Trust takes small loans on behalf of tribespeople, ‘fails’ to repay them

Tamil Nadu tribespeople allege a trust misappropriated loan repayments, defrauding 60 families in Gudalur.

The Tamil Nadu Tribal People’s Association has alleged that around 60 families in Gudalur have been defrauded by people running a trust, which procured loans for them but misappropriated the repayment.

Association district organiser K. Mahendran, along with the affected residents, petitioned the Superintendent of Police on Tuesday, demanding action against those responsible.

They alleged that the trust met tribeswomen from the Kattunayakan and Paniya communities in Devarshola, Nellakottai and Sri Madurai panchayats, offering to arrange loans for them through the Indian Bank branches at Gudalur and Devarshola. The loans were arranged for the beneficiaries through a joint liability group system, with each person receiving loans ranging from ₹50,000 to ₹1 lakh.

They alleged that trust representatives visited the women every month and collected loan instalments but misappropriated the money instead of repaying the loans at the bank. Moreover, the trust representatives collected the instalment amount even after the 30-month repayment period ended, the complainants said.

Since the collected amount was not properly deposited in the bank, the bank accounts of members of the groups were frozen, alleged Mr. Mahendran. They also leveled allegations of fraud against the bank itself, saying that the bank seized the money deposited into the women’s accounts for government housing schemes.

“The tribespeople in these areas generally earn their livelihood by seasonally collecting and selling pepper, honey and areca nuts, and by working occasionally in plantations. Some also work as labourers in estates. They do not have continuous employment opportunities. A large number of the men are reportedly addicted to alcohol. In such circumstances, the group loans have caused additional problems within the families,” said Mr. Mahendran.

The association demanded action against the chairman of the trust, its secretary, co-ordinator and others and demand that a case be registered against them under the Scheduled Castes and Scheduled Tribes (Prevention of Atrocities) Act.

Published - September 16, 2026 07:59 pm IST