An Indian credit crisis success.

On Friday Louise and I managed to go to Kalkaji slum, it was very significant for Louise as this was the same slum she went to 10 years ago with her school, Methody. We were tagging along with another couple who were starting a fortnight of volunteering there and also a Dutch family who were interested in the work of Asha.

It was quite similar to our reception in Trilok Puri when we first arrived with garlands of flowers placed over our heads and a tour of the center with similar programs/groups running such as the computer literacy classes and Bal Mandal (Children's group). The Womens group was meeting when we arrived and we sat with them, drank tea and asked questions. The majority of the questioning was being led from the Dutch family partly because they were very keen to see the benefit of Asha and we had already asked most of the questions/already knew of the work that they were asking about, What did strike me though was one of the answers to the questions asked which was in regard to the financial benefits Asha has been able to provide to slum dwellers.

I'll try and explain the history and it will be checked by Louise and therefore will have a combined accuracy of about 63.56%, 63 of which will be Louise's contribution. In truth I've lifted most of it from Asha's Annual report so it is pretty accurate.

Millions of Delhi's slum dwellers have struggled financially for years with no access to financial services. Those who tried to approach banks were turned away, and others just felt that banks were only for the well-off members of society. With no other options, they rely on the services of moneylenders who charge crippling interest rates of around 60% APR, and always end up worse off.

Asha is determined to remove the obstacles that keep slum dwellers enslaved in the cycle of poverty. They have worked with the Government of India's Ministry of Finance to develop a scheme that would enable slum dwellers to open zero-balance bank accounts and obtain low interest loans. Staff and community volunteers publicise the scheme, explain the benefits to people who could make use of it and assist subsequent applicants with the custom-designed forms. Over the past year, 10,617 bank accounts have been opened and over Rs. 73,85,461 (approximately 156,000 USD) granted in loans.

Here we have a credit crisis, not caused by over spending, major risk taking or sheer greed but by poverty, desperation and persecution for being poor.

A lot of the women we talked to had taken up these loans, from as little as 5000 rupees (£70), which they would pay back over a period of between 1 and 5 years. That wasn't what struck me, what struck me was the answer to the following question:

What is the repayment success rate? Answer: 98%.

If we asked RBS, Lloyds or any other taxpayer owned bank whether they would be keen to take on such a reliable group then I've got a funny feeling they might be nibbling at your shoulder blade by now. I think we are sometimes too quick in the west to jump to the conclusion that if someone is poor it's because they are lazy or just plain stupid. Banks too can be too quick to write someone off as a potential lending opportunity as they don't live in the right street or have insufficient income.

But you know what, these women don't care about bakers bonuses, MP's expenses or footballers salaries, they just want to be able make some decisions for themselves. They gave an impression that life is very good for them now, that since they have brick built homes they don't have to worry (as much) about the monsoons. I got a shock that day when we walked around the slum and visited some of the homes, most didn't even have a door and if you have a smaller bathroom than their whole house you'd be looking to build an extension. Some may say it's all relative, what I say is that Asha has given these people what they and all of us are really looking for, to be able to decide for themselves.