Our cook and cleaning lady in Pune, India Sunita looked very sad. So I asked her what the matter was. I knew that her son died at the age of 28, a year ago, because of some illness with his liver. She and her husband took him to the hospital. Most of these poor people have no medical insurance. As a result her husband took a big loan to pay for the hospital bills. And he is paying it off from his monthly salary because he has a Government job of sweeping the roads in the city of Pune.
Someone advised Sunita to buy something for her son so that he would recover. When your loved one is ill you are like a drowning person. You try to hold onto anything that is floating – just to survive. She needed to buy whatever medicine that was recommended and for buying it she needed money. Where to get Rs.300, 000.00 (Rupees Three hundred thousand).All one has to do is ask in your neighborhood the so called “Hutment”. Someone gave her the mobile phone number of a person who would facilitate the loan.
The son was in the hospital for months – close to a year. In most of the hospitals the relatives of a patient have to pay upfront at the time of getting admission into the hospital. And when that money runs out the hospital tells the responsible relatives that “You have to pay us this and this much for the next procedure – if you can’t afford it please move the patient to a free hospital which is literally –Hell- “ I have visited the free hospital – I wanted to see its condition. Unbelievably filthy – I can’t describe the conditions in words – one would die there – even though you may not have died if you would not have gone to that hospital”. That means the loved ones have to take loans from the loan sharks.
Sunita took a loan of Rs. 300,000.00. (Let us not convert Rupees into Dollars. People in India make Rupees – not Dollars). Unfortunately her son died in the hospital. And since the death of her son she has been paying 8% interest rate. I know how much we pay her per month. So I thought with what she makes she is fine to pay off the loan with 8% interest rate. Then I asked Asif, our manager in Pune, who takes care of everything for us. He is a very upright individual. I wanted to know the truth. He practices Islam. From what I know about him, for close to 12 years, he is more a Brahmin than many Brahmins I know of, put together. So I asked Asif in front of Sunita why she is so worried. I said the interest rate is 8% – right? But Asif realized what I was thinking.
He said 8% is not a yearly interest rate – it is a monthly interest rate! That means she has to pay Rs. 24,000.00 (Rupees Twenty Four Thousand) per month only on interest – all cash. That means in a year’s time the person who gave her loan has collected almost all of his principal in cash – not necessary to declare anything and will continue collecting interest further for years with principal still intact!
I sat down with her and Asif and we made a plan. I am giving her full outstanding loaned amount, which is the complete principal, because she had paid only interest which is about the same amount for a year, as loan’s principal WITHOUT interest. Hopefully Sunita pays us our principal back in the amount of her salary per month. Hopefully she knows that she is not supposed to take any loan. That is fine till someone from her family has to go to the hospital!
Asif went with Sunita and met the loan shark. These loan sharks meet the person who has taken the loan only on a street corner. They never give out their names or their addresses. They keep on changing the mobile Tel number very frequently. Asif asked the shark whether he feels bad to take this much interest. He said “I get the money to loan out from a rich man. I don’t want to mention the caste of the “Sawkar”, the moneyman. The Sawkar charges him 5% monthly interest. He has a partner and the two share 1.5% interest per month each.” Asif asked him what the highest interest rate you have charged” – without even blinking an eye he said 25% per month.
After Asif and Sunita returned to the loan shark Rs 300,000.00 the loan shark will find his next victim within a few minutes. One misery will be transported to another household of a poor person.
This was very upsetting to me. What I did is only a drop in the bucket! There are so many people who are in the same situation like Sunita- especially women!
Then I wanted to see whether there is any way out of this misery?
This is what I could find out from a seasoned and reliable insurance agent, Mr. Ramesh Kanade, in Pune.
All the following policies can be bought through the banks. These are the initiatives of the Central Government of India under the Prime Minister Mr. Modi.
1) PRADHAN MANTRI (Prime Minister, currently Mr. Modi) JEEVAN(Life) JYOTI(Flame- meaning Life’s Flame) BIMA(Insurance) YOJANA (Plan)
Sum Assured: 2 Lakhs (Rs. 2,00,000.00). Payable on member’s death due to any reason.
Premium: Rs.330/- per annum per member. Auto Debit facility per year.
Period: The scheme will be a one year cover, renewable from year to year.
Scope of coverage: All savings bank account holders in the age 18 to 50 years will be entitled to join. Eligible to join the scheme through one savings bank account only.
2) PRADHAN MANTRI SURAKSHA(Protection) BIMA YOJANA
Sum Assured: Rs. 2,00,000.00 . Payable on member’s death OR disability due to accident only.
Premium: Rs.12/- per annum per member. Auto Debit facility per year.
Period: The scheme will be a one year cover, renewable from year to year.
Scope of coverage: All savings bank account holders in the age 18 to 70 years will be entitled to join. Eligible to join the scheme through one savings bank account only.
3) RASHTRIY(Country) SWASTHYA(Good Health) BIMA YOJANA
RSBY has been launched by Ministry of Labor and Employment, Government of India to provide health insurance coverage for Below Poverty Line (BPL) families. It has been clearly recognized that health insurance is one way of providing protection to poor households against the risk of health spending leading to poverty. The poor are unable or unwilling to take up health insurance because of its cost, or lack of perceived benefits. Organizing and administering health insurance, especially in rural areas, is also difficult.
Sum Assured: Rs. 30,000/- Payable per family (5 Members only) annum on a family floater basis.
Scope of coverage: Health Insurance Coverage for Below Poverty Line (BPL) families only.
4) HEALTH INSURANCE
What It Offers: Cover for expenses incurred during hospitalization due to illness or surgery. What It Costs: Rs 700-800 a year for a cover of minimum Rs 50,000 for individuals aged between 18 and 40yrs.
Who is Eligible: All citizens of India
Who should Opt: Hospitalization can wipe out the entire savings of those already at a financial disadvantage. Though not offered by the government, affordable policies are available from state-owned non-life insurers like New India Assurance and Oriental Insurance.
This is a cautious beginning to do something for the poor of the country. But it is still a far cry from having to spend for Sunita’s son Rs. 20,00,000.00 for which Sunita’s husband borrowed from his employer, who is the Government of Maharashtra State, with a reasonable interest rate where the Govt. deducts money each month from his salary. And the shortfall of Rs 3,00,000.00 Sunita borrowed from a loan shark. There are many loan sharks in this country and there are hundreds of thousands of victims for these sharks to literally kill.
India is a country of Saints and Loan Sharks. Welcome to Incredible India!