I Do What I Do

by Raghuram G. Rajan

Last week, I met with some members of Ela Bhatt’s Self-Employed Women’s Association. In a room full of poor but confident women entrepreneurs, I asked how many borrowed from moneylenders before they came to SEWA. About half the women raised their hands. When asked how many thought of approaching a regular bank before they came to SEWA’s cooperative bank, not one raised her hand. Interestingly, many of them said that the loan from SEWA freed them from the moneylender’s high interest rate, which gave them enough to service SEWA’s loan fully even while focusing on other productive activities. I have heard this from other micro-entrepreneurs – the highest return initial investment is often to free oneself of the clutches of the moneylender. Despite this high return from the delivery of credit to the poor, and despite much of our financial inclusion efforts being focused on credit, we still reach too few of the target population. So there is much more to be achieved.