Lack of banking facilities drove people towards ponzi schemes

Defrauded investors of chitfund companies, that promise impossibly high returns before going bust, blame lack of proper banking facilities which drove them towards ponzi schemes, as the tales of agents and their victims keep multiplying.

"I am a daily labourer. How is it possible for me to provide documents and go through formalities at banks and post offices 5-6 km away?" asks 50-year-old Malati, who invested Rs 30,000 in ponzi schemes.

An economist, Ajitava Rai Chaudhuri, says it is the easy availability of need-based loans and high returns on short-term investments that propel people to invest in ponzi

schemes.

According to Alok Prasad, CEO, Microfinance Institutions Network (MFIN), the industry body representing non-banking financial companies-microfinance institutions, it is the failure of big banks to reach out to the people that the poor

and middle class invest in banks and RBI-regulatedinstitutions, that is to blame.

Prasad also feels that there is a need to change the policy so that NBFC-MFIs, which are RBI-regulated institutions, are allowed to take micro-finance deposits for

risk-free investment.

Meanwhile, the tales of misery, both of agents and the people they lured offering very high returns, continue.

So far 10 persons, agents, officials of chitfund companies and investors, have ended their lives, while a director of one such company has been killed.

"It is really tough for me since news of the collapse of the Saradha group broke", Brajgopal Ganguly, an agent of Saradha Group at Hooghly says.

"The investors, demanding their money back, are threatening me. But from where will I return their money when I have lost my life's savings?" asks the agent who collected more than Rs 10 lakh for the Saradha Group.

Manasij (name changed), also from Hooghly district who had raised over Rs one crore and is on the run, has had his home attacked thrice by depositors.

... contd.

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