who killed bhavna
N2-508-021
REV: MARCH 19, 2008
V. KASTURI RANGAN
KATHARINE LEE
Who Killed Bhavani Manjula?—A Story of
Microfinance in Andhra Pradesh
This case has been constructed from secondary sources and information provided to the authors by Share Microfin Limited. Many of the events in this case took place over the timeframe of 2000 to
2006. During that time one US dollar converted to approximately Rupees (Rs.) 45. Wherever possible the relevant conversions have been worked into the text. In calibrating newspaper excerpts, please note that “1 lakh” is equivalent to 100,000 and “1 crore” is equivalent to 10,000,000.
The Story of Bhavani Manjula
In the spring of 2006, newspapers throughout India were reporting that at least 200 people had committed suicide in Andhra Pradesh due to the inability to repay loans they had taken through microfinance schemes. One of the individuals profiled in the papers was Bhavani Manjula.
According to The Hindu and the Deccan Herald Bhavani Manjula, and her 24 year-old brother, committed suicide because of harassment by a microfinance institution (MFI). The papers reported that Bhavani Manjula’s mother took out a loan of Rs. 20,000 [$450] from a private moneylender, and that after 50 weeks of repaying the loan, she was surprised to find out that the majority of her payments had gone to pay the interest. According to the news stories, she had paid Rs. 100,000
[$2,200], but was told she still owed the moneylender Rs. 72,000 [$1,600]. Unable to pay this loan back, the papers wrote that Bhavani Manjula’s mother turned to an MFI from which she took out another loan so as to be able to repay the first loan. The MFI reportedly gave Bhavani Manjula’s mother a loan of Rs. 140,000 [$3,100] and it was agreed that she would repay Rs. 180,000 [$4,000] in 50 installments of Rs. 3,600 [$80] each.1, 2
The accuracy of this story has been called into question by Mr. M. Udaia Kumar, Managing
Director of the MFI, Share Microfin Limited
REV: MARCH 19, 2008
V. KASTURI RANGAN
KATHARINE LEE
Who Killed Bhavani Manjula?—A Story of
Microfinance in Andhra Pradesh
This case has been constructed from secondary sources and information provided to the authors by Share Microfin Limited. Many of the events in this case took place over the timeframe of 2000 to
2006. During that time one US dollar converted to approximately Rupees (Rs.) 45. Wherever possible the relevant conversions have been worked into the text. In calibrating newspaper excerpts, please note that “1 lakh” is equivalent to 100,000 and “1 crore” is equivalent to 10,000,000.
The Story of Bhavani Manjula
In the spring of 2006, newspapers throughout India were reporting that at least 200 people had committed suicide in Andhra Pradesh due to the inability to repay loans they had taken through microfinance schemes. One of the individuals profiled in the papers was Bhavani Manjula.
According to The Hindu and the Deccan Herald Bhavani Manjula, and her 24 year-old brother, committed suicide because of harassment by a microfinance institution (MFI). The papers reported that Bhavani Manjula’s mother took out a loan of Rs. 20,000 [$450] from a private moneylender, and that after 50 weeks of repaying the loan, she was surprised to find out that the majority of her payments had gone to pay the interest. According to the news stories, she had paid Rs. 100,000
[$2,200], but was told she still owed the moneylender Rs. 72,000 [$1,600]. Unable to pay this loan back, the papers wrote that Bhavani Manjula’s mother turned to an MFI from which she took out another loan so as to be able to repay the first loan. The MFI reportedly gave Bhavani Manjula’s mother a loan of Rs. 140,000 [$3,100] and it was agreed that she would repay Rs. 180,000 [$4,000] in 50 installments of Rs. 3,600 [$80] each.1, 2
The accuracy of this story has been called into question by Mr. M. Udaia Kumar, Managing
Director of the MFI, Share Microfin Limited