JORDAN: Amman: An alarming number of Jordanians end up in prison each year solely for failing to repay their loans, Human Rights Watch(HRW) said in a report released today. Over a quarter-million Jordanians currently face complaints of debt delinquency. In the absence of an adequate social security net, tens of thousands of Jordanians feel compelled to take out loans to cover utilities, groceries, school fees, and medical bills.
In the 47-page report, “‘We Lost Everything’: Debt Imprisonment in Jordan,” HRW documents the harsh treatment of people unable to repay their debts. The report is based on Jordanian laws and policies, and interviews with 21 Jordanians, three Jordanian lawyers, three indebtedness and microfinance experts, a member of a humanitarian organization supporting indebted Jordanians, and two global financial experts.
Imprisonment for debts
“Under Jordanian law, if you take out a loan and can’t pay it, you go to jail,” said Sara Kayyali, a Middle East researcher at HRW. Failure to repay even small debts carries a penalty of up to 90 days in prison per debt, and up to one year for a bounced check.
HRW found that the absence of regulations and oversight has allowed for the spread of informal and easily abused debt instruments. Judges often order imprisonment based on a promissory note alone, without seeing the borrower or providing an opportunity to dispute the debt or mount a defense though the law requires it.
On the other side, the problem is exacerbated, particularly for women, by very high-interest rates from some microfinance institutions. As of mid-2020, about 25 microfinance institutions had 466,394 active borrowers, 68 percent of them women. The majority of women interviewed indicated that they took the loan to pay for necessities.
“I am an engineer,” one woman interviewed said. “Imagine what would happen to my parents, how are people going to look at me? I am not a thief. I didn’t eat people’s rights. I just had too many financial commitments and the economic situation in the country is horrific.”
Most countries have abolished imprisonment for debt, not only because it is extremely harsh and violates international human rights law but because it does not lead to repayment, especially from the poor. Instead, it creates a cycle of endless debt.
“Locking people up because they can’t afford to pay their debts is not only a basic violation of human rights, it compounds the problem by creating cycles of debt,” Kayyali said. “Jordan should abolish debt imprisonment and adopt alternatives that respect people’s rights and help the economy.”
Donors and international financial institutions, such as the World Bank and the European Bank for Reconstruction and Development, should ensure that microfinance institutions they fund publicly commit not to seek imprisonment for people unable to repay their loans and assess their practices to ensure compliance with that commitment.