Bureaucratic Tales

Microfinance has now been accepted as a proven tool for poverty alleviation. It has been found to be more effective then most other development initiatives that were grant driven and government sponsored. Even though this has become a globally accepted fact, somehow, the registrar of societies office of my state does not seem to understand this.

When I went with the required documents to register my microfinance institution as a society (society can be formed only for not for profit purposes, and is registered as an NGO), the registrar’s office told me I would have to make quite a few changes in my memorandum of association and bye laws to be able to register as an NGO. They had high objections to the terms used in the documents, like microfinance ‘business’ and charging of interest for meeting the organisation’s expenses. They asked me to have it changed. While I did not want to, I still made a few changes so that atleast the organisation could get registered.

After submitting the papers and while coming back, there was a phone call from the office saying that my organisation could not be registered as it was not for charitable purposes. Trying to convince him of the same was to no avail. For the next few days I tried my best to convince all officers in the office. I told them how this was a social activity, how it was a global phenomena and that the organisation, as a society, was not going to make any profits. The strange replies to all my arguments were many. In this state we do not give license to societies to carry out any activities of finance. I cited examples of other organisations in the same state doing the activity. The answer to that was equally funny. “Do you think that if we have made some mistakes in the past, we are going to keep making them?” They even told me to register my society in some other state, and carry out my activities in my own state, they would have no problems with that. Strange!

There was also this very strong point of theirs that if the society was charging interest to its clients, its not a charitable society. First I tried to explain them the concept of microfinance, which they did not buy. Then I told them that this was not an interest being charged, but service fee to meet the expenses of the organisation. They said no, you cannot even charge that, a society cannot earn even to meet its own expenses. I do not understand, do they want our social institutions always to be grant based? Do they want to keep the begging bowl always in our hands? What would the organisation do when the donors stop giving funds? With the amount of money that is required for microfinance, will grants suffice? Also, from the point of view of the poor, do we never want them to become clients rather than beneficiaries? Should we never let them hold their heads high and demand services but always ask them to beg for alms? I do not understand why these people do not get this simple point.

What is more frustrating is the fact that these are the people who are given the responsibility of registering the institutions for social activities. They are the ones who should know and understand all these nuances, should be sensitive and be up to date with all the development sector trends throughout the world. But they still live in their own cocoons, their authority over the people who try to do something for the poor making them high on power, which they have got addicted to and treat the place as their fiefdom.

In the meanwhile, I fight on against the bureaucracy and ignorance. I have a meeting with a senior official in the same office next week. Wish me luck.