Acting COO - Oli Finch's blog from West Bengal, September 2010 - February 2011
Operations in Hasnabad continue to grow and develop along positive lines. After witnessing at first hand the joy and enthusiasm felt by Shivia’s members during loan disbursements, hearing the stories of purchasing new tools and livestock to grow businesses, it was a pleasure to begin work on developing strategy and operations in Kolkata. That said, my early experiences in the field quickly discounted much of the stock I’d placed in my in-flight Rudyard Kipling-themed reading, primarily though adding ‘cricket’ and ‘microcredit’ to his thoughts that “India is a place beyond all others where one must not take things too seriously – the midday sun excepted”. It would seem that I’d need new sources of information and experience to get to grips with development in modern India.
My first field visit was to witness loan disbursements at Hasnabad and inspect processes in the local area. Situated around 80 kilometres from Kolkata city centre, Hasnabad is the site South Asia Research Society founder, Dr. Jayanta Ray, notably ventured to trial the microlending strategies pioneered by his friend and academic co-author, Professor Muhammed Yunus. In the past few months, several commercial MFIs have also begun lending in Hasnabad. The arrival of the new commercial kids on the block seemed to be giving us clear signs of further maturation in this rapidly expanding industry. It thus seemed appropriate to take stock of our own members, their socio-economic profiles, thoughts and concerns.
The highly diligent and committed Shivia India team, including consultants Aloke Saha and Chandrani Banerjee, headed out to Hasnabad to conduct an in-depth survey to profile our members time and motion, income and living standards. The trip was a stark reminder, certainly to mollycoddled London folk such as myself, and even my professional and informed Indian colleagues, of quite how thin the margins of existence were for these often disenfranchised country dwellers. The vast majority of our surveyed members barely broke the World Bank definition of poverty, living on around $2 US per day. The sensitivity to changes in prices for rice and flour, sugar or paraffin to light the stove or lamps for evening work, all conspiring to make much of life a struggle. The grinning faces, positive outlook and enthusiastic attitude seemed to make light of it, or perhaps further reveal the untested potential and ambition of many poor Indians.
Another visit to the field had me shadowing one of the Hasnabad field executives, who organise loan disbursements and collections, on his weekly visit to see a self-help group in action, returning payments and stamping passbooks. If the disbursements had been an obvious moment of joy for many of the ladies, I was understandably surprised to witness such a sense of reward and positivity when their collecting agent announced us at one household door. We were welcomed in for chai and snacks, as the ladies discussed their trades and how grateful they were for the training and opportunity to loan money and grow their businesses. It was startling how many of the ladies discussed issues of self-worth and confidence, buoyed by something as seemingly innocuous managing their loan repayments. After the bludgeoning finance was receiving in the US and European media, microfinance seemed like a comparatively peaceful place to be, where customers were pleased to be involved with their lenders. Unfortunately, some Indian financiers were about to sail into troubled waters of their own.
The Andra Pradesh crisis caught the attention of the Indian, and to some extent, global media. For several years the high-growth darling of developmental finance, and potential cure-all for extreme poverty, the foundling microfinance industry appeared to be entering its’ difficult teenage years. Several years of rapid growth and expansion, not to mention the high-profile and enormously successful IPO of SKS, a commercial MFI, had captured attention for positive reasons. However, amidst rumour of high-pressure collection tactics and fiery rhetoric from regional politicians, MFIs were quickly singled out as dark, unregulated forces preying on the poverty-stricken. A detailed and swift report, commissioned by the government and with the aim of providing a single regulator and framework for the industry quickly followed, reducing some of the mounting pressure from alarmed investors and industry stakeholders alike, fearful that hasty or poorly-designed restrictions might undo much of the good work being done by many MFIs and development agencies.
In summary, I’ve witnessed a busy few months and been given a great introduction to development in India. We’ve undoubtedly just witnessed some sizeable tectonic rumblings in the microfinance industry, and moreover the dynamic Indian politics and society has with aspects of this growing sector. The plight and needs of the poor remains relatively static by comparison, but thankfully clear opportunities for positive development do exist for committed groups approaching problems with the appropriate mindset.