PESHAWAR: The absence of the law to prohibit private money lending business in Fata gives a free hand to moneylenders to exploit cash-strapped borrowers and apply oppressive tactics for recovery of their loans, including forced marriages and land grabbing.

A draft law to declare private money lending at exorbitant rate of interest a crime in tribal region has been pending with the ministry of Sates and Frontier Regions (Safron) since Dec 2015.

An official document shows that Civil Secretariat Fata issued four reminders to Safron in 2016 asking for the promulgation of regulations to stop private money lending in tribal area.

Use oppressive ways like forced marriages, land grab for loan recovery

The draft Federally Administered Tribal Areas (Fata) Prohibition of Private Money Lending Regulation, 2015, was forwarded to the Safron by the then KP governor in 2015.

The relevant ministry will obtain the assent of the president to make the regulation.

Like Fata private money lending business exists in Punjab, Khyber Pakhtunkhwa and other parts of the country. Punjab government had passed law in 2007 for the prohibition of private money lending while Khyber Pakhtunkhwa made legislation in 2016 in this regard.

The menace of private money lending has become a thriving business across Fata, too, where 60 per cent of the population lives below the poverty line. The people obtain loans on high interest rate and moneylenders are grabbing lands or other moveable properties like tractors, trucks or other machinery if borrower fails to repay principal amount with interest within stipulated time.

Darra Adamkhel, known for manufacturing of guns, is the only area where private money lending has declined.

The locals said the militants, who took over the area under the garb of Peace Committee in 2007, had ruthlessly treated moneylenders in Darra.

“Militants summoned moneylenders to their hideouts and slaughtered them,” said a local resident, adding that severe punishments had created fear among the people.

He said Darra was famous for the business before the arrival of militants.

An official, who designed the draft regulation, told Dawn that private money lending was the most flourishing business across tribal region and that big and small moneylenders were involved.

“This is one of the most profitable businesses in tribal areas,” he said, adding that moneylenders applied various tactics for recovery of their loans with interest.

The most inhuman practice prevails in South Waziristan Agency, where borrowers are compelled to force marriages by lenders if they (borrowers) fail to repay loans.

A local resident said several cases of forced marriages had been reported in Wana subdivision.

“The borrowers were forced through jirga to marry their sisters or daughters to the family members of the lenders,” he said on condition of anonymity.

He said clerics were also divided over the practice as many supported the business of money lending.

“I have heard about forced marriages in the money lending deal, but no case was registered,” said the official, who served in South Waziristan.

Reports suggest that the people are running money lending business called it ‘beet’.

A source said the political authorities had attempted to ban the business through administrative orders in the past, but in vain.

Officials said the draft regulation proposed severe punishment for offenders.

The draft law suggests that no person, who is bona fide resident of Fata as defined in Article 246 of the Constitution or is a member of a recognised tribe, individually or collectively, shall engage himself in private money lending in or outside Fata.

It further outlines that any person, bona-fide resident or is a member of a recognised tribe having share in profits and losses of a recognised tribe if contravenes Section 3 of this regulation inside or outside Fata shall be punished with imprisonment for a term, which may extend to 10 years but not less than seven years or with fine which may extend to Rs1 million, but not less than Rs 0.5 million or with both. The lent money shall also be liable to be fortified in favour of the government.

The draft says that any offence committed under this regulation shall be non-bailable and non-compoundable.

It adds that any offence committed under Section 3 shall be cognisable and shall be tried by the respective political agent/assistant political agent of the agency/Frontier Regions of the Fata under provisions of the Frontier Crimes Regulation 1901 amended in 2011.

After assent of the president, the Civil Secretariat Fata may make rules for carrying out purpose of this regulation, said the draft.

Published in Dawn, August 13th, 2017