A survey of 6,685 women across 15 Indian states has found that five per cent of borrowers of small loans have faced “physical or sexual violence” from recovery agents of non-banking finance companies (NBFCs) and micro-finance institutions (MFIs).

The report of the yearlong survey, by the CPM-linked All India Democratic Women’s Association, pins the blame on the Centre for allowing these firms to become intermediaries between banks and borrowers under a self-regulatory framework.

It also flags how women are dragged into a debt trap by having to take loans to repay previous loans. The survey’s main findings were released on Saturday at the association’s “national public hearing on rising indebtedness and MFI loot”.

“Forty per cent of these loans are taken from NBFCs-MFIs and about 10 per cent from other informal sources. Forty per cent of the women who have taken loans from MFIs have been refused loans from public sector banks; in West Bengal and Assam this proportion is over 60 per cent,” the survey report says.

“Distress debts and deepening extent of indebtedness are evident as approximately 32 per cent take loans from more than 3 companies and over 60 per cent take loans from more than 2 companies.

“Over 30 per cent of women in 11 out of 15 states have taken loans to repay their previous MFI loans. Approximately 40-50 per cent of the women in all states have taken loans to repay either their own or their husband’s loans. Over 50 per cent in 10 out of 15 states are unable to make timely EMI payments and have to pay fines.”

The impact of this indebtedness is violence and social strife.