Incubating Microfinance Institutions in Southern Rajasthan, by Dave Bullon Patton

I arrived in Rajasthan in September ready to learn about microfinance. I was dissatisfied with my previous life in the corporate world, and was yearning to do something meaningful and deeply fulfilling with my life over the next 8 months. Seven months later, my mind has begun to discover the intricately multifaceted nature of development work and my heart has found a life-long passion for alleviating poverty.

I have been working with ACCESS Development Services, an Indian non profit company, which has a presence in several Indian states. ACCESS partners with local Non Governmental Organizations (NGOs) to upgrade the livelihoods of India’s poorest and develop local financial services that can support their income generating activities. I’ve been working with a microfinance consultant, a livelihoods consultant, an administrative assistant and our fearless team leader. I have been involved with various projects, but I will focus on my involvement with the Microfinance Insititution (MFI) incubation project.

I have learned about the steps involved in incubating MFIs by helping the team incubate the first 8 MFIs in the region. So, what have I actually been doing? I have participated in Institutional Capacity Assessment Tests; written Business Development Plans, funding proposals and operations manuals; organized workshops; participated in exposure visits, developed management information systems (MIS); and trained MFI staff on various financial, human resource and microfinance concepts. At the Towards Sustainable MFIs workshop that I was asked to organize, we spent 2 days walking the participants through critical concepts that they must master to become self sustaining organizations.

In order to reinforce some of the concepts shared through workshops, we organized an exposure visit to a well established MFI, the Maha Shakti Fountation (MSF), on the other side of the country. It was a long train ride! Below, on the left, the partners are learning to use MSF’s sophisticated MIS. On the right we are visiting a family that runs a very successful vegetable farm with a working capital loan from MSF. This exposure visit made a world of difference as vague theoretical concepts became concrete action plans in participants’ minds. Listening to MSF’s history gave participants the confidence to move forward. If they could do it, so can we!

While group learning is very helpful, an important part of my role has been visiting partner organizations to give their microfinance staff one-on-one support as they gain confidence with some of the concepts shared in workshops. We have spent a lot of time with microfinance program directors such as Jayesh from PROGRESS (pictured below in red). One year ago Jayesh didn’t even know the meaning of the acronym MFI. At this point he is an empowered manager with ambitious expansion plans. On the left, I was enjoying some chai, while reviewing PROGRESS’ Operations Manual with Jayesh and Nomesh. On the right, Jayesh is appraising one of the lending groups that is benefiting from PROGRESS’ microfinance program. These 11 women are an example of the poor people that microfinance aims to help by providing contextualized savings, credit and insurance products that can support their livelihoods.

As a team, our efforts over the past 7 months have enabled our partner NGOs to disburse an additional USD 125,000, giving over 1000 men and women in Southern Rajasthan access to a microloan. I am thrilled to have been a part of transforming the lives of those people! By interacting with consultants, managers, bankers, funding agencies, government officials and clients I have learned that microfinance is a small part of a larger package of solutions that must be delivered together in order to make a lasting impact. I am grateful to ACCESS because the experience that I have gained in India has prepared me for my next role as a research assistant in microfinance and livelihoods in Peru. Thank you FSD for putting me in touch with such a great organization!