By Abhishek Priya - Rang De Social Investor
I have been associated with Rang De for over a year now and have made quite a few loans. All along, I had doubts about actual impact. The amount that were loaned (Rs 4000 to Rs 5000) were so small that it was really difficult for me see how these can be life-changing for anyone. So, during my sabbatical, I decided to go on a field trip and meet the actual borrowers of these loans.
My quest took me to a small district of Muzaffarpur, Bihar (India), around 100Kms from capital city Patna. I went out to meet around 15 borrowers who have taken loans from Rang De (a not-for-profit Microfinance organization working in India). This was a very humbling and eye-opening experience. Not that I have not seen life in villages before or not known people living at very nominal per day income, still I was amused to see hope, happiness and zest for better life.
It will surprise many of us to see that these small amounts result in around Rs500 to Rs1500 difference in families’ monthly income. Indira Devi started keeping diesel and sells it at Rs1 premium per liter. This results in around Rs50 additional income per-day (with investment capital of around Rs2000) during farming season and around Rs20 per day during non-peak farming seasons.
Loans from local loan-sharks are available at around 10%-20% per month, pretty much eating into whatever extra she could have made. Rang De loan at around 8.25% per-annum, allowed her to venture into this and benefit from additional income. This income was difference between her being able to send her kids for private tuition or just relying on under-funded and understaffed local government school.
For Hashibul Khatoon, just getting an additional sewing machine resulted in her being able to fulfill more tailoring orders resulting in additional Rs500-Rs1000 a month. It also meant she can spend additional time with her 3 year old daughter as she kept this additional machine at home and does not have to go her family shop to complete her sewing assignments.
Every story is equally fascinating, energizing and full of hope. But the most promising part of this was awareness and empowerment that these loans are providing to these barely literate or sometimes illiterate women, especially in these remote, rural and man-the-earner-and-the-money-manager societies. (Not that this is not the case in urban areas but it is certainly changing and seeing this kind of awareness does not really surprise us anymore).
Listening to Bhagwati Devi and Rekha Bharti about difference in microfinance provided by Rang De, other for-profit microfinance agencies and bank loans was certainly very encouraging and it is certainly sign of good times for our country.
These miniature scale entrepreneurs have a lot of enthusiasm, energy and zest to improve their lifestyle, provide for good education to their kids. We still have a long way to go to before many of them can realize their dreams but it is most definitely a positive step.
Do get in touch with us if you want to go on a field trip and experience Rang De. Stay tuned to get updates on our upcoming field trips.
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.