Loan shark victims in Rautahat have returned to the streets, alleging that the police, local administration and courts have failed to provide justice against predatory lending. At a press conference organised in Chandranigahpur, victims shared harrowing accounts of losing ancestral properties and facing legal harassment despite repaying debts multiple times over.

Narayan Ghimire, a resident of ward 4 of Chandrapur Municipality, shared his ordeal regarding local trader and lender Rambabu Prasad Kalawar. According to Ghimire, he borrowed Rs500,000 in November, 2019 but has since paid back Rs2.7 million. “Even after paying five times the principal, he refused to return my legal bond and instead filed a court case against me,” said Ghimire. “We went to the police for help, but the lender used the court to trap us further. These people must be socially boycotted,” said Ghimire.

Police arrested Kalawar last week. But victims say his tactic of issuing loans via cheques while demanding cash repayments makes it nearly impossible to prove they have paid. The crisis shows a systemic failure in Madhesh province. Bibhashankar Mahato, in-charge of the Farmer-Labourer Movement against usury, said that the web of predatory lending is pushing families towards homelessness.

“We are victimised by lenders, and now we are being victimised by the administration,” said Mahato. “They pressure us to reconcile rather than prosecute the criminals. This is our final battle for justice,” he warned.

The usury crisis gained national prominence after victims marched to the national capital in Kathmandu twice in 2023. Although the government eventually amended the national penal code to criminalise unauthorised transactions, local implementation remains sluggish. Protesters claim that lenders often enjoy political protection and use financial influence to sway local officials.

“The court listens to documents, not to our suffering,” Bodh Kumari Giri, a victim from ward 5 of Chandrapur, said at the press conference. She argued that judges often rule based on forged or inflated documents without investigating the lender’s financial sources. “The law should wipe the tears of the poor, not just validate a predatory contract. Where is the justice for those who have lost everything?”

The human cost is devastating. Manti Devi Thakur of ward 1 of Garuda Municipality lost her home after borrowing Rs50,000 to send her husband abroad for employment. She had signed over her land as collateral, trusting a verbal promise that it would be returned. The lender refused to return the property and eventually demolished her family hut. “He destroyed our home in front of the authorities. We are now completely displaced and have nowhere left to turn,” she lamented.

As protesters prepare for further agitation, they have called for a social boycott of known loan sharks and demanded that the central government intervene in Rautahat immediately to ensure justice.

The government had announced a crackdown on loan sharking in 2023, following mass protests across the nation, particularly in the Madhesh region. Loan sharking had driven thousands into poverty and landlessness, with informal lenders charging up to 60-100 percent annual interest rates. In the wake of public outrage, the government amended laws to criminalise unlicensed money lending and set up complaint mechanisms. However, victims say these promises have largely fallen flat.

Following nationwide protests, including in Kathmandu, the government formed a commission under the leadership of the former chairman of the Special Court, Gauri Bahadur Karki in April 2023 to address the demands of loan shark victims.

The commission, formed as per a five-point deal reached with the victims, collected thousands of complaints and filed some cases, but most victims are still left in the lurch.