Micro-finance – Scientific Perspective:

Micro-finance is an attempt to eradicate poverty by improving subsistence to micro and further leading to small-scale enterprises. It is especially to bolster small business, especially based on local investment, and to encourage entrepreneurship in developing countries. From the perspectives of promotion scientific and technological intervention, it would be promoting of small donations for over-head expenses, if not for core-research, to reach out basic medicines to the common people afflicted with diabetes, cataract, cancer etc. On a broader line micro-finance could also take up, if not the development of sensors (physical, chemical, and biological) to assess and monitor the environment, reaching out the gadgets to the polluted areas such as slums in cosmopolitan and mega cities adjacent to industrial estates.[1]

Target People:

Two-thirds of clients for micro-financing, that is 5 million, are the ‘poorest’ when they take the first loan – Among them 45 million are women clients. Assuming five-member family, this implies that 274 million families could benefit from micro-financing. These people, especially those who live in absolute poverty (with less than Rs 50/day/family), need help to increase their income, to build assets, and to reduce vulnerability.[2] The basic vulnerability is lack of nutritious food (about 2200 calories per day per person) and reasonable health condition to do their daily-wage work. Even among these ‘poor’ the so called ‘high-risk’ people who are in the 15 to 20% at the bottom of the socio-economic ladder need preferential attention and affirmative action.

Opportunities:

Among the NGOs there are two approaches: i. with the focus on sustainability (leading to financial sufficiency); and ii. with greater depth of outreach (assisting the poorest).[3] Micro-Finance Institutions should explore the possibilities for networking and advocacy with regard to health-based as well as environment-based research. Starting with reaching out medical and other accessories for healthy life to individuals, this could lead to enriched life, especially in the remote rural areas, with modern facilities such as primary health centres, solar-powered street lights, communication networks such as broad-band, information on higher studies in science and technology etc.

In rural areas scientific method of cultivating mushrooms, prawn-farming etc could be introduced and encouraged which would not only be educative for the rural mass but also incoming generating for the people.

MFIs could extend their services, say in small towns, through introducing smart cards for the people to purchase household goods and for availing other services. Further, collective medical and accident insurance facilities could be made available through microbanks.[4]

On domestic level solar cooker could be introduced – With aluminum coated parabolic gadget, with Government subsidy and micr-financing, solar cooker could be made available to the people. Apart from promoting researches, as indicated above, the school drop-outs could be trained for middle management in soft-ware companies and in other industries through institutes of capacity building such as Community Colleges. Training rural women as lab-technicians, chemical-assistants etc could be realized through MF programmes. Another area of growing interest in the globe is the alternate medicine. Not only herbal medicines can be promoted but people could be trained so that with micro-financing such medical systems could be effective.

MF systems could be extended to urban areas too. It is said: You can give a hungry person fish to eat – That day he/she would not go hungry. But teach the person fishing – He/she will never go hungry. But sometimes, you cannot teach people to fish when they cannot even reach the river.[5] Through establishing entrepreneur centres potential graduates in sciences could be trained in lab techniques to work as research assistants. And the research programmes such as ‘Community-Disaster-Preparedness’ projects would make people read the signs of nature, especially during the times of natural calamities (such as cyclone and tsunami), and they could be enabled to take precaution.

Action Plan:

MFIs should be able to evolve projects to promote scientific and technological advancements in order to financially support – A few action plans could be thought of:

1. Subsidy and promotion of organic farming;
2. Social education about adverse effects of malnutrition and need for hygiene;

• Soft-ware training for maintenance and middle-management;

1. Training youth as lab-technician, electrician, to repair air-condition machines, cellphones, TVs etc;
2. Promotion of solar-energy gadgets such as street-lights, solar cookers etc especially in remote electricity-less villages and high-altitude mountains;
3. Scientific training in mushroom, prawn-cultivation which would become income generating projects;

• IT training such as electronic data management, storage as well as processing;
• Dissemination and sharing of information, through writing and publishing, on scientific and technological advancement as well as job-opportunities;

1. Training rural youth, through summer programmes and week-end coaching, to take up future positions as scientists and technical experts in science, technology, and medicine; and
2. Financing implementation of scientific and technological outcome in rural areas and among the needy such as medicine.

Through organizing conferences and workshops it would be enriching to see for ourselves the new vistas open and to get inspiring ideas to take road less traveled along the alleys of science and technology that would enrich and empower the poor and the needy in the country and in the globe.

Jan 22^nd 09                                                                                    Francis P Xavier SJ

Loyola Institute of Frontier Energy (LIFE)

Loyola College, Chennai-600 034

Email: francisx@vsnl.com

[1] International Conference on ‘Recent Trends in Sensor-Development for the Assessment and Management of the Environment’, Loyola Institute of Frontier Energy (LIFE), Loyola College, Chennai (Jan 8-10 ’09).

[2] Micro-finance: Perspectives and Operation, Indian Institute of Banking and Finance, Macmillan, 2009, p.77f.

[3] B. O’Brien, The Role of Non-Government Organisations in Microfinance (In: Opportunity International, Apr 2007).

[4] S.S. Robinson, Remittance, Microfinance and Community Informatics – Development and Governance Issues (In: Microfinance and Technology Conference, Brisbane-Australia, 10 June 2004).

[5] M. Khera, Role of Technology in Expanding Microfinance in Urban Areas (In: Microfinance Insight, March 2007).