The Rural Credit Rush in India
By Jui Mukherjee
Ranu Kalita is a weaver living in the small riverside town of Changsari near Guwahati in Assam. A year ago, she and her husband were struggling to make ends meet. But then their fortunes turned when a microfinance company lent her ₹30,000 with which she started a small weaving business at her house. Today, the 38-year-old is a proud entrepreneur who earns around ₹200-300 a day. Her husband, too, helps in running the business and her family is now in a better financial position.
Prema, who used to be a food cart operator in Avadi near Chennai in Tamil Nadu, has a similar story. She took a loan of ₹35,000 from a microfinance company with which she set up a catering business on rented premises. Her daily income then shot up from around ₹600 to ₹1,500.
Kalita and Prema represent the dreams of thousands in small towns and villages across India who have turned around their lives because of small-ticket loans from microfinance organisations and fintech startups. The lenders are looking to cash in on demand for credit in rural India which is expected to rise along with a surge in consumption.
Photo courtesy of Meena Kadri.