FACTS againest MYTHS V0L-V-4-1999
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- FACTS againest MYTHS V0L-V-4-1999
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MYTHS
VIKAS ADUYAYAN KENDRA
Vol V# 4/99
INFORMATION BULLETIN
Band-Aid To Womens’ Empowerment :
The Myth of Micro-Credit
“...Micro-finance offers a unique opportunity to combine genuine humanitarian aidfor the poorest with good
opportunitiesfor trade and investment. Multinational banks are beginning to study its possibilities...as a source of
profitable investment opportnities. If 'we’ can help the poor by including them in 'our*globalfinancial system,
perhaps we never needfeelguilty and they will never threaten us again... ”—M. Harper, ” Profit For The Poor”1
“We have the money toput a man on the moon but not to put women on theirfeet. Theygave us a Day, then a Year,
then a whole Decade. May be ifwe behave we willget the whole thing. Pmt,you must never, never behave!”—Bella
Abzug, (1920-1998), Women’s Environment & Development Organisation, (WEDO), New York.
COMMENT
espite 50 years of Independence problems of
mass poverty remain endemic to India. An
estimated 168 mill'on out of a total population of
904 million continue to live below the poverty line,
84 per cent of who are the poor in rural areas. The
situation persists despite poverty alleviation being on
the agenda of the government, and various approaches
fave been attempted to identify the poorest of the
'^or.
D
1 n^rty line has been defined in rural areas comprising
of tKjsc unable to afford 2400 calories equivalent of
food per day per
person. In income
terms, a family with
annual income of
below Rs. 11,000 (as per
1991-92 prices) would
not be able to afford the
minimum
calorie
requirements. Broadly, it
is this sector that has
been classified as
"vulnerable”, requiring
greater attention from
the Government and
and also the banks.
Q FACTS against MYTHS
Until recently micro-finance was based on supply
side assumptions: subisidised credit, capital subsidies
and relaxed credit standards which led to loan losses
and leakages resulting in heavy costs to the financial
institutions and the economy as a whole. Thus, a need
for an approach that would supplement the credit
provided by the formal banking system with informal
credit delivery was attempted. The attempt led to the
origin of microcredit the brainchild of Mohammad
Yunus and the pioneer of the Grameen Bank of
Bangladesh. The subsequent success of the Bank led
to a number of NGOs and other agencies jumping
on the band-wagon of micro-credit. The World Bank
and even corporate
mughuls from George
Soros to Ted Turner
view microcredit as a
panacea to poverty
alleviation, voicing
paens to the Grameen
Bank model. This
obsession peaked in
February 1997 at
Washington D.C. with
the
Micro-credit
Summit, the brainchild
of an American NGO,
RESULTS Educational
Fund which viewed
~
C FOR PRIVATE CIRCULATION ONLY
Page 1
There is need to examine conventional notions of banking in the context of alternative modes of savings
and credit; its various appeals ofproviding the public ‘low-interest’, credit, and the like. How. do Banks do
it? Where do they get all their money from? Reproduced below are the responses from the New
Internationalist journal of London.
A Message to Our Customers from the CANDID BANK
Dear Customer
* There are many myths about banks and banking. This leaflet explains how we really work.
Myth# 1We lend, money',
Oh no we don’t, we go one step better. We invent it. If you did that you would be charged with counterfeiting.
But we can do it because we are banks. This is how it works: 'A* deposits one dollar with us. On the back of
this we are allowed to create a dollar or more to lend 'B*, charging 'B' interest of course. But we don’t lend,
'A’s dollar to ’B’. We keep it in the bank reserves.'.•
Here's the really cunning part: When ’B' pays us back the money that could only come into being because
she tookput a loan with us, we get to keep that too. and add it to our reserves! And we keep the interest we
have charged her. Economist JK Galbraith has.callcd the system of creating money through making loans
'so simple it repels the mind'. Some of our more indebted customers find it pretty repellent too.
Myth # 2: ’' Your money's safe with us'
Aft
. Hardly, If a limited number of you decide.to withdraw your money then there is no problem. But if; for
example,6ur bank makes top many bad loans and gets into financial difficulties, there might be a 'run on
the bank'; A large number ofour customers will all want to withdraw their deposits at once. In that case only
first-comers will get their money back. This is because we are only legally required to keep a tiny, financially
'. insignificant reserve and.we are no longer restricted in how much we lend in relation to how much is
. deposited with us. You just have to trust us - if things go badly wrong you might get your money back... or
. it might vanish into thin air.
Myth#3:'Banksfund development' ■
Quite the contrary, in most instances. For example, many people think that Northern banks lent to Third
World governments to help them develop their countries. Actually,-by making loans we created money with
a stroke of a pen, lent it and then creamed off, and continue to extract, huge amounts ofinterest paid to us
by the South. If indebted governments threaten to breakoff interest payments, we starve them of further
loans which they need because theyhave become so impoverished. < \ j r :
Myth#4:'The system works'
*. For banks, sure. But not necessarily for the rest ofyou; The financial system that dominates the world today J
j is founded on debt. In Britain, for example, the~Government mints prily 3% of the money. Banks bring tlAi
' remainirit 97% into existence by making loans, by getting people into existence by making loans, by getting'
. people into debt by-various means: mortgages, overdrafts, lowrinterest loans; The amount of debt in the '
world today is phenomenal-and so are bank pro fits. \
'
1;;
Myth # 5 -.'There is no alternative'
Don't you believe it.There are alternatives. Take social credit, for example. Instead of having nearly all bur
money created by banks in the form of debt, governments could create morembney themselves in the form
> ‘ of credit that can be used bn socially useful things. The demand for borrowing would drop as a result, arid
bank power and profits would decline.
.)
I hope this clarifies matters. Ifyou have any further queriesour staff will be happy to advice you.
' Jane Makepeace
-5 J
>
'.TheManager**
' The Candid Bank
. V.' .?■
•• ’
♦ Oryou could refertoan excellent new bookbyMichaelRowbpthamcalled The Grip ofDeath: A study
ofmodern money, debt slavery and destructive economics (Jon Carpenter, 1998).
Q FACTS against MYTHS
'99
Page 2
micro-credit as the first
step of a decade-long
Forms of Credit and Savings*
o
campaign that sought to
ensure delivery of credit
1. Informal & Private Provision
for self-employment by
❖ Savings may be in the form of hiding money; buying valuable
20005 to 100 m. of the
or livestrock; depositing money or valuables with a friend or
world’s poorest families
broker; reciprocal arrangements with neighbours such as
especially the women of
lending in the expectation of an equivalent return later;
those families. The
Summit was backed by a
❖ Credit may be acquired from relatives, friends and neighbours
number of transnational
possibly as part of a reciprocal arrangement, from
agglomerates
e.g.
moneylenders and traders, or landlords. It may involve highly
Citicorp Foundation,
exploitative relationships, leading in extreme froms to debt
Chase Manhattan, the
bondage, to systems of indebtedness to the ‘company store’
American
Express,
from which workers are unable to free themselves, and to the
Mastercard International,
virtual enslavement of women to brothel-keepers;
The Monsonto Fund and
❖ Rotating Savings & Credit Groups exists traditionally in many
the Charles Stewart Mott
societies, the pecise details of organisation depending on the
Foundation. It was a
size and purpose of the fund. The essential feature is that
cgjcerted attempt by this
each member makes a payment into a central fund, the whole
powerful
lobby
to
of which is then handed over to one of the members chosen
generate consent around
either by drawing lots, auction or predetermined rotation. This
microcredit as the best
fund then rotates until all members have received a lump sum.
available development
option. Since then, not
2. Formal Commercial or State Savings and Credit Institutions.
surprisingly, microfinance
These are the national Post Office network, and commercial
or micro credit has been
or state banks.
vigourously promoted by
3. Intermediary Institutions. These include
a number of I GOs
including aid agencies with
❖ Revolving Loan Funds (RLFs), Saveway Clubs as in Zimbabwe,
many of the programmes
Credit Unions, Alternative or Intermediary Banking Systems;
being
dubbed
as
❖ Rotating Savings and Credit Groups exist traditionally in a
successful. Small wonder,
number of societies, the precise details of organisation
then, in his budget speech
depending on the size and purpose of the fund.
on February 27, 1999,
* The Oxfam Handbook of Development and Relief
Finance
Minister
Yashwant Sinha himself
proposed
an
credit-worthy middle-class. But the world is riot made
expanded role for micro-credit to kick-start rural areas.
up of only middle—class. When market gets saturated
This ‘new world of micro-finance’ has, however,
by the middle-class TNC's begin to wean even the
come in for a great deal of criticism. It is seen as
poor class. The poor cannot possibly be goaded into
symptomatic of the larger crisis afflicting the world
buying dishwashing machines or a pair of Levis but
today. It is a direct shift from earlier models of
certainly investing into those non-essentials, ranging
development to the current neo-liberal oriented
from Coca-Cola to Colgate-Pamolive shaving cream
ideology which, among other things, legitimises ‘credit’
and from Uncle Chip's to Fair and Lovely fairness
as an effective tool to perpetuate,and prise open
creme, if credit is made easily available to them.
domestic and global markets. Extending 'credit' to
Indeed, commodity markets have mushroomed and
also nation-states have become a common practice
expanded in the background of rapidly declining
to not just the IMF and World Bank but also to MNC
resources and all-round deterioration in the quality
enterprises like Citi Bank etc. The middle-class are
of life. Poor women in particular being the most
today vigourously encouraged to use Credit Cards,
affected are targets for numerous development
their new status symbol. This ensures that whatever
policies of which micro-credit is the latest ‘mantra’.
their reach, the market would be consumed by the
Q FACTS against MYTHS
Page 3
Supporters of this strategy make the assumption
band-aid kind of remedy to the seemingly intractable
(often not field-tested in all conditions) that the poor
problem of poverty. This makes it necessary to not
are bankable, are credit-worthy and that micro-credit
only reexamine the premises on which microcredit is
helps them tide over their poverty and misery. But
founded but to also demystify some of the claims
this somewhat naive assumption of microcredit being
made by its proponents.
a panacea to under-development led to development
MYTH : Micro-credit is a new and innovative
professionals and donors getting concerned with
form ofsavings for thefinancial needs ofthe poor.
sustainability, outreach and impact of their work.
Unfortunately, this approach is totally devoid of any
FACT: The notion of microcredit is not a new
understanding of the politics of food, hunger or
phenomenon at all. The poor of the world have
poverty. The Grameen Bank too, in its wider
always had their own traditional ways and means of
comprehension, is problematic. Recently it undertook
managing their finances which not only serve but also
plans to collaborate with the exploitative agricultural
at times exploit them. These were regular savings
TNC, Monsohto, one
mechanisms, with or
of
the
major
without a credit
promoters of micro
component, but
16 Promises .
credit. The planned
they have been seen
The Grameen Bank, a model for a number of
collaboration was
as the poor man’s,
MCIs, has . One of the most structured and
however cancelled
or more usually
regimented systems through which borrowers
owing to public
poor
woman’s
not only commit themselves to the .'group, but
protest.
The
substitute
wL/r
also learn and promise to commit themselves to
arrangement would
formal banking, not
certain social and welfare values which are
have given the
as a potentially
beneficial to them.
Grameen
Bank
profitable
$250,000 to provide
distribution channel
Before being enrolled into the Bank each woman
loans to poor farmers
for banking services.
has to learn to sign her name and learn the 16
• to buy Monsonto’s
Promises/These Promises, chanted at each
What is however
agrochemical and
Meeting, include * looking after their health ’
new is that people in
biotechnology
* educating their children * repairing their
‘modern’ formal
products.
homes * building and using pit-latrines
financial institutions,
* growing vegetables * drinking clean water
These
critiques
which have evolved
* undertaking higher investments for higher
rekindled a range of
to serve the financial
incomes * helping out their group members
much wider concerns
needs of the rich
* not taking part in dowry * not practising
e.g. on the role of
have
since
child
marriage * undertaking physical exercise
microcredit
in
recognised that they
in the Centre. Borrowers also take part in the
c o m m u n i t y
can learn from the
programme
in a military style, raising the
empowerment, its
informal finanjj^
Grameen flag, saluting it before meetings,
ability to impact mass
intermediaries Bat
signing a Grameen song, and referring to the
poverty, its trickleserve the poor, and
bank workers as ‘Sir’.
down approach at the
that there may even
expense
of
be profits to made
experimentation,
in this ‘new* market,
innovation and diversity of approach in working with
which is really the oldest financial market place of
the poorest of the poor who actually may even be
all.Financial services used to be regarded as a form
on the starvation line.
of assistance to small enterprises; now they are
comming to be seen as another type of enterprise
This ‘new world of microfinance’ thus really means
themselves.1 •
doing profitable business with the poorest sections
In India, similar credit programmes emerged in the
of society! Moreover, experiences with this business
80s known as Self-Help Groups (SHGs) to provide
approach to development is showing that microcredit
credit facilities to the poor, especially to women, in
can only lead to “micro-results”. Nor has it found a
both urban and rural areas. Institutions like NABARD
blueprint for surefire success that allows models of
also offered generous loans to these groups and also
best practice to be replicated worldwide. Any
by international donor agencies like Ford Foundation,
developmental strategy requires far more than this
Q FACTS against MYTHS'
Page 4
UNDP and Swiss Agency for Development and
Cooperation. Examples of micro enterprises that are
often quoted are Grameen Bank, Bank Rakyat
Indonesia (BRI), Bolivia’s Banko Solidario, Banko Sol,
among others. In the Indian context, the examples
include the SEWA Bank, MYRADA, eta Such types
of local savings groups are wide and varied with
different names. (See box on page 3)
bear the liability for repayment), and in only 37 per
cent of the cases had women retained full or
significant control over the businesses that were in
their names. In comparison, business that were in their
names women did not know how their husbands,
sons, fathers or brothers had used the loan and had
not even been inolved in “their” enterprises. At
Grameen, daughters of women borrowers are
illegible for a loan because the ban has a policy against
making two loans to a family even though a borrower
can take out additional loans for her son’s business.
So much for the “empowerment” of women!
"Modern" micro-finance such as SEWA of
Ahmedabad, Grameen Bank of Bangladesh, etc.,
however, owes their origins and successes to two long
standing but very different institutions, the
moneylender and the local savings groups.
There are also many modem variants of traditional
moneylenders whose businesses owe nothing to the
recent innovations in micro finance. Pawnbrokers, for
instance, enable poor people to make use of what
few assets they have to mobilise funds when they
n^d them, and goldsmiths and jewellers not only sell
jWellery but also offer an ‘after-sales service’ by
lending money on the security of what they have sold.
They are above all familiar. The local moneylender is
usually a neighbour, which is one of his strenghts, but
s/he is generally richer and many may not be from
the same community in a case or socio-economic sense.
The members of local savings groups, however, are
usually not only neighbours but also friends and fellow
workers. The savings groups provides what is often
the only opportunity for social interaction, particularly
for women in some communities.
These groups are always handicapped, however, by
the same features which give their strength. They are
started, financed and managed by the same small local
group of people whom they serve, and their financial
resources are limited by the abililty of these people to
*c, and to generate additional funds from the profits
tney earn by investing their savings.
MYTH : Microlending programmes like those of
Grameen Bank of Bangladesh or SEWA of
Ahmedabad, among others around the world,
lead to women’s empowerment whilst
simultaneously benefiting them socially and even
emotionally.
PACT : Again, however, ground realities, present a
completely opposite picture.
Citing researchers Goetz and Sen-Gupta the journal,
Aspects2, noted that the authors found that while
women get the loans from Grameen Bank and related
organisations, a “significant portion” of those loans
are direcdy invested by male relatives (although women
FACTS against MYTHS
"
Moreover, Grameen, is actually using these poor
women as collection agents. As a Bangladeshi
government field worker explained to these
researchers: “We are much better at getting our loan
money back now that we are using women as middle
men [sic]”. Even the western development literature
is guilty of painting women as the sole moral and
financial guardians of the family. Grameen’s high
repayment rate is commnly explained away with the
response that men fritter the money through gamblings
and alcholism whereas women are more responsible,
trustworthy, and concerned about the family. But these
explanations rarely note the pressure that poor, illiterate
women must feel from Grameen’s highly educated,
primiarly male staff, nor do they examine what leads
men to behave so irresponsibily.
Further, under the banner of liberation, Grameen
ironically reinforces women's traditional roles. While
capitalising on household activities, women are kept
out of wage labour—which, whatever its limitations,
can offer some degree of independence. As these
researchers put it, using women as “conduits for credit
for the family”, keeps women as the “policers of
recalcitrant men”, dubious progress in gender relations.
Panos3 cites a study that reports of the large chunk of
USAID spending in 1993 went to men. Women
received 56 per cent of the total number of loans,
but only 35 per cent of the total money available.
It becomes obvious that in the final analysis Grameen’s
social interventions have less to do with empowering
women than with making them good repeat
borrowers. At every meeting women rather cultishly
parrot the “16 Decisions” (See box on pg. 4) that
they must adhere to in order to be Grameen
borrowers including, “We shall reduce our expenses
to a mimimum” and “If we learn that discipline is
not respected...we go along to help and restore order”.
While there is universal agreement that women can
and do benefit socially from microfinance there are
’99~^)
Page 5
reports that domestic violence sometimes increases
as a result of disagreements about control over the
loan, men’s disapproval of women’s participation in
such schemes, and pressure women on men to help
out with repayments.3 Other reports have shown that
men can be very supportive of th eir wives’
partcipation in schemes, though not always for the
right reasons. As one man whose wife drew a loan
from ASA explained: “I encouraged it, because we
would get money and I would not have to work so
hard”.
Finally, another study found that Grameen had no
significant impact on women’s wages in rural villages,
although it did booste men’s and children’s wages.
And with all the hype about Grameen being the largest
microlending program in the world, one could never
guess that loans to women have remained a mere
five percent of the total amount lent in rural
Bangladesh since the 1980s.
MYTH: Microcredit is the key tool in the struggle
to end poverty and economic dependence.
FACT : This is merely a seductive ploy to ‘sell’
microcredit to governments and to the business
community with the bait of ‘financial sustainability’,
and ‘profitability’.
With the 'success* of microcredit programmes a
number of international donor agencies have offered
liberal grants for microcredit operations. This initial
seed money, in turn, attracts additional capital from
the corporate sector and financial institutions. Loans
are to be provided to borrowers through a network
of subsidiary lending institutions. In order to assure
investors a good rate of economic return, these
corporate entities lend at market rates. However,
such microcredit simply keep the poor on the treadmill
of debt or bypass them altogether in favour of those
who can afford credit at market rates. For instance,
the World Bank’s own microlending arm, the
Consultative Group to Assist the Poorest (CGAP)
with its narrow focus on microlending as an end in
itself has done
more danlage to
“empowerment
lenders” than good.
A 1997 report by
the Washington
DC-based Institute
for Policy Studies
found that 46 per
cent of CGAP’s
expenditure in its
Q FACTS against MYTHS
first year of operation was spent on policy reforms
which may benefit lenders but end up hurting the poor
borrowers, particularly women. For example, CGAP
views microlending as an unviable in the presense of
usury-legislation which provide ceilings on interest
rates. Thus, its first order of business at $ 500,000
conference in Mali in Central Africa was to get
government officials to repeal their nation’s usury laws.
CGAP also calls on countries to privatise completely
their micro-lending institutions, removing all subsidies
for banks which service the poor. Such reforms would
force banks as the Grameen Bank of Bangladesh,
which relied on subsidies for 17 years before
becoming financially viable, to shut down or charge
much higher interest rates to reach self-sufficiency in
a shorter time-span. CGAP also advocates stronger
debt collection laws - specifically collateral laws-which
would result in a safer environment for bankers but
which could exclude the poorest, and poor women
in particular, from access to small loans.
Swaminathan Aiyar in the Econonmic Times (17-31999) referred to a recent study that suggested only
5% of borrowers emerged above the poverty line
and according to offcial statistics, most of the poor
families who received micro-loans, half of them
remain below the poverty line. Thus, despite its
positive features, microcredit has had a limited impact
on poverty. Some of the reasons for this being
❖
the typicalmicro-credit loan is around Rs.4,000. Even if
thisyields borrowers extra income it may be too modest to
pull them out of poverty. Indeed, many strugglejust to
repay loans;
❖ micro-credit aids entrepreneurs but only a smallproportion
of the poor have the risk-taking inclination or capacity
required for successful entrepreneurship. The rest need
alternative strategies of poverty alienation, like
employment works;
❖ to use creditproductively, skills are required, and thepoor
often lack these. To overcome this problem, some NGOs
inpart training before providing loans;
❖ While borrowers
benefit through micro
credit, this may be at
the expense ofothers. yl
village has only a limited
demandforshops, repair
facilities or sewing
machines. When micro
credit beneficiaries occipy
this pace, they crowd
out others;
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Page 6
•••
While the recovery rate of loans is generally high, it can
collapse suddenly because of natural disasters likefloods
and cyclones. Floods in Bangladesh in 1998 wiped out the
assets of many of Grameen Bank’s borrowers, forcing it
to seek large additionalforeignfinance;
*•* The apparent liability of.micro-credit societies is somewhat
illusory. The administrtive cost of selecting and monitoring
small beneficiaries can be very high. One study suggests
thatforfull viability, NGOs would need to charge upto
30 per cent interest, and at such a high rate substantial
default would inevitable. This soberingfact explains why
NGOs that charge 15 to 20 per cent interest on small
loans stillremain dependent on subsidies andgrants, mainly
fromforeign donors;
Micro-credit has been given principallyfor household self
employment. But as the economy modernises, this sector is
bound to shrink, giving way to larger production units
run with hired labour.
As far as India is concerned there are important
lessons to be gleaned, viz.,
•>
the need to ensure that SHGs remainjust that, and do
not become dependents of NABARD and extensions of
theformal credit system;
Sf the need to mat buffers to scotch attempts ofpoliticians to
get NABARD to write off loans.
❖
Bangladesh’s experience shows micro - credit beneficiaries
may simply crowd out other villagers from the limited
economicspace available in a stagnant rural economy.
The above makes it quite clear that more than being a
poverty alleviation tool microcredit in the current
global economic climate is analogous to giving
someone a fishing pole, and telling him or her to go
fish — in the wake of giant trawlers whose net spans
Mie horizon.
MYTH: Unlike the rural credit systems which
today are in dire straits — riddled as they are
with large-scale default — micro-credit
programmes have been successful in reaching the
poorest of the poor — those much below the
poverty line.
FACT : Research has shown that institutions have
extended the reach of the formal financial sector
mainly into ‘upper’ and ‘middle’ income poor
households but have been relatively ineffective in
reaching the poorest. Hulme & Mosely4 state several
factors for the failure, namely,
❖ the emphasis on credit delivery ly many institutions:for the
poorestpeople and households the opportunitiesfor credit-
Q FACTS against MYTHS
financed self-employment are highly restricted, and the risks
are unreasonably high. Citing a study by Rutherford
(1993) they show how research with the poorest in
Bangladesh commonlypractice ‘self-exclusion from income
generating credit initiatives which they do notperceive as a
solution to their livelihoodproblems;
❖ forgroup schemes, processes ofsocialexclusion are inportant:
that is, group members (most often people below the the
poverty line) deciding that some prospective members are
‘toopoor’ to begiven group membership. This may be due
to economicgrounds that such people are 'too risky'or on
socialgrounds as thepoor differentiate amongst themselves.
Direct cases of such exclusion were reported for
SANASA, BRAG, among others, where members
identified somepeople in their villages as being unsuitable
for group membership because of the intensity of their
poverty;
❖ there is evidence that as creditprogrammes are expanded
and management isprofessionalised, the incentive structures
for staff(bonuspayments andpromotionprospects)favour
a concentration ofgroups other than the core poor. This
was evident in the case of BRAG (VoUI, Ch. 12) where
the average values ofnew members’ assets was higher than
the asset levels of successful third-time borrowers. Field
stafffind that headquarters—setperformance-targets can
best to be acheived ly working with the poor rather than
the corepoor (ibid). In Sri Lanka, SANASA isfaced
also with this dilemma: to shiftfrom a largely voluntary
staffing to a moreprofessional one.
The problem of effectively reaching the poorest of
the poor through credit programmes is also faced by
the otherwise very successful development project,
the Women’s Sericulture Project of Rajasthan of
increasing employment opportunties for Adivasi
women. The Adivasi women in the project comprised
of the upper lower-class from an impoverished area.
Landless women were excluded as also women living
on inadequate or particularly poor land.5 The
predicament also applies to Grameen Bank
beneficiaries themselves! Only 20 per cent of its
members fit in their target ‘landless’ categroy. Bancosol
in Bolivia is also tending to exclude the poorest, while
another state-run programme in Bangladesh, TRDEP,
although classifying 79 per cent of its borrowers as
‘poor’, methodologically excludes the poorest from
its clientele.4 Further, credit institutions generally fail in
providing services for people with disabilities. The
emphasis on self-employment in low-demand-highcompetition markets for goods and services made
many programmes irrelevant in terms of the
opportunities available to the disabled. Removing the
need for collateral makes little difference to the
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Page 7
disabled who face many other hurdles. Interestingly,
even BRAC’s Income Generation for Vulnerable
Group Development (IGVGD) programme —
targetted on the core poor — has a physical-fitness
criterion for access which ensures that the physically
disabled are screened out.
(The purposes of raising this pont is not to maintain
that such credit programme should address also the
needs of the disabled or infirm it would be
unreasonable to expect them to meet all social welfare
needs), but to point that explicit and implicit claims
that such programmes reach the ‘poorest of the poor’
need to be tempered. If Doyal’s (1983) estimate of
around 350 milion physically and mentally disabled
people in the South is updated, given population
growth, the emergence of AIDs and the explosion
of cripplings linked with the increasing incidence of
warfare (and the cheapness of landmines), there is
clearly a vast number of disabled poor (including
children) who are presendy beyond the reach of even
the most innovative institutions. Similar is the situation
of the elderly. However, the demands of the elderly
for accessible saving schemes was evident from Sri
Lanka where almost 10 percent of SANASA
members had reached ‘retirement age’. Such people
used SANASA to ‘lumpy’ income, from the sale of
assets or gifts from friends and relatives, and to
accumulate savings so that major purchases could be
(such as roofing,new clothes, etc.). The needs for
r
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financial services for the elderly may well be similar
to those of the able but very poor.5
References
1.
Harper, M. Profit for th? Poor: Cases in Micro-Finance,
Oxford &. IBH Publishing Co., Pvt, Ltd., New Delhi,
1998.
2.
Neff, G. Microcredit, Microresults, Aspects of India’s
Economy, Mumbai, #21, 1996.
3.
The Future of Microfinance, Panos Briefing, #2,
London, 1997.
4.
Hulme, D., Mosley, P. Finance Against Poverty Vbl.1.,
Routledge,-London, 1996
5.
Creevey, L. Changing Women’s Lives & Work: An
Analysis of the Impacts of Microenterprises Project,
I. T. Publications, London, 1996.
6.
Micr^T Credit: A Step Fb'rvi&rd, Anubhav, Pune, #8,
1997.
7.
Singh, K. and Wysham, D. (Editorial), Micro Credit:
Band-Aid or Wound? The Ecologist Asia, #4, Bombay,
1997.
8.
Singh, K. Microcredit: From Sandals to Suit?, Pl^^
Update, #2, 1997.
9.
Balakrishnan, V. Micro-credit Summit: Between the
Lines, The Review of Contemporary News & Views,
#4, New Delhi, 1997.
10.
Micro-Credit; Economic Empowerment of Women,
Comet Media Foundation, Mumbai, 1997.
11.
Singh, K., et al, Micro-Credit: Just a Band-Aid to Hide
a Gashing Wound?, TWN Features, Goa.
12.
Bundell, K. Microcredit and the Needs of the Poor,
Christian Aid, London, 1997.
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