Tirupati: Most street businesses take place by taking loans from private financiers. The unaccountable transactions are going on at rampant pace, with the demand for 'hand money' lending increasing among big and small merchants. This is beneficial for the financiers, but the result is the pilgrims are bearing the brunt of exorbitant prices.
“The entire business community here depends on the private financiers. Our fate is decided for the day based upon the money we can get from the moneylenders,” said Iqbal, a fruit vendor. The borrowers immediately get onto the roads with goods purchased and return home only after repaying the amount with the interest.
Iqbal, who became bankrupt as a businessmen and presently sells fruits, said the demand for hand to hand money transaction would remain forever due to the current demands and poverty levels.
Following the strict norms stipulated by the banks in giving loans, the small time business people are forced to knock the doorsteps of private financiers for taking hand loans, which will be in thousands.
K. Ramanjaneyulu, a chaat vendor who migrated from Anantapur said the procedures to be followed in the banks for loans is much harder than getting money from financiers. “I hail from Anantapur and want to take up a business in Tirupati. For this, loan from a bank is one of the possible ways but the procedures for it getting sanctioned is cumbersome. It is much easier getting and repaying the money to a financier,” he said.
The high rate of interest on loans by private financiers is also one of the reasons for the exorbitant prices in the temple city. It is a common sight to see shocked expressions from pilgrims from other places on hearing the exorbitant prices of products which is only because of the underground loan system which is going unnoticed. “For one day the interest rate for Rs1,000 in the market is approximately Rs 100. In this case, the borrower, who is already at the task of earning bread, would automatically sell the product at higher rate so as to fulfil an another task of paying the interest," said Sri Lakshmi, who is running a fancy shop in TK street.
According to unofficial reports the private financiers in hill shrine of Tirumala lend finance to the hawkers and shop owners at an exorbitant rate of interest, which depends upon the period of time which they repay the loan. If a hawker takes a loan of Rs 1,000 in the morning the interest of Rs 100 will be deducted in advance and he or she has to repay the total amount by evening....