Grameen Financial Services founder talks micro-finance

It takes commitment and passion to be successful and Vinatha Reddy, founder - chairman, Grameen Financial Services Pvt Ltd, has proved just that…

Could you tell us a bit about your life before Grameen happened?
Before Grameen, I was part of an NGO working in the field of education, solid waste management and Women’s empowerment. Being a trained Montessori teacher, I also worked at Gurukul (a Montessori house of children) teaching children between the ages 2 and a half  to 6 years.

How did the idea of micro-finance come to you?
Growing up as a child, I spent a lot of time with my grandmother in the village. The poverty I saw in the village remained a painful memory. So, when I came across Professor Muhammad Yunus’ work with the poor, through the Grameen Bank in Bangladesh in a book called Give us Credit by Alex Counts, I was inspired enough to replicate the same work in our village.
 
What is the exact agenda of Grameen?
Sixty three years since Independence and 41 years since bank nationalisation, more than 50% of Indian households remain unbanked. They have no access to institutional credit and are dependent on informal high cost credit. At Grameen Koota, we borrow wholesale bulk funds from banks and on-lend to our clients who come from poor but economically active households. Grameen Koota’s agenda is to link unbanked households to institutional credit to enable financial inclusion, which in turn will lead to economic and social empowerment.
 
What were the challenges you faced at the beginning?
The poor were not considered credit worthy, so in Grameen Koota’s early years we faced the challenge of accessing funds from banks for on-lending to our groups of women. Our other challenge was building adequate systems and processes.
 
Looking back, can you recollect some of your best moments, as far as Grameen is concerned?
During workshops and field visits, we meet many of Grameen Koota’s women clients. It is both humbling and heart warming to hear their stories of positive change and empowerment. They are confident, run micro enterprises, have created assets and now have plans for the future.
 
Do you think Indian society could do with more micro-finance institutions?
As Professor Muhammad Yunus says, credit is a human right and if the poor have access to it, they will work themselves out of their situation. So, yes, microfinance institutions have a critical role to play in enabling financial inclusion amongst low income and unbanked households. Microfinance institutions are playing a vital role in linking poor households to India’s mainstream economy.
 
Do you get enough support from the government?
The microfinance sector is well recognised by the government for its work in reaching the last mile households with financial inclusion. The government supports and promotes this sector by making it eligible to access priority sector funds from banks. It also plans a microfinance bill to promote the orderly growth and development of the sector.