Financial Inclusion for Survivors of Sex Trafficking

On 2nd January, 2019, The Department of Financial Services from The Ministry of Finance, The Government of India initiated formation of a task force to work out the modalities for extending benefits of financial inclusion to women who are victims of sex trafficking (F.NO.FR-6/14.2018-FI (C300405894)). While the Trafficking of Persons’ Bill, 2018 is pending debate at the Rajya Sabha, wherein critics of the bill claim that criminalisation alone is not enough to address problems that render people vulnerable to trafficking and sexual exploitation, this attempt at building financial security for survivors of sex trafficking is an interesting and needed approach that can, if planned, strategized and implemented well, go a long way in eliminating debt traps and debt bondage for survivors of sex trafficking, empower survivors to find ways of rehabilitation that are more effective than what is practiced now and weaken the stranglehold of traffickers and other exploiters over survivors of sex trafficking.

The Task Force is chaired by the Director (FI, Department of Financial Services) and its members include representatives from the Ministry of Health and Family Welfare, Ministry of Women and Child Development, Ministry of Home Affairs, UIDAI, National AIDS Control Organisation, State Bank of India, Punjab National Bank and 3 civil society organisations Prayas, Shakti Vahini and NICT and the Mission Office Coordinator, department of financial services.

Is financial inclusion relevant to victims of sex trafficking?

The relevance of a financial inclusion policy for victims of sex trafficking can be far reaching. When a girl or a woman gets trafficked into prostitution, she is caught in debt bondage to her buyer, who is typically a brothel manager, pimp or agent who runs a sex trade operation. Victims of sex trafficking are typically young, with low education, poor and while in captivity of her traffickers, pimps and madams, they have no freedom, restricted mobility and no access to mainstream services – be it of health, education or law enforcement. While some of them may be able to escape either by themselves or through police raids and rescues, many of them work their way through the debt bondage and over time, negotiate some control and autonomy with her captors and move into becoming a semi dependent or independent sex worker. Since brothels are deemed illegal under the law, and they live in a room or part of a room, they do not get any rent receipts for the money they pay for accommodation and stay. Not having a residence proof prevents them from being able to open bank accounts and that becomes a barrier for any further financial services through the formal banking system. As a result, they have a high dependence on private money lenders, and stigma prevents her from seeking services from money lenders outside the red light area. Money lenders who operate with red light districts or provide money to sex workers operating outside red light areas charge a very high rate of interest (allegedly between 25% to 70%) and this creates a debt cycle for them. As they move into their 30s and 40s, and as their demand from customers of prostitution reduces, they have options of trafficking other girls and women, and becoming traffickers and madams themselves or are forced to prostitute their own daughters resulting in inter-generational prostitution for lack of alternatives.

On the other hand, survivors of sex trafficking who manage to escape the captivity and forced prostitution and return back home find themselves battling poverty and stigma in their own families. With low education or employable skills, no capital or land (most of their families are landless), they have no collaterals to leverage and seek financial assistance for micro businesses. The social stigma  that is associated with sex work often prevents their inclusion in self help groups with other women. On top of all of this, for those who suffer from Post Traumatic Stress Disorders, depression, anxiety and dysthymia (in a study conducted with 100 survivors of sex trafficking in Bengal who had been rescued and returned back home after ‘rehabilitation services in shelter homes’, 87.4% of them were diagnosed with dysthymia – a condition of chronic depression and anxiety disorders[i]) and other physical health problems due to sustained violence and torture, seeking and claiming services and entitlements for their rehabilitation and empowerment, including financial security becomes a bigger challenge.

The Agenda and the Task Force:

The Task Force set up to develop ‘modalities to extending benefits of financial inclusion to victims of sex trafficking’ would therefore be required to set financial inclusion indicators for survivors of sex trafficking and monitor progress in reaching them. However, the critical process in this initiation stage for the task force include: (a) diagnosing the state of financial inclusion (b) agree on targets (c) identify barriers and (d) craft policies, to remove barriers and (e) decide mechanisms to monitor and measure policy impact. Given that there is no country level data and diagnostic assessments to inform the design and help in sequencing reforms, the committee is set with the first challenge of diagnosing the state of financial inclusion.

Few questions that the members of the committee should deliberate at this stage are:

(a) What are the numbers of victims of sex trafficking, where are they and what are their needs? What is the state of financial inclusion of women and girls who are victims of sex trafficking? This is a dispersed population – geographically and demographically. It includes sex workers who live in red light districts as well as those who may not be in red light areas but being prostituted in hotels, lodges, establishments with other fronts (such as some SPAs or bars), private residences, those who may be working as ‘flying sex workers’. Not all sex workers are victims of sex trafficking and some, who may have been trafficked several years ago may no longer be victims of trafficking today. Then there are nomadic or settled tribes such as the Bedias, Nats, Kanjars and Sansi, for whom intergenerational prostitution has become the mainstay livelihoods for families and communities. And then, there are victims of sex trafficking who may have escaped captivity and returned back home to their families, mostly in rural or peri-urban areas and thousands who languish in shelter homes. The Task Force would require to study and understand their status of financial inclusion and barriers therein, some of which could be common but some would be peculiar, before being able to decide on targets and craft an appropriate policy to remove barriers. Given the lack of State penetration to these communities and individuals scattered over wide geographical areas, the Committee may decide to depend on civil society organisations for outreach, data collection for assessment and diagnostics or think of alternative mixed strategies. Unless the policy crafted by the Task Force, and the modalities to enhance financial inclusion are based on accurate information and data, the attempt may fail to have any impact in building financial security in survivors of trafficking.

(b) Does the TF include appropriate organisations and agencies who can help in outreach, mapping, assessments and diagnostics? The NACO may have a reliable estimates on adult sex workers in the country though, with the weakening of the Targeted Intervention programmes, many outreach programmes for sex workers have stopped. The Home Ministry has data on crimes of sex trafficking registered under ITPA, 370 and other IPC sections, and may be able to contribute in offering estimates. However, the under-reporting of sex trafficking crimes are well reported and acknowledged and cannot be relied upon for estimates and numbers. The Ministry of Health and Family Welfare has no intervention with survivors of sex trafficking or sex workers other than the AIDS prevention programme through NACO. Of the 3 CSOs invited into the Task Force, the focus of the organisations is on juvenile justice, rescue of victims of trafficking and reaching information and technology benefits to the masses. What seems to be missing are organisations who work with sex workers in red light areas or non brothel based sex workers, organisations who work with tribes where intergenerational prostitution is the only means of livelihoods for families, organisations working with survivors of sex trafficking who have returned back to their homes and communities. It would be useful to have researchers and academicians who study trafficking and sexual exploitation. It may be necessary for the Task Force to diversify the CSO representation geographically drawing membership from different and most affected states like West Bengal, Andhra Pradesh, Maharashtra, Assam, Telangana and Tamil Nadu to conduct demand-side data surveys to help understand financial needs (met and unmet) and barriers encountered when seeking financial services and products and users’ socio-economic and demographic characteristics.

Inclusion and exclusion:

Given that there has not been any public announcement on the formation of this committee, and the Departmental Order has been shared only amongst members and organisations who have been invited into the committee, one wonders why this Task Force is mandated to focus only on victims of sex trafficking, and not on victims of labour trafficking? It needs to be published as a Notification with due processes involve for public awareness on the same to be generated. Also, the mandate and Terms of Reference for the Committee needs to be made more specific for clarity on a multitude of issues including on whether existing models of financial self-support, through SHGs and co-operative banking, that many CSOs working on commercial sexual exploitation have implemented or sought to implement at ground level been incorporated in the development of financial support as envisaged. Until and unless the same happens, our contxt beggars the following questions:

Why is the mandate restricted to women and girls, and does not include boys and women or trans-persons and hijras who may also be victims of trafficking and sexual exploitation? For example – hijras and trans-persons are one of the most excluded communities in the economic workforce rendering them vulnerable to exploitation and forced work. The phenomenon of cyclical debt bondage of brick kiln workers or workers in the construction sector who are trafficked by unscrupulous labour agents is a significant phenomenon in Odisha, Telangana, Jharkhand and Assam. Chhattisgarh and Jharkhand has consistently reported phenomena of tribal people being trafficked into brick kilns, bonded labour in agriculture. They depend entirely on cash economies, are paid advances which puts them into debt bondage and are exploited by agents and employers alike. One is left to speculate if the Ministry of Finance has chosen victims of sex trafficking as the most vulnerable population amongst others and that the Task Force would expand its mandate to other communities equally or more vulnerable to sexual exploitation in bonded labour or/and labour trafficking, and if that be so, perhaps the Ministry should clarify its intent and vision behind this initiative.

[i] Bringing It All Back Home (Sen, Dasgupta and Majumdar, 2014)

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