Women play a pivotal role in the economy and are behind millions of small businesses across the country. With little beginnings and small savings tucked inside spice tins and pillowcases, they strive to provide the best they can for their families. Their world revolves around making their families more secure and future ready. They are willing to do their best for a better life. A small push in the form of modest loans can set the ball rolling in their battle.
Kautilya belongs to a community that inherits the knowledge of Chanderi saree weaving. She was unable to convert this into a business opportunity owing to lack of capital to buy inputs and this forced Kautilya to work as a daily wage labourer earning a meagre INR 250/- per day to keep her going. She was not okay to take a loan from local money lenders since she was sure that she will not be able to afford the interest rates charged by them. Today, with the assistance of microcredit, Kautilya received a loan at regulated interest rates to buy raw materials. She established herself as a businesswoman now, earning about INR 10000 to 18000 per month making beautiful handwoven Chanderi sarees.
Gowramma, a 28-year-old housewife, lived next to a brick kiln where her husband worked as a tractor driver. She got seed money of INR 10000 from an NBFC microfinance company to start a small goat farm. Today she adds significantly to her family income. Once a landless labourer, Anita, a woman entrepreneur, has experienced the joy of being a businesswoman and has succeeded as a tailor earning up to Rs. 2 lacs per annum with a small loan to start her business. Numerous stories like these have been an inspiration and encouraged other zealous and enterprising women.
These are stories of not just three women, but a representative of more than 3.2 crore customers served by the NBFC-Microfinance institutions, who have either started or expanded small businesses, are carving out identities of their own. What made it possible for all these women is that little help that came from microfinance institutions (MFIs) which triggered their success odyssey in the form of seed money, working capital, loans for expansion, etc.
The COVID-19 pandemic has brought the entire nation to a halt. Economy has been hit hard, and impact on the businesses has been enormous. But the good news is that rural India mostly involved in agriculture and essential services which remain largely unscathed from the impact. Moreover, they are seeing an uptick in demand of their products, witnessed through the prompt repayment by a majority of the customers and fresh demand for new loans. MFIs are overwhelmed by the resilience & response from their customers have started extending fresh loans to these women amidst the pandemic.
Since every microfinance borrower is a contributor to the local ecosystem, it will be imperative that the local stakeholders too need to play a positive role. Stakeholders may be leaders in the village, political outfits, media, local Govt administration etc., It is important to support and encourage such microfinance borrowers to keep their credit history strong to access uninterrupted formal capital for their various needs.
There are cases in different geographies where MFIs stopped offering their services totally due to negative interferences from some of the stakeholders which prevented MFIs from carrying out their work smoothly. This resulted in lack of credit for such underserved population impacting their lives significantly. It is to be noted that MFIs in our country are now highly regulated by the Reserve Bank of India and are subject to stringent norms w.r.t interest rates and collection modalities. Moreover, they are also governed by self-regulating bodies like MFIN & SADHAN that reviews operations of various MFIs. Today microfinance customers have an option to raise their issues with such regulatory bodies unlike yester years equating them to customers in the normal stream. It is important to note that the Government has recognized the importance of such institutions and had granted banking licenses to some of them during the past few years.
Women entrepreneurs with the help of microfinance are silently scripting success stories and ensuring sustainable livelihood opportunities for their families. Microfinance industry has a critical role to play to support these entrepreneurs, and it is important that all the relevant stakeholders must step up their effort for a conducive environment for MFIs to operate. Thus, millions of microfinance customers like Anita, Kautilya and Gowramma who depend on micro-credit for their businesses continue to get uninterrupted services.
It is important to note that even under extreme circumstances like the current pandemic, Microfinance companies continue to support their customers with fresh credit enabling them to restart the livelihoods of customers who have been impacted due to the pandemic. Various development bodies from across the world are working with MFIs to improve the lives of poor women in our country. Most employees of such MFIs are picked up locally whose mothers are also customers of such MFIs. Thus, giving them an opportunity to serve their own community and lead a better life apart from gaining respect. These young men & women who are few lacs in number meet crores of poor households every day to collect small sums of money ensuring they are available and remain affordable. They also play a vital role in delivering financial literacy and many other information regarding health, education and other aspects that are important for these women.
It is important for the country to recognize their services, support them for their efforts and prevent unscrupulous elements from interfering in their activities, thus enabling affordable credit to remain available to the most vulnerable segments of our country.
