One of the most successful social business models in the world ‘Micro-Finance Model’, conceived by Nobel Laureate Dr. Muhammad Yunus, seems to be in a threat in many parts of India and other developing countries. As the model got adopted, more and more people turned it into a dirty business. It just became a model of giving loans at higher interests (as high as 30%) and collecting the payments (installments). The social objective of brining women out of poverty got defeated as it became business of the sharks (money lenders). More and more suicides started happening due to increased debt on the farmers and communities.
The current state of Micro-Finance Institutions and their practices has raised lot of questions about its real motive. As a social enterprise, ZMQ was very keen to study why this is happening and find a solution to it. We reviewed many MFIs and their models. The concept looked really great but something was missing. Majority of beneficiaries are women and found out that most of the MFIs were set to just give loans to these women and just collect back installments with high interests. There has been no support training given to women beneficiaries. Women were just in multiple vicious loan cycles for years.
In order to achieve real development and alleviate its communities from poverty, there are two important factors – firstly, the financial accessibility and secondly, provisioning holistic information services & training. In the recent past, most of the MFIs have championed in delivering financial services without paying much attention to other key component. This had miserable impact on the lives of millions of poor women who have been lured into vicious cycles of high interest micro-loans, which failed to improve their lives. In order to improve this, it is extremely important to provide these women with them with sustainable life-line services which can only enable them to get out of chronic poverty. We also found that the nodal person interacting with these women beneficiaries, the loan officer visits a group of 15-20 women on a weekly basis for 1 hour. This interaction can easily be converted into a ‘classroom-based-learning’, and can be used as an ideal scenario to provide training and other lifeline services to women. We believe that this can ultimately improve their standard of living and change the lives of their families.
ZMQ approached various MFIs and SHGs and did a thorough survey. We found out that small and medium MFIs often lose money and they don’t have a very strong mechanism to support it. At the same time they could never have their own mobile platform which is very expensive. But if we create a mobile platform with a centralized MIS, it could connect people with the loan officers and subsequently with the beneficiaries through the mobile phone. It would save money for MFIs as would help in substantial cost reduction but at the same time will save money (loss). This was the key message we wanted to give to MFIs to get connected with us. But our objective was absolutely different. As a social enterprise we wanted to provide lifeline services to the women (who are using mobile phones) on critical health issues, disaster preparedness and provision them training.
One of the most successful social business models in the world ‘Micro-Finance Model’, conceived by Nobel Laureate Dr. Muhammad Yunus, seems to be in a threat in many parts of India and other developing countries. As the model got adopted, more and more people turned it into a dirty business. It just became a model of giving loans at higher interests (as high as 30%) and collecting the payments (installments). The social objective of brining women out of poverty got defeated as it became business of the sharks (money lenders). More and more suicides started happening due to increased debt on the farmers and communities.
The current state of Micro-Finance Institutions and their practices has raised lot of questions about its real motive. As a social enterprise, ZMQ was very keen to study why this is happening and find a solution to it. We reviewed many MFIs and their models. The concept looked really great but something was missing. Majority of beneficiaries are women and found out that most of the MFIs were set to just give loans to these women and just collect back installments with high interests. There has been no support training given to women beneficiaries. Women were just in multiple vicious loan cycles for years.
In order to achieve real development and alleviate its communities from poverty, there are two important factors – firstly, the financial accessibility and secondly, provisioning holistic information services & training. In the recent past, most of the MFIs have championed in delivering financial services without paying much attention to other key component. This had miserable impact on the lives of millions of poor women who have been lured into vicious cycles of high interest micro-loans, which failed to improve their lives. In order to improve this, it is extremely important to provide these women with them with sustainable life-line services which can only enable them to get out of chronic poverty. We also found that the nodal person interacting with these women beneficiaries, the loan officer visits a group of 15-20 women on a weekly basis for 1 hour. This interaction can easily be converted into a ‘classroom-based-learning’, and can be used as an ideal scenario to provide training and other lifeline services to women. We believe that this can ultimately improve their standard of living and change the lives of their families.
ZMQ approached various MFIs and SHGs and did a thorough survey. We found out that small and medium MFIs often lose money and they don’t have a very strong mechanism to support it. At the same time they could never have their own mobile platform which is very expensive. But if we create a mobile platform with a centralized MIS, it could connect people with the loan officers and subsequently with the beneficiaries through the mobile phone. It would save money for MFIs as would help in substantial cost reduction but at the same time will save money (loss). This was the key message we wanted to give to MFIs to get connected with us. But our objective was absolutely different. As a social enterprise we wanted to provide lifeline services to the women (who are using mobile phones) on critical health issues, disaster preparedness and provision them training.
Under the Organized Human Network Model (OHN), ZMQ has been working with various MFIs (Micro-Finance Institutions) and SHGs (Self Help Groups) and providing them mobile based technology channel to manage their financial operations. ZMQ developed a concept of seamless delivery of both financial and non-financial information through a single window platform through their partnering MFIs. We got a support from Qualcomm and PCI to develop the platform. The objective of this platform was to provide women beneficiaries with two kind of connected services: Firstly, financial services that is information related to their account, loans, payments, dues, installments, balance, receipts etc. and Secondly, the non-financial services (called Life-line services), which are provided on customized needs of women (based on their profile) related to Health, Livelihood opportunities, Education, Vocational Training & Disaster preparedness. Under the Healthcare, women can subscribe to Pre-natal Care Information in an iconic format (pregnancy week-by-week), Child Immunization in iconic format), Family Planning and Home based Neonatal Care Info, Communicable diseases (HIV, TB, Malaria, Cholera), Hygiene and Sanitation for Young Girls (children on Women). This led us to create a concept of a Women Mobile Lifeline Channel, which later became MIRA channel in 2012.