Here is a personal perspective communicated from one of our members, Mrs. Ranu Mahanti, 
to motivate SEEDS' renewed effort with fresh approaches to the issue of micro-credit
for India. Comments, help and contributions are highly welcome.
 --DP 07/23/2005
Ranu Mahanti’s Personal Experiences and Justification for Micro Finance Bank in Orissa:

Child labor, prostitution, selling children for a few rupees, giving away the daughters to marry in another state through unknown middleman, I have eye witnessed all the above during my last eight years.  No parents will like to sell their children or send a child for child labor or encourage the young daughters to get involved in prostitution. When the parents can’t provide two meals a day to the family, what is the alternative? There are multiple problems. Needs are vast and situations are different economically and geographically from village to village. I have realized with time and experience that all the social problems are intertwined and interdependent. I also strongly feel that women can change the world in a better way. This is not a biased opinion; it is my own experience.


The young girls need to be occupied and trained in different trades with some vocation instead of sitting at home and waiting to get married or getting involved in prostitution. Instead, they can earn money for living in a dignified way. Financial independence opens the door to opportunity, gives a sense of confidence and the girls realize marriage is not the only option for them to survive in this world.  In fact when they are financially independent, many men come forward to marry them, preferring an earning woman over a non-earning one. Beside education, rehabilitation is extremely important. Again, I find that the most difficult part is to identify livelihood possibilities in the concerned localities and how to finance them.


For emergency or for any other financial needs, poor people do not have access to the regular banks, because they do not have any assets or credibility to get loan from a commercial bank.  The only choice left for them is to depend on the money lenders at an exorbitant interest rate (120% or more per year). In such a case, the burrower will never be able to pay back the principal. They can barely pay the interest every month with great difficulty with their limited income. This cripples their financial condition for the rest of their lives. In the past, I have personally helped a few women to be free from such loans through BISWA or with my own contribution.


For the last 10 years, I have asked you for your kind support year after year for carrying out different projects in Orissa to provide the “basic needs” to the poor. I am truly humbled with your kindness and trust. Due to your help, we have come this far. As the “basic needs” program expands into different parts of Orissa, it will be difficult to support this program in the long term through your charitable contribution.  A permanent solution to this problem is to start a Micro Finance Bank (MFB) in Orissa. With time, it will generate sufficient funds to support the “basic needs” program in different parts of Orissa. After starting the bank, I will need your charitable support for about two more years, then the proceeds from the bank will take over the support of the program.


Why Micro Finance Bank?


Eradication of extreme poverty and hunger: Micro finance helps reduce poverty through increase in income, allowing the poor to build assets and reduce their vulnerability.

Promote gender equality and women’s empowerment: Microfinance clients are overwhelmingly female. Microfinance has been widely credited for empowering women by increasing their contribution to household income, the value of their assets, and control over decisions that affect their lives.

Achieve universal education: Households that have access to microfinance spend more on education than non-client households. Participation in credit and savings programs has enabled many families to send several children to school at a time.

Reduce child mortality and combat disease: Microfinance contributes to improve nutrition, housing, and health.



BISWA, a Sambalpur based NGO, is promoting self help groups (SHGs) and is providing micro credit to the poor people, particularly women since 1994. (More than 5200 SHGs, total members almost 80,000). Now the stage has come when the micro credit program needs to be institutionalized by forming a Micro Finance Bank (MFB) for providing better service to the needy poor by mobilization of more resources. Although BISWA is able to mobilize loan funds for lending to the SHGs, these loans are purely short term and need to be repaid within a period of 12 Months to 24 Months. Further, this fund carries a higher rate of interest. As a result, BISWA is not able to generate any surplus funds beyond meeting the day to day expenditure requirements. To establish a MFB, BISWA needs Rs.2 Crores, which will be utilized as a deposit with the Reserve Bank of India to meet the registration requirements. BISWA has already generated Rs. 90 lacs and needs another Rs.1.1 Crores (~$250,000) to meet the RBI requirement to start a MFB. Under the recent laws of Govt. of India, BISWA is eligible to borrow up to 5 million dollar as the External Commercial Borrowing, which can also be repaid in dollars.


Besides BISWA’s extensive experience in Micro Finance, my personal experience with BISWA has been extremely positive. I am working with this organization since January, 2002 and have established the “basic needs” program in the rural/tribal villages of Western Orissa through our team effort. I am very pleased with the follow ups, accountability, hard work, and the progress.  

Awards Received for Micro Finance activities:

Certificate of Excellence from Planet Fiancé & ABN, AMRO BANK
Bharat Darshan Award from Bharat Darshan Group for 2004 as the best Social Worker
Award from CARE-CASHE program
Award from CITI Group for Micro Enterprise National Award