Indebtedness – From the Perspective of Commercial Microfinance in India

Abstract

Debt may be good but not the state of indebtedness! It has both qualitative and quantitative implications. Propensity to debt, especially “indebtedness” is a matter of concern. Impact of indebtedness varies both in degrees and dimensions. The state of being in debt (indebtedness) covers both personal and behavioural finance and is blended with positive and negative outcomes. On the positive side, people with easy access to debt have higher chances for financial wellness, provided the money is used for productive gain. The negative outcomes are desertion, distress and depression of the indebted consumers. Many a times, such incidence results in forced migration as observed in the cases of absconding. The extreme end of indebtedness leads to suicidal tendencies often culminating at self-killing! Such unpleasant incident potentially affect the present as well the future of a person. Sometimes the shock of indebtedness cascade down to a couple of generations. Recent agitations of the Tamil farmers, protesting for the announcement of a drought relief package and loan waiver, are evidences to what debt-distress is and what it can do!