Kuldip Maity

American President Thomas Jefferson had said, “Honesty is the first chapter in the book of wisdom”.

While interacting with women entrepreneurs trying to create a new business and a better future, I have always maintained that to be successful, an entrepreneur needs to be wise more than clever. Also, formal education, though preferred, is not mandatory for one to be honest, and so, wise.

It hardly was a surprise when I came across Anu Singh of Goda in West Bengal’s East Burdwan district. Anu had dropped out of school in Class 4 and so did not have much formal education. But she has learnt the lessons of life.

With a loan from Village Financial Services, Anu runs a small tailoring unit in her house. She stitches women’s garments such as churidars, palazzo pants and school uniforms for young girls of her locality.

This is her moonlighting engagement, as she already works at a shop selling garments, helping the owner with sales. But unlike the common perception of moonlighting, she does not do it on the sly but has told her employer. Anu’s employer is also her biggest customer.

As it happens with any popular outlet, she hardly has time to cut and stitch at the shop. She brings the fabric home along with the measurements. There, she cuts and stitches the garments and takes them back to the shop where she works. Her employer also needs to be praised for allowing Anu to earn some extra money and improve her finances. It was his idea and he trained Anu for a year in tailoring to empower her. Anu showed the tenacity that has been helping her reap the reward for the last three or four years.

Anu’s income is the only steady one in her family. Her husband is in the fish business, but the COVID19 lockdowns and transport disruptions have created a slump. They have a ten-year-old daughter who attends school.

Anu’s long-term approach and honesty towards work show all promise of success in her entrepreneurial journey. It is never easy to balance between salaried work and a business of one’s own while keeping the employer happy, but Anu seems to have cracked the code.

We will keep a keen eye on Anu’s growth and try to extend the support we can. Her employer has also made a soft promise of handing over the business to her, once he decides to retire.

I am sure that Anu is not the only such entrepreneur among the 500,000-odd customers that VFS serves. I wish them the very best.

Small businesses are used to sticking close to their roots and developing a customer base around their areas of operation. Digital technology is giving SMEs the opportunity to increase their reach, become more mobile and even relocate, although these do not work for every line of business.

As in many other aspects of our lives, the COVID19 pandemic has forced us to revisit many established models. The pandemic has shaken up many businesses, transformed others and forced many to overhaul to survive and grow. One such story is that of Nupur Santra.

Nupur’s husband and his brothers were manufacturers of besan or chickpea flour, and motichoor laddus. While the business covered their financial needs, it could not survive the downturn caused by the lockdown announced by the government in March 2020.

The brothers had to separate their income sources. At the same time, Nupur’s parents needed geriatric care. Taking the decision to relocate was not difficult, but starting the business all over again, that too in the pandemic’s shadow, was.

Nupur and her husband first listed the positives. With a loan from Village Financial Services, Nupur set up a small manufacturing unit at her parents’ place. Earlier, the business had been a common set-up.

The next step was to get customers in the new locality. Fortunately, the quality of their products got them plenty of new customers. When we spoke, the sales figures had risen enough to bring back the confidence in their voices and enable them to clear some debts.

Nupur’s story is a perfect example of how rational thinking helps small entrepreneurs overcome their hurdles. Business, as with every other sphere of life, has its own sinusoidal motion. For an entrepreneur, some days promise a bright future, while other days have clouds on the horizon. We should not be ruled by emotions. Instead, we should structure our plans from a logical perspective.

I also ask my customers to list the positives before they start thinking of the hurdles. This approach helps create a positive mind-set and boosts confidence, with which the negatives seem to have a much lower impact.

Uncertainty is a part of life. There is no denying that the pandemic has created unprecedented uncertainty. All the more reason to get back the confidence of moving forward with a bigger boost. Sitting back and brooding can never be an option!

In the current shadow of the COVID19 pandemic, it is rare to hear someone say that her business has not been affected by the lockdowns, transport disruptions and broken supply chains. So, we were all ears when Gazala Parvin told us her story during a review call.

Wife of a migrant contract labourer, Gazala lives with her three children at her parents’ house. Her parents were farmers and had some land. But Gazala had the drive to start a business. Her first business was a tailoring shop, where she stitched ladies’ apparel. Her income increased and became steady when she got some job work from garment manufacturers. The manufacturers also supplied the cloth, so Gazala did not need much working capital. Gazala had to employ some workers.

Then the pandemic ravaged the economy. But Gazala was quick on her feet. She began training local girls in tailoring, creating an income stream that helped offset the losses in her main business. This also localised part of her income and protected her from the supply-chain disruptions in the garments business caused by the lockdowns.

She did not stop there. She also set up a grocery or kirana. The government-imposed lockdowns from the end-March 2020 to arrest the spread of the COVID19 pandemic exempted kirana shops so the income was protected.

In my last blog, I had touched upon the need for business planning to counter the abrupt negative blows to the business environment. One of the measures I mentioned was diversification to spread the risk.

Gazala, who dropped out of school after Class 10, has no business management diploma nor is it likely that she has read any textbook on risk management. But it was her quick thinking and never-lose attitude that led her to diversify.

This is the reason why I love sharing the stories of our customers. There are many learnings that we take away from these discussions with our borrowers. The most factor is a sense of purpose. Our women entrepreneurs are always looking for avenues to make it a better tomorrow for their families and themselves.

It is a matter of great pride for me to be able to contribute to their success stories.

The credit rating agency ICRA has forecast better growth for microfinance institutions in 2021-22on the back of healthy demand and increasing economic activity. ICRA’s forecast, put out last week, is encouraging, though we were not surprised. Collection metrics indicate that the industry is going back to the days before the COVID19 pandemic hit the world. So ICRA’s estimated growth rate of 12-15 per cent in assets under management (AUM) is quite in line with our forecasts.

The fight for survival at the bottom of the financial pyramid is much harder than we can envisage. Even so, most of our customers have been focused and kept their businesses going, or even diversified. After a pandemic-driven year, our customers deserve to harvest the fruits of their resilience. They deserve a turnaround in the business environment.

However, we are now faced with the Omicron, a new variant of the Corona virus, which could impose another period of restricted activity if not a lockdown.

There seem to be differences in opinions about the new strain. An article (https://www.ndtv.com/world-news/coronavirus-omicron-cases-are-hitting-record-highs-but-heres-the-silver-lining-2687409) that I read recently says that “a string of new studies has confirmed the silver lining of the omicron variant: Even as case numbers soar to records, the numbers of severe cases and hospitalizations have not. The data, some scientists say, signal a new, less worrying chapter of the pandemic.”

But there is also another group of experts discussing that the situation may be different for India, as a rapidly spreading variant might exhaust the hospital infrastructure.

India reported over 37,000 new COVID-19 infections on January 3, 2022, which was significantly higher than what was recorded in November and December, when new cases remained around 10,000. While metropolises such as Delhi, Mumbai and Kolkata account for most of this surge, it will be fair to assume that rural India, home to our customers, will also get affected. If we factor in the so-called ‘residual pandemic’ where those who have recovered from COVID-19 are complaining about health problems, we do have challenging times ahead.

A few success strategies that I could gather from our interactions in the field involved customers diversifying to mitigate the risk. I have written earlier about garments tailors having added PPE kits to their portfolio and idol-makers having set up grocery shops.

As Village Financial Services, we have ramped up our ‘phygital’ strategy, so that the connect with our customers does not suffer because of the uncertainty cast on life by the pandemic.

It might be premature to forecast the end of the pandemic and a business-as-usual world. But our learnings will help us look forward more positively. We can at best hope that 2022 will be a year of revival and growth.