Jun 14, 2010
Beggars Loans, aims to rehabilitate beggars into society by encouraging them to begin income-generating activity at their place of begging. Professor C. Gopinath discusses the innovative concept led by the Grameen Bank of Bangladesh that enables them to become credit-worthy.
I felt I had spent more time sitting in traffic than visiting people and places during my recent visit to Dhaka, Bangladesh. Like all major metros of the world, but especially in developing countries where it takes a while for infrastructure to catch up, Dhaka has its share of major traffic snarls, notably during office hours. The mix of vehicles along with indisciplined driving behaviour adds to the confusion.
Most of us are upset by this. We ponder about the increased petrol consumption of the vehicle due to the stop-and-go motion, the pollution from slow-moving traffic adding to health problems, the increased road rage, and of course, the wastage of productive time.
But one group of people must be quite pleased (although they don't look it) with the traffic jams. They are the beggars.
Here is an opportunity to confront high net-worth individuals, who have nowhere to go, and see if their purse strings loosen a bit. So you have mothers with clinging babies, the blind, physically handicapped people in crutches coming near the car windows with their arms outstretched. If we are in air-conditioned comfort, they tap the windows to attract attention.
Confronted in this manner, our reactions are varied. We suddenly develop an interest in an activity on the other side of the vehicle, or begin to concentrate on the newspaper in hand.
A few of us do break down and offer a coin. Most, though, look at them and wonder. They are a traffic hazard, weaving between lanes of vehicles.
The able-bodied ones should be looking for work rather than begging. The government should be solving this problem, it's not mine. Move on.
Grameen Bank’s Initiative
Governments have been trying to chase away the problem (China rounded them up before the Olympics and kept them out of sight), but Grameen Bank in Bangladesh decided that it would do something about it.
Their innovative attempt to convert beggars into entrepreneurs deserves our attention. Grameen is giving ‘Beggars Loans', also called ‘Struggling Members Programme.'
A conservative's view of a beggar would be one who shirks work and tries to get by in life. The Grameen Bank, on the contrary, believes that begging is the last resort for survival for a poor person.
The Bank has earned a name for itself in alleviating poverty by giving loans of small amounts to the rural folk of Bangladesh to help them with their various income-generating activities.
The potential borrowers have to first form a group of five members, undergo training, and then as members of the Bank, become eligible for credit. The loan is collateral-free but carries an interest of 10%.
Since 2002, the Bank decided to extend its lending activities to beggars. As Jannat E-Quanine, their General Manager explained, these loans are interest-free and many of the existing rules of the Bank do not apply. They are not required to form a group, for instance. They are required to return the loan, although repayment terms are flexible.
The beggars are not told to stop begging; the attempt is to slowly rehabilitate them into society by encouraging them to begin income-generating activity at their place of begging! It is believed that, over a period of time, the beggar would want to give up begging.
Of the 111,713 beggars who have joined the programme, the Bank estimates that about 20% have stopped begging. About 10% have joined the Bank as mainstream borrowers.
Groups and centres are encouraged to become patrons of the beggars, and each beggar is assigned to an associate of the Bank who tries to get them to attend centre meetings so they can see how other poor people, especially women, have taken control of their lives and participate in a collective decision-making process.
The recovery rate of beggar loans is about 77% as against a 97% loan recovery rate for the other loans of the Bank.
Beggar members are covered by life insurance and loan insurance programmes, for which they do not pay any additional costs. What would a beggar do with a loan? These are for very small amounts, such as to buy a mosquito net or an umbrella. After a while, the beggar is encouraged to get hold of a basket, buy a few items, and go selling stuff from door-to-door.
The beggar receives an identity badge, which with the Grameen logo, is worn with pride in Bangladesh. This also gives confidence to those dealing with the beggar that there is a national institution backing the effort.
Quanine made an interesting point about the programme. She said the idea is to take the beggar into ‘intensive care'; they are so vulnerable that they do not want to make eye-contact with the person from whom they are seeking alms. This clearly did not seem to fit the woman who was tapping my glass window. She seemed aggressive, and stared me straight in the eye, as if to shame my behaviour. But then, there are beggars and there are beggars.
There are people who believe it is more profitable to beg than do a day's honest work — never mind if the work in question is less than honest. But let us not parse meanings here.
The question is whether we are willing to take a few steps to solve the problem rather than analyse it to death and then expect the government to do something about it. Gandhiji said that we must be the change we want to see in the world. Clearly, Prof Yunus follows that dictum.
(The author is professor of international business and strategic management at Suffolk University, Boston, US. firstname.lastname@example.org)