Late last year it was my privilege to attend a field trip in Southern India with Milaap; a social credit organisation based in Bangalore. Milaap was set up to provide easier access to credit for the working poor of India. They work with field partners in poor and rural areas who implement projects such as sanitation, solar power, irrigation and vocational training. This pragmatic approach is an example of a new breed of socially focused organisations in India determined to help people to help themselves by providing finance at very low rates of interest. Their motto 'lend a little, change a lot' was something I was able to see for myself during my visit.
I volunteer several hours a week writing online borrower profiles for Milaap's various projects so it was great to be able to see their work in person. After discussions with volunteer coordinator Alister Monte, it was decided I would visit some sanitation and irrigation projects in Musari, a small town in rural Tamil Nadu.
After an overnight bus ride from Bangalore to Tiruchirappalli I was picked up in by Senthil Kumar, my host for the day from local NGO Guardian. Guardian (or Gramalaya Urban and Rural Development Initiative in full) is Milaap's field partner in the region and has been working in water and sanitation in Tamil Nadu for 20 years. The relationship works like this; people apply through Guardian for funding for their particular need, Milaap provides the online platform to advertise the loan request and finally the money comes in and the project is paid for through Milaap. The borrower then pays the money back monthly in cash for Guardian to collect on behalf of Milaap who return this amount to borrowers. This system allows national and international funds to reach small communities all across India through local NGOs.
The drive to Musari provided me an opportunity to discuss Guardian's work with Senthil. He informed me that his organisation work village by village to improve living standards. Education is a hugely significant part of the process I learn. You need to empower people with the knowledge of how they can improve their lives before providing the actual means. The first step they take is to arrange meetings with village elders to educate them about how local sanitation and irrigation could be improved through their initiatives. They then meet with the wider community and once they understand the health and environmental implications the uptake spreads quickly. At present Guardian works successfully in 600 villages and rural towns in the region.
Upon arrival to the village the first borrower I was introduced to was Chitra, a local washer woman aged 35. Chitra showed me into her one room brick home where she and her husband, an ironer, live with their three children. It was less than 20 square metres and necessarily well organised with a bed on one side, clothes hanging nearby and pots and pans for cooking in another corner.
She recently received a loan of Rs. 7,000 (USD$113) through Milaap for the installation of a water tap at her home. The free standing faucet now stands over a wooden grate in the yard. It was set up by tapping into the main water pipe running beneath the roadside in the town. As simple as it seemed to my eyes, this installation has made a big difference to her life. In Musari, the water only comes through for an hour every two days. Townspeople have to queue at the well to collect water for their families. Chitra used to have to walk quite a distance to the well and would only be able to bring back 5-6 pots each visit. She said the queue could be very stressful with people arguing and even fighting over access. Now Chitra has her own tap it not only saves time and stress but yields over 20 litres of water per collection.
The terms of her loan allowed her a maximum of 18 months to pay back the loan plus the standard 2.5 percent. She was able to afford a repayment schedule Rs. 400 (USD$6.50) permonth through she and her husband’s combined wage.
A short walk down Musari's dirt road we came to our next borrower"s home. Vajaya was a 36 year old on her own with two children after separating from her husband. She works ironing and washing clothes for wealthier people in the town. She recently received a loan of Rs.10,000 (USD$161) for the installation of a toilet. Now complete, the toilet is a simple, low cost construction built in a small outdoor room. It has a steel squat pan set in concrete and a combustible underground septic tank beside it. In short it is an ingenius structure that has been designed to be built with a minimum of fuss and cost in the developing world*.
As a single mother Rs. 10,000 is quite a large amount to borrow but Vajaya felt that she needed to have a toilet in the home not just for convenience but also for the safety of her family. Without this convenience in the home they would have to travel 500 metres to a field and find cover in nearby bushes each time they needed to go. You can imagine her fear in the unlit darkness of the village at night and the shame of daytime.
Financially it has been tight but affordable. She has been paying the loan back at a rate of Rs. 600 (UDD$9.70) per month and hopes to have paid it off in full within the 18 month term. I asked Vajaya if it would have been possible to install a toilet without the assistance of the loan. She said it would have taken years to come up with the money and she would likely have had to sell some of her possessions to pay for it. As it was, the construction started quickly and she was able to have this important facility available after just 6 weeks work by local labourers.
The final person we visited was Banupriya; a young married woman in her early 20s. She is a new mother and lives with her husband. They are both self employed; he as an ironer and she a tailor. Work can be erratic and dependant on the season but they bring home Rs. 13,000 (USD$210) per month on average. She is also paying the loan back over 18 months and is currently paying Rs. 600 per month. She says this is not a major struggle for them to afford especially with such a low rate of interest at 2.5 %. With other moneylenders in the town she would have been paying 30-60 % interest so you can appreciate that the social credit philosophy really is filling a gap for people like her without access to traditional modes of credit like bank loans.
She had similar reasons to build the toilet as Vajaya. The convenience and security of a toilet in the home compared to the risks of going in the field. Now that she has started a family that is doubly important to her. She said that sometimes bad people and drug users hang around in such places, while local wildlife can be a challenge too. The final straw came last year when she was nearly bitten by a snake while relieving herself! With the stress of her first baby to contend with she is very happy not to have to concern herself with these sorts of dangers in future.
After this final meeting was over it was time to reflect on my day in Musari. I felt very privileged to meet Chitra, Banupriya and Vasaya and be welcomed into their homes and community. To gain insight into the lives that many Indian's face was thought provoking. At the same time it was reassuring to see how pragmatic steps like the loan of initial capital can give working people like these the chance to improve their daily lives for the long term.
If you are interested in learning more about the social credit philosophy of Milaap and their field partners please visit www.milaap.org. You can support a project for as little as $25, remembering that as it's a loan it won't cost you anything but it can make a valuable difference.
*Note: Access to toilets is certainly not the most glamorous issue in global development but it may well be one of the most important. According to UNICEF 2.6 billion worldwide (essentially half of the developing world) are considered to be living without access to a suitable toilet. Proper sanitation and disposal of waste is of crucial importance especially in countries like India where people live in such close proximity. Apart from the lack of dignity, this can lead to illness and even death. It is estimated that 1.8 million children in these circumstances die each year from Diarrheal diseases.
