Dengarkan

Thousands of Indians in West Bengal have lost their savings after a financial group collapsed two months ago.

They mainly with low incomes have invested in the scheme run by the Saradha Group.  They had made promises of high returns over a short period of time.

More than 20 people in West Bengal alone have reportedly committed suicide following the Group collapse.

Kamal Seikh’s family is mourning.  42-year-old Kamal committed suicide last month.

He was a fund agent for the failed Saradha group ….responsible for nearly 30 thousand US dollars from more than 30 families.

His cousin Rakib Gazi says when the fund collapsed he came under intense pressure.

“The depositors felt cheated and they blamed Kamal for their loss. They asked him to refund the money within a week... and the pressure went higher for Kamal. When he said to the villagers that he couldn’t return the money, they treated him badly. He couldn’t bear the pressure and he hanged himself.”

Cycle rickshaw puller, Rajab Ali, was one of the people putting pressure on Kamal to pay back his money. He invested 700 US dollars in to Saradha Group fund with a promise of four-fold return in 10 years.

He wanted to use the money for his daughter’s marriage.

“I sold a piece of land I inherited from my father,” he recalls.

“Then Kamal offered me to invest the money, it seemed attractive and I invested all my money there. Now as Saradha group collapsed, I’m very worried. How can I pay the expenses for my daughter’s marriage? I earn only 2 US dollars a day, I can’t save any money. Saradha has ruined my daughter’s future.”

Saradha Group is a group of Indian companies that began collecting funds for investment, or chit fund, from the public in 2007. At its peak the Saradha was a powerful group with holdings in real estate and the media, including several newspapers and TV channels.

In West Bengal alone, it had 350 thousand investors with a total investment of more than 700 million US dollars.

Nandita Haldar is a Saradha agent who collected more than 28,000 US dollars from various villages. She is now in hiding.

“The depositors are raiding our houses demanding their money be refunded,” she says.

“Our life is under serious threat. We are staying away from our villages. If I return to my village the depositors will kill me. We took their hard-earned money promising a good return on maturity. Now if we fail to return their money either they will kill us or we have to commit suicide.”

Protests have erupted in towns and villages by people demanding their money back. And the police and the government have also launched a multi-agency probe to investigate this case.

Saradha Group is not the first group in India offering this type of short-term high-return schemes – know in India as Ponzi schemes.

Investment expert Dr Timir Baran Garai explains why they are popular among poor and illiterate families.

“Firstly, there is a lack of banks in vast rural areas. To open a bank account you need proper identity certificate, residence proof and other related documents. Poor people often can’t manage to procure many of such documents. As a result, for a common man opening a bank account is a Herculean task. On the other hand, agents of these Ponzi schemes are extremely investor-friendly. They rarely seek a document that a depositor cannot produce.”

This is the case for Reba Thakur, who sells vegetable in a market in Kolkatta.

“I am illiterate. I don’t know how to write even a letter from the alphabets,” she says.

“I shall be lost in the sea if I go to the bank. So I never thought of saving or investing money in a bank. But I wanted to save some money so I began depositing money in a chit fund scheme. The agent of the fund did not ask for any document. He visited my shop to collect 55 cents from me daily. I found this service extremely convenient.”

Thakur deposited her money in MPS Greenery, another popular chit fund in India. But she took all her money out when she heard about other funds going bankrupt.

But it was too late for driver Biswaji Pal...

“I took my widow mother's entire life's savings of 10 thousand US dollars and put it in a Saradha scheme. I trusted the company more than average investors did,” he says.

“But now it has been public that Saradha has duped its all investors. We have lost our entire family's savings in this scam. We are at sea. I cannot face my mother now.”

“I have to commit suicide."