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Anisa Sheikh, Saree Vendor

It is laundry day at Anisa Sheik’s home in Kherwadi. We climb up the stairs past lines of colorful, drying clothing and sit in the small, main room off the kitchen.

Anisa graciously allows us to interview her and take photos for the ACCION blog. She says being interviewed is the least she can do for Swadhaar after all they’ve done for her. Anisa is very excited that we’re going to write about her and jokes with us to put everyone at ease.

Anisa Sheikh, Swadhaar Joint Liability Group (JLG) Loan client

Anisa sells sarees from her home in Kherwadi where she can outfit women for every occasion. She travels to another state, Gujarat, to procure sarees that no one else in Mumbai will have. But only a few years ago Anisa was limited by her undersized stock and infrequent trips to Gujarat. She never thought that anyone would give her a loan until she saw a pamphlet in her neighborhood for small loans for women; Anisa jumped at the chance to expand her business.

She first took a loan with Swadhaar, ACCION’s partner, in 2006 for about Rs. 5,000 or USD 106 to expand her inventory. She is now an experienced borrower currently paying back her sixth loan of Rs. 20,000 or roughly USD 425. Anisa is fully aware of the opportunities that have opened up to her since she first gained access to microcredit. She is now able to purchase more sarees, which means she can sell more and, of course, profit more. She also takes advantage of the opportunity to purchase goods in cash, which is less expensive than negotiating a purchase on credit from a saree supplier.

Anisa has done so well with the saree business that she and her husband have been able to open a second business, a motorcycle repair garage across from their house. With the profits from both businesses Anisa is preparing to send her 19 year old son, Mohisin, to medical school this fall. She proudly shows off her one and a half month old granddaughter, Aligra. She hopes that someday Aligra will be a doctor too.

Anisa with her granddaughter, Aligra

Without that first loan from Swadhaar, Anisa doubts that she could have made enough progress to be where she is now. She is thankful to Swadhaar and ACCION. And she has a special message for ACCION donors: your money is being spent well. “It’s going to the right place,” she says.


The Commercial Approach and the SKS IPO

The SKS Microfinance IPO (Initial Public Offering) has been big news in India and in the microfinance community. SKS is the first Microfinance Institution (MFI) to go public in India. News of this IPO brings up good questions about the profitability of microfinance and the commercial model. 

A billboard advertising the SKS IPO seen in Mumbai

Microfinance isn’t a panacea; it won’t solve poverty on its own. But used as a tool along with other poverty alleviation strategies microfinance is very powerful. It gives people the much needed opportunity to better their station in life through the use of financial services. But just as microfinance is only one avenue to alleviate poverty there are different approaches within the field too. 

The approach that ACCION takes, and the one that I believe in, is commercial microfinance. The commercial approach is one way to expand access to credit and financial services to microentrepenuers. The infusion of private capital allows MFIs to reach more people and provide better and more efficient services at lower interest rates than philanthropy would alone. At least that’s the idea. 

Now SKS and a US based nonprofit, Unitus, are ensnarled in a bit of controversy over the recent IPO and the validity of the commercial model. Last month before the IPO opened Unitus closed up shop and announced that microfinance will not be the focus of any future activities by the organization. 

I think that it’s a shame to see Unitus go. Microfinance needs the voices of nonprofits to protect the consumers and keep the focus on the double bottom line (social responsibility and profitability). That’s why I’m glad ACCION is still in the game promoting client protection through the Center for Financial Inclusion’s (CFI) Smart Campaign. 

The Smart Campaign addresses how financial services can cater to the needs of poor people in an efficient and affordable manner. The CFI aims to make it easy for MFIs to protect clients and be transparent financial organizations. This is increasingly important as the industry matures and naturally comes under more scrutiny. 

I truly believe that access to credit and financial services should be a right in this day and age. Naturally, financial services aren’t as essential as access to clean drinking water or housing, but each improves life for the recipients. Yet microfinance (and the commercial model) has the capacity to improve lives so much further because it is a sustainable approach to alleviating global poverty. 

For more about the SKS/Unitus controversy please read this article published by the New York Times last week. And for more about the Smart Campaign please go to If you’ve enjoyed this blog you may want to check out the CFI’s blog too.

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Microfinance in Action

Catalina and I were lucky enough to visit Swadhaar’s Chembur branch last week and catch a group loan disbursement in action.  Four female microentrepreneurs signed for their first loan and we captured it on video. As you’ll see, the women got dressed up to come to the modest Chembur office for a momentous day in the course of their microenterprise.

Below watch a short video of one of the women signing for her loan. Just like loans in the US she has to sign and initial several pages. Right before she signed the Swadhaar Administrative Assistant thoroughly explained the terms of the loan, so the clients understand exactly what they are getting into. However, that part was all explained in Hindi, so I edited it out for our mainly English speaking audience. In the interest of full transparency, feel free to email me if you’re interested in seeing the full video.

Unlike Swadhaar’s Individual Business Loans, their Joint Liability Group Loan product is exclusively for female borrowers. These loans range from Rs. 6,000 – 34,000 or roughly USD 125 – 725. That seemingly small amount can truly make a difference in the lives of women living and working in the slums of Mumbai. Access to credit allows a woman to get ahead by buying in bulk or having products delivered rather than wasting a day traveling to the market to purchase raw materials. Check out the video below to see these four successful businesswomen journey into the exciting world of credit and banking thanks to Swadhaar and ACCION.

The concept of microfinance can be a little difficult to grasp at times, so I hope these videos made it a bit more tangible.

Hope you enjoyed the videos,