By Rupal Kulkarni, CEO of Shram Sarathi, a partner of Aajeevika Bureau.
Shram Sarathi is a pioneering financial services company working on financial inclusion of seasonal labour migrants and their families. For more information, please visit their website: www.shramsarathi.org and follow them on Twitter: @Shram_Sarathi
A few weeks ago, I spent two days in Sayra and Gogunda (in Udaipur district) meeting Shram Sarathi’s loan clients, both past and present. I wanted to hear their stories and better understand how financial services can help their families cope with sudden shocks and turn migration into a positive opportunity for them. In the process, we ended up meeting Nathu Gameti, a migrant who was once our client but failed to maintain a good credit history and never renewed his loan again. We also met the family of Moti Gameti, the very first client who availed a home completion loan from us, but had defaulted on his most recent installment after two years of perfect repayments.
After learning their stories, I kept thinking about the normalcy of unpredictability in their lives. Nathu like many others, had borrowed money from multiple moneylenders to construct his house. He borrowed 30,000 rupees and was told that he would have to pay an interest of 2% per month. After a few months, the moneylenders amped up the interest to 10% per month. This was nearly 6 years ago. He estimates that he has already repaid around 80,000 rupees, but according to records with the moneylenders, he still owes around 1 lakh rupees in total. I had the uncomfortable realization that his interest liability was piling up as we spoke – 10,000 rupees per month; nearly 330 rupees a day; almost 14 rupees an hour! And how much did Nathu earn? Around 250-300 rupees a day, IF there was work.
Nathu then told us that he was eventually forced to send his two sons to work, one aged 14 and the other aged 17. They migrated to Rajkot and Mumbai respectively and began helping out with household expenses and interest repayments, whenever possible.
A few hours later, we were at the home of Moti Gameti. While he wasn’t at home, we met his family who were apologetic about a missed repayment. Apparently, Moti’s 18 year old son was taken to Rajkot by a contractor and then without warning, abandoned there. His son had no money, no means to come home and no acquaintance to seek help from in Rajkot. Moti had to ride his motorcycle all the way to Rajkot to rescue his son. We also learnt that his son was recently engaged and the wedding date was a few months away. However, for some reason, his son’s fiancée had moved in before the actual wedding. As a result, Moti and his family had to pay a settlement to the girl’s family. This was why Moti had missed a payment.
When we heard both stories, nothing in their manner of narration or the expression on their faces seemed to suggest that these events were extra ordinary. It seemed to be a perfectly reasonable thing to happen in their lives – nothing strange or incredulous about it at all. I was marveling at how such unpredictability was so internalized.
And this got me thinking if we can actually model for such idiosyncrasies when delivering financial services to such a vulnerable group. For one, it is my strong belief that microfinance needs to be non-judgmental. In popular discourses of microfinance today, there is a disproportionate emphasis on providing credit only for enterprises. People like Moti and Nathu fall in between these cracks in the absence of dignified finance. I wonder if we realize that our judgement on how the poor manage their finances has inter-generational effects. I wonder if life would be any different for Nathu’s two sons. When, if ever, will they be debt free? With limited skills and an early entry into physically demanding work, will their incomes ever be enough? For Moti’s son, will he ever have the courage to migrate again given his traumatizing experience? Would he have had a different experience if he had access to an emergency financial reserve?
As financial service providers, we have a responsibility to embrace all kinds of needs and peculiarities about clients like Nathu and Moti. For them, the freedom of financial choices today is just as valuable as future financial stability. After all, as Nathu put it “Lakhpati nahi vanno hai, bas shaanti chaave” (I don’t want to be a millionaire, I only crave a peaceful life”).