Into India

Two years ago, Opportunity International Australia entered India with a plan to provide microfinance to families in desperate need. Today, the India Program is reaching out to more than a million people, supplying small loans in city slums and some of the most isolated rural areas imaginable.

A few years ago, Sunita, a mother from a slum in Delhi, India, used a loan of $171 to purchase some pigs, hoping to raise them and use the money from their sale to provide for her children. But not long after she bought them, Sunita’s pigs were stolen. Local police would only help if she would pay a bribe that she could not afford. Bravely, Sunita started again, applying for another loan from Shikhar, one of Opportunity International Australia’s partners in India. With the money, she purchased more pigs and began to breed them at a small farm outside of Delhi.

Today, Sunita’s farm has more than 60 pigs. The income she has made from her business has meant she has been able to provide proper meals for her family, and even send her children to school. She no longer needs small loans to help her through – this young mother has a second business – a market stall – and is even employing others in her community, providing an income for them, too.

Sunita is just one of many people who have been given a hand-up out of poverty through microfinance. Thanks to your giving and support, Opportunity International Australia’s India Program is currently helping more than one million people out of poverty – people just like Sunita. Back in 2007 before our India Program launched, many of these people struggled to afford food and clothing. They lived in slums or other makeshift homes in some of the poorest areas of the country. Their children didn’t go to school – they couldn’t afford the fees or the text books, and many had to send their children to work simply to survive. Today they have businesses, regular incomes and money to spend on all of the things they should never have been without.

When our program launched two years ago, our estimates suggested that microfinance was serving close to 12 million people in India, a little over one-tenth of an estimated 100 million potential households where microfinance could be a viable intervention. That left at least 88 million households unserved and trapped in a cycle of poverty.

Today, one million of these people now have loans. Support from Australian and international donors has meant we have been able to raise and distribute more than A$28 million to our Indian subsidiary Dia Vikas Capital, who has then been able to fund our microfinance partners as they distribute small loans to people in need. Much of this money has also been multiplied through leverage. When we invest equity in a microfinance institution, they are able to leverage our investment by borrowing from commercial lenders, bolstering the amount they have to lend to the poor. In India, this is typically around 4-6 times. In addition, the nature of microfinance means that this $28 million will constantly be at work – once a borrower has repaid their loan, this money will go on to help someone else and the cycle continues.

Opportunity International Australia now has 16 partnerships with microfinance institutions in India, working through more than 730 branches. A mix of start-up and established organisations, these microfinance institutions work in rural and urban areas right across the country – wherever there is a need. The majority of our partners work in the underserved north of the country – here, the need is great.

Many of our clients in India are women, who, in developing countries, typically have fewer options to earn a livelihood and provide adequate food, housing and education for their children. KC Ranjani, director of our India Program, say this: “Women are the ‘change agents’ of the family. Research shows that women are more likely to invest their earnings into improving the lives of their whole family. By encouraging women to build businesses and take charge of their futures, we can impact whole families and communities.”

The impact of microfinance in India has been tangible. It is not a silver bullet, but in many cases, microfinance is the only service reaching into poor communities. Without the hand-up it provides, many poor families have very little hope.

In 2010, we aim to provide small loans to twice as many people in India, helping millions make their way out of poverty. But we can’t do it without you. Please give and help set people free from extreme poverty. Families like Sunita’s are waiting on us.

If you are able, please donate today.