Forms of Exploitation in Loan Sharking Practice in Mahottari District

Abstract

This research unpacked the forms of exploitation in loan sharking practice. Many scholars conceptualized exploitation in different ways. However, in this research, exploitation is more closely related to rural indebtedness. This study identifies multiple forms of exploitation experienced by borrowers in Mahottari District, reflecting the coercive strategies used by loan sharks to recover their money. Informants reported their experience of verbal abuse, threats of imprisonment, land seizure, and psychological pressure. Material exploitation was also prevalent; borrowers had lost their land, while others faced serious risks of land loss due to ongoing legal actions initiated by loan sharks. Physical violence emerged as another extreme form of exploitation in the study area. In this research, which explores the forms of exploitation in loan-sharking practice, a qualitative research design was used. Guided by the constructivist paradigm, this study seeks to understand the various forms of exploitation in loan-sharking. Data has been gathered through in-depth interviews and key informant interviews. The findings illustrate that loan sharking practice in the study area shows a broad chain of exploitative practices, starting from verbal intimidation and threats to land dispossession, physical violence, homelessness, and psychological harm. At the same time, this research highlights that exploitation is not universally applied, as some borrowers experience more lenient treatment depending on the loan shark’s personality, social ties, or the impossibility of recovering the debt.