Keya Sarkar: Study falls short of expectations

OUT OF FOCUS

The advantage of writing a column is that I get to know about what is happening in the world of microfinance even from quarters where I am not looking.

A few weeks ago I received an email from Prof. S Rajagopalan of Icfai Business School, Ahmedabad, asking me whether I would review a book co-edited by him and Nirali Parikh (faculty associate with the same organization) titled Microfinance: Impacts and Insights.

I answered in the affirmative, the book arrived and here I am. Published by Icfai University Press, the book is produced well. But it seems like an effort to cash in on the huge interest in the subject in India and the fact that many educational institutions have started offering courses on the subject and there is a lack of available literature.

My expectation from a book published now in India on the subject would be that it would harness the learning from the many microfinance companies now working in India. Considering that it has been published last year, the book could have analysed in much greater depth the situation in India. The policy framework, the emergence of many large MFIs, and the new focus on the urban poor are just a few topics that would have made the book less dated.

Instead, Rajagopalan and Parikh have chosen to put together articles by scholars from across the globe on the subject. This is not to undermine the worth of the articles that constitute the book. They are exceedingly well written and a pleasure to read. In fact the editors have managed a 360-degree look at impact assessment "" from issues in designing effective impact assessment systems to evidence of poverty alleviation to impact on women's empowerment. The limited point I am making is that considering in the last five years the Indian microfinance industry has made huge progress and has in fact become a place from where the rest of the world now wants to learn (the open house that the Hyderabad-headquartered microfinance company, Basix, holds every quarter is increasingly attended by practitioners and scholars from across the globe is only a case in point) it is a pity that the book does not capture enough of the Indian experience. Particularly when the Indian microfinance companies, both small and big, are documenting a lot of their strategy and the impact of their outreach.

However, while each country is different in its demographic pattern and more significantly in its policy framework, there is little doubt that experiences from across the world will have some relevance for students and practitioners in India.

Many of the microfinance companies that have been recent start-ups and many that have recently increased disbursement volume manifold are routinely doing impact assessment surveys. But as I have mentioned in this column earlier, although these efforts are commendable, many of them lack in sophistication. Both Rajagopalan's own article titled "Impact Assessment in Microfinance Methodologies and Tools" and that of Anton Simanowitz titled "Issues in Designing Effective Microfinance Impact Assessment Systems" would be valuable readings for those undertaking such surveys.

The second section in the book is a compilation of articles on the role played by microfinance companies in poverty alleviation, written by Christopher Dunford, Martin Greeley, Bernd Balkenhol and another written jointly by Shannon Doocy, Dan Norell, Shimeless Teffera and Gilbert Burnham. All these articles, which analyse impact on poverty while underscoring the fact that there are no easy answers, at least sensitise the reader to the whole gamut of reactions that are set in motion by extending credit to those who do not have access to mainstream finance.

The next section on women's empowerment as a result of their availing of micro credit has an article by Ranjula Bali Swain, which talks of a study of the SHG bank linkage programme in India. But this survey too is dated 2003. The final article by Naila Kabeer concludes that microfinance cannot automatically empower women any more than education, political quotas, access to waged work or any other interventions towards women's empowerment.

The book is certainly a good compilation but for students in India it does not reflect the vibrant industry that the microfinance companies of today comprise. It would be interesting for publishers to cajole practitioners to document their experience in dealing with policymakers, politicians, administrators, competition, in order that studies on microfinance can be a little more than an academic pursuit.