From Looking to Seeing

By Kshama Fernandes, CEO, IFMR Capital

I met today with the promoter and CEO of one of our newer Small Business Loan Originators and visited some of their end borrowers in Bombay. I heard an interesting story of their very first client not too long ago. This was a sandwich vendor who runs a makeshift stall outside the Bombay Stock Exchange (BSE) and has been supplying sandwiches to the entire BSE crowd for years. Imagine a business with a captive clientele in one of the oldest and the largest exchange in India. One would think the vendor must be an attractive credit opportunity for any sensible lender. Well, it so happened that the gentleman had no access to formal credit for decades despite being located on Dalal Street – traditionally considered the nerve center of India’s capital. Till the day a credit officer from our Originator discovered him. As expected he had little to prove his credit worthiness. So the credit officer spent two days standing next to his little stall and counting the number of sandwiches he delivered to the BSE building from morning to evening. This was followed by a personal assessment through a Q&A session, a visit to his home and a few conversations with neighbours. Using the sandwich-movement-activity based cashflow and other observations, the credit officer built the sandwich vendor’s P&L and B/S. The vendor was given a one-year loan of INR 9 lakh. He repaid the loan in 6 months and reapplied for a larger loan, tapping into a formal source of finance for the second time in his life.

The CEO told me that when he left behind a promising career in a mainstream commercial bank and decided to get into a more interesting and possibly a higher margin business, he thought he would have to go to far flung areas of the country in search of those who had no access to credit. He was wrong. He found many such down the street from his office. I visited some of them today.

India is indeed a promising land. We simply need to look a little closer and go a little deeper into the lives of people around us – people whom we always ignored because we never thought they had potential. We need to stop looking and start seeing!


From the hills of Uttarakhand

By Kshama Fernandes, CEO, IFMR Capital

I am writing from Thatyur village in Theri district, Jaunour block – about 3.5 hours north of Dehradun in Uttarakhand, India.

I met Akhilesh Badhani today, an entrepreneur in a beautiful riverside village in a valley surrounded by hills. He started the hardware and provisions shop 4-5 years ago and caters to around 25 to 30 villages in the surrounding hills having a total population of around 10,000. He is a client of Sahastradhara KGFS, has availed a Micro Enterprise Loan of Rs. 1.5 lakh from them and is one of their most disciplined borrowers. He has almost repaid his first loan and wants to now apply for a larger one.

Thatyur village
View of the Thatyur village

At some stage Akhilesh decided to pursue his studies at Benaras Hindu University and so his younger brother runs the shop for him now. Akhilesh did a one-year course in Sanskrit from an institute in Rishikesh. Then did his Masters in Indian philosophy from BHU and is currently pursuing a Ph.D in Bhagwat at BHU (there are two streams of Indian philosophy Р Bhagwat and Vedanta). He aspires to be a professor of Indian philosophy post completion of his research.  Said he wants to work on dispelling the superstition associated around Indian scriptures.

Here is what he explained to us from a scripture: Imagine a devotee who makes an offering of ghee, kheer and all festive delicacies to the Lord in a temple. And standing right next to him is a poor starving man who hasn’t eaten for days. Does the offering of ghee made to the Lord make any sense? Such offering is akin to bhasma (ashes) left behind by a fire – worthless. Feed the hungry man instead and it will be worth its weight in gold.

Akhikesh concluded by saying “Nar seva hi Narayan seva hai” which inadequately translates into “Service to man is service to God”.

To-be-Dr Akhilesh
To be Dr. Akhilesh

I was fortunate to meet Akhilesh because he was visiting his village for a week during University vacations. He returns back to the city in pursuit of his research on the 23rd.

Everytime I visit the field I am struck by how many fascinating stories exist out there. A few we have the opportunity to touch – we provide them with a financial product and they provide us with the inspiration to go on and touch many others.