The Social Meaning of Over-indebtedness and Creditworthiness in the Context of Poor Rural South India Households (Tamil Nadu)

This paper examines the daily indebtedness of poor rural households in Tamil Nadu, India. It analyzes the processes through which contemporary forms of debt lead to pauperization and misery. Rural South India has witnessed a dramatic increase in consumer credit over the last decade. Study findings indicate that household over-indebtedness is shaped by and constitutive of broader socioeconomic and political changes. More specifically, households' over-indebtedness illustrate contradictions of the urbanization and modernization of rural South India. Conclusions include:

• Over-indebted households not only face material poverty but also have growing social aspirations that are not compatible with income uncertainty and job precariousness;
• Very few people in extremely vulnerable financial situations consider themselves over-indebted;
• Individuals engage multiple criteria to establish debt hierarchies and to evaluate debt burdens;
• Financial criteria matter, but the social meaning of debt is equally or more valued;
• Social aspirations translate into costly needs and the willingness to engage in market debt relationships;
• These relationships are more costly financially than traditional relationships of dependency and patronage;
• Households’ strategies and practices towards debts are more motivated by maintaining creditworthiness than by paying off debts.