Excerpted with the permission of Penguin Books India from the book Uncommon Ground: Dialogues between Business and Social Leaders by Rohini Nilekani.
Type: Article
Microfinance, Macro Trends
The macro crisis in the microfinance sector may not get resolved anytime soon. But it is a symptom of a much larger trend moving through the country.
The Indian microfinance model developed differently from that in its original home in Bangladesh. It took root with self-help groups (SHGs) set up in Karnataka by Myrada, with NABARD’s support, back in the early 1980s. These affinity groups created a social glue among poor women which allowed them not only to offer their mutual guarantee as collateral against their borrowings, but enabled them to work collectively for other causes in their communities. There are hundreds of documented stories of how the SHG movement has generated social change and political empowerment, in addition to accessing more finance for the poor than ever before in independent India.
As the fledgling sector began to attract notice from banks and markets for its excellent repayment rates, well into the high 1990s, a lot of things began to change. From a vision of creating slow and steady small fortunes ‘for’ the bottom of the pyramid, some microfinance players moved to selling a glittering story of quick and large fortunes ‘from’ the bottom of the pyramid.
Within a short span of five years, the microfinance sector in India, built around carefully nurtured affinities and an appropriate pace of scaling up based on capacities, has turned into a chaotic marketplace with little regulation. It now has diverse offerings from multiple players and scant regard for proper group formation. An estimated Rs 30,000 crore is chasing the poor and being collected from them, whether they are ready for it or not.
A movement that was based on the hope that women working closely together could create for all of them some economic and social value has been overrun by the idea that loose coalitions of joint liability groups can enable individuals to escape poverty. This subtle shift rides on high theory. When we the elite do not need to form groups and prove our book- keeping skills to access bank services, how long should we expect that of the poor? Hence the sector has moved to many financial products designed for individuals. Fair enough, so long as there is informed consent of the risks of indebtedness.
But the strategy shift also surfs a wave in the current polity. We are witnessing the march of socio-economic rights in India. We have had the right to information, to education and to work. We will soon have the right to food and maybe to water. Each day, someone thinks of a new entitlement to frame as law. This rush to secure individual rights seems to suit everyone.
For rights-based activists, every success brings a heady sense of power and progress. Compared to the hard and long struggles undertaken by NGOs for sustained collective action to preserve the commons, for example, the rights movement has seen relatively quicker policy wins. And it seems they plan to continue on that path.
For market players, who deal with citizens mainly as consumers, the emerging sense of entitlement is useful to consolidate messaging around high individual aspirations. As India becomes the newest focal point for all the world’s leading brands, Indian consumers will be able to satisfy any whim, if they can afford it, or can access ‘buy now, pay later’ services.
And for a government committed to a market economy and struggling hard to deliver to a growing population all the public infrastructure that the urban elite takes so much for granted, the individualisation of demand creates an easy way to channel resources into individual citizen pipelines. Clearly, this is simpler than creating the public school education, health care services, roads and energy and communication services that the urban middle class has enjoyed and built its future on. All those services were created by the state in its more socialist avatar. Today, many governments across the country talk of public-private partnerships as the only viable model for infrastructure development. These are powerful though subtle shifts in the economy that arguably could put India on a path to more human dignity and prosperity.
But is there something we are missing, something we are losing out on, in this splitting up of the collective for the benefit of the individual? To those organisations struggling to pull people together beyond their individual or caste and creed based identities, the answer is obvious. The focus on the individual takes away the focus from work that requires collective action. Individuals cannot preserve water bodies. Individuals cannot protect forests. Individuals cannot prevent coercive states or uncaring corporations from taking away lands and livelihoods. All of these require continued and creative united efforts.
Perhaps the old institutional forms may never return; they have lost their moral power. Some cooperatives that collapsed on greed, some Gandhian groups that compromised on truth, some communists who took to extreme violence, all have made 21st century Indians wary of old paradigms and formations. And there is no denying the arrival of legitimate individual ambition in a young and economically stronger India.
Yet, if we want to belong to a nation where poverty is history and nature’s power to nurture and sustain is restored, we have to find viable new models of cooperation. Otherwise, the securing of individual ambition may remain a mirage.
Some homegrown ideas and forums are emerging. There is also hope in the innovative way in which technology commons are being used to build virtual bridges across physical divides. But, as the serious distress in the microfinance sector warns us, we must not undermine the models we already have.
A Philosophy Of Philanthropy
Journalist-turned-philanthropist Rohini Nilekani, the founder of Bengaluru-based NGOs Pratham Books and Arghyam, feels everyone should be water-wise today.
See life through a water prism
SIMPLE INNOVATIONS LIKE THE TAP HAVE DISTANCED PEOPLE FROM PROBLEMS AT THE SOURCE.
World Water Day has come again. Did we do anything differently about our use and abuse of water since the last Water Day? At the gross level, it appears not. Because, in the context of India, this past year was one of interspersed drought, inflation in food prices, increasing evidence of groundwater depletion and plummeting water quality, rising agitation about river pollution, etc. At least 100 million of our citizens had no assurance of the safety of the water they drank every single day.
Giving Is Easy” – Heroes of Philanthropy
Journalist and novelist. Corporate wife and mother. Now, armed with a fortune from Infosys’ meteoric rise, Rohini Nilekani is intent on helping India’s poor.
48 Heroes of Philanthropy
From helping disaster victims to funding soup kitchens, they make our latest regional list.
Forbes Asia.
Uncommon Ground – For The Children Of India
The debate has shifted to higher studies, but we I cannot afford to take the foot off the pedal on early education.
In this, the final column in this series, I turn to a core area of my work over the past decade—the education and development of young children.
Some sights and sounds remain sharply etched in the mind—the five-year-old in a preschool that we had set up in a Bangalore slum, who cheerily sang a rhyme about butterflies but said she had never seen one; the little children in the fields in Bettiah, who looked like they were just playing, but in actuality were catching tiny fish from the ponds for their dinner; the 10-year-old boy who stood outside a school in Kolar, but could not bridge the social distance to get in.
Uncommon Ground – A Fine Balance in Kutch
There’s a massive export of virtual water from dry regions to wet, through the sale of both milk and meat products.
on work, with soaring temperatures and no promise of rain despite an unusual cloud cover. We travelled a couple of hundred kilometres in the clay desert, despairing at the spread of Prosopis juli-flora which — like so many other
foreign species brought in by the forest department with all good intentions—has now overpowered large tracts of the countryscape, to the detriment of useful, hardy local species.
Uncommon Ground – Tilling The Urban Soil
Urban farming enthusiasts believe it is the best way to green the city, while providing a little food security too.
It is remarkable how much you can grow in a small space with very little fuss. My colleague Vishwanath, who himself has demonstrated the viability of growing paddy on his small rooftop garden, taught me to grow vegetables in the boxes in which truck batteries are sold! Sitting pretty on the terrace, they provide an environment safe from bandicoots to grow consumables.
And the joy of having something that is grown around us, and plucked fresh for the kitchen, is indescribable, the experience priceless. And of course, the food tastes much better, too.
Uncommon Ground – Greening The Toilet
The past century of sanitation has been an environmental and financial nightmare for the world.
It is supposedly the 100th anniversary of the modern lavatory, though there is some dispute about when the modern flush toilet as we now know it was invented and by whom. Nevertheless, for the billions around the world who take their daily convenience for granted and for the remaining billions who have no access to modern sanitation, it is a good opportunity to sit and think about the future of human waste, of which millions of tonnes is generated every day.