Victims of predatory lending suspended their nine-day protest on Friday after signing a nine-point agreement with the government that commits to criminalising loan sharking, drafting a special law within three months and establishing dedicated tribunals to handle such cases.

The agreement followed negotiations in Kathmandu between a government team led by Pushkar Sapkota, secretary at the Office of the Prime Minister and Council of Ministers, and the victims’ negotiating panel. Sapkota signed the agreement on behalf of the government, while Awadhesh Kushwaha signed on behalf of the protesters.

Under the agreement, the government will table a Cabinet proposal to declare loan sharking an economic crime and draft a Predatory Lending Crime Control Act within three months. The proposed law will invalidate fraudulent loan documents, criminalise 14 predatory lending practices, provide for the review of past cases and allow investigations against offenders under anti-money laundering laws.

The victims’ “Justice March on Foot” began on July 9 from Tritiyagachhi in Dhanusha. After the protesters reached Nijgadh in Bara, Home Minister Sudan Gurung travelled there on Tuesday and spent three days meeting demonstrators in Nijgadh and Simara.

The minister said he wanted to hear first-hand the grievances of farmers and labourers who claimed they had been driven to the brink of losing their land through fraudulent loan agreements. He later persuaded the protesters to suspend their march and send a delegation to Kathmandu for formal negotiations.

Once the Cabinet approves the proposal, fraudulent promissory notes, conditional land mortgages, and cheques obtained under coercion among others will automatically become invalid.

The home ministry has also committed to drafting the legislation within three months. The law will provide for an independent tribunal to expedite loan-sharking cases, mechanisms to return property to victims and compensation for those affected.

To prevent future exploitation, ward offices will be required to verify the legal source of funds and banking transactions before certifying private loan agreements. The agreement also calls for legal action against individuals who invest proceeds of corruption or other illicit income in predatory lending.

The proposed legislation will explicitly criminalise 14 predatory lending practices, including inflating the principal amount in loan documents, capitalising interest into the principal, failing to issue receipts after repayments, charging excessive or unregulated interest rates, threatening or coercing borrowers, subjecting them to physical or mental harassment, forcing them to sign blank cheques or documents, and unlawfully seizing their ancestral property.

The agreement also provides for forensic examination of disputed loan documents and investigation into lenders’ assets under the Asset Laundering Prevention Act. The government has pledged to remove legal obstacles that have prevented victims with cases pending before the courts from obtaining relief.

At the administrative level, a high-level coordination committee and a dedicated desk will be established at the Office of the Prime Minister and Council of Ministers under the leadership of a secretary. At the district level, facilitation committees led by assistant chief district officers, with three representatives of the victims, will be tasked with resolving complaints within six months. Their work will be monitored by committees headed by the chief district officers.

The government has also committed to introducing financial assistance through the annual budget to help vulnerable families avoid falling back into debt.

For hundreds of victims, the agreement marks a significant step towards securing legal protection against predatory lenders.

“This agreement is a major step towards justice,” said Shiva Shankar Mahato, Bhojpura in-charge of the Joint Worker-Farmer Movement Against Loan Sharking. “Declaring loan sharking an economic crime and introducing a special law will provide the legal tools needed to curb the practice. The real challenge now is ensuring that these commitments are implemented in both letter and spirit.”

Chandan Devi Raut, a victim from Dhanusha who says she has endured harassment by lenders for the past four years, said the agreement had given her hope.

“Just knowing that an agreement has been signed makes me feel the burden we’ve carried for so many years may finally be lifted,” she said.

The protesters, who are staying in Nijgadh, plan to return to their home districts on Saturday after receiving a final briefing from the negotiating team.