The colloquial term “meterbyaji” is difficult to define—the closest analogy to the process of interest compounding upon fraudulently increased principal would probably be the water supply gauge in Kathmandu Valley where the meter swirls even when all that is gushing out of the pipe is merely pumped air. But to understand its ruinous effects upon the lives of plebeians ensnared in the web of falsified documents, usurious interest rates and exploitative methods of recovery, a mere look at the faces of meterbyaji victims is perhaps enough.

There are laws in place that proscribe usury, but their enforcement is fraught with institutional hurdles. Power relations at the local levels are highly skewed in favour of the loaners. Lenders are the ones who fund political parties during elections, entertain government officials during their field visits, and host assessment teams from provincial or federal capitals. Ironically, even the poor are often reluctant to speak against loan sharks for fear that they would be denied credit should they need to borrow money sometime in the future.

The provision of systems such as grievance redress mechanisms for the borrowers at the local levels is necessary, but not enough. The meterbyaji phenomenon is a symptom of rural distress—adversely affected livelihood of the peasantry due to climate change, stagnant productivity, land fragmentation and pandemic—where modern credit systems have failed to displace exploitative lending practices inherited from the feudal era. In addition to the landlords of the past, quite a few “loan entrepreneurs” have emerged that borrow large sums from commercial banks at lower interest rates and then lend them to those in dire need at higher rates compounded into the principal at regular intervals.

Aware of the futility of protesting in front of the district administration office or the provincial government, many loan shark victims from different parts of the country have walked from as far afield as Kakarbhitta near Mechi River in the east and Gaddachauki along the banks of Mahakali in the west. They covered hundreds of kilometres on foot in about 23 days.

The federal government seems unmoved by their plight: All it has done is assigned a bureaucrat to look into their grievances. A few civic activists have been unwavering in showing their solidarity, but the larger society appears to have little concern for the victims of economic injustice.

Economic atomisation

The city traffic had gone haywire on the first day of the protest rally of usury victims. Since unhindered movement is the fundamental condition of urban life, the grouse of commuters stranded in the traffic was partly understandable. From a relaxed plutocrat ensconced in the air-conditioned comfort of a chauffeured hybrid car or an SUV on his way to a leisurely lunch around Durbar Marg to the wage worker hanging by the door of an overcrowded bus headed towards Godavari, almost everyone could be heard complaining about the nuisance that the “meterbyaji pidits” have become for the city.

Apparently, there is little sympathy for the denizens from “outside” among the citizens of Kathmandu. In a stagnant economy, it appears that everyone is under stress of some sort or the other with little time or intention to empathise with anyone else. Analogous to the process of social atomisation that creates a society of isolated individuals under an all-powerful state, economic atomisation seems to produce fragmented groups of stratified players in the marketplace where purely transactional association triumphs over everything else.

The feudal society had its nobility, priesthood, householders and peasants where the relationship of loyalty and protection created some sort of bond between the patrons and their clients. Even amidst extreme exploitation, social trust maintained regime stability during the Ranarchy (1846-1951), which collapsed mainly due to geopolitical changes. The absolutist Shah monarchy (1960-1990) transformed the patron-client relationship into the deity-devotee connection where the faithful worship its God-incarnate with a sense of religious duty.

In much of the West, industrialisation produced elements of social modernity. The working class solidarity emerged as mass production brought labourers from various backgrounds to one place. With its control over means of production and appropriation of surplus, the bourgeoisie had enough to invest in arts and culture and establish its hegemony. A rise in awareness brought about class consciousness. Various ideologies—liberalism, capitalism, socialism and communism—soon became the basis of mobilising the masses into political parties that then contested for control over the reins of the all-powerful state.

By contrast, a universal belief after World War II that economic modernity would automatically follow political modernisation led to the emergence of political parties that had little resonance with ground realities in developing countries. The feudal economic structure remained intact as charismatic leaders, often from an aristocratic background, emerged as the patron protectors of the populace. The personality of the leader rather than an ideology of political economy has remained the fulcrum of most political parties. After the late 1990s, Nepal entered into the post-industrial stage without ever experiencing the modernising effect of industrialisation as massive export of unskilled labour to West Asia began to transform the entire society.

Pecuniary culture

Perhaps due to the misogynistic implications of the quote, comparing statistics to bikinis—“what they reveal is suggestive, but what they conceal is vital”—has largely gone out of circulation. Any data, however, is only as useful as its interpretation. Compared with 7.9 percent of the GDP in Pakistan, 5.1 percent in Sri Lanka, 4.7 percent in Bangladesh and 3.3 percent in India, the share of remittances to the GDP of Nepal in 2022 was as high as 23.1 percent. It continues to hover around that figure with chances of increase in the coming years due to larger out-migration of the labour force.

Official numbers are high enough; unofficial estimates put the contribution of remittances to at least one-third of the GDP since informal channels of inflow are almost impossible to monitor. Even with the lower figure in mind, it’s easy to surmise that remittance is the main driver of the economy in the country.

Oodles of noodle packets sold in the countryside are mostly paid out of remittance inflows. Rural wages have gone up largely because the labour supply has drastically decreased as every able-bodied person has exited out of the local market and gone international. A plethora of budget schools and hospitals of the profit sector draws its entire clientele from remittance-receiving families.

Despite the exploiter-exploited relationship, the feudal lords of yore knew that their fields would go fallow if peasants exited their domain. The mill owners milked their workers but were vested in keeping them alive and productive. In the pecuniary culture of consumerist society, financial institutions have no direct bond with the primary source of their funds—the depositors, much of it consisting of direct or indirect beneficiaries of remittances.

Institutional lenders concentrate instead upon their main customers—the large borrowers—that manipulate the market through syndication and cartelisation for profit maximisation. It's all legitimate and par for the course. The weakest section of society has almost no access to formal financial institutions. Often either the populist politicos and so-called saving and credit cooperatives step in to harvest the discontent of loan shark victims. There seems to be no end in sight to their plight.