Gadi Meir (back row, on the right) meets with a group in Chennai that works with Varam Capital. (Photo credit: Gadi Meir)
Living in India can be a mind-boggling experience for a westerner (even this “westerner” who has lived in India previously). Each day brings a new experience, usually one that alters the way you view the world or view yourself.
India is full of contradictions. How can a country that has vital infrastructure needs like reliable roads and utility service be experiencing one of the highest economic growth rates - - if not the highest - - in the world? How does this country embrace technology while preserving its rich heritage and traditions?
And why do I see so many hard working people.. yet they have so little. From the women weaving saris from morning to night, to the construction workers in our building banging down walls and pouring concrete without a thread of protective gear or even shoes on their feet.
Needless to say, my time as a Bankers without Borders® volunteer for Grameen Foundation (while on leave from my regular job with Wells Fargo) was eye-opening.
The core of my project was to help Varam Capital, a microfinance institution in Chennai, to find ways to improve their clients’ incomes and their lives.
In particular, I was inspired by my visit with a group of Varam clients. We arrived to find 20 women crammed into a small room, attending their monthly meeting with Varam to make their regular loan payment.
These women are breaking the mold. They are often poorly educated and illiterate. Yet, urged on by a desire to better their lives, or by a goal of saving for their children's education, they bravely embark down a path of entrepreneurship.
I peppered the women with questions (using my best Tamil language idioms). One used the loan to buy a sewing machine. The loan repayments are about 1300 rupees per month, and she now earns 3000 per month from stitching jobs. The machine will be paid off in two years. Simple and powerful. Several reported how they are primary income earners in the home; one husband had an injury; another had simply left the home.
Towards the end of the meeting, the women stand and chant an oath of solidarity to each other before the loan officer collects payments and shares financial guidance. This is their 8th monthly meeting…and 8th full loan payment without a hitch.
One key part of my project was figuring out how to better serve poor women who want to expand their successful cottage businesses. Some 20 percent of these women have paid off several rounds of loans. But transitioning from small loans in a group setting to larger individual business loans is complicated…for borrower and lender alike.
Because the women receive loans as a group, there isn’t any individual credit information (like a credit score) to enable lenders to qualify individually successful women for larger loans. Also, many of these women cannot read or write, so they don’t keep bookkeeping records that would allow lenders to make business loan decisions.
Back at the Varam office, we spent hours brainstorming possible solutions. This joint limited group lending model is ripe for innovation.
The people at Varam Capital were wonderful. I can’t overstate how grateful I am for the opportunity to contribute towards this important cause, all the while learning from the team at Varam. (They also taught me how to eat with my hands and how to temper the wildly spicy food of south India with a slash of yogurt.)