Hyderabad: Old financiers now insist on daily Malai'

Hyderabad: Private financiers in the Old City are adopting a new modus operandi to make money. They have coined a new term for the daily collection of money from shopkeepers and hawkers and that is Malai. This means that if someone has taken a loan of Rs 10,000 from the financier, then he has to pay him Rs 100 everyday, no matter what happens. This daily collection is known as Malai.

The irony is, the principal amount remains the same despite paying Malai everyday. The operations of financiers in the Old City are different from that of new city. When someone seeks a loan from a financier in the new city, he can take it on a daily return or monthly return basis. He can pay the amount in EMIs, or daily for a certain period, after which he will be relieved of the loan, said Abdul Zaki a fruit shop owner. “But things are different in the Old City. Here a person has to keep paying the daily interest (which is now known as Malai) until he repays the principal,” he added.

The term malai is in circulation from the beginning of this year and it is used as a code to avoid the attention of police and others. Md Abdul Akram, an activist in Old City, said that malai will be collected more during Ramzan as private financiers lend money to push-cart vendors, shop owners and hawkers at high interest rates, and these people do the seasonal business of selling Haleem, fruits, vegetables, dresses etc.

“People take loan from them as they can pay malai everyday, because of the flourishing business dring Ramzan. But problem crops up after the business slows down. There were serious repercussions when many people couldn’t pay the daily interest. The financiers would react by taking away the household items of the defaulter. They even take away vehicles. In worst cases, people who took loans were beaten up when they were unable to pay; and some were murdered.”

When contacted, deputy commissioner of police, south zone, Mr. V. Satyanarayana, said, “We have a special focus on financiers because they try to take advantage of the Ramzan season and fleece vendors. Their main targets are the middle class and the lower middle class. If anyone is found indulging in illegal acts they will be booked under the Telangana State Money Lending Act and also under the IPC provisions against extortion.”

30 cases booked

• Rs 1 Lakh -The interest rate for Rs 1 lakh is nearly 25 to 30 per cent
• Malai is the new code word used by private financiers.
• The loan taker should pay Rs 100 every day as Malai.
•  Amount given on loan can be anything between Rs 1 lakh and Rs 10 lakh.
• Around 30 cases were booked against illegal private financiers in 2017.
• The word Malai is used to escape the attention of the police and outsiders as that can be dangerous at times.

Rs 18,000 ‘Malai’ on  a loan of Rs 50,000
Rasool Khan a resident of Ali Jah Kotla and a fruit shop owner, had taken a loan of Rs 50,000 from a financier six months ago and is still repaying Rs 100 everyday. Now he is afraid of what will happen to him if he is unable to repay the principal amount of Rs 50,000.

Rasool's main concern is that despite paying Rs 18,000 as malai, the principal is still the same and if he is unable to repay the entire principal at one go than they might attack him.

Fear of illegal financiers has gripped vendors in the Old City. The financiers leave no stone unturned to trap the poor. People approach them for financial help, but they also hunt for people to keep their businesses running and they do this by word of mouth. They casually say areyy tum kabhi bhi paise wapas kar sakte ho (you can return the money whenever you want) and the vendors get trapped.

They take the loan and start paying malai, said M. Vinod Agarwal, a resident of Bahadurpura. He added, “My neighbour who has a dress shop took a loan of '50,000 from a money lender last year and started paying Rs 100 everyday. But one day he realised that he had paid more than the principal and questioned the financier about the interest rate and was unconvinced with his reply. So he told him that he won’t pay anything more. Next day a gang of 10 came to his house and beat him up. He filed a police complaint. They were arrested but are out on bail now.”

Activist Md. Abdul Akram said, “Nationalised banks don't give loans to small businessmen and they are forced to approach financiers. The banks don’t give them loans as they don’t qualify for loans. That is why the state government introduced minority loans for daily wage labourers but that is not availed by many. So what could be the next step for these poor people if nobody comes forward to help?”