Life indeed, is strange. While everyone else struggled, those at the base of the pyramid — the microfinance borrowers, the ones dubbed hapless — apparently were among the first to immediately pick up the threads of productive life after the lockdown was lifted.

It might be pertinent to remember the basic tenet that acted as the springboard of the microfinance movement. When Muhammad Yunus began his experiment with microfinance to tackle poverty in Bangladesh, his belief was that the people who miraculously manage to survive by taking every day as it comes and overcoming every challenge that life throws at them are naturally endowed with the power of enterprise. The only thing that stands between them and prosperity is a lack of access to capital.

The post-lockdown experience has endorsed the wisdom of Yunus. On June 15, The Hindu reported that the microfinance companies are back in action in the areas that are not containment zones. That was about Unlock 1.0. Quoting microfinance industry sources, the newspaper said that the expectation about the recovery at the end of May was about 12-14 per cent. The recovery rate was expected to pick up from June. But to their utter surprise, May 2020 ended with a recovery rate of 18 to 20 per cent!

This essentially implies that the people at the base of the pyramid started to pick up the pieces no sooner had the markets opened. There was a difference between urban and rural customers: the urban customers were slower to get back on their feet than the rural ones. This was logical as the urban customers’ products could be deemed as less essential than those in the rural customers’ portfolio.

Micrometer’s report for the third quarter of FY 2020-21 also indicated that life is fast becoming normal for the microfinance industry’s customers compared with the rest of the world.

These are the people at the base of the pyramid and have almost nothing to fall back on. Yet, most of them declined the offer of a loan repayment moratorium when it was extended. If you recall, everybody else was clamouring for an extension of the moratorium. The regulatory authority had to accede to the demand. But the microfinance customers, or at least most of them, declined the moratorium as they had successfully picked up their economic life again, perhaps, from scratch.

In the same report, The Hindu quoted the industry sources as saying that initially, there were demands for emergency loans amounting to Rs 5,000 on an average. But soon, the demand for credit transformed into the usual loans for business.

Enterprise is tested in the time of adversity. What could have been more adverse than the pandemic—a time when the entire world stood still, factories shut down, and life became uncertain? Right after this, as we look at the microfinance customers’ statistics, we find that the adage about enterprise got tested to the hilt. And the proof lies in the lives of those at the base of the pyramid.