Financier is king in coastal Andhra's sex industry

The Indian Express, December 9, 1998
By Syed Akbar
PEDDAPURAM, DEC 8: The "financier" enters Lakshmi's life when she is fined by the court. He is there, outside the court, waiting with the money. She doesn't need to give any guarantee, it just work on ``mutual trust,'' Lakshmi should repay in daily installments with 40 per cent interest. The problem is he never leaves her life.
Nor that of the owner of brothel who bought her on a contract. It was the financier who bankrolled the deal. ``We have to bear the rest of our expenditure like purchase of cosmetics, clothes and medicines and obtaining bail whenever remanded to judicial custody. At times we run short of money. That is when the financiers come to our rescue,'' says Lakshmi (not her real name), a sex worker.
The financiers fund the `companies' and rule the `trade' in the coastal belt of Andhra Pradesh, where sex is an industry and where they use euphemisms from the business lexicon to describe prostitution and related thing. Everyone plays the game according to the financier's rules.
As many as 200 financiers get the sex industry going in the infamous red light areas of East and West Godavari districts. They collect exorbitant interests -- up to 40 per cent -- on the money they lend to ``company owners'', read brothel-owners, and sex workers.
According to insiders, the money involved in the `finance business' here runs into at least Rs 50 crore. The daily turnover is a little over Rs 10 lakh. Such financiers are mainly concentrated in towns such as Peddapuram,Duvva, Tadepalligudem, Tanuku, Velpuru, Rajahmundry and Eluru.
Here's how it works: First, a broker brings the news to a `company' owner about a `new arrival' from a certain place or about the availability of a `fresh face'. The company owner then approaches the financier, who in turn ``personally assesses the quality of the product''.
Only if he is satisfied that the `product' is `saleable' in the market and reimburses the investment along with high profits, the financier hands over the money to the company owner who takes the woman oncontract. The money is repaid in daily installments.
While a middle-aged sex-worker fetches Rs 5,000 on a three-month contract period, those in the teens command as much as Rs 25,000 a month. This investment is borne by the financiers, who recover the money before the contract expires.
The financiers of the sex industry operate from both sides. They finance the company owners as well as sex-workers for their daily needs. While the sum involved is large in the case of company owners, who maintain as many as 25 to 40 sex workers, it is just a few thousand rupees in the case of individual sex-workers.
Whenever the police raid brothels and produce sex-workers before court, the financiers rush there with money. They pay the fine imposed on individual sex-workers and bear the expenditure involved in obtaining bail. Once the sex-workers are free and resume work, the money invested is collected.
In some cases money is advanced towards renovation of brothels with latest luxuries like revolving beds and lovelyrooms with mirrors all around. Some brothels here, a policeman says, beat star hotels in terms of facilities.
G Venkateswara Rao, a financier, proudly says that his area of operation extends to places like Mumbai, where a large number of sex-workers from Andhra Pradesh are holed up. He finances the expenditure incurred by individuals who seek a ``lucrative career'' in Mumbai or northern cities on `contract' for a specified period.
``There is no need for a surety or guarantor. Everything functions smoothly on mutual trust,'' he says.
According to a senior police officer, each financier makes not less than Rs 50,000. Asked why the police did not crack down on the financiers, he expresses helplessness in the absence of complaints. ``Moreover, financing is not a crime,'' he adds.