MUMBAI: Ajambar Soi from Jharkhand defied the conventional methods of silkworm farming by innovating with modern techniques. His success helped the entire community of silkworm farmers in his village to boost their economic fortunes.
Soi is not a lone innovator. Along with 10 other entrepreneurs he was honoured with Citi Micro Entrepreneur Awards 2007 at a function held last week in Mumbai. The award acknowledged the entrepreneurial skills of the winning micro entrepreneurs and exemplified their spirit.
How did the have-nots achieve it? It was their spirit of enterprise that pushed them in the forefront. They all had a viable business module and were guided in accessing information and finance by their respective NGOs to establish a successful business.
Their ingenuity and hard work was recognised and it was no mean achievement because all the winners had started from below the poverty line. It was this spirit that adman and TV commentator Suhel Seth, moderating the panel discussion at the award function meant when he said, "We need to have a Mittal, Tata and an Ambani in every village of India."
It was also that one evening when the underdogs hogged the limelight while celebrities like actor and Member of Parliament Shabana Azmi, chairman of HDFC Bank Deepak Parekh, noted columnist Gurcharan Das, JJ Irani of the Tata Group and Sanjay Nayar, CEO of Citi India and several eminent guests cast admiring glances from the sidelines.
Another panelist Pramath Sinha pointed out that the earlier fear of a failed business project in the family was slowly going away. Agreed Seth, "Appetite for risk has improved."
The panelists felt one of the reasons for the growth of entrepreneurs was the growing disillusionment with the government. There were only 14 million jobs by the private sector and 20 million jobs by the government in the market. And so, there was a need to create many more jobs.
But there are challenges as one needs an effective legal system to start and close a business. Cultural factor to promote enterprise is required, too and family's support is needed.
Describing the scenario another panelist Minakshi said there had been a paradigm shift in India over the last few years.
"Consumerism is on the rise. And middle class no longer carries the burden of a job. They are setting up small business."
She further said that the role of financing was crucial. If one provided seed capital many more business would increase. Taking bank loans at times is a difficult process, especially if one decides to undertake a bigger business.
Chairman of HDFC Deepak Parekh was disappointed to hear about the difficulty to obtain loans from banks to fund business. "Banks, however, cannot do acquisition finance in India. Hence, micro finance is an effective tool for poverty alleviation. So it's popular." Indicating that those who secured smaller loans and had lesser risk appetite were better equipped to establish successful businesses.
Similarly, Shabana Azmi advised, "Micro finance is a revolutionary idea of our time and 98 percent success has been seen where small loans were taken. The ones who have taken bigger loans suffer a set back." Kishore Tiwari of the Nagpur based Vidarbha Janandolan Samiti echoes similar sentiment, "Now, most suicides are being committed by the prosperous farmers in the suicide prone area of Vidarbha. They take huge loans and suffer losses in business and are unable to pay it back."
In the latest human development index released by the United Nations Development Programme in New Delhi on Tuesday India ranks 128 in human development index out of 177 countries. The country ranked 126 in 2006. In the scenario where reportedly every 30 minute a distressed farmer commits suicide, the award highlighted incredible stories of 11 individuals who rose above their distressed stages to set up successful enterprises. Saluting this spirit of enterprise former US President, Bill Clinton in his audio-visual address at the award function said more than 20 nations were involved in micro finance.
Even in the face of license regime and before the advent of the free market economy in India, entrepreneurs were born - Dhirubhai Ambani of Reliance was one of them. The success story of those individuals proved that people facing grim situations could and should go out to do something by themselves, if they have to change their lives and possibly bring succor to others around them.
Micro finance has the potential to curb farmer suicide in some of the most distress regions in India. The State Bank of India, Central Bank of India, few corporate houses and NGOs like the UNICEF have promoted and credit-linked thousands of all-women self help groups (SHGs) in the last three years. Yet, the district of Yavatmal in Maharashtra has witnessed a large number of suicides.
Tiwari said that the skeletal for micro finance was ready and if handled appropriately it could flourish in the state. "There are already 2 lakh SHGs in the six districts of the suicide prone area," he informed.
However, the reason micro finance has not picked up in those areas was because of goat farming, which was promoted by the government as secondary structure to provide relief to the farmers and which resulted in loss. Secondly, the loss proportion of various businesses undertaken since 2004 and lack of market linkages killed businesses.
"Revival of crop farming is the need of the hour if micro finance and the distress state of the farmers is to be handled. In the other parts of rural India people depend 50 percent of the time on crop farming. We need food and health care to sustain any business."