If you are a regular follower of India media, one thing would strike you - the incessant talk about gennext personalities. These babalogs are projected as the future messiahs of the particular field. It may be Rahul Gandhi and Sachin pilot of Politics or Gautam Gambhir of cricket . The all-knowing anchors and columnists have analyzed and dissected these genext personalities to the very last atom and molecules in various talk shows & news analysis.
What about the gennext moneylenders? Are they going to be same as their older counterparts who had enjoyed virtually monopoly or still enjoying in some parts of world or they are the new dinosaurs who would be crushed by the benevolent and great force of micro finance? When I think of money lender the picture of one famous Oriya actor comes to mind. This guy has played the villainous role of money lender in as many movies I can remember. So my feelings towards this particular class has something to do with the great acting skills of this famous actor rather than any personal experience.
A recent visit to Chidambaram’s home town helped to understand the implementation of FINO's BC model introduced me to the actor's real-life counterpart and challenged my conventional thinking on moneylenders.The FINO agent who was accompanying us to interact with various microfinance clients took me to a man who introduced himself as one of the customers of FINO smart card service under the business correspondent (BC) model.
But there was one difference between this person and others whom we met. He seemed to be more affluent than the other clients and claimed to own 2 shops and 2 acres of agricultural land, which happens to be way above average in this locality. We asked this man on his intention to take credit this BC scheme; his confident "NO" made me bit confused and it was in stark contrast to our most of respondents who were very eager to avail a loan facilities now or some time in future. He explained that he is using the smart card for its convenience of small savings rather than anything else.
I don’t know what prompted me, but I just asked him “Do you lend money to people in this locality”? His positive reply increased my curiosity and excitement. But I was not happy - he was not my typically villainous looking person, but rather possessed a smiling and affable countenance. So the happiness of seeing a money lender was not there as he was not the money lender whom I had imagined. On probing further what came to light is that on average he holds something around 30-40 K outstanding loans per month with an interest rate at 2.5 % per month.
In spite of having so many loans outstanding, he in fact takes loan form IOB once in a year. He sees this as a working capital loan for the cultivation of his agricultural lands. He promptly repays this loan after the harvest season. His logic was that there was no need to invest his savings on agriculture as he would recover it very soon. He never seemed to have faced any difficulties on getting loan for the same.
One thing surprised me is about the astute accounting and financial knowledge of this person. Even if I am sure he doesn’t know the theory but he seems to follow the main theory of accounting that says never mix business account with personnel expense account. So in sum, he uses smart card to deposit proceeds from daily business and subsequently withdraws depending on business requirement. For agriculture he doesn’t make any capital expenditure from his own savings, rather he prefers to take working capital loan which he can repay from business returns. He uses his other surplus capital on money lending activities where he can get on average 20 % more interest than any saving bank account.
So one thing struck me, he is not the typical money lender but rather a common man like everybody else in the locality. The only difference is that he is more affluent and knows his finance pretty well and uses his surrounding environment to get maximum return on his investment. In fact he may be the gennext money lender - who in fact doesn't match with my stereotyped money lender picture from Oriya films. Is he good for society?? You can take the call on that.
Also another thing that struck me from the field visit is the acute need for a small convenient saving product among the already banked and so called well off people.
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