By Moin Qazi,

Microfinance Focus, July 16, 2011: Historians will tell you that the moment the world starts complaining there is nothing left for inventing anything or finding solutions to intractable problems becomes a losing battle and everyone starts believing it is the end of the road, an explosion of creativity will follow. It is fate’s way of reminding that there is always something just over the knowledge horizon. A new wave of creativity is now being blazed by entrepreneurs who are using their creative energy for fostering social change. These new age heroes are known by the appellation ’social entrepreneurs’.

In India from the well known captains of industry like the Ambanis and Tatas, healthcare giants such as the Reddys ,well-known IT pioneers like Narayana Murthy and Azim Premji, social entrepreneurs like Ela Bhat ,Vijay Mahajan and Bunker Roy to the millions of men, women and children who are entrepreneurs out of necessity, are using their imagination and wit to survive and bring prosperity to the country and solutions to its intractable problems. While many Indians, young and old, may aspire to emulate the commercial entrepreneurs who have made billions, there is a growing passion to follow the trail blazed by a growing number of talented, educated young men and women who march to a different drummer. They want to use markets to change our broken systems in the fields as diverse as politics, governance,, healthcare , education and housing.

A Ramesh Kumar is one such charismatic individual who has successfully kept himself insulated from the glare of the arc lights of publicity .He is strong believer in the spiritual mantra :focus on the mission bring s more adherents for your philosophy, focus on self can only breed jealous rivals.    In my three decade career in microfinance and rural development in which I was largely engaged in designing and delivering services for the rural poor, I have seen few passionately committed corporate wizards in the development field. Kumar, a professional banker and development expert, has used the social enterprise route with rare ingenuity to forge solutions for rural poor. His vision encompasses a vast range of initiatives covering inclusive financing, women’s empowerment, promoting alternative and cost effective methods for combating malnourishment, organic farming, affordable toilets and housing. Kumar argues that   with determination and innovation, even a single person can make a surprising difference. Kumar has been a flag bearer of the Triple Bottom Line approach long before the concept entered the development lexicon.

Kumar has all along his professional career been a social entrepreneur. He gave up the rewards of India’s corporate banking to pursue a moral vision that would enable the poor to help themselves by putting their individual destinies in their own hands. Trained as an international banker and development expert, he is he now recognized as a front rank leader in the field of social entrepreneurship.

In India the general impression of the public sector is one of bureaucratic insensitivity and bland indifference with executives preferring to stick to the status quo and conforming to byzantine traditions. .But executives like Kumar have broken out of the mould to reinvent the system and make it more responsive to the poor. ‘You are taught to depend on the councilman, and you are taught to depend on the senator. You pay them with your tax dollars to do things for your community. But sometimes you have to create your own government. . . . The best way to predict the future is to create it..’ says Kumar. He has always sought to remake the world around him instead of becoming part of the blame game brigade. ‘‘Our generation is replacing signs and protests with individual actions” Kumar asserts.

Kumar’s foray into microfinance was a radical move: “If someone wants to do work in a village, the formal education system discourages him,” asserts Kumar. “The mindset that this system inculcates in students is that going back to the villages is a losing proposition. Remaining in the city is considered a success.”

“I had the most snobbish, exclusive education any Indian could have had the misfortune to have,” “How is it possible that some people live in such penury – and we go through the best of education but don’t give anything back?” Kumar asks. “Poor people show so much courage and ability to take the little that the deck has dealt them and transform it into livelihoods for their families and their communities.” It was this combination of conscience and anger that drove him to slowly wean himself from the high profile jet-setting corporate planet to soil his hands  and immerse in the hard job of working out solutions for the disadvantaged and the dispossessed..

His model of microfinance pioneered in Maharashtra is now quite well known for having spawned an army of women entrepreneurs who have set up own businesses and are also playing an active role in the political and social affairs of their villages. The microfinance movement in Maharashtra has gained stimulus owing to the commitment of Kumar who has travelled to remote areas that don’t even exist on the physical map. He was fascinated by the sheer desire of poor women to excel.

As part of the team that    Kumar assembled, a dynamic visionary and head of SBI’s operations in Maharashtra. I was witness to the way his charisma worked like magic and stoked a thunderous growth trajectory. It was a revolution that inspired the grassroots managers in a way a general inspires warriors. Yet, even as policymakers stoked fast growth with every means at their disposal, little was done to transform these workers into foot soldiers of a different sort. To everyone he was a genius s in reducing the confusing science of microfinance to its essence, breathing life into vapid concepts by using simple anecdotes. Never had we been in the presence of a master teacher, the kind who leads students down the long road to independent thought and creative thinking. Now that we were under the wings of such a person, we could get enough of it.

"We need loan officers with a banker's head, a social worker's heart, and the stamina of a distance runner” was the way Kumar would exhort program managers. Kumar is a brilliant at building and mentoring his team. He has a piece of advice: Focus on each person’s strengths and manage around his or her weaknesses. Don’t try to perfect each person. Instead, do everything you can to help each person cultivate his or her talents. Help each person become more and more of who he or she already is.

In Malad area in northern Mumbai there are about 150 SHG’s of HIV affected individuals. These groups have helped them to overcome the social stigma and have also provided them a platform for conducting economic activities that can give them both security and livelihood. When the state government in Maharashtra banned bargirls from performing, banks came forward to rehabilitate them through self help groups. In participation with Sangmitra trust SBI is running a unique program for the HIV affected in Mumbai. Similarly the bank has financed self help groups in Santa Cruz east and Ghatkoper east for various activities. The groups in Santa Cruz availed loans of Rs 100,000 each for securing an order for supply of midday meal for Mumbai schools. These loans are now nearing liquidation and the groups propose to buy vans, to have their own vehicles for transporting cooked food.

The German Chancellor Angela Merkel personally facilitated the group members during her visit to Mumbai last year.  The bank has designed a special loan product for encouraging self help groups to take contacts for midday meals. More than 80 such groups are functioning in Maharashtra. In Chandrapur district the banks first urban SHG under the government supported Microfinance program is celebrating its 15th birthday this year. Similarly, there are about 25 SHG’s which are more than 12 years old. The low rate of attrition of SHGs is primarily in account of the close monitoring by commercial banks.

There are as it no NGO’s operating in the rural financial space of Warora block, hence it has been left primarily to banks to undertake the twin jobs of financial and social intermediation. Taking a cue from the Gramin Bank of Bangladesh the bank’s branch in Sakoli block of Bhandara district   financed a SHG of beggars. Thus, we see that this indigenous model has been able to engineer a social revolution that has begun to redefine the contours ofrural economy.

For millions of women who have for the first time stepped out of their courtyards and handled a pass book and the responsibilities of leadership, the SHG experiment has been truly life renewing. Women in Maharashtra have taken on entrenched village hierarchies and hoisted the national flag in their villages despite opposition from men. They have put an end to the brewing of liquor, they have bid for contracts for fishing in village ponds, developed wastelands and grown fruits and vegetables and enhanced their economic position in numerous ways. The loss of control that the village moneylender has suffered, is a common enough story now in villages where SHGs have taken root. Women belonging to the Scheduled Castes at a village in Solapur told Kumar, “We have no work for four months in the year and in order to survive, we are forced to take a loan of Rs. 300 per month during this period from the money lender at 100 per cent interest. But after we formed the SHG we have no need to do this. We take the money from our SHGs.” In the tribal villages of Dhule women who used to purchase grains from the grain merchants at a high price in times of scarcity, have found a way out by forming their own grain local banks which have rules similar to the rules followed by the SHGs for saving moneyKumar is a highly committed visionary whose lovable wife is equally committed despite her own preoccupations. Mrs. Kumar’s induction in the informal team was really a great shot in the arm for the movement.

The spouses of the local managers were inspired by Mrs. Kumar’s gesture and they also came on board. This further deepened the SHG’s roots as senior urban educated women started guiding village women in social development particularly in matter of hygiene, sanitation, proper cooking practices, designing of nutritional diet for infants and proper upbringing of children.

Kumar headed the NABARD Committee on Rural Habitat which comprised the country’s top development and rural habitat experts. The Committee’s report is the most exhaustive and comprehensive blueprint for rural habitat, an area that had remained unaddressed even after six decades of independence. .The recommendations have been accepted by the Government of India and NABARD, India’s apex agricultural bank has launched a nationwide habitat programme for the rural poor. Kumar was also on the Advisory Committee of Development Alternatives (Basin South Asia) who have formulated and recommended to the Govt. of India the Draft of a National Policy on Rural Habitat.
creating assets for the poor, specifically housing is vital for moving out of poverty, says Kumar. Having decent shelter, while clearly important to raising living standards, is also a bottom-line requirement for earning citizenship in the village, living with dignity, and accessing all other benefits.He has taken personal initiative in designing and implementing a revolutionary model of affordable housing through use of platform created by self help groups and community institutions. Low income households, particularly in rural areas, seldom have clear, legal land titles, though they often have semi formal or para-legal rights of some sort, which though accepted implicitly by the local community are not accepted as collateral by the banks and financial institutions thus depriving access to housing to them. Many of them may not have a full land title but posses a documentary right to ownership, such as tax receipt and a legal protection from eviction.

Kumar believes that community and multiple guarantees are as good as, or even better than full proof mortgages. This assumption is based on the company’s experience as well as the established wisdom of microfinance practice. Most housing microfinance institutions extend housing finance on the strength of multiple guarantees.

Kumar has tried to use the traditional community based strengths of grassroots people’s institutions like Gram Sabha (Village Assembly), Gram Vikas Samiti (Village Development Council) etc. which are also constitutionally mandated grassroots institutions with community ownership, to overcome arcane legal complications and necessity of elaborate documents and also in aiding the screening and scrutiny of borrowers.

If renunciation stories in general are interesting, then this one is doubly so for what Kumar intends to do and how he plans to do it. “The idea is to make the markets work for the poor,” says Kumar. The poor and the markets, one would imagine, would be the most disconnected worlds. Yet, those are the linkages that Kumar wants to forge in the belief that the markets—agenda-less creatures that they are—have an appetite for anything that fits their frame of requirements.

Juniors vouch for the fact that Kumar is a person who empowers you and then is very exacting in his standards. He stokes the fire in other people. He is also the kind of person who will stand by you against a howling mob not because of his friendship with you but because of his conviction. Add to it the lack of individual covetousness in Kumar and the combination exercises tremendous influence over people. Along with the passion for development and his ability to inspire people, Kumar is also a sharp thinker. He is one of the finest lateral thinkers in the country and can make linkages between diverse situations to draw up solutions that may seem unfathomable to most.

According to Kumar, "if you are poor, you are disadvantaged but if you are poor and also a woman, you are doubly disadvantaged." Kumar feels the elimination of poverty is possible, provided we re-examine the wisdom of our assumptions. The poor are poor not because they are unskilled or illiterate but because they cannot retain the returns to their labour. They neither own capital nor does anyone give them access to capital or credit, except on the most unreasonable terms. But the worst tragedy of the poor is they live on the edge in constant fear of a catastrophe or a tragedy but they have no insurance. Insurance providers say it is a losing proposition. The social safety nets of the state are grossly inadequate and are mired in corruption and bureaucratic red tapism.

He has seen that without firm political leadership, bureaucratic inertia was inevitable and expensive programs and schemes were highly ineffective, mired in red tape. The poor, he argues, already have skills, are politically conscious, and are aware of the need for schooling and taking care of their health. The first and foremost challenge for them is  their lack of income that makes using their skills impossible. Providing investment capital for additional income generation, he asserts, can unlock the capacity of poor people to solve many, if not all, of the manifestations of poverty that affect their lives. His faith in poor people’s ability to get out of the rut is unshakable. His core belief has been gradualism. Kumar has concluded that lasting social change most often — and perhaps always — comes slowly rather than in a burst of revolutionary fervor. This belief has shaped his work.
Kumar is of the view that poverty is not cyclical. People don't get above the line and automatically stay there nor do they necessarily fall into poverty permanently. They move in each direction for very different reasons. The trick, then, is to neutralize the pressures that drive people into poverty while fostering the stimulants that lift people out. As economic, social and political pressures blur the boundaries between the for-profit and not-for-profit worlds, a new breed of do-gooder is emerging, one that uses techniques and tools honed in the workplace to tackle social problems. In most cases, they start small. But taken together, they are changing the way nonprofit enterprises are conceived and run and bringing a new dynamism and drive to the business of doing good.

A wonky workaholic, burning the midnight oil along with the candle at both ends, Kumar makes it a point to take time off from his punishing work routine for extensive touring because he feels one has to keep one’s ears open to grassroots voices. Apart from being a yoga enthusiast, Kumar is an avid cricket buff but hockey remains his first love .He was himself a star player in college. “I spend most of my time fostering innovation, leadership, teamwork and work values within the organisation,” adds Kumar. Kumar believes that the true and full measure of growth, success and progress lies beyond balance sheets or conventional economic indices. It is best reflected in the difference that business and industry make to the lives of people. Kumar laments that India has many highly qualified professionals but few in the field of development. His goal: take microfinance and sustainable farming to poor households. From very early on in life Kumar was hooked to development work He is interested in using his energy to make situations work out for other people’.

Kumar has an incredible tenacity, which I think comes both from a sense of outrage around injustice and an elongated view of time. “I don’t get tired of evangelizing for my cause over and over again” Kumar narrated one of his visits to a remote village where women were known for their tenacity and diligence and had set up a unique example by successfully running microenterprises. “I was completely blown as I listened to the stories of these tenacious women. I was emotionally overwhelmed .They have sophisticated credit algorithm ‘Does the woman own a buffalo? Some chickens? Does she have a toilet in her home? Does she come barefoot to a meeting or has a slipper. What kind of roofing material does her home have? Does she bring a shawl to the village meeting?" Kumar says we feel that rudimentary societies have poor financial skills. But experience in the corporate world has shown that financial tools are not a substitute for human judgment .the highbrows look down their noses charging development practitioners with superficiality and over simplification

“It is these women who form my natural constituency. I believe that we were put on Earth for a purpose. For me, that purpose is 'connectedness,' first, to the power greater than ourselves; secondly, in my case to poor people. Poor people show so much courage and ability to take the little that the deck has dealt them and transform it into livelihoods for their families and their communities".

Kumar is fond of a quote by Aristotle: “Education of the mind without education of the heart is indeed no education at all.” Kumar himself was raised on a message of spirituality and entrepreneurship. So it was perhaps natural that when opportunity knocked he  volunteered to take up a rural assignment . “I grew up in cities but frequently visited villages. The poverty I saw during my childhood visits to villages triggered a desire to do something to improve life for those who were suffering. After college, I kept contact with the voluntary sector. I learnt from this experience that the single most important development intervention was to foster economic self-reliance. It is the foundation on which all other development inputs like health and education can be built.” He recalls humorously “When I first started working in the field of development, I had the view that the poor were ignorant and uneducated. I imagined I would help them improve their lives. Most people admired my aspiration. You really can’t help the poor. They know a lot more than we do. I was puzzled... (and) wrote off the s response as simply an attempt to show outward humility. So, I started my work driven by the notion that I was going to help the poor. But I soon saw what happened when the ‘educated’ tried to ‘help’ the poor—how bureaucrats gave subsidized loans for high yielding buffaloes and how these buffaloes died in tough drought conditions, leaving the poor worse off. How education failed to prepare poor children for getting a job, yet alienated them from their traditional economies. I put away my books and immersed myself in the rhythms of villages. Learning from the poor, I was able to understand their lives and design programmes that worked. I felt that my whole life had been preparing me to do this job.”

Kumar joined the rural banking bandwagon at a very critical period in the history of development banking. This was a time of still unresolved conflict between two tendencies in developing countries: the emergence of a huge range of creative solutions to the problems of how to lend to poor people, all of them involving interference with the market mechanism, and the universal pressure from international financial institutions to remove all interferences of this kind, including interventions in financial markets.

Kumar laments that NGOs that actually carry out developmental work in the field are stuck within programs specified by planners in developmental agencies and donor institutions. New ideas and creative plans that may at many times run counter to conventional wisdom  that is at the core of most programs  seldom qualify for any funding. Thus, project proposals are prepared to reflect the requirements set by these planners in terms of methodology and outcomes. There is little initiative from the ground up, and no real feedback. Demonstrating compliance on paper ends up more important than actually getting the job done effectively. As a result, recipients of developmental funds spend significant time preparing reports that will find approval with the planners to qualify for continued funding, and less time worrying about what benefits the poor.

Kumar argues that “to face the future confidently we need to think bigger and outside our usual frames of reference. We need to share our achievements and keep inspiring each other. These big thoughts aren’t likely to originate with politicians, nor with businessmen. So where will these ideas – sustainable, ground-up, human, humane and, perhaps most importantly, replicable in the real world – come from?” This, says Kumar, come from the grass root workers and the man heading the organisation must always have a patient ear to keep the upward communication channel strong and active.

Kumar who is also an established authority on modern management practices believes that every aspiring individual should have a personal vision. A personal vision is a picture of one’s true self in the future. An effective personal vision includes all the important elements of your life and career; it is who you want to be, what you want to do, how you want to feel, what you want to own, and who you want to associate with. Although your personal vision helps you to see into the future, it must be grounded in the present. It is a statement of who you are, and who you are becoming. It is the framework for the process of creating your life.

Kumar has always been   inspired by the poor entrepreneurs .He admires their grit and tenacity “Time and again, they have shown us that when they are given an opportunity, they seize it and turn it into success. Every day we meet savvy, resourceful, and hard working micro-entrepreneurs who have the potential to turn their small businesses into large, successful enterprises but struggle because they lack access to basic business tools and services. This is because the majority of the private sector is not yet convinced that offering these business development services to the poor is a viable business opportunity. We are changing that. We are giving the poor an opportunity to succeed and we can’t wait to see what they’ll do..”

The significance of microfinance, beyond the lives it touches directly according to Kumar, is that it has taught us what is necessary to vanquish poverty. Any strategic model that seeks to actually roll back global poverty must have four fundamental attributes. First, it must reach massive scale. If we are unable to reach billions of people, we'll be fighting a fire with eye drops. Second, it must achieve permanence. Poverty will not be defeated in just one generation, so we have to make sure that what we do will reach today's poor, their children and their grandchildren. Third, the model must become progressively better, gaining continuous efficacy. Fourth, it must become progressively cheaper, achieving continuous efficiency.

Poverty, says Kumar, is not created by poor people. The seeds of poverty are embedded in the deficiencies of our institutions, the deficiencies of our policies, and the deficiencies of our concepts. It doesn’t have to be. If you can pick out those seeds, no one will have to be poor. I have also learned that it is impossible to be an effective leader without self   renewal.  We cannot perform if we do not replenish ourselves, physically but more important, spiritually.  For  me, taking  the  time for spiritual renewal also  means  aspiring  to  be a  better  leader.

His engagement with rural people has given him deep insights into what needs to be done. “On several occasions, I have sat across a farmer asking for money when I know that he does not have it. There is little point to that conversation,” Kumar says, as existing product designs often do not offer solutions. Why do weather insurance payments take almost two months to pay? Why are credit histories not being built for microfinance customers who are low on defaults? Why are there no microfinance institutions in Maharashtra? How can financial institutions become proactive and foray into the rural space without waiting for NGOs? How can people be deprived of financial services if there are no NGOs? He rattles off the questions, which also offer a glimpse into his priorities.

Kumar repeatedly emphasizes that it is impossible to be an effective leader without self renewal. “We cannot perform if we do not replenish ourselves physically but more important spiritually.  For me taking the time for spiritual renewal also means aspiring to be a better leader. In examining companies with staying power” it has been found that the leaders that achieved success and sustained greatness are those who blend the paradoxical combination of deep personal humility and fierce resolve.   Kumars verve and enthusiasm for what many consider a deadened causes has won him several loyal (and high profile) admirers. “Kumar taught me so much through his own life path, through his deep and abiding belief in fairness his. Plain and simple. I have never come across anybody like him, not even close To use Kumar’s favourite words: “I believe that part of our faith journeys includes working to better the lives of those who are less fortunate.  We have the opportunity to express our faith by making this world more just, fairer and more peaceful.

As global citizens of the 21st century, and as people of faith who happen to be highly privileged, this is our work going into the future .

It is uncommon that there is such a brilliant and productive person, also wrapped into the same person who is also such a caring, gentle and humble being, I have been really fortunate to have been his colleague and experienced the richness he brought into our lives.
His advice to me is the mantra that is my guiding motto and a litmus paper with which I keep testing the credibility of my work “I’m convinced that the only thing that kept me going was that I loved what I did. You've got to find what you love. And that is as true for your work as it is for your lovers. Your work is going to fill a large part of your life, and the only way to be truly satisfied is to do what you believe is great work. And the only way to do great work is to love what you do. If you haven't found it yet, keep looking. Don't settle. As with all matters of the heart, you'll know when you find it. And, like any great relationship, it just gets better and better as the years roll on. So keep looking until you find it.

“Our time is limited, so we shouldn’t  waste it living someone else's life .We shouldn’t just be content with following the trail somebody has lazed for us .We shouldn’t be trapped by dogma — which is living with the results of other people's thinking. We shouldn’t let the noise of others' opinions drown out our own inner voice. For us it is the most authentic voice. And most important, we must have the courage to follow our heart and intuition. They somehow already know what we truly want to become. Everything else is secondary”.

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About the author: Moin Qazi
An award winning poet, the author is an independent researcher and consultant who has spent three decades in microfinance with State Bank of India, India’s largest bank, where he was involved in microfinance as a grassroots manager and as head of its microfinance operations in Maharashtra. He belongs to the first batch of managers of commercial banks who were associated with the launch of India’s microfinance programme. He has doctorates in economics and English literature He writes regularly on development finance and environmental issues. He was a Visiting Fellow at the University of Manchester specializing in microfinance.