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Three rows of wooden stilts elevate Than Than Htwe’s house above a stagnant pond in Seikkyi Khanaungdho township, an island that lies at the convergence of the Yangon river and Twante canal in Myanmar’s largest city. She shares the one-room house with eight members of her family and a scourge of deadly mosquitoes that fester in the thick, green water beneath her feet.
A television used to decorate one corner of the house, balanced on a shelf to avoid the floodwater and sewage that seeped in through the floorboards while seasonal rain thrashed the hand-built structure from above. But they no longer have to worry about the television getting wet in monsoon season. They pawned it for cash earlier this year.
Than Than Htwe has struggled to support the household since her grandchildren moved in last year. With her husband out of work, she had to borrow 40,000 kyat (roughly $30) from her sister.
Every day that Than Than Htwe fails to repay the full amount, she must give her sister 2,000 kyat ($1.48) in interest. A year later and she has paid her sister far more than the original sum through these daily interest payments, but the debt still stands.
“She is really rude. She stands on the street and shouts ‘I didn’t give you that money for free’ and other horrible things,” says Than Than Htwe.
She is not the only one to be crippled by high interest loans in Yangon. In a recent survey of three townships, Save the Children discovered that 85 percent of households have taken out a loan from a local moneylender. While the loan may rescue them from an immediate financial emergency, the interest rates – which range from 5 percent daily to 30 percent monthly – trap the borrower in a perpetual cycle of debt.
“I have worked in Asia most of my life and I have not come across such high levels of indebtedness. The number of people borrowing, the amount they are borrowing and interest rates are worse than anywhere else I have seen,” says urban poverty adviser Mike Slingsby.
As the commercial capital of Myanmar, Yangon is a magnet for rural migrants hoping to benefit from the country’s rapid economic expansion. But stable jobs are difficult to find. Many families rely on members who work as trishaw-drivers, street vendors or casual labourers for their main source of income. These jobs do not offer regular employment and can be severely impeded during the monsoon season, which lasts for almost half the year.
More than 80 percent of the families surveyed by Save the Children live off 2,000 kyat (roughly $1.48) per person per day, less than the global poverty line of $1.90 set by the World Bank. The majority of those tried to survive off even less, just 1,000 kyat (roughly $0.74) per person per day.
Two of Than Than Htwe’s sons work as trishaw drivers, earning about 5,000 kyat per day (roughly $3.7). Her son-in-law earns a similar wage as a casual labourer, but is offered only 10 to 15 days work a month.
Their household income was not enough to absorb the cost of her husband’s medical bill after he sustained an injury carrying drinking water from house to house. Than Than Htwe took out another loan, this time from a neighbour living across the street. She cannot remember the initial sum, but she is unable to afford the daily interest rate and her debt has now grown to 500,000 kyat (roughly $370).
“I fear the dawn and the dusk. In the morning I am worrying about having to borrow more money, in the evening I am worrying about paying it back and at night I am worrying about tomorrow. I want to escape this. I am always worrying about my debts,” says Than Than Htwe. “Just to pay my daily interest rates I have to go round [and] borrow money from neighbours, and now people resent me because I am always borrowing.”
While one of the main reasons for contracting heavy loans was health-related costs, an increase in food prices means more and more people are relying on predatory loan sharks for basic living expenses.
In the areas surveyed by Save the Children, more than 50 percent of households took out a loan just to buy food. This came as a particular shock to their director of programme development, quality and advocacy, Katy Welby.
“I think this really highlights the terrible condition that people are living in – if they can borrow money then they can feed their kids; if they cannot pay it back and cannot borrow again, then they will not eat,” she tells Al Jazeera.
Their research also shows that 50 percent of children drop out of school at the age of 13. While education is nominally free in Myanmar, the cost of snacks, notebooks and informal tuition fees are too much for families struggling to repay their spiralling debts.
Than Than Htwe’s son dropped out of school at 16 and now supports the family by selling fruit at a nearby market. Her second daughter dropped out after just one year of education and was married at 14.
Her third daughter, now aged 14, stays at home to help her mother to look after the grandchildren. Out of school and with high familial debt, she too is vulnerable to child labour, early marriage or perhaps worse.
“With such high interest rates, a poor family can very quickly find themselves with 4 lakh (roughly $296), 5 lakh (roughly $370) or even 6 lakh (roughly $444) of debt … there are only [a] few ways to get that sort of money fast, and sex work is one of the fastest money earning activities you can find,” says anthropologist Maxime Boutry. “[A family’s] last recourse might be selling their daughter.”
Ma Ei Pyi lives in a one-room shack that clings to the banks of a polluted ditch in Hlaing Thayar township, its bamboo foundations almost floating on the thick layer of refuse that suffocates the water below. She used to sell vegetables from a stall outside her house, which she shared with her father and two children while her husband worked abroad as a fisherman. She made just enough money to feed the family, until both her father and husband died.
Dying is an expensive business in Myanmar, with hospitals and monasteries charging at least 100,000 kyat (roughly $74) to bury the body and produce a death certificate, Slingsby says. Ma Ei Pyi received compensation for her husband’s death but still needed to borrow 50,000 kyat (roughly $37) for her father’s funeral. She was unable to afford the five percent daily interest rate and the debt quickly tripled.
“If you are the woman in the family and not educated, your only choice is sex work. Life is very hard here, especially in Yangon, and we have to find money for our family to survive,” she says fighting back the tears. “In this industry I can earn a lot of money, pay off my debt, feed my children and support my family.”
Ma Ei Pyi entered the industry upon the recommendation of a neighbour. She talks about her decision with candour while her 12-year-old daughter, crouching on the bamboo floor, listens intently. “I can give my children a lot better food than the other people in this area,” she says.
In 2015, Care International conducted a survey of female sex workers in Myanmar’s two largest cities, Yangon and Mandalay. Debt was repeatedly cited as the trigger for women entering the industry. However, it rarely solved the issue as their families often borrowed money against future work, putting the female sex workers further into debt.
As well as supporting her two children, Ma Ei Pyi is now the main breadwinner for her mother, three siblings, sister-in-law and nephew who all moved into her one-room house. Last month she had to take out another loan of 50,000 kyat (roughly $37) to pay for her sister-in-law to give birth.
While struggling to reduce the amount she owes, Ma Ei Pyi has been relieved of daily interest rates and now pays 10 percent monthly interest on accumulative loans of 170,000 kyat (roughly $126). “I know the moneylender and they are happy to give money to a sex worker. They know I have a steady income and will pay the money back,” she says.
Sex work can be lucrative. Mai Ei Pyi earns 10,000 to 15,000 kyat (roughly $7 to $11) per session, three times the average daily wage of a woman working in Hlaing Thayar’s infamous garment factories. But sex work is a dangerous job in Myanmar, which outlawed the industry in 1949.
“Since November, I have not been getting many customers because there have been so many arrests. The police know who we are, they know where we meet the customer, they wait there all the time and when they see us they threaten us. If we don’t pay them money then they arrest us,” she says.
Ma Ei Pyi says that sometimes the police don’t just demand money. She says she was among a group of sex workers forced to accompany a police officer to a local guest house and have sex with him in order to avoid being arrested.
An officer from Hlaing Thayar police department, who asked to remain anonymous, told Al Jazeera that “police are arresting sex workers more and more and making their work space narrower and narrower. There are almost no sex workers left in Hlaing Tharyar township … It is completely impossible [that we took bribes] because we are serving our duty to arrest them.”
To avoid the police, Ma Ei Pyi now works with a broker who sends her clients in return for a cut. The relationship is supposed to be reciprocal, with Ma Ei Pyi recruiting virgins from the impoverished squatter camp where she lives.
“He is always asking me for young and pretty girls and offers me 50,000 kyat (roughly $37) for everyone that I recruit. I know a few people who started working in the industry because they are virgins, but I don’t like doing that job,” she says.
According to Maxime Boutry, it is common for severely indebted families to sell their daughters’ virginity to repay their loan. “This is the most obvious link between debt and [the] sex trade … for one girl’s virginity it is 5 lakh (roughly $370) for the family, this is a really big amount of money that they can not earn anywhere else.”
“Most families are deceived in some way because all of these economies are interconnected. You have plenty of recruiters in these townships recruiting for commercial sex work,” Boutry continues. “They don’t go blindly into the area, the recruiters often rely on the money lenders who have a good knowledge of their neighbourhoods.”
It is not clear who is creating the market for virgins, but some fear that it might be Chinese businessmen who believe that having sexual intercourse with a virgin will cure them of sexually transmitted diseases, including HIV.
“I am especially worried for my daughter,” says Ma Ei Pyi as she leaves her home for another day’s work. “I do not want her to go into the industry, that is why she I am sending her to school. I want her to finish her education.”
Aye Winn Sann slouches in her chair, waiting impatiently for a customer. Business at her restaurant is not going well. A few curious faces peer beneath the sun shade to see what is on offer, but no one stops to eat.
She lives in Dala, a township built on marshland south of the Yangon river. It is a 10 minute ferry to downtown Yangon, but Dala is a world apart from the colonial hotels and grand embassies that line the northern shore. Jobs are scarce here and poverty is rife.
“If you compare the restaurant to money lending, then money lending is a lot better right now,” she says, wafting away flies from the untouched curries.
Aye Winn Sann says she has never heard of someone selling sex to pay off their debt. Or taking a child out of school. According to her, the risks fall solely on the money lender. “It is good because we can make a lot of profit but some people cheat us and that is the sacrifice we must make.”
Earlier this year Aye Winn Sann lost two million kyat (roughly $1,480) when four families disappeared in the middle of the night, leaving behind an empty shack and a number of unpaid loans. According to Aye Winn Sann, interest rates must be high to accommodate the one in four chance that someone will not pay.
To avoid another financial loss, Aye Winn Sann has stopped lending money to strangers but continues to lend a maximum of 30,000 kyat ($22), with 20 percent monthly interest, to her neighbours.
“If I do not lend them money then they might be in trouble. By borrowing from me they can resolve their difficulties and I make a profit, so it is a win win situation,” she says assertively.
According to the 1945 Money Lender Act, those wanting to lend money must obtain an official license. Licensed money lenders must adhere to strict accounting rules and any contracts that contain compound interest or interest rates that exceed 12 percent per annum for a secured loan or 18 percent per annum for an unsecured loan are void under law.
Few pursue the legal path, concealing their operation under the cover of another business. But while they may be operating beneath the law, they are not, according to Mike Slingsby, criminals at heart.
“They are usually people in the community who have more money than their neighbours and spotted an opportunity to make even more … Some people can be quite harsh but they don’t usually get violent. Social shaming is very common, that is the way they operate,” he tells Al Jazeera.
Aye Winn Sann admits that on one occasion she did “smash things around” at a client’s house, but usually she works with the ward administrator to collect her debts. “If I need to get money, then I usually do it by negotiating with the authorities because I am cooperating with them,” she says.
Nobody from the regional government was available to respond to the allegation that they are colluding with illegal money lenders.
Every inch of Win Win Moe’s beauty salon is decorated with photos of her clients. Wedding photos, graduation photos, passport photos; even the plug sockets are plastered with photos.
As she rummages through a cupboard bursting with cosmetics, an image peels away from the wall, breaking the mosaic of faces that follow her every move. She emerges, proudly brandishing a pair of hair straighteners which she bought last month.
“My customers want me to stay open longer and buy even more products but I don’t have enough time,” she says.
The salon looked very different nine years ago. A lone mirror hung from the wall and the equipment stand housed only some scissors and a comb. With the business struggling, Win Win Moe took out a loan of 100,000 ($73) kyat with 20 percent monthly interest, to boost the family’s income, but it was not enough to keep her 16-year-old daughter in school.
Her fortunes changed when the 34 women living on her street in North Okkalapa township started a collective savings group in 2009, hoping it would break the cycle of debt afflicting their lives.
“My business was very small before, but it has grown bigger and bigger with the help of the group … it also helped put my daughter through college,” she says.
Each member invests 3,200 kyat ($2.34) per week in the group savings account – a padlocked box fiercely guarded by the group leader Aye Aye Khing. After investing for three months, members are illegible for a low-interest loan. The group’s current liquidity stands at 3,321,000 kyat ($2,430).
The women take it in turns to borrow 1,000,000 kyat ($732), which is usually invested into a business. They pay 2.5 percent monthly interest which is shared among the group at the end of the year. If someone has an emergency they can immediately call on the group for an interest-free loan.
Win Win Soe made her first withdrawal to help her daughter to study psychology at college. Once she paid off the first loan she took out another, this time using the money to buy new products for her salon. Others have started making shoes, handbags, musical equipment and skincare products – the entrepreneurial energy on Dawna Street is tangible.
“This group is good because when you are not a member your family are the only ones who can help you if you are in trouble – your family or a money lender. Now we have an entire group ready to help if we have an emergency, if our child wants to continue education or needs to go to hospital,” Win Win Moe explains. “There are still rules, but we really are like one big family.”
The group is supported by local NGO, Women for the World, which has helped to set up 80 collective savings groups across Myanmar, effectively breaking the cycle of debt for nearly 4,000 women. Its impact, however, is localised. Just one street away from Win Win Soe’s manicured garden, others live in dilapidated shacks, vulnerable to the predatory lending practices of informal loan sharks.
International NGOs are only just waking up to the scale of urban poverty in Myanmar, which the World Bank described as “surprisingly high”.
“Urban poverty is still not something that people want to put their money into, it’s not very fashionable,” says Slingsby. “The focus is on rural poverty because more people live in rural areas and because they see urban poverty as extremely complicated.”
According to the World Bank, poverty in Yangon stands at 34 percent, just three percentage points below the national figure for rural poverty.
Save the Children have begun piloting a socioeconomic graduation programme, pioneered by the Bangladesh Rural Advancement Committee (Brac) and celebrated for its impact on rural poverty.
It is, however, an expensive programme, involving a series of cash and asset transfers at the household level, and Save the Children are yet to secure a donor. It will, therefore, be a while before it is rolled out on a scale capable of solving Yangon’s endemic levels of indebtedness.
Until then, more families will fall in to debt, more children will be pulled out of school and more women will be forced into the sex industry to repay their loans.
As the sun sets on Seikkyi Khanaungdho island, Than Than Htwe begins her search for another neighbour who can cover her daily interest payments. “I don’t want to use money lenders,” she says. “But I have no other option.”