Three things I ‘re-learned’ as an Ambassador at Swadhaar in Mumbai

While at first I felt as though my time in Mumbai, serving as an Accion Ambassador at Swadhaar FinAccess, had only just begun, my last day was upon me before I even knew it. For me, this was a time for reflection: I began to process all that I had learned over the last three weeks in preparation to implement my new knowledge back into my “day job” at Accion.

During this processing exercise, three distinct lessons came to the foreground. Along with an embarrassing number of textiles, I brought these reminders with me back to Boston as important souvenirs from my time in Mumbai:

1. Microfinance is very different from traditional finance. I often find myself engaging in dinner-table conversations about microfinance and the work that I do. When I am asked to explain Accion, I tend to use the explanation that we are helping to provide ‘banks for the poor.’ “Everyone needs access to financial services,” I say, “and microfinance provides that same access that you and I enjoy – to a segment of the economic pyramid that would otherwise go un-served.”

While there is no denying that those statements capture the essence of microfinance, this explanation is too simplistic. It was the complexity of the issue of poverty that first drew me to the field of microfinance – three years later I am reminded that microfinance done correctly is so much more than traditional finance on a small scale. Serving these clients demands patience, creativity, and innovation.

One illustration of this creativity is the use of alternative education channels at Swadhaar. To serve their clientele of poor, mostly illiterate, women, Swadhaar has developed a number of pictorial tools that are used to illustrate everything from the lending process to how to manage a variable income. It’s innovations like these that make microfinance successful, and Swadhaar is proving this one client at a time.

A pictorial ‘budget diary,’ given to women who participate in Swadhaar’s three day financial education program.

A pictorial ‘budget diary,’ given to women who participate in Swadhaar’s three day financial education program.

2. Microfinance will not help the destitute. While in India, I  met several expatriates working for nonprofits and NGOs with missions such as feeding street children or providing medical services to impoverished women suffering from AIDS. While microfinance also services the economically disadvantaged, I am reminded of an important distinction: our clients are poor – but they are not destitute. Financially vulnerable, yes. But while it may not take much to upset their financial house of cards, they are getting by – running a business, sending their children to school, putting food on the table for their families to eat.

While at Swadhaar, I have been reminded that microfinance does not replace mission work, government programs, or nonprofit organizations. There are many levels of poverty. A responsible lender – Swadhaar being one – can recognize the difference between a client whose life will be improved through access to a loan and a person whose economic situation is so dire that the additional burden of debt would be a setback, not a leg up.

Gleaming stone walkways and clean saris drying in this alleyway tell a story: the inhabitants are poor but not impoverished.

Gleaming stone walkways and clean saris drying in this alleyway tell a story: the inhabitants are poor but not impoverished.

3. Mobile banking isn’t for everyone. For many of us, mobile banking has become a part of daily life. I myself have not visited a physical bank in over a year – I pay my bills, check my account balances, and even deposit checks all from my mobile phone (in the U.S.). With so much to gain in terms of productivity – on both the user and the institutional side – it comes as no surprise that mobile banking has become a priority focus for the microfinance industry as well.

Through my work at Accion I know that implementing mobile banking solutions is not without its challenges. Yet I was startled when the topic of mobile banking was brought up in a financial education training I was observing, and participants immediately laughed! While making payments via a mobile phone may be palatable for younger generations in India, older clients – like many here in the U.S. – look at the idea with skepticism. Some don’t own a mobile in the first place, others are just distrustful of anything virtual when it comes to their money. They would rather have their cash in hand.

To combat this skepticism, Swadhaar is taking a ‘slow and steady’ approach. Like any new product, mobile banking is one that must be ‘sold’ to clients, and depending on the demographic it may take some handholding. While Swadhaar’s Axis Bank-Airtel Money mobile money product is still in pilot phase, they hope to significantly reduce the amount of time required to service each loan though bringing more and more clients on board. In the meantime, it will take just that – time.

Name block - Sara T 2014

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