Sometimes the decisions made with right intention take us to worst situation!!

We have come across many people who have gone bankrupt though they had made some decisions with right intention. I had seen one such family in my native who are our close friends. It’s a joint family of 7 members with 3 sons and 2 daughter. Both the daughters were already married. The head of the family is a close friend of my dad.

They were a very happy family until 1993, during this time they made a decision to lay the pipe line from Krishna river to their field. If I am right, they didn't have any money at hand and decided to take money from local lenders at village instead of going for bank loan which they thought could delay their project. They were so eager to get the pipe line done as early as possible so that they can start growing sugar cane. But we should note that the local lenders usually charge more interest, I feel this was their first mistake but it was the only option for them to complete the project in time.

The project was completed just in a month time and they decided to grow sugarcane. They had a plan in place to repay the loan amount in one year after they sell the crop. But unfortunately they didn't estimate the amount they had to invest to grow the crop in next one year. Sugar cane crop usually gives the yield in 10-12 months time frame and after that you can cut it and send it to make jaggery or sugar . During this one year time frame they borrowed some more money to manage the additional farming expenses, worked very hard for the whole year and they managed produce very good jaggery.

It was a happy time for them as the yield was best during that time compared to other farmers. But the time was so bad and suddenly the jaggery rate went down. There is a conception that the jaggery rate goes up during Navratri/Dipavali time due to high demand. They decided not to sell immediately and instead wait until the festival season starts. This added some 3 months of wait time to get the returns and on the other side the interest was going up.

They finally sold the jaggery after 3 months but there was only a marginal increase in the rates and they couldn't get the expected money from their first year crop. It happened that they could only managed to pay half of the interest amount accrued and the remaining interest got added to principal amount and next year interest cycle started. Mean time they borrowed some more money to manage the additional farming expenses and to support their elder son education.

This continued for almost four years and they never even got to the situation at least to repay complete interest amount year on year. The confidence of the family touched its nadir and they lost the hopes of repaying the loan amount. At the end they took a decision of selling their property and repaying the loan amount. In a bid to close their loan, they sold 10-12 acres of land and I think they left with another 3-4 acres of land that was not good for farming.

The family was so hard working, they did most of the farm work on their own and none in the family had any bad habit. But it was just unfortunate that one decision they made with a good intention got them to a worst situation of their life!!!!