans to rural poor.
On 17 November, a CPIML team visited Balua village to ascertain the circumstances surrounding the incident. The team, comprising local party leaders Veerbal Rai, Rita Devi, and Ranbir Kushwaha, met with the victims’ relatives and villagers.
The investigation revealed that Kanhaiyalal Mahto had borrowed from multiple microfinance companies and was struggling to meet the weekly repayment instalments. Facing severe financial distress, he had already sold his cow and e-rickshaw to pay off previous loans. His children’s education had been halted due to lack of money. Despite working as an auto driver, Kanhaiyalal could not keep up with the relentless pressure from loan agents.
On the day of the incident, Kanhaiyalal and his wife attended a meeting of the loan committee in Amarpur market, where they faced intense harassment and threats from microfinance agents. Returning home in despair, they reportedly purchased poison and, later that night, consumed it along with their children.
Kanhaiyalal’s elder brother, Shyam Mahto, described the unbearable pressure from loan recovery agents. Their elderly mother said, “How will we survive without him? My husband has been missing for ten years, and now my son is gone too.”
Villagers corroborated the family’s plight, accusing microfinance companies of exploiting the rural poor, particularly women, with enticing loan schemes that trap them in cycles of debt and harassment.
Several microfinance companies, including Bandhan, RBL, BSL, ACFL, and BSS, operate extensively in this region, targeting poor rural families, especially women, with group loans. Despite the presence of established banks like State Bank of India, Punjab National Bank, and Canara Bank, villagers find it difficult to secure loans from these institutions due to complex procedures. This drives them towards private microfinance firms, whose aggressive recovery tactics have been likened to that of “goonda banks.”
The CPIML has condemned both the central government and the state government led by Nitish Kumar for enabling such exploitative financial practices. The party has demanded urgent reforms to prevent further tragedies.
