Friday, November 14, 2008

Microfinance for Beggars?

Yesterday at SCU's event "Transformative Changes Through Science and Technology: The Role for Social Benefit Entrepreneurs" honoring the 2008 Tech Laureates I heard something new. It has made me change my mind. (In the interest of full disclosure, I hereby state that not much changes my mind these days).
Here is the story: I am just back in the US after six weeks in India. A common sight in India is women and children at stop lights- begging. There used to be a time when I would give some change but I have stopped doing it now; doesn't giving them money encourage them? Not much has changed over the years except now they often carry tissue boxes, balloons, magazines, hats, toys etc. to sell. Where did they get the money to buy the stuff? Some tiny children offer entertainment in the from of headstands or juggling or something. "The goods must be stolen; they are just an excuse for begging - whatever" I think. I look away. I can do nothing about this. I feel rotten for a while till I get over it.
Yesterday, I heard Mohammed Yunus talk about Grameen's new program in Dhaka, Bangladesh - "loans to beggars". He thought - why not do something for the beggar? and that's how the program started. They find a beggar and ask one question - at what time in your life did you become a beggar? And then they gave him/her an idea - continue begging, but why not carry some small article to sell- give their "customer" a choice - so as to speak - buy or give charity. If the beggar agreed, they gave an interest free loan with no time set for repayment. Whenever they are read to repay, they can come back to repay. That he said was key. Enablement- a person who tries cannot fail. In fact, they said - take your time to repay. To keep their own costs low, Grameen provides no other service, just trusting the person to come back. Loan amount is $15 flat. So far there is $100K in the program and 11,000 people are not begging anymore. Most others are only part-time beggars and some are successful entrepreneurs.
So next time I am stopped at a light in New Delhi - I will roll down my car window. I may not be in a position to start a loan program but I can buy a box of tissues. Who knows? It might make a difference. Why had I never thought about this before? Why did I assume the goods were stolen? The kids wanted to trick me?
Why? Becuse I still have a lot to learn.


Bhalchander said...

A lot of the pioneering work in lending to beggars was done by Jamii Bora in kenya:

Grameen adopted it quickly and we can use those ideas in India and other countries as well.


Nitin said...

I have to disagree with this assessment/conclusion.

The context and expectations in the Yunus model are quite different from buying a box of tissues you don't need.

By buying that box, you are not improving the beggar's life in a sustainable manner - if anything, they now have a new dependency and potential reason to be misled.