THE INTERNATIONAL - International Indian

[ MICRO FINANCE ]
Parinaam is a not-for-profit company
registered under section 25 of the
Companies Act. This means that all
programmes are funded purely through
donations and/or grants from sponsors.
The only investors in the company are
the Promoters/Founders (Elaine Marie as
the main and one other - very senior retd
director from the Tata Group of Companies
– Mr. Sarosh Ghandy). Parinaam does not
give any dividend on the investment, and
all profits and funds will be channelled
back into the organisation’s programs
for the poor. Therefore, as Parinaam is
a purely not-for-profit, it is permitted to
apply for tax exemption under Section
12A and for the exemption under 80G (the
‘“... the truth of the matter is that borrowers of microfinance
always pay back; women in particular.”
Income Tax Act) to provide some tax relief
to all donors and sponsors. Parinaam’s
application for these two exemptions
is under process at the Tax Dept at the
present time. Anyone who wants to help
with healthcare, education and other
programs for Ujjivan’s poor customers
will be welcomed with open arms! Please
send queries to: Elaine Marie Ghosh,
Executive Director, Parinaam Foundation,
Website:
www.parinaam.org,
Email ID: emghosh@ujjivan.com,
Cell: +91 98450 28680
Regarding Ujjivan, Samit says,“ We
just completed our fourth round of
capital infusion on November 14th,
2008. We will next raise capital after a
year. People who want to get involved
in our programs can do so through
Parinaam.”
5,00,000 to provide ‘credit plus’ programs
for Ujjivan customers: quality healthcare
and education; practical vocational training
and job enhancement; basic community
services and capacity building initiatives
for the Ujjivan customer, her family and
her community.
Financial Meltdown
How have Ujjivan and Parinaam been
affected by the financial crisis that has
made the world weep? Elaine Marie
answers this one: “Ujjivan is not a charitable
organization, a foundation, or an NGO.
It is a non-banking financial institution
registered under the Companies Act. It
was set up with people who invested their
money; it is for profit; the profits go back
to the investors, employees and customers.
Investors are in it because they want to
help the poor, but they do not want to give
donations. While the rest of the world is
going broke, the shares of micro-finance
companies are being sought after because
they are valued higher.”
Samit affirms this as he says, “We signed
the documents for our fourth round of
Capital increase on November 14, 2008.
Due to over subscription, we raised Rs. 94
Crores instead of the original plan of Rs.
75 Crores. This is after less than three full
years of operation. Also, for the first time
in the micro-finance industry in India, we
organized secondary sales of our individual
investors. The few of our initial investors,
who opted for this, were able to register
incredible capital gains. Quite a story
considering today’s environment. We have
less than fifty investors of whom four are
from Dubai.”The problem if any is that
they have depended on the banks for loans
which they on-lend it to the customer. Now,
the banks have reduced extending credit,
the flow has slowed down, the interest has
been raised by at least 2 to 5 % and as Samit
points out, “This increase cannot be passed
on to our poor customers, we cannot raise
our rates, so it impacts our profitability.”
It is however not a large problem since
the amount of investment has increased so
dramatically. And the truth of the matter is
that borrowers of micro-finance always pay
back; women in particular. “We have a 99.5%
repayment record,” says Samit with pride.
Where Parinaam is concerned, it remains
unaffected by the global crisis because, as
Elaine Marie points out, “The reality is that
one way or another, we cannot do without
our maids, vegetable vendors, grocers and
all those who make our lives comfortable
Those who can afford maids will continue
to afford them; meltdown or not, you will
still go to buy your vegetables and pick up
your rice and dal. So the jobs of the poor are
not affected and they face no crisis. That’s
what makes micro-finance companies so
attractive to investors.”
Sacrifice is the Bottom line
The irony is that rarely is there great
professional success without a large dose of
personal sacrifice.
Samit says with a laugh: “Elaine complains
that our social life is nil. Frankly, when I
stepped into it, I had not expected it to be the
24X7 involvement it has turned out to be.”
Elaine elaborates: “He leaves at 7.30
in the morning, returns at 7.30 in the
evening and goes straight to his computer.
As a couple, we have lost touch with one
another. I could be ill, or the children
could be having some problems, but he has
had to let go of those kinds of concerns.
I cannot talk to him about the cook or
the maid or the things couples normally
interact about. Our conversation is only
about work. I feel sad that we have lost
our personal relationship and am honest
enough to admit it. But in 2004, when we
walked through the door, we both knew
that we were no longer husband and wife,
but that we had become colleagues. What
I had not anticipated was that we would
remain colleagues even after coming out
of the door at the end of the day.”
However, both Samit and Elaine consider
it a “small price to pay” when they look at
the lives that are being transformed by
Ujjivan and Parinaam.
Ingrid Albuquerque is the Content Editor and Website
Manager of the Haggai Institute’s international
website; and the Managing Director of Berean Bay
Media House. She has edited many magazines and
is the author of a few best-selling books.
THE INTERNATIONAL INDIAN 57