June 11, 2010
Luckshmi Sivalingam is a Program Officer for Grameen Foundation's Solutions for the Poorest program.
Before joining GF, I interviewed fifty clients of a Nepal savings and credit cooperative as part of an impact assessment. I saw that particularly for those living in extreme poverty, the solution to changing their situations can’t be limited to providing access to microfinance’s traditional product: an enterprise loan.
THP client on her new farm in West Bengal
Nearly all the clients I spoke with said that if they’d undergone appropriate skills development or received training on value addition for the goods and services they were selling, then their microenterprises could have generated the additional income required for them to progress out of poverty.
The Solutions for the Poorest team at GF is joining a small but growing group of microfinance practitioners that are looking at how the industry can better meet the needs of the very poor. One approach we are testing couples livelihoods support with microfinance in a financially sustainable manner, contributing to what has been termed the “double bottom line.”
Solutions for the Poorest has partnered with BASIX/The Livelihood School India, a pioneering livelihood promotion institute, to design an integrated and sustainable methodology to provide financial and non-financial services to the extreme poor—individuals that BASIX wouldn’t typically serve through its everyday microfinance activities. Also, my colleague, Malini, and I recently travelled to Calcutta to visit Bandhan’s Targeting the Hard Core Poor (THP) program. THP targets female-headed households, like Shahida Bibi’s, with no or very erratic opportunities to make income. The program provides these women with the skills and assets required to jumpstart a microenterprise. Supplemented with confidence-building measures, this support cultivates a seemingly limitless entrepreneurial spirit.
Shahida, her seven children, and her disabled husband survived on just $2 a week. Shahida was a housemaid, but without any productive skills and regular income, she wasn’t considered creditworthy by other MFIs. THP provided her with four goats to help generate a more consistent income stream. This income has allowed Shahida to provide for her family while also nurturing the habit of saving. In eighteen months, she sold one goat for $43 and diversified her income stream by buying chickens, selling eggs, and later selling coconuts and vegetables to her neighbors. Shahida has now grown into a real business woman, generating a weekly income of Rs. 2,000 (about $42 dollars). She's already planning for additional ventures.
- Shahida and her children share their story
Addressing the issue of global poverty in a holistic and practical way has made the past month’s immersions in Solutions for the Poorest initiatives an intellectually stimulating and inspiring experience for me. I look forward to continuing our work to propel the bottom billion into the next billion.
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Comments
It is an achievement.
Good work Go one
Dear Grameen Foundation,
The work you do is admirable indeed. You have helped 0.5% of the neediest people on earth. That's a start. But it's not quite enough for many in India. I'm not sure if you get news from the Northeast of India, but it seems the Maoists are making much better progress at generating a realistic solution to the grinding poverty that the people face there. They are moving into more heavily populated states such as Bihar, as well. Perhaps, they are giving the locals some hope that there can be real change rather than a few cosmetic touch-ups that make nice photo-ops.
I'm not knocking the work you are doing, but what kind of success rate is helping 0.5% of the people in poverty? It beats what Mother Teresa was doing in Calcutta, but she didn't seem to be too interested in expansion. Any help for the poor makes good copy, but it does little to change the vastly impoverished circumstances of people's daily lives.
So, how about this idea? Allocate a significant amount of the funds that go through your organization to the people who are actually risking their lives in fighting against the social and political injustice that is taken for granted by many Indians, but provides the legitimacy for the gross economic inequality that is resented by many more. Just trying to 'fix' the problem of poverty is an exercise in futility if you don't re-organize the other social institutions that establish the laws and perpetuate the social customs that support the inequality.
I've lived in India for 3 months now. I've seen a few Westerners and talked with one for about 10 minutes. They are in groups with other Westerners. There may be an Indian person or two with them. But I've yet to see another Westerner at the hotels where I'm staying. So, it doesn't surprise me when I see the puzzled look on their faces as they see people hauling scrapwood by oxcart on national highways that run through cities. And they probably don't know that those people, or the ones tending food stalls are working 16 hours a day. They remain poverty-stricken yet they are working so hard. Why? (hint, it's not market forces).
I've lived alone in working class neighborhoods since I've been here. The people are just as intelligent (but under-educated) and work harder than the people I lived around in Shibuya-ku Tokyo and worked with in Shinjuku-ku, myself included. But it takes them 6 months, or for the even less fortunate a year, to earn what I could in one day in Tokyo.
A few months ago, I retired to see how the rest of the world lived. In India, most don't live very well. Some don't live well by any standard. That's called absolute poverty, and it exists even in Bengaluru (Bangalore), where I am now, the poster city of the 'New' India.
My first month in India was spent in Rajasthan just as tourist season was ending, and I couldn't convince people that I wasn't touring, but leisure traveling (I'm learning more than I expected on this trip). Bangalore really does look like a jewel compared to the places I visited in Rajasthan, but the kindness, generosity, and honesty of the people in both places are beyond reproach. So, I keep asking why must they live such hard lives. And they know their lives are hard. And I have been asked more than once for money to help out a sick relative, or to help someone start a business, which I invariably decline because I'm not a bank. You are.
But somehow, you seem to be missing about 99% of your market. What gives? Are you short on professionals with marketing expertise? How much capital do you actually have that can be loaned to the needy? Does the 33% illiteracy rate in India present a complication when one of those who falls into that category comes to apply for a loan? After living here for 3 months among the people and then reading the entries in your blog, I have more questions about your organization than I did before I read it. And I am familiar with Mohammad Yunus who started the Grameen Bank in Bangladesh.
Something is really out of whack in the way resources are distributed in the world, and micro-finance is not going to do much good unless you are micro-financing some people who are willing to put their lives at stake to fight for an equitable society. India has the greatest number of people in poverty in the world, yet brags about having the greatest number of billionaires in the world, as well. There might be nothing ironic about that to a middle-class Indian person who is a devout Hindu, but for the hundreds of millions here working 16 hours a day for $1 or $2, it doesn't seem quite fair. And who could blame them?
So, if given a policy initiative like taxing the millionaires and billionaires so the poor children can go to school so they won't have to work 16 hour days for a buck, many people would support that. I sure would. Therefore, if Grameen Foundation wants to make a real impact rather than become another Save the Children, Give an Over-Educated Westerner a Chance to Feel Good, I suggest you allocate funding to those groups that are working for real political change.
If you look at the demographics in India, which aren't nearly as scary as some other countries, there are going to be billions more people in another generation asking, "where's my micro-loan?" And I don't think any social or economic organization will have the answer to that question, do you?
I believe you. Very few people accomplish something because of luck. They achieved heights because they were trained to become one. So, training is very essential in every profession. Whether that person is in the poor, middle, or high class society.
This is excellent work,
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excellent work, may god be with you, very intersting read