Local Moneylenders Research Articles

Pradhan Mantri Jan Dhan Yojana (PMJDY):A Step towards Eradicating Financial Untouchability

Financial untouchability is a phenomenon that results from certain situations that prevents people to access formal financial systems. In the absence of a formal financial system, people are forced to go to local money lenders who charge exorbitant interest rates from poor people. Financial untouchability also creates the problem of social discrimination. The only solution to fight with the evil of financial untouchability is promotion of financial inclusion, which may be defined as the process of ensuring access to financial services and timely and adequate credit where needed by vulnerable groups such as weaker sections and low income groups at an affordable cost. Financial inclusion can be achieved by ensuring access to financial services, affordability of services, and actual utilization of financial services. In order to promote financial inclusion, the Pradhan Mantri Jan Dhan Yojana (PMJDY) was launched across the country. It is a mission mode project of the Government of India. The scheme aims to ensure universal access to banking facilities in each and every household of the country. The scheme has provision of opening a zero balance account with free debit card and inbuilt accidental insurance. It also includes program of financial literacy, access to credit, and insurance facility. The present study made an attempt to study the effectiveness of PMJDY by analyzing the effectiveness of the financial literacy program and awareness towards PMJDY. The study was carried out among workers in working in Central University of Rajasthan and villagers of Bandrasindri village in Ajmer district of Rajasthan. The primary data was gathered in the form of discussions held with respondents in 2015. The secondary data were collected from various published and non-published sources. The findings of study showed that still, there is a long path which needs to be covered to eradicate financial untouchability in a real sense from our country.

Road to Sustainable SHG-Bank Linkage Programme: Formulating Strategies for Managing Credit Risk with Respect to Rural Bengal

To alleviate poverty and unemployment in villages and to include rural India under a structured financial system, the government, through institutions like National Bank for Agriculture and Rural Development, has been trying to promote Self Help Groups (SHGs) by financing their projects. These rural SHGs have been financed mostly by the semi-urban bank branches, rural bank branches, Regional Rural Banks, microfinance institutions and regional cooperative banks. However, the financial institutions are burdened with huge losses due to non-repayment of loans availed by the SHGs which leads to accumulation of Non-performing Assets. Moreover, the bank managers are held responsible in case of such default, their superannuation benefits being either curtailed or delayed. This has made them all the more reluctant to further finance the SHGs. This situation adversely affects the birth of new SHGs and the existing groups are forced to embrace local moneylenders at an exorbitant rate of interest. Hence, the government’s effort to financially reach out to the poor through SHGs seems to be a rather difficult task. This article focuses on formulation of strategies for managing credit risk of SHG as an effort to make the SHG-Bank linkage programme sustainable. It is framed from the viewpoint of the banks, concentrating on their approach towards financing SHG projects.

Household coping strategies for delivery and related healthcare cost: findings from rural Bangladesh.

This study aims to measure the economic costs of maternal complication and to understand household coping strategies for financing maternal healthcare cost. A household survey of the 706 women with maternal complication, of whom 483 had normal delivery, was conducted to collect data at 6weeks and 6months post-partum. Data were collected on socio-economic information of the household, expenditure during delivery and post-partum, coping strategies adopted by households and other related information. Despite the high cost of health care associated with maternal complications, the majority of families were capable of protecting consumption on non-health items. Around one-third of households spent more than 20% of their annual household expenditure on maternal health care. Almost 50% were able to avoid catastrophic spending because of the coping strategies that they relied on. In general, households appeared resilient to short-term economic consequences of maternal health shocks, due to the availability of informal credit, donations from relatives and selling assets. While richer households fund a greater portion of the cost of maternal health care from income and savings, the poorer households with severe maternal complication resorted to borrowing from local moneylenders at high interest, which may leave them vulnerable to financial difficulties. Financial protection, especially for the poor, may benefit households against economic consequences of maternal complication.

Causality between Financial Deepening and Economic Growth in Nigeria: Evidence from a Bootstrap Rolling Window Approach

been implemented in an attempt to integrate financial services into growth objectives in Nigeria. Further, the global financial crisis has illustrated the potentially disastrous consequences of weak financial sector policies for financial development and their impact on the economic outcomes. The crisis has challenged conventional thinking in financial sector policies and has led to much debate on how best to achieve sustainable development. Nigerian financial market has been noted to be one of the largest in Sub-Saharan Africa with regard to diversity of institutions and instruments (3). The Nigerian financial system can be broadly divided into two sub-sectors, namely: the informal and the formal sectors. The informal sector comprises the local money lenders, the thrifts, savings associations, etc. This component is poorly developed, limited in reach, and not integrated into the formal financial system. The formal financial system on the other hand can be further sub-divided into capital and money market institutions. It is made up of the banks and non-bank financial institutions. The system became liberalized in the 1980s when the structural adjustment program me was introduced. The system has undergone significant changes in terms of the policy environment, number of institutions, ownership structure, depth and breadth of markets, as well as in the regulatory framework. The financial system comprises of the central bank, commercial banks, mutual funds, brokerage firms, discount houses, and stock exchange, to mention just few. These institutions trade in financial instruments such as domestic currency, foreign currency,

The Perception of Micro-Entrepreneurs and Petty Traders on Conventional and Islamic Microfinance : A Case Study of Pakistan

Microfinance is a general term that entails the provision of financial services to micro- entrepreneurs or to those who do not have access to banking facilities. The current issues faced by micro-entrepreneurs are difficulties in seeking financing from financial institutions due to lack of sufficient collateral, no credit history, irregular or uneasily verified sources of income. Consequently, they often rely on relatives or local moneylender s who charge high interest rates. Thus, on grounds of equity and justice, Islamic microfinance seems to provide an alternative needed by them. This research deals with the perceptions of micro-entrepreneurs and petty traders towards conventional and Islamic microfinance in Pakistan. It further investigates the intention to use Islamic microfinance and challenges for the micro-entrepreneurs. A total of 270 people were surveyed by means of self- administered questionnaire. The sample comprises 81 percent males and 19 percent females in three major cities; Rawalpindi, Lahore and Peshawar. Results of this study indicate that Islamic microfinance is a preferred choice as compared to conventional microfinance and best answer to poverty eradication. Although, Islamic microfinance is a new concept but majority of respondents had some understanding of this concept. However, the respondents also expressed their dissatisfaction to the management of Islamic banks.

The Growth of Microfinance in India: A Study of SHG and MFI Bank Linkage Models

The lack of loans from formal institutions leaves the poor with no other option but to borrow money from local money-lenders on huge interest rates. In different countries including India, efforts have been made by their governments to deliver formal credit to rural areas by setting up special agricultural banks/rural banks or directing commercial banks to provide loans to rural borrowers. However, the inability of formal credit institutions to deal with the credit requirements of poor effectively has led to emergence of microfinance as an alternative credit system for the poor. Microfinance is defined as provision of thrift, credit and other financial services and products of very small amounts to the poor in rural, semi-urban and urban areas so as to enable them to raise their income levels and improve their living standard. This programme is becoming popular and emerging as a powerful instrument for poverty alleviation in many countries of Asia, Africa, Europe and America. In this paper an attempt is made to analyse the growth of the two microfinance distribution models, viz. The SHG-Bank Linkage Model and the MFI Model, in India.

Financing the SME Value Chains

Asia’s economic miracle is often associated with large, multi-national companies. While these organizations have been important drivers of the region’s growth, small and medium enterprises (SMEs) accounting for more than 98% of the enterprises have played a key role. These SMEs contribute around 40% to their country’s GDP in the ASEAN region. In developed nations such as the USA, UK, France and Singapore, SMEs contribute more than half of their country’s GDP.Addressing SMEs’ needs for finance, it is assessed that formal financial lending organizations represent a weak link in the financial supply chain for SMEs in the region. The problem also hinders the physical supply chain in that SME’s are key drivers of business growth in the region. This paper proposes a framework for financial lending to allow formal lending organizations to compete with the alternate sources of finance SMEs seek.This research work is built upon case studies from Malaysia and India, and surveys conducted on the supply and demand of SME finance in Malaysia. A lack of collateral and limited access to venture and growth capital are some of the obstacles that SME owners face when seeking finance for their businesses. Cash flow shortages caused by long or delayed payment cycles exacerbate the problem. On the supply side, a number of issues including high transactions costs, inadequate information about borrowers and weak governance, deter large banks from developing SME lending portfolios. In the absence of bank lending options many SMEs turn to other sources of finance such as unregistered money lenders that charge high interest rates. It is realized that the local money lenders are accessible and understand the SME business model better. They are also able to keep a tight rein on costs and have developed ways to make sure that investment funds are used by borrowers for profit-making purposes.This work identifies nine areas of demand for capital, including funds to pay for fixed assets and raw materials, to pay for seasonal periods of low demand, and to ramp up operations ahead of product launches. In addition to money lenders, SME’s typically use eight types of financing options including family and friends, micro finance institutions and owner’s equity. There are also various government schemes to help SMEs find the financing they need, but the research finds that that penetration is a key challenge to these interventions. These programs only reach a relatively small fraction of the total population of businesses.The lack of affordable financing options stymies the growth of SMEs in Asia. This work suggests that banks in the region need to redesign their lending portfolios so that they are better able to evaluate and manage the SME’s needs for finance. To help clarify the risks, this paper includes a grid showing how the different sources of SME financing are weighed in terms of the so-called 5Cs: capacity, capital, character, collateral and condition. It is recommended that banks should adopt more innovative ways to analyze SME loans, and gain a deeper understanding of how these enterprises fund their supply chains.This does not necessarily require a complete overhaul of current practices; financial institutions can tap into the SME market by learning to work within current financing systems. To this end, MISI describes 11 key devices that can be leveraged to catalyze the lending process. For example, Joint Liability Groups comprise farmers with compatible businesses who come together to borrow from financial institutions. Group members can borrow individually or collectively by offering mutual guarantees for each other. Technological advances such as the growth of internet banking and electronic funds transfers can also be harnessed to facilitate SME lending. New standards such as the Bank Payment Obligation (BPO) rolled out by SWIFT and the International Chamber of Commerce (ICC) are helping to unlock IT-related advances in banking.With mass customization and fragmentation of manufacturing, creating a viable market for SME financing benefits both the financial institutions and the enterprises involved. Regional and global supply chains also benefit in that there is an increasing need for sustainable and financially viable SMEs in Asia. This work thus addresses the factors responsible for widening the supply - demand gap for SME finance by studying the flow of finance through SME supply chains.

Financial Inclusion in India: Its Prospects, Scopes and Challenges

The major focus of the Union Budget for the financial year 2011-12, 2012-13 and 2013-14 was to achieve the larger aim of the financial inclusion. It focuses on the poor who do not enjoy the formal financial institutional support and get them out of the clutches of local money lenders. The objective of the study is to identify the difficulties that Government of India is facing to implement the concept of financial inclusion. Simultaneously, this research work will focus on developing the marketing strategies of the financial instruments to the rural population where a signification portion of the population are suffering from poverty, inequality, unemployment, illiteracy and superstition. Another dimension of the study is to develop the investor awareness programs in suburban area and remote villages by which maximum retail participation in capital market can be ensured. Since socio-economically rural residents are the most vulnerable portion of the society, it is the ethical, moral and social responsibility for the Government to ensure that the downtrodden common mass of the country receive protection from the risk of mis-selling by the unscrupulous financial intermediaries. The methodology used for the proposed study is based on secondary information available from several research articles prevalent in the different reputed national and international journals in the sphere of financial inclusion. Similarly the data has been collected from the RBI database, the annual reports of SEBI and IRDA as well as from the different published reports. The dream of real financial inclusion will be materialized only when the entire population of the nation will be able to become the beneficiary from the different financial reforms made by the different regulatory apex bodies of the country such as RBI, SEBI and IRDA.

'Marketing and Providing the Banking Services to the Unbanked Population - Is it Necessary and Sufficient Condition for Financial Inclusion?'

The average purchasing power of the Indian Rural Economy is growing gradually due to increase in Government Expenditure on social sector projects such as hundred days work, mid-day meal, strengthening Public Distribution System so that essential food grains can be made available at cheaper price to the persons who are living below the poverty line. The major focus of the Union Budget for the financial year 2011-12, 2012-13 and 2013-14 was to achieve the larger aim of the financial inclusion. It focuses on the poor who do not enjoy the formal financial institutional support and get them out of the clutches of local money lenders. The branchless banking is an innovative concept where account can be opened and operated without going to bank branch. The profiles of Business Facilitator and Business Correspondent have been created so that they can work as the agent of the banks who are directly dealing with poor villagers. But the circle of financial inclusion cannot be completed unless and until both awareness as well as participation of rural population will increase in capital market products along with money market instruments. The objective of the study is to identify the difficulties that Government of India is facing to implement the concept of financial inclusion. Simultaneously, this research work will focus on developing the marketing strategies of the financial instruments to the rural population where a signification portion of the population are suffering from poverty, inequality, unemployment, illiteracy and superstition. Another dimension of the study is to develop the investor awareness programs even in remote villages by which maximum retail participation in capital market can be ensured. Since socio-economically they are most vulnerable portion of the society so it is the part of ethical, moral and social responsibility for every stakeholders of the nation so that they can be protected from the risk of miss selling by some unscrupulous persons. The methodology used for preparing the study is based on secondary information available from several research articles prevalent in the different reputed national and international journals that show how the process of distributive justice is being ensured in different nations over the period of time. Similarly data has been collected from the RBI database and the different published reports. The proposed intellectual output will give a direction how maximum benefit can be provided to the maximum number of persons so that fruits of growth can be distributed in an equitable way. A productive society can incorporate the inequalities provided maximum benefit can be ensured to the most downtrodden portion of the population. Otherwise India will be separated from Bharat where Metropolitan cities of India will enjoy the brand equity of shining India as a significant share of the fruits of the growth of the economy will be appropriated by a very few beneficiaries and remaining output will be left for the semi-urban, rural population of the nation.

A COMPARATIVE ANALYSIS OF INTEREST RATES: FORMAL SECTOR BANKS, LOCAL MONEYLENDERS AND MICROFINANCE INSTITUTIONS

This study examines the interest rate differences paid to a bank, a Micro Finance Institution (MFI) and a local moneylender. In a multi-period lending contract, a borrower discounting the future income stream at a constant rate is willing to pay the highest interest rate to the local moneylender, comparatively lower rate to a MFI and the lowest to a formal sector bank. In other words, if the interest rate charged by each of the three lenders is the same, the repayment rate will be highest for a moneylender followed by a MFI and the lowest for a formal sector bank.

Coping strategies with floods in Bangladesh: an empirical study

In the time of the flooding, rural people in Bangladesh suffer from the lingering effects of labor market disruption and income deficiency. This study shows a model based analysis on the research question, ‘what coping strategies are followed by the flooded households in Bangladesh and how?’. Data are collected through a three stage stratified random sampling technique on 595 flooded and rural households’. Survey is carried out aftermath of the flood in the year 2005, from four different districts in Bangladesh. A major proportion of households are found to borrow money or resources from informal sources, such as nearby shops or the pharmacy, friends or relatives, or local money lenders, to buy food items and other essentials. A censored tobit model analysis shows that households initiate coping with borrowing money after the realization of floods, and gradually lead to cope with savings and selling assets as the duration of flood increases.

Green Revolution Revisited: The Contemporary Agrarian Situation in Punjab, India

The Green Revolution was India’s first industrial agricultural revolution that replaced the traditional farming system completely. But the adverse consequences of Green Revolution in the form of stagnation in production aggravated the problems of the farmers in the era of post-Green Revolution in 1980s and 1990s. The late 1990s witnessed an emergency of debt-driven suicides and rapid indebtedness that had taken hold of the countryside across the nation. Being the epicentre, the Green Revolution in Punjab did not sustain for a long time, as it started losing its charm and was followed by a series of ‘crises’, especially in its economy and environment. The farmers in Punjab are facing a severe problem with stagnation in production due to vast cereal-based mono cropping (mainly wheat-rice cycle) instead of multiple cropping, abandoning other crops like pulses, mustard, vegetables, and so on. Besides the practice of monoculture, the application of expensive chemicals (like fertilisers, pesticides, weedicides, and so on), over-mechanisation, labour and irrigation eventually increased the input cost of cultivation manifolds. Due to this high input costs of cultivation, farmers resorted to various formal (like banks, cooperatives, and so on) and informal (like local moneylenders or arhtiyas, who are commission agents in the grain markets) credit institutions for borrowing money. But due to repeated stagnation, the net output and subsequent profit margin reduced drastically. As a result, farmers could not repay the loan and eventually got entrapped into the vicious cycle of debt. On the other hand, after the liberalised economic policy of the government, the farmers received marginal importance and they could not cope up with the free and open market system. As a result, the incidence of indebtedness increased at an alarming rate. To get rid of indebtedness, many farmers across the state committed suicide. On the basis of empirical data, the present article will show the real picture of the contemporary agrarian situation in India’s most-developed state, Punjab.

Banal, Familiar, and Enrapturing: Financial Enchantment After Guatemala's Genocide

Banal, Familiar, and Enrapturing:Financial Enchantment After Guatemala's Genocide Diane M. Nelson (bio) Maybe I should start with the world that has made conspiracy theory not only possible (and popular) but ever present, unavoidable, pervasive, compulsive, fun, frightening, and fascinating. . . . The networked world of system and power. . . . The burgeoning new world order of starkly divided camps where haves and have-nots have become, more simply and efficiently and finally, winners and losers. . . . The sure knowledge (and experience) that everything is interconnected and merging—a seduction, a dreaming . . . coupled with the . . . moment of terror when something whispers in our ear that the inter-connectedness is all controlled by a dark and monolithic Other and we are in it, no exit. —Kathleen Stewart, Paranoia Within Reason: A Casebook on Conspiracy as Explanation Pervasive, Compulsive, Fun, Frightening Enchantment is close by for many in the Mayan highlands of Guatemala. Working the fields frequently turns up enigmatic ancestral stones and charismatic zoomorphic figures of clay. The past hugs near. Agriculture's risks are hedged by Monsanto products as well as careful rituals around the seeds, sexual abstention, and eating only traditional foods (nothing associated with the Spanish occupiers) before planting. It is very important that domestic life be calm and a man's heart be right, happy, and balanced, when he furrows the earth to prepare new crops.1 Families make pagos—vegetable food or animals buried in the corners of fields—offerings to telluric deities to reciprocate for what they will take with the harvest (López García 2010; [End Page 205] Wilson 1995). In the same way, everyone knows that the great cuts into the earth made by the state's road-making machinery and World Bank-supported gold mines require human sacrifice. If heads are not laid in the ground at night, "accidents" will ensure payment. At night, after supper, people tell each other stories about wondrous worlds that lay under the mountains, overseen by the dueño, the earth owner (Lara Figueroa 2002). But the tales are also horrifying, of kingdoms full of souls traded for wealth in the mortal world, now working off the debt for untold centuries underground. Others tell of a great three-headed horned snake that appears to those making the right incantations, bringing baskets full of money if you can brave their satanic vermilion eyes. More quotidian, everyone knows that a local moneylender (dueño de dinero) has a pig's tail within his pants, a sign of his deal with devil. A collective of Mayan scholars calls this "the enchantment of reality, Mayan knowledges in the social practices of daily life," promising a "great harvest of emancipatory understandings arising from the peoples of the semio-sphere [meaning-space] of corn" (Instituto 2007). Yet enchantment may hug near those considered modernity's others in a too-tight embrace, marking them the losers in the tribunals of reason. Those sexed and raced via colonial stereotypes afford simultaneous shivers of delight and terror (Said 1978) and the condescension of self constituting othering for those who attempt to account for enchantment. Poor chaps, in thrall to such nonsense! Postcolonial feminists can offer carefully researched analyses about how such a magically productive divide was made. For example, Mary Poovey's (1998) history of accounting and the "modern fact" shows how, through the development of double-entry bookkeeping, the representation of reality moved through a series of four books. The first, in which women could write, was full of homely details. These are gradually excised till the fourth book, for men only, that shows only debit and credit: the world reduced to numbers, Weber's disenchanted modernity. Yet tales of a magically productive divide remain enticing, offering an essential difference between us and them (though spiced with the tempting possibilities that we also may be seduced and enchanted). So I begin by trying to honor the experiences and stories I've shared over twenty-five years of fieldwork in Guatemala, but deeply wary of how they fit so smoothly into the savage slot that "the West" so obligingly keeps open for those unliberal subjects, insufficiently differentiated from each other and from "nature" (Escobar 2011; Trouillot 1991). [End Page...

The Effect of Ownership Rights on Urban Households’ Access to Credit in Lahore

Land titling and ownership rights have recently been advocated in policy circles as a powerful tool for poverty reduction. The lack of formal titling prevents the use of property as collateral, and hence prevents the capital embedded in these assets from being "unlocked." Some studies show a fairly insignificant relationship between informal loans and property rights, while others indicate a significant positive relationship between formal loans (credit cards, bank loans, etc.) and land ownership. The objective of this article is to look at the impact of owned titled land on formal and informal loans among urban households in Lahore. Here, formal loans are seen in terms of bank loans and credit cards while informal loans are characterized as loans taken from relatives, friends, or local moneylenders. The findings suggest that land ownership has a positive and significant relationship with formal loans but no relationship with either bank loans or informal loans alone.

Narrative Approach to Study Business Model of Flower Sellers and Role of Micro Finance

Flower sellers are part of Tamil culture. They are found in every town, predominantly women. Use of flowers for different festivals, occasions or as an expression of auspicious nature of event is part flock lore of Tamil culture. However, it is not restricted to Tamilnadu and may be generalized for other parts of India. However, their business models are least studied and seldom cared for by management researchers. One of the estimates indicates the flower market in Chennai is one hundred cores per annum providing employment to approximately one lakh thousand women. As predominantly the business is carried out by women with less education, narrative approach has been used to obtain information and make some inferences. The model given by Business Model Generation is used to discern different dimensions of business. For this study 20 flower sellers were interviewed – mainly about their background and their business model with Focus on how they manage their finances and role of micro finance. Also included in this report are insights from 3 others who are a part of the world of micro finance – Mr. Matt Duncan of the Grameen foundation, Ms Rebecca, centre leader of Equitas in Choolaimedu and Mr. Viswanathan, a local money lender or in international terms money shark. Some of the results are counter intuitive; they prefer the money shark. The inferences are given in the form of points to ponder on what should be done by state, administration or civil society to help these millions who are just have no voice or just not worthy to reach except during elections.

ECONOMIC CONSEQUENCES OF MATERNAL ILLNESS IN RURAL BANGLADESH

We use panel data on household consumption combined with information taken from the medical records of women who gave birth in health facilities to explore the economic consequences of maternal ill health, in the context of a rural population in Bangladesh. The findings suggest that there is a large reduction in household resources associated with maternal illness, driven almost entirely by spending on health care. In spite of this loss of resources, we find that households are able to fully insure consumption against maternal ill health, although confidence intervals are unable to rule out a small effect. Households in our study area are shown to have good access to informal credit (whether it be from local money lenders or family relatives), and this appears critical in helping to smooth consumption in response to these health shocks, at least in the short term.

Economic Consequences of Maternal Illness in Rural Bangladesh

We use panel data on household consumption combined with information taken from the medical records of women who gave birth in health facilities to explore the economic consequences of maternal ill health, in the context of a rural population in Bangladesh. We find that households are able to fully insure consumption against maternal ill health, although confidence intervals are unable to rule out a small effect. There is a negative effect of maternal complications on the number of children the family has in school, suggesting that there may be consequences for the most vulnerable household members. Households in our study area are shown to have good access to informal credit (whether it be from local money lenders or family relatives) and this appears critical in helping to smooth consumption over the short term.

Editorial: Farmer Suicides in India: The Role of Psychiatry and Anthropology

Farmers in India continue to commit suicide at alarming rates. Although offi cial estimates suggest that fi ve thousand people have taken their lives since 2001 in India’s western and southern regions, unoffi cial estimates suggest that the number may surpass ten thousand (O’Connor, 2007). Once known for its ‘King Cotton’, Vidarbha, in particular, witnessed suicide rates of around two per day in 2006 due to a combination of rising seed and fertilizer costs, the state government’s 32% drop in guaranteed purchase price after harvest, and cheaper American imports after a slash in import duties, all of which forced farmers to accumulate debts from private moneylenders with interest rates as high as 50–60% (Chu, 2006). Because few farmers leave suicide notes as suicide is an illegal act, many suicides often go unreported (Bhatt, 2004). However, little doubt remains when 79% of the farmers have ingested pesticides (Saunders, 2007). In 2005, two districts alone accounted for 600 suicides, mostly of small farmers holding less than ten acres (Kulkarni, 2006). By the end of 2006, 1280 farmers in Vidarbha killed themselves and only 30% of the eligible two million farmers received fi nancial support (The Asian Age, 2007). The Indian government’s response has been to announce the appointment of a research fellow through the Archaeological Survey of India to collect DNA samples from affected families in order to detect a genetic predisposition towards suicide (Arya, 2007). However, psychiatric research itself represents a unique culture with its own biases which must be scrutinized before its application (Bhui & Bhugra, 2001). A recent study on suicide in rural Tamil Nadu suggests that the vast majority of suicide completers succumbed to the exigencies of chronic stress factors rather than preexisting mental illnesses (Prasad et al., 2006). Farmers in India do not express the same stresses as farmers elsewhere, since they must confront additional challenges such as illiteracy, the bondedlabor system, providing for large families, government corruption and rapacious debts from local moneylenders (Venugepal & Jagadisha, 2000). A responsible methodology must ultimately embed the biological within its broader social, cultural, political and economic contexts. Scheper-Hughes and Lock (1987) have advocated examinations into the interconnections of the individual body, the social body and the body politic. Similarly Kleinman et al. (1997) suggest that the societal and the individual remain enmeshed so that a responsible account of pain and suffering requires a wide lens which deconstructs categories normally established as separate discourses such as the ‘medical’, the ‘legal’, the ‘moral’, the ‘religious’, the ‘political’ and the ‘economic’. Collective traumas such as famine and drought require interrogations into existing social, political and economic conditions (Zarowsky & Pedersen, 2000).

Transforming Microfinance Institutions: Providing Full Financial Services to the Poor

DOI: 10.1355/ae24-2g Transforming Microfinance Institutions: Providing Full Financial Services to the Poor. By Joanna Ledgerwood and Victoria White. Washington, D.C.: World Bank, 2006. Pp. 517. volume's fifteen chapters, written by the coauthors, each of whom is an experienced development professional, and six other highly qualified development scholars and practitioners begins with a statement and two related questions that are at the core of the study: The microfinance industry (MFI) has seen impressive growth for longer than a decade and yet still reaches only a small percentage of its potential market worldwide. How do we reach those still unbanked? What steps can we take to make microfinance available to more people and do so on a lasting basis and, as well, provide them with the financial services they need other than just credit? (p. xv). book's four parts combine to provide thoughtful responses to the questions posed by the co-authors. Part one examines the basic principles underlying the generation of savings and their mobilization into investments. examination is conducted from three analytical and policy perspectives: institutional, regulatory and macroeconomic. Part two delves further into issues associated with the regulatory and general institutional framework within which deposittaking (savings generation) takes place. third part focuses on transforming MFIs where, for the purposes of the book, transformation is defined as the process of a credit-focused MFI ... creating or becoming a regulated deposit-taking financial intermediary. An intermediary is an institution that mobilizes deposits and then on-lends these deposits to its borrowing (p. xxviii). fourth part contains two case studies summarizing Uganda's experience in developing laws, regulations and licensing agreements that oversee deposit-taking microfinance institutions. They (a) chronicle the development of Uganda's policies towards improving microfinance regulation and supervision; (b) review the key success factors upon which improvement is based; and (c) identify the remaining challenges that impede further improvement in the way that the country's microfinance sector functions. case studies are followed by an interesting and useful appendix that offers fifteen steps in the institutional processes of mobilizing savings and generating of investments. steps begin with studying savings demand to investing excess liquidity, and appropriate sequencing is crucial to achieving success in the process of deposit-taking and on-lending. Ugandan cases are interesting and useful, but for readers who focus their attention on Asia it would have been useful to supplement the volume by examining a case study closer to home. Examining the history, structure, and activities of the Vietnam Bank for Social Policies (VBSP) as an MFI, for example, would be an appropriate supplementary study. It was initially called Vietnam Bank for the Poor (VBP) when the government created it in January of 1996. VBP was designed to provide relief to poorer and underserved depositors and borrowers (who often had no choice but to borrow from local money lenders). result often was huge debts due to exorbitant interest rates because the poor could not obtain loans on a commercial basis from regular microfinance institutions. As an MFI, the Bank stepped in by operating more than 500 branches, mainly in rural areas, as well as 1,500 smaller outlets belonging to the country's Bank for Agriculture. Their deposit-taking and on-lending clients were mainly Vietnam's rural poor. When the VBSP came into being in 2003 it expanded upon its predecessor institution's focus by extending its activities to include providing preferential credit to poor households, poor students, rural and urban job-creating activities, needy migrant workers and both households and business ventures. VBSP has worked reasonably well but similar to virtually every MFI it continues to face the challenge of maintaining profit levels necessary to ensure survival. …

Living on the Edge and Paying for It: A Study in Sanjay Colony, Okhla Phase II, Delhi

The aim of this paper was to conduct a survey among residents of an unauthorized settlement in Delhi, and calculate the poverty premium (if any) being paid for a basket of services comprising water, power, education, health, sanitation, housing, and finance. Poverty premium here is defined as the differential between the real cost of a commodity paid by the urban poor and the formal market price paid by more affluent residents. This real cost includes both the actual price of the commodity, as well as hidden costs like cost of access, opportunity cost etc. The survey, conducted with a structured questionnaire, made use of a sample of 95 households selected through stratified random sampling. It was found that with inadequate and inefficient government provision of services, and in the midst of illegality and surrounding issues, residents in Sanjay Colony are paying a premium - either qualitative or quantitative or both - for most basic services. In the case of water, residents incur a heavy quantitative as well as qualitative premium. At Rs 45 per kilolitre, the premium comes to 4-7 times when compared with the city's Water Board tariff. Credit is another huge issue. Not deemed creditworthy by banks, residents are dependent upon local moneylenders. Their rate of simple interest (10% per month), imposes a penalty which is ten times the rates charged by banks. Loans at short notice can be obtained only at 15% per day. As regards sanitation, even with three public toilet complexes in the vicinity, only 15.7% people prefer to use them due to a host of problems. For primary health care, 84% visit local doctors/quacks. Accessibility and procedural hassles at government hospitals make 54% of the residents opt for private treatment despite financial constraints. Thus, despite being located in the country's capital city, slums in Delhi are often relegated to the periphery when it is a question of access to basic services.