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Rare Canvassing of Client Voices in India
November 28, 2010
Ramesh Arunachalam’s blog is following and commenting on the Andhra Pradesh microcredit crisis in detail. At least for an American outsider like me, the blog is a bit awkward and disorienting—there is no explanation of who the “Indian Micro-Finance Blog Team and Ramesh Arunachalam” are. But if you persist in perusing, you’ll find content found nowhere else. It seems as if the author(s) come from the microfinance industry and yet are quick to criticize it, which gives them credibility.
One post tells the story of Zaheera Bee, who committed suicide, in words and harrowing statistics. Another contains direct (translated) quotes from clients on the definition of coercive debt collection. I find this extremely valuable because among all the loud voices on the crisis (including mine), those of clients have barely been heard. I hope the “Candid Unheard Voice of Indian Microfinance,” as the blog tags itself, brings us much more of this, so that those voices and the blog will in fact be heard.
Examples (all emphases in the original):
Client A: “The fact that fieldworkers/agents came day after day (for week after week) and pressured me to pay back is itself a sort of harassment and coercion. As I (and family) do not have serious livelihood means, we have to either borrow from another MFI (this would help consumption and also repayment for some time) or borrow from money lenders (at even 10% per month) to pay them and get them off our backs. The idea is WE HAVE TO SOMEHOW PAY THEM or they will not leave. When all options of borrowing run out, we either have to migrate or die. This is what is happening to other women and may happen to me someday soon”
Client B’s Husband: “My wife who committed suicide, had taken 8 loans and had to pay back 2 loans on Monday, 1 Tuesday, 1 Wednesday, 1 Thursday, 1 Friday, 1 Saturday (every fortnight one), and 1 once a month. There was no respite during the week and on Saturday, she felt happy that Sunday was the next day but that was short lived as we had to make payments from Monday again and the whole cycle continued…When one has to pay loan repayments on 6 days a week and people will not leave without collecting payments, it is downright harassment.”
Client H: Another client said, “The earlier support (SHG) groups have now become pressure groups that insult. So there is no respite and harassment is 24×7 as group leaders and other members live at the village itself and they obstruct participation in village activities if the loan installments have not been paid. You just cannot get away without paying as they have a lot of local influence and can do anything…”
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2 Comments on “Rare Canvassing of Client Voices in India”
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November 28th, 2010 at 12:54 pm
Thank you David and This is Ramesh. I was delighted to see you post this and thanks for your kind words. Will try and do my (our) best always. I have never blogged before and I am not sure whether I have got it right. Nonetheless, I and others wanted to bring an honest and objective perspective to Indian micro-finance and I have worked a lot with MFIs (including most top ones in India). The Indian Micro-finance blog team worked on the Zaheera Bee case and a couple of other pieces and all other posts have been done by me. The others want to remain anonymous and I am unable to convince them to come out out in the open. I have worked in the micro-finance industry for over 2 decades in India and other countries. All my interviews are video taped and/or audio taped, to ensure authenticity. Thanks and apologies for a longish comment! I love your blog posts and your diagrams including the latest from Andhra.
December 5th, 2010 at 1:28 am
Dear All
According to my understanding of the Andhra Situation ( The position in the rrst of India for rural banking is not much different.), the core issue is the debt repayment. One who is objective ( There are very few such people, the Governments included!)and one who is aware of the realities of the rural scenario in India can vouch for the fact the debt repayment culture was very strong , particularly among the poor. For instance, even under the Government Poverty Alleviation Programs like IRDP, the repayment was 100 percent according to the central bank study in interior places like Honavar Taluk in the coastal Karnataka. I do not oppose grants and open subsidies to the poor.But the populist Government measures of loan waivers, the unthinking media support to defaults and the special pleading intellectuals all acted and have nearly damaged the “REPAYMENT CULTURE ” and created permissiveness and default.However noble or desirable, financing system cannot function viably if the repayment culture is not there !
Policy makers and public leaders and all of us should recognise this sooner than later!
Thanks and regards
Satchidananda, Director, GLOBAL MICROFINANCE FOUNDATION