Microfinance Live: An Indian Perspective

By Deepa Aravindan.

Cartoon strip by Jeet Thakker

Breaking news can be termed as one if it creates a hard-hitting impact on the minds of the news watcher, an impact that nowadays is the cynosure of all questionable eyes due to over usage of media. When that impact is not created, the news breaks, becomes run-of-the-mill and gets lost in the noise. A classic example of the same would be the case hapless farmers who fall prey to the suicide trap in India.

A still from the movie Peepli [Live], releasing Aug 13, 2010.

An Indian farmer’s income is a direct dependent variable on the weather conditions. If the crop produce is good, he is in a sustainable position. But at this juncture, we are clearly talking about the output in favourable conditions. The input to this cycle is first he should have the money to buy seeds, sow them in his already-in-debt land, wait for the mercy of the rain God and then think of selling his produce for him to be able to repay his loan. This can be termed as

a “mercy cycle” whereby the farmer is at the mercy of MFIs, banks and the weather. When “loot”disguised in the form of “empowerment” at high interest rates is thrusted upon the farmer, he collapses and when that happens, an entire family collapses.

The “sahukar “ era has been replaced by organized money lending. We need to ensure an interest-free form of loan lending which basically facilitates continuous funding. The print, visual and the social media can be effective propagators of information if the advantage of their reach can be used to highlight the authentic MFIs which follow transparency and accountability in their code of conduct practices. We, at 30$F, endorse that and try to infuse the spirit of micro credit in the minds of rural India women.

In India, movies are a major medium which is generally tapped for passing socially relevant messages. Just around the corner, is the release of one such movie called “Peepli Live” by Aamir Khan Productions which is a satire on farmer suicides. What is also noteworthy is that an artiste of Aamir’s calibre is producing a small budget rural setup film because of its relevance in today’s times.

A briefing on the storyline of the film:

“The story focuses on two poor farmers, Natha and Budhia, who are at the end of their tether, unable to pay their debts. When the local politician refuses to help, they learn that they could benefit from a government scheme that would pay compensation in case a farmer committed suicide. They sense that a dead farmer is more use to the family than a living one. A journalist overhears their discussion, and this triggers a vicious media frenzy with live streaming news and polls as to whether or not Natha will commit suicide. The film tackles caste, class, politics and media in an explosive cocktail.”

Natha nahi marega [ Click to Enlarge ]

Its upto us to see more than what meets the eye and how many such Nathas and Budhias will perish or are we upto the task??

Social media and the changing face of microfinance

By Deepa Aravindan.

“You are aware of the economic conditions present in the society. You do not have the full-fledged time to devote to cause-related activities. Still you want to make a difference. The ability to do that is just a click away”. This is what the changing thought process of a wannabe social investor looks like. There is an inherent buzz about online micro lending which should be tapped to its fullest potential.

This social investor profile is clearly of a person employing social networks like Facebook,Twitter and the rest to improve his/her awareness about the ongoing developments in the microfinance sector. The average age of such an investor would be around 35 and is looking to contribute to that change which involves reaching out to a beneficiary, assessing the beneficiary’s risk profile and using technology as a “trusted” tool to make that money transfer. Thus social media helps people manage, share and organize their lives.

Social media typically acts as a conversation for a social investor-beneficiary relationship. Technology is just not about gadgets, it is all about connecting to the life of a beneficiary. The likelihood of a divide between informal networks using human carriers of money versus formal networks using mobile internet is the clear path of the future.

The internet has marketable qualities to make difference at the grass-root levels which has to be exploited by using efficient channels. With generation shifts, changing the tools of youth engagement via social media would become of prime importance for the growth of microfinance.

The fundamental concept of microfinance is about “financial inclusion” and as more microfinance players come into the market, the need for transparent partners and a robust completely connected global society of commerce would also arise. Ignoring such fundamental changes is likely to leave the existing money transfer firms dead in the wake of dynamic societal change.

30$F recognizes the need for a highly transparent system to induce confidence in the lenders. 30$F uses the social media to act as advisory and support service for creating awareness among the social investors about the beneficiaries. The degree of transparency that 30$F provides to lenders ensures that the funds are channelized through a proven, sustainable and secure system.

Remember its not only those grains of microtransactions that is going to build the future but along with that we also require a lot of micro thoughts….