The Challenge

While economic growth in India has benefited a growing middle class in India, it has also created great disparities—disparities between urban and rural areas, prosperous and lagging States, and skilled and low-skilled workers. The Northeast states of India have sustained a particularly high rate of poverty during this period of economic growth. With 213 tribal communities, 175 languages, and many non-tribal communities, the region presents a unique cultural, ethnic, linguistic, and religious profile not to be found in any other region in India. Difficult terrain, political volatility, and vast cultural differences have made Northeast India particularly difficult to operate poverty alleviation efforts.

Typically, small and marginal farmers, unable to access financial loans to grow their businesses, have been forced to purchase loans from local agents at outrageously high interest rates. Though formal lending institutions are available, they are not traditionally geared towards small-scale entrepreneurs. This predicament inspired Dhattateya Hosagrahar to establish the Institute of Integrated Resource Management (IIRM) in 2000 to provide the hard-to-reach communities of Northeast India with life-changing access to microfinance. 


The Entrepreneur and the Solution

A native of Karnataka, “Dhatta” became passionate about the Northeast region of India while undertaking a government development project. During this time, Dhatta experienced first hand the difficulties faced by the local poor in accessing essential financial services to improve their lives.

To navigate the region’s communities, IIRM took a traditional development approach of relationship building in each village to successfully launch microfinance. Today, IIRM is focused on providing socio-economic support to rural and urban poor communities, operating exclusively in India’s Northeast region.

IIRM currently serves nearly 8,000 clients with an average loan size of $80 USD.  IIRM clients include farmers, tea plantation workers, and small-scale entrepreneurs.  The organization offers a range of loan products for different client segments. Borrowers use tailored loan programs to expand their businesses and typically redirect extra income towards improved education, healthcare, and housing for their families.

IIRM will be expanding throughout the Northeast over the next few years. Currently a non-governmental organization (NGO), IIRM plans to evolve into a non-banking financial company (NBFC) by 2008 in order to increase its impact and reach.  By 2010, the organization plans to grow to serve 157,000 clients. 


The X-Interview

While in the Philippines, Global X interviewed Dhattateya Hosagrahar and asked him to describe his success metrics. His response: "Our team members, who work day and night for the organization."

The Challenge

Karnataka is one of India’s largest states, home to Bangalore, India’s third most populous city.  The dichotomy of urban slums and extreme rural communities illustrate the depth of poverty throughout Karnataka.


The Entrepreneur and the Solution

MokshaYug Access (MYA) is employing innovative business models and its experience in large-scale infrastructure projects to expand the reach of microfinance throughout Karnataka.  MYA aims to establish poverty-free villages by leveraging the financial resources and innovation of the private sector, the knowledge and commitment of non-governmental organizations, and the vast outreach of the public sector. 

Launched in 2006, MYA has expanded across Karnataka to reach the poorest communities and intends to reach 5.3 million rural poor by 2012. While MYA’s mission is broad and looks to achieve poverty alleviation and access to financial services across India, the organization is currently focused on just three districts in Northern Karnataka. Through a laser sharp focus on a few distinct districts, MYA intends on successful expansion into new products and services to further support existing clients in Karnataka to empower them to improve their lives.

MYA currently serves nearly 25,000 clients. It provides an array of services including savings, loans, and insurance services in rural areas of Karnataka. In addition to life and health insurance, MYA offers livestock and goat insurance to marginalized farmers, helping ensure they don’t lose critical income should an animal become ill. MYA has also generated additional economic opportunity for local entrepreneurs, most recently working with India’s leading incense maker to aggregate and supply raw materials at lower rates – increasing its clients’ profits by 60 percent. Additionally, MYA is building a comprehensive supply chain model and will franchise it throughout India to provide rural households with additional products and services.   

Harsha Moily, CEO of MYA holds multiple degrees in Business and Management and has a background in agribusiness and venture capital. He is a young and dynamic entrepreneur who combines a discipline in business with experience in infrastructure sectors such as hydrocarbon, power, healthcare and telecom to provide solutions to poverty alleviation. Determined to make a difference in his home state of Northern Karnataka, Moily shifted his career from the world of international corporate finance to address economic development at home. He brings commercial experience and genuine enthusiasm to the fight against poverty in India.


The X-Interview

While in the Philippines, Global X interviewed Harsha Moily and asked him why he is doing what he is doing. His response: "I can't be a spectator to what's happening India. I need to be a player."

The Challenge

Nearly 50% of the population in the Philippines live in rural areas and depend on agriculture as a primary source of income. Consequently, poverty in the Philippines is most severe and widespread in rural areas where almost 80% of the country’s poor live. Overall, one out of three people in the Philippines lives in poverty.  The southern island groups of the Autonomous Region of Muslim Mindanao (ARMM( and the Bicol in the Visayas region have seen the greatest increase in poverty since the early 90’s. For the microentrepreneurs working to break the cycle of poverty, accessing financial services that are designed to serve small businesses or provide microloans are exceptionally challenging. Most financial institutions continue to focus on traditional customers, focused on large firms and capital-intensive industries.  However, for a woman that operates a sari store, sells fish, or works a farm, small loans of $80 USD can make the different between a lifetime of poverty and the first step to working themselves out of poverty.


The Entrepreneur and the Solution

Founded in 2003, LifeBank, Foundation, Inc. is changing the status quo.  One of the Philippines' fastest-growing microfinance institutions (MFIs) in the Philippines, LifeBank is dedicated to providing financial opportunities for the poor, specifically women. The need is evident. In 2007 alone, LifeBank has grown from serving 61,000 women to nearly 126,000, doubling the number of clients it serves over the last two years. Recently expanded from its original location in central Philippines (the Visayas region), LifeBank is now reaching women in the rural areas of Luzon and Mindanao. With a vision for nationwide growth, LifeBank plans to grow to serve more than 270,000 clients by 2009. 

Vincent Perlas is President of the LifeBank Foundation.  Trained in agribusiness and public health, Vincent chose to dedicate his time exclusively to microfinance in 2005.  After years of working in banking and agriculture in nonprofit and for-profit capacities, he began to believe in the promise of microfinance as a serious solution to worldwide poverty. Although he admits that poverty is caused by a spectrum of factors, he firmly believes that the lack of financial services for the working poor, the majority, is one of the core sources of the problem.

"The answer to worldwide poverty is the need for unity and cooperation among sectors.  Government, the private sector, and the civil society must work together to bring the poor into the economic system. With nearly 50 percent of the Philippines population living on less than $2 a day, there is a tremendous need to expand the reach of microfinance in our country and serve the working poor," said Vincent Perlas.

At the helm of LifeBank, Perlas has led the organization to realize tremendous growth over the past several years.  Navigating through complex regulatory and business environments in the Philippines, LifeBank uses disciplined commercial practices to address its social mission. Perlas has a unique passion for addressing the needs of the poor while maintaining a vision for large scale growth.


The X-Interview

While in the Philippines, Global X interviewed Vincent Perlas. Watch him as he describes his three ingredients to success: "Keep a high spirit, get the right methodology, and make sure you have enough gas to grow!"

The Challenge
While India is one of the fastest growing economies in the world, poverty runs deep throughout country. About two thirds of India’s more than 1 billion people live in rural areas, and almost 170 million of them are poor. Although urban migration continues, three out of four of India’s poor live in rural areas of the country where poverty is a chronic condition especially among the scheduled castes and tribe communities. 

One major cause of poverty in India is lack of access to productive assets and financial resources. Women are generally the most disadvantaged people in Indian society, though their status varies significantly according to their social and ethnic backgrounds. Women are particularly vulnerable to the spread of HIV/AIDS from urban to rural areas.


The Entrepreneur and the Solution

Bandhan is a microfinance institution which provides services in microfinance, micro-entrepreneurship, health, education, and disaster management to India’s working poor. The organization focuses primarily on providing financial services to women, a critical step in breaking the cycle of poverty. It is led by Chandra Shekhar Ghosh, who has more than 20 years experience in microfinance and development. Building on his experiences with BRAC, CARE International, and other non-governmental organizations, Ghosh believes that microfinance institutions play an important role in addressing poverty. Speaking to a group of students in India, Ghosh reminds them that, “everyone must be persistent in becoming effective agents of change.”

Born out of a meeting of conscientious minds with a desire for the common good, Bandhan means togetherness.  It was formed with a vision of creating an equal and just society, by alleviating poverty and empowering women.

Founded in 2000, Bandhan currently serves more than 800,000 people, growing more than 300 percent last year alone. Bandhan operates primarily in Rural West Bengal, which is largely considered to have some of the poorest communities in India.  Providing Bengali-speaking staff and services targeting the working poor in Bengal has been an important point of differentiation for Bandhan.

The unpredictable climate – heavy, destructive rains – and the often tense political climate make life extremely difficult for rural Bengalis as their income sources are often affected. An average client earns less than $46 USD a month and is able to use loan capital to expand their small businesses and work their way out of poverty. The average loan size is approximately $82 USD. Bandan has aggressive growth plans and hopes to reach 1 million members by March 2009.

Bandhan recently received recognition in Forbes Magazine “The 50 Top Microfinance Institutions” ranking. The first of its kind, Bandhan ranked #3 for its efficiency and impact. With Ghosh’s leadership and focus on highly standardized systems, the organization has expanded with increasing efficiency.  Through their systems and cost control, Bandhan has been successful at lowering rates for clients, allowing them to access the financial services with greater ease. 

Bandhan has been an industry-leader in this regard and regional microfinance institutes continue to look to Bandhan for leadership and best practice.


The X-Interview

Be sure to watch the short X-Interview of CS Ghosh in which he tells Global X why he launched Bandhan and shares advice to fellow social entrepreneurs. Three words: “Focus, focus, focus!”