Pioneers in Microfinance

Microcapital has identified the following five Asian microfinance “pioneers,” individuals who have made long-standing contributions to the evolution and promotion of microfinance practices and/or technology in Asia:  Mechai Viravaidya of Thailand, Anton Soedjarwo of Indonesia, Vijay Mahajan of India, Bambang Ismawan of Indonesia, and Karunawathie Menike of Sri Lanka.  Below are short descriptons of the contributions of each:

Mechai Viravaidya – Thailand

Mechai Viravaidya is a Thai entrepreneur who has worked on poverty, health and HIV/AIDS issues since the 1970s.  In 1974, Mechai Viravaidya started the Population and Community Development Association (PDA) in order to promote family planning in Thailand as a solution to unsustainable population growth in the hope that this would free up resources for economic development.  PDA claims to be the first organization to use non-medical personnel to distribute oral contraceptives and condoms in villages and urban neighborhoods.  From 1974 to 2005, Thailand experienced one of the most rapid fertility declines in the modern era as the rate of annual population growth declined from 3.3 percent to 0.6 percent.  In 1991, Mr. Viravaidya was appointed cabinet minister in the 1st Anand Panyarachun government, and he became the chief architect of Thailand’s HIV/AIDS awareness and prevention campaign.  Today, PDA’s work now includes poverty alleviation, income-generation, microcredit, HIV/AIDS prevention and stigma reduction, environmental restoration, and democracy education.  In 2007, Mr. Mechai and PDA were awarded the Gates Prize for Global Health.

Mr. Viravaidya is best known for his public health initiatives, but he and PDA have made significant strides in the rural microcredit arena as well.  In 1988, PDA launched its Thailand Business Initiative in Rural Development (TBIRD) in order to leverage the business acumen of the financial sector for the support of rural development.  Today, PDA’s Rural Microcredit SEED project uses community reforestation as a tool for achieving village capital formation.  For each tree the community plants, a small amount of money is deposited into a capital fund for the village bank, which in turn provides micro-loans to individuals and groups. For more information, please see PDA’s website.

Anton Soedjarwo – Indonesia

Anton Soedjarwo first became interested in rural resource issues in 1968 when, as a civil engineering student, he was tasked by a Swiss Catholic priest with solving a village water problem.  Eventually, he and a group of other technically-oriented students started Yayasan Dian Desa (YDD).  YDD is a “hybrid” non-profit organization dedicated to improving the quality of life and sustainability of low-income rural communities.  Today, YDD is one of the largest foundations in Indonesia with a staff of about 300 who conduct projects all over the country.  Different “departments” within YDD focus on different areas: water and sanitation, waste water treatment, cooking technology, agriculture and aquaculture, and small-scale industry.  Small-scale industry activities include microfinance and other skills-training programs meant to assist rural villagers with their businesses.  The microloan program was started in 1995 and caters to a number of groups and individuals involved in small-scale farming, small-scale industries and crafts, cattle breeding, food stalls, and small-time traders.  For more information, please see a report on earned income projects in Indonesia.  Mr. Soedjarwo has received a number of awards, including the Majelis Ekonomi Indonesia award in 1976, the Kalpataru award in 1980, the Ramon Magsaysay award in 1983, and the Simavi Institute award in 1999.

Vijay Mahajan – India

A graduate of India’s Institute of Technology and Princeton’s Woodrow Wilson School of Public and International Affairs, Vijay Mahajan has dedicated his life to improving rural Indian society.  He has started a number of development and microcredit organizations and societies, including PRADAN in 1983, Sa-Dhan in 1998 and the Andhra Pradesh Mahila Abhivruddhi Society (APMAS) in 2001.  He has published a book on the rural non-farming sector in India and over 50 articles on rural development and microfinance.

Mr. Mahajan was chosen as a Schwab Foundation scholar for founding Bhartiya Samruddhi Investments and Consulting Services (BASIX).  Started in 1996 shortly after the denationalization of the banking system in India, BASIX claims to be the country’s first microfinance institution (MFI), and one of the first such organizations in the world, to attract commercial equity investments both domestically and internationally.   According to the Schwab Foundation, BASIX helped create a viable institutional space for MFIs in India by lobbying the government for changes to the Indian regulatory policy framework.  The average income of BASIX borrowers increases by 20 to 30 percent in the two to three years after their entry into a microloan contract.  The organization works with nearly 95,000 borrowers, mostly women, spread over 40 districts in nine states.  Over its history, BASIX has disbursed over 137,000 loans worth over USD 33 million. For more information, please visit the BASIX website.

Bambang Ismawan – Indonesia

In 1967, Mr. Ismawan started Bina Swadaya to work on the socio-economic development of Indonesia’s rural communities.  The organization traces its roots back to the Pancasila social movement of the 1950s, especially the Pancasila Farmer Association.  The organization first went into the publishing sector to create Trubus, an agricultural magazine meant to address the strong public demand for agricultural education and training.  Since that time, Bina Swadaya has grown tremendously and now divides its activities into seven categories: (1) Community Empowerment; (2) Microfinance Development; (3) Agribusiness Development; (4) Development Communication; (5) Alternative Tourism Development; (6) Printing Service; and (7) Providing Community Facilities.  To carry out its mission, Bina Swadaya organizes people from the community into self-help groups that then become the locus of the organization’s training and microfinance programs.  For more information, please visit the Bina Swadaya website.

Karunawathie Menike – Sri Lanka

Ms. Menike’s father was a poor farmer, and she was one of seven children.  Although she performed well in school, her family did not have the money to provide her with much education.  Undaunted by her situation, she made it her goal to fight poverty when and wherever she could.  She started her first savings group in the 1970s, and since that time she has worked to promote female-oriented economic development programs in order to achieve greater social transformation for her country.  Ms. Menike organizes poor rural women into savings groups and encourages them to save at least one rupee per month.  Each group spends its first year saving capital and every year thereafter supports business ventures for its members by offering them microcredit.  Ms. Menike also places a large emphasis on providing assistance for craft manufacturing and ranching and teaching collective bargaining to her clients.  She also created the community-funded Wilpotha Women’s Organization (WWO), a coordinating office for many of her programs as well as an additional savings facility that allows dues-paying members to take advantage of larger loans for business ventures.

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Source: www.microcapital.com; Thursday, November 13, 2008

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