The Associated Press has obtained portions of a suppressed independent investigation into the role that debt collectors working for microfinance giant SKS played in the suicides of desperately poor borrowers in the Indian province of Andhra Pradesh. SKS made global headlines when it received backing from a US venture capital firm, the Boston-based Sandstone Capital, and then had a highly successful IPO. The independent investigation, commissioned by SKS itself (though the company has disavowed it) documents a pattern of usurious practices by vicious debt-collectors working for the company that drove several borrowers to grisly suicide.
The interview videos were shown to the AP by Uma Maheshwari, who said she was present during one set of recordings and visited several of the families personally. She left SKS in July.
In one video, the daughter of borrower Dhake Lakshmi Rajyam cries, gasping as she talks to an investigator in Tadepalligudem, Andhra Pradesh.
Rajyam was unable to pay off $2,400 owed to eight different companies. Employees of microfinance companies, including SKS, urged other borrowers to seize the family's chairs, utensils and wardrobe and pawn them to make loan payments, her family told investigators. Unable to bear the insults and pressure of the crowd of borrowers who sat outside her home for hours to shame her, Rajyam drank pesticide on Sept. 16, 2010, and died, the family says.
"We have lost my mother," her daughter says. "Nobody will support us."
The investigator's conclusions lay the blame on SKS employees, saying they failed to comply with company policies "and even basic moral rights."
Vautrey said he sent the case studies to three top managers, including Rao. Emails obtained by AP indicate that summary reports were emailed to the managers.
Rao did not respond to multiple requests from AP seeking comment.
(via Making Light)