Microcredit programs generally lend or grant money to poor people to help them start a business. A small Indian NGO has turned the model around, providing in-kind loans to help poor people make money.
 | In-Kind LoansMataprasad managed to build his own small business in Delhi, India with in-kind loans from Family of Disabled (Photo: Family of Disabled) |
Instead of providing budding entrepreneurs with a cash loan as most microfinance institutes do, the Family of Disabled (FoD) — a charity that supports disabled Indians in Delhi — lends participants in its ‘Apna Rozgar’ scheme the cash equivalent in goods to sell: soft drinks, telephone cards, newspapers, stationary, beauty products, clothes, and similar small-ticket items. It is then up to them to convert those assets into profits.
“It is a form of interest-free loan, the upper limit is 3,000 rupees (54 euros/74 dollars) and we never give them cash,” says FoD founder Rajinder Johar, himself a quadriplegic. “Cash might get diverted: if someone is sick, to repair a house, for education of children.”
 | Key Facts about the Apna Rozgar Program |
Where the participant is particularly poor or deserving, FoD will give the funds as a grant. Field workers then help to "set up shop" and "stock the shelves."
Teach them how to fish
“Apna Rozgar has a three-pronged effect,” Johar explains. “The first is to eliminate poverty, the second is to give employment to disabled people, and the third is to bring them into the mainstream.”
He is convinced that because of the lack of facilities, transport and access for disabled people, self-employment is the best way for FoD’s target group to achieve long-term independence and dignity. The scheme takes as its motto the Chinese proverb: “Give a man a fish and he will eat for a day. Teach him how to fish and he will eat for a lifetime.”
To be poor and uneducated in India is debilitating, but to be poor, uneducated and disabled often means total marginalization. “Here in India 90 percent of the disabled population is illiterate, unskilled and below the poverty line,” says Johar. Many of India’s disabled consequently turn to begging, or to unscrupulous moneylenders.
From exclusion to ownership
But not Mataprasad, a Delhi resident who is crippled by polio in both legs. When he enrolled in Apna Rozgar in 2000, he had no income to speak of. Now, he earns 8,000 rupees a month (126 euros/172 dollars) selling mobile phone covers and accessories from Delhi’s commercial hub, Connaught Place.
"I own a mobile phone. I have bought a jhuggi [shanty hut]. I have kept a maid. I've also engaged an assistant for my business,” he says proudly. Since 1998, FoD has assisted 316 disabled people like Mataprasad. Johar says 80 percent of them have been financially successful with 63 percent now holding bank accounts.
Johar estimates that about 70 percent of Apna Rozgar entrepreneurs earn 3,000 to 4,000 rupees a month, well above the official poverty line, which is around 1,500-1,600 rupees of monthly income. Some 20 to 25 percent even earn 4,000 to 7,000 rupees, and the top 4 to 5 percent earn up to 10,000 rupees a month.
Restoring pride and self-esteem
To be successful, the entrepreneurs receive training from FoD case workers in how to run a small business, from basic accounting and stock-keeping to lessons in customer service. It is a steep learning curve. The scheme lasts for a year only. Once their business gets running, participants are monitored every few months, and they are expected to save regularly in order to pay back their loan in small installments, about 200 to 300 rupees a time.
FoD’s approach represents a strategy for empowering people too poor or marginalized to access mainstream microfinance. It makes up for a shortcoming of traditional microfinance that often ignores people whose disability, lack of education, or sheer poverty makes managing a cash loan or grant too daunting or risky. Most importantly, FoD restores a feeling of pride and value in people who had been marginalized for most of their lives – something money cannot buy.
editor: James Tulloch
publishing date: July 17, 2007
1. Participants are given a one-off interest free loan of up to 3000 rupees worth of goods/stock. They are never given cash.
2. FoD supports each participant with training and mentoring for one year.
3. 80 percent of Apna Rozgar participants have succeeded and live above the poverty line.
4. 70 percent of Apna Rozgar entrepreneurs earn 3000 to 4000 rupees a month.
5. 63 percent of Apna Rozgar participants now have a bank account.
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