Rural vs. Urban Microfinance

One of the things I'm constantly aware of while conducting our study in Jaipur is how different and affected the responses we recieve are, purely because of the fact that all our respondants are located in, or near the city. Almost all of the small amounts of money injected into the businesses of these women, gets used up efficiently by the local markets that provide cheap resources and at the smae time supply a seemingly inexhaustible demand for all the little goods these women produce. Given the proximity and strength of these urban markets (for both resources and finished goods), one can't help but wonder how women in more remote rural areas with similar small scale business models fare. Not a single respondant in our survey has failed to increase their savings with these relatively modest loans.

In remote rural areas, where microfinance is traditionally supposed to work in India I suspect, the whole process of providing or strengthening the links these small scale businesses have with their respective markets, is an important dimension of running a successful microfinance enterprise that seems to be missing from such a urbane setting. If anything, in the cities, microfinance firms only need to be worried about and keep a look out for market saturation in the future - which is probably the only thing that could threaten the livelihood of these women (who themselves think taking out bigger loans would allow them to buy more raw materials, produce more goods and consequently make more money - the case for which they vehemently make when they mistakenly assume us interns have any influence on the loan sizes they recieve)

Of course this discussion only relates to women who actually used the money for their own businesses, rather than the family or husband's work, and there are plenty of cases of the latter. In a for-profit microfinance enterprise, it hardly matters who uses the money as long as the installments are paid on time. But thats a subject worthy of entire new blog post (if not an entire paper).

PS: I was planning on uploading some pics on the only rural outpost of Sahayata we managed to visit, but unfortunatley this computer isn't letting me reduce the gigantic image size or upload such a big file...but more intersting pictures are on there way soon when I head back home to Delhi this weekend.