Why don’t underprivileged micro-entrepreneurs bolt with the loan?
People often ask me, “We heard you provide unsecured loans to the unbanked microentrepreneurs. But don’t they run away with that money?” Well, my answer is always a big no! Not once have I come across a micro-entrepreneur, out of the few that I have come across, who has disappeared with the money. In fact, I have myself asked this question many a time – that what stops them from running away with the money? All the more reason being that more than seventy percent of people that my micro-finance social organisation lends to, are immigrant micro-entrepreneurs. For them, it is far easier to abscond to their native lands. But still, they do not! Though we have our own homegrown, soft due-diligence mechanisms in place, still, in such compelling times, any human being who is anyway under a huge stressful environment, can get mentally corrupted to cheat and run away with the money. But it still does not happen! Why? In fact, I have even tried to speak to a few of them, in order to get my answer… And I realized a few things. People who lack opportunities (read – underprivileged) are far more obliged when they know that there is actually someone who wants to support them, to attain a dignified livelihood. And this is something that does not happen immediately, but with time. At the first instance, they used to see our role with a lot of suspicion, as very rarely in their lives would they have come across someone who had actually given something to them, without taking a lot of it and more back. They are actually the ones who have been giving. So once they are used to our model and they start to believe in the fact that we are here not to cheat but to support, what overtakes is overwhelming gratification. And it is this superlative gratification that binds them morally to not become corrupt. In the segment that we are catering to, there exist broadly two kinds of people. First are the ones who have decided not to work, and remain in the confines of their destitution. They are happy and content with any charity that comes their way as they are somewhere within themselves determined that they would not take any step in the direction of moving away from their state. Unbridled charity either in cash or in kind and doling out of freebies and thereby not making them earn their livelihood, somehow have spoilt them and have made them uninspiring laid back monsters. While on the other hand there is that section of people who wants to struggle and toil to get out of the current state. They are the ones who are constantly on the lookout for opportunities, and are largely benefitted from the same. At first, through our interview process, we try to find out whether the beneficiary is from the first category or the second. If he/she is from the first category, we outrightly reject their application, and if he/she is from the second, we move forward with the application. And we have observed that once we take our first step forward with our financial intervention, there is no looking back. These people then do magic. Their penchant for growth and their sense of enterprise is so high that they better their own living conditions by the day. And they are so busy building upon their micro enterprises, and multiplying their capital that they know that running away with that initial small loan would be foolish. The third reason is that we invite applications only through references of existing micro-entrepreneurs, and they stand moral guarantors for the new ones. I have observed that moral guarantees are far more binding on human beings than any other form of legal guarantees. Legal guarantees do not have a human face attached, but moral guarantees do. And that is the reason it is more compelling and binding on the micro-entrepreneur, forcing her/him not to cheat, as then it bears negative social ramifications on them in their community. Lastly, there is no business of money where there is no risk of cheating. Additionally, we all know how the corrupt and the powerful have looted from all sources, day in and day out. So, at our given positions and situations, we are in no position to question the morality of the underprivileged micro entrepreneurs. Despite all those measures, even if there is a couple of micro-entrepreneurs who cheat and run away with our money, we would be happy, because we would know that they would any day have a better reason to steal, than most of us, who are anyway corrupt without any reason