Harry O’Sullivan is a student at The University of Melbourne and has been a micro-credit volunteer at IIMC, Institute for Mother and Child, Kolkata.
Fifteen Rupees per month, this is how much it costs for a child to attend Dukherpul School, located in rural West Bengal, India. However, despite this minute cost, roughly 0,19€, many of the children that are not sponsored tend to drop out before secondary school because their family cannot afford the tuition. What makes this reality all the more heartbreaking is the obvious love the children have for school and the joy they receive from learning.
While on an overnight stay at Dukherpul School, I got to see firsthand how the school operates and what material they are taught. I was amazed when I sat in on a class of 5 and 6 year olds and the children were learning simple mathematics and spelling in Bengali, the language of the region, and English. When I asked the teacher, appropriately named Joy, if it is common for the class-work to be so advanced he replied, “The majority of children only have 5-6 years of schooling so it is important to teach them as much as possible”.
Although the importance of education is becoming more and more apparent to the people of West Bengal, the crippling poverty of the region deprives most of the basic right to education. This is where Dr. Sujit Kumar Brahmochary and his NGO, Institute for Indian Mother and Child (IIMC), has stepped in and tried to help.
Dukherpul School was built by IIMC, as well as 23 other schools, located in different parts of rural West Bengal. This education initiative is part of a four-dimensional plan that Dr. Brahmochary has devoted the last 24 years of his life to. The vision of IIMC is to alleviate poverty, empower women and implement basic healthcare into some of the poorest regions of India. In addition, Dr. Brahmochary insists on an all voluntary work force in order to keep costs low and charges patients a symbolic amount of money, as he strongly believes that ‘charity’ is not the answer. IIMC aims to achieve this by, firstly, offering basic medical treatment to over 120,000 patients every year while simultaneously running a micro-credit bank and a social development program. These projects, as well as the 24 schools, including pre-primary, primary and secondary, form the four-dimensional approach developed by Dr. Brahmochary.
This unique model was born out of an intuitive observation made by Dr. Brahmochary in the early inception of the organisation. IIMC initially offered only medical treatment from a small branch in Tegharia, Kolkata. After a number of years, he found a pattern, the same patients were returning with the same basic problems. His solution was education. In 1994, Dr. Brahmochary and his wife Barnali, a teacher, formed an education program for the children of this region. The program allows donors from all over the world to sponsor a child and allow them to attend school. At present, over 4,500 children attend IIMC schools, with over 2,500 children being sponsored. This additional program allowed children to be educated, among other things, about hygiene and sanitation and pass this information on to their community, thus creating a more permanent healthcare impact in the region.
Having observed the growth and success of these first two initiatives, IIMC decided to commence a micro-credit program. Micro-credit is the brainchild of Bangladeshi economist Dr. Muhammad Yunus. It connects the world’s poorest with the financial services we, in developed countries, take for granted. The concept encapsulates offering small loans to individuals (from 10€ to 100€), with no collateral. The only real requirement is that the loan should be for a “business purpose”.
This program, solely directed at women, was designed to have a multi-faceted impact on individual women and, more broadly, society as a whole. Firstly, it was and is IIMC’s believe that sexual discrimination is a core problem within many regions of India. In order to combat this deeply ingrained issue, IIMC consider the empowerment of women to be a central factor in removing this prejudice. By offering loans to women to start a business, and thus earn an income, IIMC felt that there family, and the community, would respect them more and value them as equals.
Although the IIMC micro-credit program is based on Dr. Yunus’ model, due to the low costs of running the organisation, IIMC have been able to make some quite amazing changes. Dr. Yunus recommends an interest rate on loans of between 12.5% and 20%, yet IIMC offer a flat 10% interest rate regardless of the amount or riskiness of the loan. The maximum loan is 15,000 Rupees (200€) but initially one can only borrow 1,000-3,000 Rupees (10€-40€), thus hedging the risk of large defaults.
While at first the standardised interest rate may seem commercially unviable, this observation drills to the core of Dr. Brahmochary vision: a socioeconomic solution. That is, working with their ‘clients’ in a social relationship. In many of the micro-credit branches, the branch manager also lives in the village and knows the women in a cordial manner. Furthermore, what one must understand is that micro-credit does not work like a normal bank. Women involved in the program have never had savings accounts or access to ‘borrowed money’. As part of the program, women open a savings account, which attracts 4% interest, higher than regular banks at around 3%. These generous rates are achievable because of the 700-odd volunteers that work full time for the organisation and receive only small honorarium pay for daily expenses.
As mentioned above, loans are given at 10% interest and repayments are made over the following year. This margin of 6%, between interest on loans and savings accounts, is used to pay for the overhead expenses of each micro-credit branch.
Another amazing feature of this micro-credit program is the default rate. It is virtually zero. As part of IIMC’s social approach to micro-credit, managers encourage women to discuss with them, or with their group committee, if they are having problems repaying their loan. Managers will never pressure women to repay and will work with them to solve their issues.
Take for example Lipika who came to IIMC to create a savings account. After many months she had saved around 300 rupees, after depositing 10 to 15 rupees per week. Suddenly her husband started to become physically violent with her and demand her to give him money for alcohol. Lipika came to IIMC crying and asking for help. Their solution was for Lipika to bring her husband to the weekly micro-credit meeting and then offer them money to start a business, after explaining to him the error of his ways. Now Lipika and her husband have a small shop and a cart that they sell groceries and have repaid their initial loan of 3,000 rupees and several more loans of up to 15,000 rupees. This is not an isolated case. I was taken to meet other successful cases including a paralyzed woman, Molina, who was given a loan and a wheelchair so that she was able to sell fish at the market. Molina has paid back more than 10 loans of up to 15,000 rupees. Of the 8,000 loans given in the past 12 months, only 2 women have been categorized as potential default risk and are receiving help from their branch manager.
IIMC has grown from a simple medical clinic in Kolkata into an organisation that is supported by 15 countries worldwide and 700 local volunteers helping to achieve Dr. Brahmochary vision everyday. Their unique, four-dimensional approach to education and healthcare is having a lasting impact all over West Bengal.
As Mrs. Brahmochary says “India is 50 years behind western countries” but it is obvious from what I have experience that this program is a step in the right direction.