For many middle-class and lower-middle-class families in contemporary India, debt has become essential. Loans facilitate education, consumer purchases, and medical expenses. However, challenges arise when repayment becomes unmanageable, particularly for women, who are more susceptible to harassment from recovery agents. An Expert Panel of legal and financial specialists explains how women can protect themselves from coercive recovery actions. Defining middle and lower middle-class families in India is challenging, as definitions vary. Surveys indicate that the Indian middle class comprises about 31% of the population, roughly 43.2 Crore citizens as of 2020-21, with projections suggesting it may rise to 47% or 71.5 Crore by 2030-31.
A substantial segment of the middle class falls within the lower middle class, which faces the greatest vulnerability to income disruptions and debt stress. A 2024 survey found the average monthly income for lower-middle-class individuals to be INR 33,000, while urban household expenses can be at least INR 19,000, leaving little financial buffer. This financial strain often forces families to seek loans for various needs, and any unexpected health crisis or income disruption can lead to defaults. Women’s economic dependence is a significant issue, as they often do not hold primary earning roles in their households. According to World Bank data, only 32.8% of women in India participate in the labor force, compared to around 77.1% for men.
Reports indicate that by September 2025, women’s labor force participation rose to 34.1%, the highest in recent times, while the work participation rate was 32.3%. The Ministry of Labour states that women’s employment reached 40.3% in 2023-24, up from 22% in 2017-18. However, much of this increase is attributed to informal, low-paid, and part-time work, which lacks stability. Consequently, many women depend on male family members for consistent income, rendering them vulnerable when recovery agents come to collect debts. Loan defaults are viewed as a systemic risk in India. While exact figures on personal loans are hard to come by, some segments report default rates of 5-6%. Key reasons for default include income irregularities, medical emergencies, and job losses.
Illegal lending apps exacerbate this issue by aggressively pursuing repayments and resorting to harassment tactics like accessing contacts and threats. Recovery agents are dispatched by lenders for missed payments, leading to reports of home visits, persistent calls, abusive messages, threats, and public humiliation. Women often bear the brunt of this harassment, as many are non-earning household members unaware of loans or agreements signed by family members, including spouses. Recovery agents frequently visit homes unannounced, targeting women to gain psychological leverage. Social stigma, fear of repercussions, and lack of knowledge about rights prevent borrowers from contesting these issues. The Reserve Bank of India (RBI) has established guidelines to protect borrowers, including non-signatory family members.
These guidelines require recovery agents to carry valid identification and authorization from lenders, and borrowers may only be contacted during specific hours using civil methods. Agents are prohibited from employing intimidation, threats, abusive language, or physical force, and they must maintain borrower confidentiality. Banks are responsible for ensuring that recovery agents do not engage in coercive behavior, with the RBI taking action against violators. Women facing harassment must take action if recovery agents exceed their authority. Initially, they can file a complaint with the lender’s grievance cell, as all regulated financial institutions have one. If no response is received within 30 days, they can escalate the issue to the organization’s nodal officer.
If this does not yield results, women can utilize the RBI’s grievance portal to contact the RBI ombudsman. Social media can also be an effective platform to highlight issues with lenders. Additionally, women can approach the National Commission for Women for assistance, prompting local police involvement. For threats or harassment, they should contact local police or the women’s cell and may seek legal assistance to stop the harassment. Empowering women through awareness is crucial. While the RBI has laid out guidelines, awareness is essential for women to combat loan harassment. Structural changes are necessary, extending beyond legal measures. Financial literacy should be promoted so women understand active loans, EMIs, and creditor contacts within their families.
They should also keep documented records of lender communications and recovery visits. Collaborating with NGOs and legal aid groups can provide additional support. Advocating for women’s economic independence is vital to reduce reliance on others’ borrowing decisions. Loan harassment remains a complex issue in India, often concealed by silence and stigma. Women’s dependence on family for financial matters can lead to victimization due to a lack of awareness. Nonetheless, they can regain power through knowledge of RBI guidelines, legal rights, and complaint mechanisms such as the NCW and police. In addressing loan harassment, awareness serves as the first line of defense, making empowerment and collective support critical to prevent loan distress from causing personal trauma.