The Untalked Debt Trap: Exploring Loan Inequality Among South Asian Farmers

Despite being one of the most fertile regions in the world, South Asia’s farmers bear the brunt of loan inequalities, even though they are the backbone of the economy in many of these nations. Countries like Bangladesh, Sri Lanka, India, and Pakistan are major agricultural producers, yet their farmers struggle to access formal credit and are forced to rely on lenders who charge exorbitant interest rates. This paper investigates the reasons for the systemic failure of loan inequality in the agricultural sector of South Asia, such as the issue of financial literacy, the fear of banks of default by the borrowers, and the monopolistic positions of large corporations. Moreover, it provides the various critical socio-economic impacts of inequality in the region, for example, the escalating suicide rates of farmers from financial stress. The paper urges policy makers to address these issues through the reformation of the financial system, more equity to credit, and that measures be put in place to shield the powerless farmers from such exploitation.