By Gautam Mahanti - Rang De Social Investor
“Little drops of water, little grains of sand
make the might ocean and the beauteous land…”
What does it take to be an ‘entrepreneur’? You would probably say investment capital, an appetite for taking risk and may be a smart idea. But what does it take to be a ‘rural entrepreneur’? My answer would be hassle free micro credit which is available at an affordable rate of interest.
Having been associated with Rang De as a fund raiser and also having performed audio evaluations, I was confident about the transparency and efficacy of the model. I was convinced that micro finance is viable only when the cost of funds is low and is made available to the borrowers at rates comparable to bank interest rates. However, I have always had the niggling doubt on how a Rs.5000 loan would make a difference in the life of a borrower. For the urban city dweller it is something like a dinner for two in a five star or perhaps the monthly fuel expenses for the family. So, this time during my visit to Bhubaneswar, I decided to meet some borrowers and check it out for myself.
Nikhil, put me in touch with the team at Pragati (Rang De’s field partner covering Puri District). Madan Mohan and Sulochana from Pragati met me at Satasankha (45 kms from Bhubaneswar on the main highway to Puri) on hot and sultry Saturday morning and we proceeded towards Balanga (7 kms), our first stop.
Thanks to the Pradhan Mantri Sadak Yojna, the drive was smooth and during the course I also got to understand that it was due to Rang De that our field partner Pragati could survive the micro finance crisis as all other NGOs/MFIs have either stopped funding or have gone kaput. Pragati today through Rang De touches the lives of 1500 rural entrepreneurs working with 15 co-operatives. On our way we also picked up a lady from ‘Bhairavi Co-operative’ who would be taking us around the homes.
Balanga gave the impression of the quaint little village and was marked by quietness all around. The first knock on the door was that of Sanilata Prusty.
Sanilata lives with her husband, 3 kids and her in-laws. With an irregular income from her husband who works in the paddy field and also has a rice shop, she decided to add to the family income by making decorative wall hangings made of sea shells. The demand for these items is so much that all items get picked up directly by the large distributors directly from her doorsteps. With a loan of Rs. 5000, she could manage to stock up her raw material of shells and pipes bought from Puri thereby managing to save costs on umpteen number of trips required to procure the shells and also spruce up her monthly income. She has been regularly paying her monthly installment of Rs 453 and is hoping for a larger loan for the next tranche. On being asked how much she would like to borrow, she said at least Rs 25,000 with a smile.
We walked through Sanilata’s house to reach the so called factory of Parbati Sethi who is in the business of spurning ropes from coconut jute. Being a labour dependent process, Parbati provides an opportunity for some of the girls in the village to earn a few extra bucks for themselves. A mother of two, Parbati with her zeal and hard work has been able to set up this shed like structure and grow her business from here. She has utilised the loan amount from Rang De in buying jute material and requested for additional funds. With her business growing, she has also borrowed from the Co-operative albeit at an higher interest (2% pm) and is hoping for a larger support from Rang De the next time around.
The ladies of ‘Balanga’ proved that if you have the will and the right support you can make a difference. I then decided to check out some other village, which was further inside and perhaps not as developed as Balanga.
We then proceeded towards ‘Resinga’, which was about 5 kms from Balanga. The people here were primarily employed in the Dairy Business. The milk is sold to the Milk Co-operative either directly or to the milk men (Behera) who in turn supply it to the Co-operative. A good Jersey Cow which comes at about Rs. 12,000 can give upto 12 ltrs/day, whereas a ‘Desi’ one which comes around Rs 5000 will yield upto 5 ltrs. I realised there is no method or parameter on the basis which the milk price is set and surely there is some way to go before ethical milk sourcing happens.
I had the opportunity to meet up with Dami Behera and Bibhulata Ojha who bought a Jersey and Desi cow respectively from their loan amounts and have been able to add to the family income.
It was well past noon and the sultry heat had started taking a toll on all of us. I began to wonder what must be like for these young ladies from the co-operative to diligently visit each home every month to collect the monthly installment amount of Rs 451 (Rs 417 Principal + Rs 36 Interest) besides the regular work of identifying new borrowers, doing validation and processing the loan papers. Any guesses for the charges for one time loan processing and documentation, a princely sum of Rs 100. An additional charge of Rs 50 is collected from the borrower towards insurance premium which gives a life cover of Rs 25000 for a period of 2 yrs.
My doubts were answered, the sky had started opening up and it was time to head back home but not before making one quick detour to Beraboi on my way back and stopping by at a carpenter’s place.
I left the place with mixed feelings of how small things in life give the biggest joys and yet people are lost in the race of acquiring the ‘big things’. Rains drops started falling on my head and drizzle turned into a downpour. Thanks to Rang De, I thought…
“…Little amounts of money, little words of encouragement
make the poor self sufficient and prosper”
After 11 years of operations, Rang De is now taking a massive leap forward with our brand new peer-to-peer lending platform rangde.in. Check it out.