Roshan Vikas: Working to empower Muslim women through microfinance

Empowering those who are marginalised at the ‘base of the pyramid’ has been a recurrent and powerful motif for the majority of our site visits. Our visit on Saturday afternoon to Roshan Vikas, a Microfinance Institute, was no exception.

9 of us (Richard, Patrick, Akhil, Debbie, “GG”, James, Sonia, Rees and I) fought our way through considerable (and apparently not atypical!) Hyderabad traffic to the ‘Old Part’ of the city. We met the founder-director, Ali Askar and the new COO, Jeevan Kumar. Following on from the stunning morning spent at Acumen Fund (well I certainly found it stunning!), the Roshan Vikas (R.V.) team were always going to have a tough act to follow.

Before continuing, it is probably worth explaining that Microfinance refers to the provision of financial services to poor or low-income clients, including consumers and the self-employed. It is an area I have personally been spending some time looking into during my sabbatical. But rather than yabbering on about it here, it probably makes sense to give the Wikipedia link (especially coz that’s where I stole that definition from!): http://en.wikipedia.org/wiki/Microfinance. :)

One of the reasons microfinance is so powerful is that it fills the massive gap that commercial banks leave; banks don’t feel that the poorest in society are worth providing any financial services to. I know – outrageous!! Roshan Vikas’s mantra is “Kindling Hope, Saving Lives”. Their concept is to promulgate a ’double bottom line’ – that is, returns that are both economic and social. One of the best things about them though is that they are involved in many areas, beyond just providing small or ‘micro’ loans. They are focussed on the issue of empowerment and provide education loans, health access and skills training (especially to artisans who make classic Hyderabadi Zardozi clothes and fabrics). At present, R.V. empowers 17,000 people, the vast majority of whom are women and, in turn, the vast majority of whom are Muslim Women. In an Indian city made up of 40% Muslims, it is fantastic.

R.V. has very aggressive growth targets and they talked us through these in detail. In some ways, this makes sense given the massive need – over 32% of the urban population lives below the poverty line. Oof! Something must be done! But, in other ways, microfinance institutes must be careful in over-stretching with such aggressive, ambitious expansion.

Just as we have seen the unprecedented crisis faced by all banks around the world – caused by slackening lending standards and expansion at unsustainably high pace – this must act as a salutary lesson for the microfinance industry. Microfinance has tremendous brand equity, particularly after Muhammad Yunus, the father of the microfinance industry, won the Nobel Peace Prize in 2006. So it would be devastating if microfinance institutes recklessly repeated the mistakes of such recent past.

The site visit concluded with a very interesting visit to a workshop of women producing Zardozi clothes, who had received the loans from R.V. Given the co-operative structure, it was wonderful to witness these Muslim women who were not only earning their wage, but having a share of the profits too. And what better testament to the impact of R.V.’s success – Debbie and Geraldine bought a few pieces and were then disappointed they could not buy some more salwar kameez pieces as they were already on order by Fab India! We had a good chuckle and it really made the women smile. It was a great way to end the visit.

- Vinay, Hyderabad, 29/Nov/08