In the Interest of the Poor.......

On one of my recent visits to a microfinance institution (MFI) for an assignment, this incident set me thinking.
This NGO was very worried about competition from other financial service providers in the area due to which they were in fear of losing their market very rapidly. The competitors were providing much better quality services at a much lower price, and providing much better customer service than the current NGO.
Now, it was very recently (about 1.5-2 years) that the NGO had started its microfinance operations, otherwise it used to work on other development issues like health, education, advocacy, gender issues etc. They started out with a concern that poor people do not have access to good quality financial services and they started their microfinance operations to address the same. Ofcourse they were not starting microfinance operations to earn money or because it was the latest fashion and everyone else was doing it!!! They were doing it out of their concern for the poor.
After these couple of years, the development activities have taken a backseat and microfinance is their major activity. With the entry of new players in the market and banks lending directly to a section of their clients, they are fast losing their market share. This organisation also realised that all these organisations had deep pockets and can afford to provide better services to the clients than themselves, and they would not be able to match the same even with their best efforts in quite some time to come. This has them worried. They just wished that these players were not there in the market. And this has me perplexed.
If, as the organisation claimed, it was only concerned with the clients getting access to quality financial services, why would they wish that the other players were not there in the market? When these players are providing services better than themselves? When they know they cannot match the other players services for a very long time. Why do they want their clients to still get these services at a lower quality, higher price as long as they take it from them?
Is it not better that the organisation go back and do the development stuff that they did earlier? Now that the reason why they had started microfinance operations were fulfilled? But the organisation did not seem the least interested in going back to the development activities, neither were the staff.
Paisa kamana hai isliye microfinance kar rahe ho, to aisa bolo na yaar.......why this garb of charity???
God save the poor from these "development" organisations.

Being Professional is Hazardous for the Society, We Need Unprofessional Organisations

At last there is some motivation. Some hurdle on the way.
I had earlier applied in my state to be registered as an NGO and there were a few problems that had been coming up from time to time. So, this Saturday, I went to the Registrar's office, to try and convince the officials there that microfinance indeed is a development activity. I cannot believe that with so much of hype around the sector, I still have to convince people about it, that too to the government officials, whose work is to deal with development organisations, day in and day out.
Anyway, the first shock that awaited me (actually, I found it extremely amusing), was that my application had been rejected, on grounds that the organisation I wanted to start was going to be a 'professional' one. Can you beat that? They rejected it because they thought it was going to be professional. They want unprofessional organisations only here. Well......I could have understood had they said commercial, but 'professional'........Though it is very frustrating, I find it quite funny, but I am game for the fight.

P.S. - I tried talking to the 'high' official who had finally rejected my application, and he was downright rude to me. 'I have written whatever I had to say in the letter of rejection that I have given you. I do not have so much time to sit down and discuss this with you. If you have to say something, give my office a written reply to this, then we will see what can be done,' was what he told me. All this while he was sitting leisurely in his office and sipping chai and having sprouted chana from his tiffin box. As for the written reply, his secretary told me it was not worth it as he is never going to even read it, let alone take action. This when I had to juggle my plans so much to be in that place for that one day. When I had waited in his office in this summer heat without a fan for 4 hours to meet him. And this, to sacrifice a settled job to come and do something meaningful for the society. I guess that hardly makes a difference. These people have been given tremendous authority and they are rulers of their fiefdoms who can do anything within that and no one can challenge the, As public servants, they are not even supposed to be as much as polite to the public, who they consider to be unwanted intrusions in their 'busy' lives, busy with coming to office at 11 am and leaving at 5, and in between have endless rounds of tea, paan, gossip, telephone conversations with long lost friends and the like. If they sometimes do move some files, you can be rest assured that either there is a pull from some one in power higher than their own, or the power of the moolah.
So, if you are a professional, move over, they need no change, sorry, things need to move the way they have always done........inculcate some unprofessionalism, they will be happy to oblige you, just do not forget the green bucks.

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.