The Challenge

About two thirds of India’s more than 1 billion people live in rural areas, and almost 170 million of them are poor. For more than 21 percent of them, poverty is a chronic condition.  Poverty is deepest among scheduled castes and tribes in the country’s rural areas. Women in general are the most disadvantaged people in Indian society, though their status varies significantly according to their social and ethnic backgrounds. Women are particularly vulnerable to the spread of HIV/AIDS from urban to rural areas. In 2005 an estimated 5.7 million men, women and children in India were living with HIV/AIDS. Most of them are in the 15-49 age group and almost 40 percent of them are women.

The Entrepreneur and the Solution

Equitas is a voluntary, non-government organization dedicated to improving the livelihoods of communities throughout the northern region of Bangladesh, Noakhali district & Dhaka City, India.  Equitas is committed to facilitating development through self-employment, improved health, increased literacy and skills, and ensured self-reliance with a specific focus on women.

A for-profit from the start, Equitas has understood the importance of capital and operational efficiency since day one.  With a business model in mind, the organization has enabled itself to maintain rapid growth. To date, the organization has and plans to continue implementing key operational innovations such as centralizing administrative functions, frontline incentive structures, franchising, etc. The combined senior management team experience in the retail and banking sectors reinforces their growth strategy.

Equitas is led by Vasudevan Vasu, a visionary and entrepreneurial leader with a background in commercial finance.  With almost 20 years experience in the Indian finance sector – specifically launching businesses lines at Chola Finance Ltd, one of India’s most successful finance companies—he has earned the respect of the Equitas team.

Equitas currently serves 10,000 clients and has aggressive growth plans for India. Nearly 100 percent of its clients are women and typically borrow loans of $53 USD. The organization has been focused on the urban Chennai region of India but has plans to expand across Tamil Nadu and beyond throughout the rest of the country.

The X-Interview

P. N. Vasudevan tells Global X: “Poor women usually don't have a place at the table because they don't bring food. Microfinance creates a perceptible shift in the power balance."

The Challenge

Nearly two thirds of India’s more than 1 billion people live in rural areas, and almost 170 million of them are poor. Although urbanization is on the rise, three out of four of India’s poor live in the vast rural regions of the country. For more than 21 percent of the population, poverty is a chronic condition.  A major cause of poverty among rural communities is a lack of access to productive assets and financial resources. High levels of illiteracy, inadequate health care, and extremely limited access to social services only aggravate the situation.

Swadhaar is a new microfinance institution (MFI) which operates primarily in the urban slums of Mumbai – largely regarded as one of the most difficult areas to alleviate poverty. According to the 2001 Indian Census, 54.1% of Mumbai’s residents live in Mumbai’s slums, generally without even basic amenities such as running water or indoor plumbing. Until very recently, urban microfinance was thought to be impossible -- especially in Mumbai, regarded as one of the most complex markets due to its client base.


The Entrepreneur and the Solution

Swadhaar is changing all of that. Headquartered in Mumbai, Swadhaar opened its doors for business in March 2006 and already serves 2,500 individuals.  Swadhaar is a nonprofit organization whose mission is to assist the poor in building their own capacity in breaking out of poverty through access to financial services. Swadhaar provides an average loan of $85 USD and enjoys high repayment rates.

“We formed Swadhaar to bring opportunity and hope to the hardworking poor people of Mumbai trapped in poverty. A strategic partnership with Unitus and microfinance expertise from ACCION will move us much closer to our goal of providing financial services to 195,000 clients by 2011,” says Urmee Mehta Mankar, Swadhaar. “Historically, the urban poor have been chronically underserved by microfinance institutions in India – Swadhaar is hoping to change that.”

Swadhaar commenced operations in March 2006. In the next fiscal year (through March 2007), Swadhaar hopes to open two more branches. By the end of 2011, Swadhaar has the visionary plan of reaching 195,000 clients with access to microfinance services. Unitus is excited to partner with Swadhaar as they enter into the field of microfinance. Even as a recent start-up, Swadhaar already boasts an impressive pilot project history, a strong management information system and the willingness to invest in the technology and professional expertise that will make their institution a success.


The X-Interview

Global X interviews Urmee Mehta Mankar, who works with Swadhaar in Mumbai. Even though this microfinance institution is quite young (it was launched only two years ago), there is lot to be learned from this interview: why she loves Unitus, why she thinks that you should "get out into the field and learn about the market reality," and why a 12-year old boy who was selling tissue paper boxes at a Mumbai intersection became her mascot.