India’s micro financiers have struck gold while reaching out to the poor and vulnerable
By most definitions Bihar is one of the toughest places in India to do business. The state is unstable and its politics are often corrupt. Close to 90 million people live in an area little bigger than Portugal. More than a third live below the poverty line and only about one in 10 can read or write. The average person earns about US$160 a year.
Only one thing is certain in Bihar – just about everybody wants more money.
“Within a six kilometre radius of our office I could easily lend US$50 million,” says SR Sinha, a veteran financier. Seeing this need he started Saija Finance, a microfinance institution (MFI), in 2008 based in Bihar.
In about two years, Saija developed 10,000 clients, most of whom are poor and vulnerable and so cannot get bank loans. It acquired twice as many clients in a single month earlier this year. Sinha’s biggest problem is not repayment – Saija’s default rate to date is zero – it is finding the capital to lend.
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