December 6, 2019

Millennial lives and the new age debt trap

...A few months after Mahapatra’s first brush with new-age credit, he got to know that many of his friends who’d also taken loans from the same fintech firm had started getting calls from recovery agents. “Their pocket money wasn’t enough but they didn’t realize how high the interest was. They hadn’t even informed their parents. The interest kept mounting and they were just not able to repay," he says.

Mahapatra gave Mint access to a WhatsApp group where students and young professionals, who have been unable to repay their loans, discuss the harassment they’re dealing with. “When I saw the torture people on the group were subjected to, I closed my ongoing loan and uninstalled the app. The problem is huge and has penetrated deep within the student community," says Mahapatra. One of the members of the WhatsApp group, Kishore (name changed), is a 21-year-old student preparing for MBBS in Kota, Rajasthan. Kishore would take loans from the fintech firm very often to meet his lifestyle expenses: from going out with friends, ordering take-out food, and so on. But the last time he borrowed ₹2,000, he wasn’t able to repay.

“I am a student. How can I repay if the amount keeps increasing?" says Kishore. The fintech firm tried to recover the loan, but when Kishore still didn’t pay his dues, he started getting calls from recovery agents. “The agents are threatening to inform all the contacts on my phone about the default. They can do this because I’d given the app access to my contacts. I’d also uploaded a video on the app promising to repay all my loans on time and accepting all the terms and conditions. The agents are blackmailing me with this," says Kishore.


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