Bihar: Lives Crushed Under Debt Trap, Illegal Microfinance ‘Gunda Banks’ Terrorise Villages
In Bihar’s Muzaffarpur district, poverty-stricken families are being pushed into a deadly debt trap as illegal microfinance companies—locally dubbed “Gunda Banks”—continue to operate unchecked, exploiting the weakest sections of society. Charging exorbitant interest rates and using intimidation tactics, these unregulated lenders have turned entire villages into zones of fear, with a disturbing rise in suicides linked to loan recovery harassment.
Despite the presence of only 22 registered microfinance companies in the district, dozens of illegal entities are functioning openly, exposing serious administrative lapses. These lenders, masquerading as legitimate microfinance institutions, reportedly charge up to 30 percent interest and deploy criminally inclined recovery agents to coerce rep...









