Kuldip Maity

“Patience is not sitting and waiting, it is foreseeing/ It is looking at the thorn and seeing the rose, looking at the night and seeing the day/....”

The 13th-century Persian poet Rumi, like thousands of poets before and after, expounded on the virtues of patience. But how many of us remember them or their words? Some of us who have been fortunate enough to be healthy amidst the pandemic have already started cribbing about being in quarantine. And we have forgotten how hard it has been for our frontline COVID-19 warriors. We need to count our blessings in surviving the health and financial crisis because many find it hard to do or did not survive.

But many like Purnima Malik did not wait for the crisis to take a toll on them. Instead, they “looked at the thorn” and saw the rose blooming...or, in her case, heard the chickens cluck!

Last year, when India went into months of lockdown to battle the first wave of the COVID-19 pandemic, Purnima had just settled down after her daughter’s wedding. The preparations for the wedding had lasted months, leaving the family no time for rest. Purnima’s two sons were busy gathering resources and making arrangements; her husband oversaw the plans and invitations. As for the bride’s mother, Purnima was in charge of looking after her daughter’s bridal needs.

Indian weddings, however big and fat or small and humble, do cast a financial burden on the families. Purnima thought they would soon recover from the wedding expenditure. Her husband works in a nearby potato warehouse. Her sons were one of the busiest van drivers in their small village near Tarakeswar in Hooghly district of West Bengal. Little did they knew that their fate, including that of everyone in this country, was about to change. The lockdown grounded the sons as the government ordered all public transport off the roads. They could only sit at home and hope for a quick return to their normal daily routine.

Purnima was thunderstruck. The Malik family was gripped with the fear of both health and financial crisis. With only one source of income—her husband’s job—Purnima managed to run the house and weather the months of lockdown. But it wasn’t enough to tide over the monetary void. She realised that no good will come from “sitting and waiting”. She needed a plan, another oar to cling onto.

The yearning to do something on her own took Purnima to the nearby branch of Village Financial Services. It was the day when the country unlocked with precaution. VFS put Purnima in its JLG group Payel, Purnima started her chicken farm. Her sons helped her with the contacts of poultry and poultry feed suppliers. Her daughter helped in spreading the news of the new business.

Purnima was finally able to see the light at the end of the tunnel.

Purnima’s farm is now a go-to place for the locals whenever they look for chicken meat. Purnima monitors the upkeep of the farm meticulously, ensuring that the standard hygienic and health conditions of the birds. Purnima calls in the local vet regularly for check-ups. She makes sure that her farm meets the best standard of safety and quality checks.

Sometimes, Purnima wonders what would have happened if she had not taken that leap of faith and applied for a loan from VFS.

For every entrepreneur, the first step is a leap of faith, a jump into the unknown. The ones who can muster the courage learn to build their way. Their resilience comes from “looking at the night and seeing the day....”

For an entrepreneur, looking after a business is just like caring for a growing child. No obstacle, however big, can ever blunt hope. Temporary setbacks are countered with grit so that they stay just that. Temporary.

Take the story of Sumitra Sarkar of Hasnabad in West Bengal.

Sumitra’s husband Chiranjit never wanted to be a wage earner in a bag-manufacturing company. He dreamt of his own factory but lacked the capital. Sumitra also always wanted to start something but could not figure out the exact business she wanted to pursue. They decided to put Chiranjit’s skills to better use and start their entrepreneurial journey together.

But business is not only about skills. It needs financial acumen along with capital. Borrowing from local money lenders was not an option. While Village Financial Services would finance their idea complete with handholding, they had to be a part of a Joint Liability Group to get a VFS loan. A JLG has like-minded women with similar entrepreneurial dreams. It was time to take the first step as an entrepreneur—that of team building, forming a consortium of like-minded business aspirants! And Sumitra came out with flying colours.

There has been no looking back for Sumitra. With a working partnership with her husband, financial support from VFS, and regular handholding by VFS representatives, the bag-manufacturing business kept growing. While Sumitra managed the production, Chiranjit developed business relationships with the wholesalers of Burrabazar, Kolkata, who were buying the bags from them.

But running a business has never been smooth all the way, and the Sarkars were no exception.

As with everyone, the pandemic and the lockdowns have hit the business hard. With schools being closed for over a year now, there is no market for school bags or backpacks. Even carry bag sales shrivelled. The Burrabazar wholesale market and retail stores were badly affected by the lockdown restrictions. Add to this the two cyclones, which led to waterlogging in Hasnabad and made communications a huge challenge.

Just when the business started recuperating from the first phase of the COVID-19 lockdown and the impact of Cyclone Amphan last year came the second wave and Cyclone Yaas in 2021. When my office spoke to Sumitra, the region was still waterlogged, making regular business impossible.

But every cloud has a silver lining. The streak of hope has come in the form of an order from a major nationalised bank. As a part of their Corporate Social Responsibility, the bank is supplying relief material to the areas affected by Cyclone Yaas and has ordered bags from Sumitra. Along with it has come the hope of revival.

I cannot express the great feeling that swept through me when my team mentioned that Sumitra has also enquired about the possibility of larger financial assistance. It indicates that they have put the negative behind them and started to dream again. Having a dream is extremely important for any entrepreneur to prosper.

My prayers are with all my borrowers, and I am eager to hear more such revival stories.

This brings up the most important aspect of microfinance. It is not only poverty that our customers are fighting. They are also up against the various uncertainties of life and Nature. Having meagre savings multiplies the impact of anything negative that happens in their lives.

Microfinance companies such as VFS must nurture entrepreneurs and support them to help them recover from such situations.

Financial institutions have just one bottom line to look after, but microfinance institutions or MFIs must protect two bottom lines. One, of course, is business sustainability. The other is outreach.

Keep in mind that, for MFIs, business sustainability connotes more than it does for other financial institutions. To understand this, we need to understand the evolution of microfinance. MFIs evolved as development intervention instruments. Not only that, they evolved as direct intervention institutions in poverty alleviation.

To understand what governance means in the world of microfinance, we must know how MFIs function. MFIs believe that the poor are entrepreneurs created by their environment. They exist from moment to moment, from one day to the next, and they have to be enterprising to tackle the challenges that every moment of life throws at them.

The question raised during the 1960s was, what if such enterprise was channelled into productive engagements and such poor turned into micro-entrepreneurs? Instead of giving them handouts or dole or subsidies, what if they were helped to earn their own living with small loans? Such entrepreneurs powered by small loans could even create indirect employment. In short, every entrepreneur helped would have a ripple effect.

But borrowing money requires collateral! Without any collateral to offer, poor entrepreneurs could not get the cash they needed to connect to the market and move out of the vicious cycle of poverty into a cycle of prosperity.

So the next question was, what if a mechanism could evolve so that these entrepreneurs could access some capital to power their businesses? This mechanism could solve a major challenge in development. Thus evolved the concept of microfinance institutions. They would provide small loans to the poor without asking for collateral as understood in the business of lending money. Borrowers would be formed into groups and made to understand that the group would be responsible for each other’s repayment default.

Hence, MFIs were tasked with a mission and their governance required parameters different from those of conventional financial institutions.

Other financial institutions do not require to handhold their customers. But MFIs monitor, help and teach their clients how to keep their financial capital productively employed. Environment protection was also an issue as the poor had a more direct symbiotic relationship with nature. For example, disposable saal leaf plates are made by the poor aspiring to ride out of the vicious cycle of poverty into a cycle of prosperity. If the environment is denuded of saal trees, the first casualty would be their livelihood.

So MFIs, despite being financial institutions, are here with a mission defined by the development needs of the people at the bottom of the pyramid. Their governance is different from that of other financial institutions. In this short space, I just took a shot at making you realize why and how. I shall be back with my views on governance in a subsequent blog.

As if the COVID-19 pandemic wasn’t enough! Last year, amidst a long lockdown, Cyclone Amphan wreaked havoc of disastrous proportions. One year down the line, as we were still counting the cost of Amphan while tackling the second wave of the pandemic, Cyclone Yaas decided to pay a visit. This time, as the cyclone raged through the border of Odisha and West Bengal, the flooding in its wake caused concern.

These natural disasters hurt the poor the most. The Sundarbans story is even more alarming. According to reports coming in, even concrete walls built to protect the islands yielded to Nature’s rage. There is gloomy news on the COVID-19 front also. Last year, the pandemic had stayed largely within the limits of the cities. This time it has spread to the villages and is affecting children as well.

Though the administration swung into action ahead of Cyclone Yaas and moved the people to storm shelters, there is now the danger of COVID-19 spreading faster. Physical distancing is impossible in storm shelters, and even a few hours’ at close quarters can help spread the pandemic.

Also, the people joined hands to protect property from the gale and the tidal waves. In such a fight, one cannot keep to the COVID-19 safety rules. The people fighting to survive are often trading their lives for the benefit of others. There are also stories of people trying to protect the embankments physically with their bodies acting as plugs. These acts of standing together in the face of adversity will inspire future generations.

One must also remember that the need to fight adversity together is true for the larger society as it’s true for any organization. If people survive, so do societies. If organizations survive, so do their stakeholders. Each organization works towards an objective. For example, in the microfinance industry, the organizations serve the cause of society by working towards alleviating poverty.

In the situation facing us, the microfinance industry will have a huge role to play. Lakhs of people face a huge challenge regaining their income streams from their enterprises. Economic rehabilitation will depend on their access to resources. The microfinance industry and organizations such as VFS have to join hands with the stakeholders to overcome disaster. It won’t be an easy task. Reaching out to the affected will itself be a Herculean task, as the cyclone has destroyed roads and dislocated people.

We face a challenge on two fronts: personal and social. Many of us have lost friends or family to the pandemic. There is hardly a family that COVID-19 has not touched. The cyclone has added a challenge. We will survive. We have to survive.

And I am sure we will do so by sticking together, joining hands to fight out bleakness and reposing trust in each other and emerge into the sun as winners.