the coldblooded murder of mohammed jaweed in chatta bazaar has once again exposed the thriving unlicensed microfinancing in the dark underbelly of the slums of the old city the assailant one such moneylender hasan jabri slit the victims throat in full public view the attack was brazen and its impudence points to a chilling reality that these moneylenders have become an emboldened lot a result of the collective apathy of government agencies police and public representatives a day after the murder the police proclaimed that they were determined to crush financiers with an iron foot but the tall claims of arrests of 31 moneylenders under the money lending act stood on shaky ground as it required a contingent of around 40 policemen and two long hours to take zafar pehelwan a local strongman and former constable and corporator into custody while zafar allegedly involved in 30 criminal cases including murder and extortion was released a few hours later much to the surprise of many his inviting a section of the media to his highwalled residence to put on record his refuting of all allegations only reflects his hardened stand with such nefarious individuals running the illegal microfinancing business in the old city it was only a matter of time that things would get bloody while police action comes across as a knee jerk reaction a case of too little too late the governments socioeconomic interventions such as womens selfhelp groups and the ap state minorities finance corporations bankable schemes do exist but the outreach is limited and awareness creating efforts are halfhearted the thousands of costermongers and petty traders of the old city run their small business on money borrowed from financiers at staggering interest rates of up to 10 per cent per day the model much like that of a daily wage earner is such that perishables are bought and sold every day with refrigeration remaining an expensive affair it is imperative that goods are sold on the same day otherwise crushing losses will be incurred though the loans with an interest rate between 12 per cent and 15 per cent per annum which banks offer is lucrative the trader finds it difficult to save money and replay the loan at the end of the each month therefore the repayment has to be on a daily basis but this does not meet the criterion of banks as they work on a monthly repayment model it is exactly this vacuum which unlicensed microfinanciers have identified and continue to exploit the problem can be nipped in the bud if banks with a high penetration in the area embrace a positive hyperlocal approach by making lending and repayment easier this can be achieved if banks devise tailormade loan schemes for the old city using the kiosk banking system while banks maintain that sending their officials to collect repayments from borrowers every day is not a costeffective method this could be tackled by roping in reserve bank of indias approved banking correspondents