THE INTERNATIONAL - International Indian

[ MICRO FINANCE ]
The Root of Inspiration
The genesis of the idea can be traced to his
roots. Once he had achieved professional
and material success in his career as a
banker in India and the Middle East, he
says, “When I reflected on my life, I realized
that I had always been strongly influenced
by my parents and teachers. My father
spent his life working for the government as
a doctor for the coal miners in Bihar. Father
McFarland, an American Jesuit who had
become my mentor, spent his life setting
and running educational institutions in
India and Africa. Both of them strongly
cared about the vast numbers of the poor
and deprived, my father by caring for the
sick, while Fr. McFarland saw to their
education, and constructed schools.”
Fr. McFarland had been a close friend of
the family. When he was 10, Samit had lost
his father who before he died had asked the
priest to watch out for the family. “And he
did,” Samit remembers nostalgically. “He
cared for us more than any other member
of our family did; to the extent of grilling
Elaine when we had decided to get married.
He was like our surrogate father.” The year
Samit quit banking, Fr. McFarland had just
died. Samit took a year’s sabbatical and
used a lot of that time to collaborate with
friends to bring out a book on the American
priest. Titled One Beautiful Life, the book
traced all that the Jesuit priest had done for
the society around him. Samit remembers
with awe that Fr.McFarland had been a
brilliant professional who could have done
anything in the corporate world; instead he
chose to serve people around the world – in
India, the US and Africa. “Even when he
was dying, his thoughts were only on how
he could improve life of the poor.”
The experience of putting the book
together became a tipping point. “I felt that
as a financial service professional, my life
would be incomplete, if I did not utilize my
academic and professional experience to
help people get out of poverty,” says Samit.
Unstoppable
So when the invitation to micro financing
was issued, it was not just anyone who was
issuing it, but a man with credentials,
experience, and a heart for the target
customer. Like his wife Elaine puts it, “He
kept talking about it to all the banks he had
Samit and Elaine Ghosh with their children: Mallika, Sailen and Nihal
worked for, but no one was really interested.
His last commercial assignment was Chief
Executive, of Bank of Muscat in India. He
took voluntary retirement, spent time in
Bangladesh, returned to India and did a
strategy paper on setting up a microfinance
institution for urban & semi-urban poor with
an old friend from Wharton, Sunil Patel.
For a year, he talked about it with investors
with little effect, and he was on the verge of
giving up when friends and colleagues from
the financial services industry from around
the world and India rallied to support the
enterprise. And he accepted their invitation.
He was well respected and people trusted
him. Their attitude was, ‘If Samit is doing it,
then it has got to be something good’.”
They were right. By December 28 2004,
Ujjivan was incorporated as a finance company;
a month later the first board meeting was held,
in February 2005. Ujjivan got its first employees
– Samit, Ajit Grewal, Carol Furtado, Srikrishna
, all old colleagues in their first office lent to
them by Mphasis Ltd.
By August 26, Ujjivan had completed
raising domestic capital of Rs. 24.31
million. The icing on the cake was the
RBI’s swift approval of the license for the
Non Banking Finance Company. Samit
explains, “The RBI is very supportive
& encouraging to microfinance and
promotes financial inclusion of the poor
into the organized financial services.”
Understanding Micro-finance
The basic idea of micro-finance is as simple
as those it is intended for: if poor people
are provided access to financial services,
including credit, they will be given the
opportunity to start or expand a microenterprise
or educate their children that
will allow them to break out of poverty.
The programs actually succeed in enabling
them to increase their income levels. Elaine
says rather emotionally “The most beautiful
part is that they can now increase their
income levels. Before, they were unable to
even open a savings account in a bank; they
had no access to financial services which
were exclusively available to the upper and
middle income population.”
The poor women Ujjivan works with are
either employed (garment factory workers,
domestic help, etc.), self-employed (vendors,
tailors, shop keepers, etc), and piece rate
workers (those who roll agarbattis, beedis, etc.).
In the past, to make ends meet, these women
had to rely for their finances on moneylenders,
chit fund operators and pawn brokers,
and pay interest rates up to 10% per month.
Micro-credit changed their life. They
could now get loans from Ujjivan at one
THE INTERNATIONAL INDIAN 55