By Smita Ram, Rang De Team
Bakshi Bee — group leader of ‘Allah Baksh’
“ We need a second chance, a rebirth” says Bakshi Bee who is the group leader of ‘Allah Baksh’ — the last group that Rang De funded in Andhra Pradesh.
There has been an almost eerie silence about microfinance for the last few months after the crisis unfolded in AP. Our visit to Kurnool last week broke the silence.
Bakshi Bee was not just aggressive but also pragmatic. She said the crisis had varying impact on different groups of people. There were groups of borrowers who were well off and had taken larger loans and were now happy that they did not have to repay the loans.
Group Members of ‘Allah Baksh’
But it was the poorer groups like that of ‘Allah Baksh’ that were bearing the brunt of the crisis. Bakshi Bee and all her group members are in a financial crunch and are looking for more loans to run their business.
We moved on to meet other groups hoping to hear a different version from them. But no matter where we went, we heard the same voices. They have stopped making plans for their businesses. Their husbands have become lazier and have stopped working as they do not have to save money or repay the loans. Many of the borrowers have now been relying on odd jobs and daily wages.
Group members of ‘Khader Basha’
They are borrowing from money lenders, from government schemes and are really looking forward to getting loans. What was surprising was that none of the bigger MFIs have even made an attempt to get out there in the community since October last year.
For the majority of the last decade, the microfinance industry was glorified not just by the media but even by development organisations, banks and other funding organisations. Ever since the situation in AP came to light and the government passed an ordinance, one has only heard negative stories about microfinance. So one is left to wonder what happened to all the stories that were being show cased during the hay days.
Surely, poverty is a complex problem and cannot be solved without an integrated approach that involves planning, policy and implementation. Given the urgency the situation demands, can we afford to wait till we fix issues related to governance and the system? Microcredit has been able to provide some ray of hope to those who are starving for credit and opportunities. It deserves due credit for what it was able to address.
Let us not think that microfinance is the ‘be all’ and ‘end all’ of all problems. Let’s also not forget that it gives people a realistic chance to fight poverty.