Tamil Nadu perhaps has the best laws against usurious money-lending and worst forms of settling disputes arising out of un-repaid loans. Section 7 of the Tamil Nadu Money Lenders Act, 1957, says, “No money lender shall charge interest on any loan at a rate exceeding such rate as the government may, by notification, fix from time to time.”

The trouble is that legal banking and financial institutions do not lend money to poor traders or farmers without collateral. To cater to those in dire need of money a system known as kandhuvatti lending has been developed which functions round-the-clock, all days of the week. Interest rates are exorbitant and the way in which it is collected drove many to commit suicide. The Tamil Nadu Prohibition of Charging exorbitant interest Act was enacted in 2003. In 2014, the Chennai Commissioner of Police formed a special wing called kandhuvatti and non-specialised traditional crimes wing.

None of these had any significant impact on kandhuvatti lending though it is illegal. On 23 October Essakkimuthu, 28, of Kasidharman village in Tirunelveli district, his wife Subbulakshmi, along with their 4-year-old son and 18-month-old daughter committed self-immolation in front of the office of Tirunelveli district collectorate.

The horrific act of the distressed family once again turned the spotlight on the kandhuvatti lending in vogue in Tamil Nadu for decades. Essakkimuthu, a daily wage earner, had borrowed Rs 1.45 lakh from a usurious money lender and repaid more than Rs 2 lakh which was treated as interest and he was harassed to repay the borrowed sum which drove him to take the extreme step. The kandhuvatti business is patronised and protected by local politicians. It is not confined to rural Tamil Nadu only. It is prevalent in cities, including Chennai.

It is easy to borrow any amount of money even in the middle of the night. No questions are asked. If a borrower defaults in repayment extra-legal methods are adopted. The most common practice is to harass the women folk in the family of the borrower, including sexual abuse.

A common sight at Koyambedu, the wholesale vegetable market in Chennai, is a retailer taking a loan of a thousand rupees from a money-lender in the morning who will disburse Rs 900 only, keeping Rs 100 as interest for the day. By evening he will return Rs 1,000 to the lender after making a small profit for himself. The 10 per cent interest a day works out to 3,650 per cent per year.

No one complains. Trouble starts only when the borrower fails to repay in the evening which is not infrequent.

As long as the deadly concoction of the nexus between local politician, local money lender and local police continue, usurious interest rates will prevail and suicides like those of the Essakimuthu family cannot be averted.