A Conversation With Ela R. Bhatt
Friday, September 30, 2011
Ela Bhatt, a Gandhian and a lawyer who founded the Self Employed Women’s Association in Gujarat, is sometimes referred to as the mother of microfinance. She helped start Mahila Sewa Co-operative Bank in 1974, two years before Muhammad Yunus began the project that would later become Grameen Bank.
Ms. Bhatt, who is also a member of The Elders, was recently appointed to the board of the Reserve Bank of India, the country’s central bank. I spoke to her recently as I was working on a story about India’s effort to expand banking to the large number of rural Indians who do not yet have bank accounts.
She said some rural poor save money through post office accounts but many place it in unsecured parts of their home or deposit it with people they should be more wary of. I also asked her about the troubles of the microfinance business and her ideas about strengthening local economies.
The R.B.I. estimates that about 50 percent of Indian households do not have bank accounts. Do you think this is because they do not have access or do not feel that they need accounts?
It’s a question of access and also acceptance. Formal banks are not keen to have accounts of the illiterate and semi-literate, of those small, small amounts. And it’s too much work. It’s also accessibility. There is a total lack of financial literacy.