Thursday, May 13, 2010

Micro-credit exploration for cycle rickshaw pullers


For those who haven't (yet) gone through our latest newsletter, some of us have been investigating into a micro-financing possibility that enables rickshaw pullers to own their vehicles rather than renting them (which they currently do by paying up about a 1000 Rs a month - 20-25% of their earnings). I am appending the piece I wrote in the newsletter for handy reading. Please go through it to know of the exploration thus far and where we stand now.

We ideally would like existing micro-financing institutions/groups to take charge of the legalities, with the ground work undertaken by another group that has a rapport with a pullers' community, while we play the mediator/facilitator. While we have found one field partner, we haven't made much ground on the former (although a proposal has been sent out to Rang De). In the light of that, to comprehend the legalities involved in us taking on the role of micro lending, an informal discussion has been arranged with Devahuti, the same expert who delivered a general talk on micro-finance in the last ORM. Those of you keen on working on this or any other application of micro finance may benefit from taking part in it.

Venue: Dilli Haat
Time: 9:30 am, Saturday (15th May)

Please reach your confirmations to me on 9278857591 or by an email response.

(Micro) crediting the green paddlers

Not so long ago, through an article in this very forum, Deepak had aptly urged us to step up the use of cycle rickshaws. Rickshaw pulling is sometimes refrained from due to a misplaced sentiment of guilt - one human carrying the load of another. The truth, however, is that the pullers would much rather have you hire them than pity them. More importantly, the work conditions of rickshaw pullers are far healthier and safer than those of most industrial workers who are confined to a close, often polluted environment. Rickshaw pulling is also one the few truly green jobs, without which, Delhi alone would consume a thumping 5 lakh liters of additional fuel each day and choke the lungs of many of its residents, most acutely the poor/homeless. Reiterating the appeal to favour rickshaws over autos and private vehicles, though, is not the prime motive of this article.

Most pullers across the NCR region don't own the rickshaws they ride. They shell out 30-40 Rs everyday on the rent to the rickshaw owners, who often happen to be members of what's called the rickshaw mafia. Indisputably, this is a considerable loss, which prompted us to ponder on how to do away with it. Having made the observation, arriving at the thought of loans was a no-brainer, as you'd expect. Like all other poor, rickshaw pullers have no collateral and hence no access to traditional banking services. So, it would have to be micro-finance. The heartening thing about applying micro lending in this context is that if a loan of around 10k is extended to a puller for rickshaw purchase, he can actually own the rickshaw in a year, with the SAME daily amount (say 40 Rs) going into loan repayment.

We have begun digging into the implementation possibilities of this concept in Delhi and Noida. For the capital, a Rohini-bound cycle rickshaw cooperative spearheaded by NGO Path is one group we have identified (potentially) for grass roots coordination. A micro-financing venture like Rand De, which connects social investors to needy micro-entrepreneurs, is to form the other half of the system. Our role in the simplest case could be that of a facilitator. We have already initiated preliminary joint discussions involving Path and Rand De. Depending on Rang De's priorities and constraints, it could well come down to us having to assume the key role of a micro-financer ourselves. However, these are early days, and the picture is likely to remain blurry for some time more. For now, we just wanted to give you a heads up and sound you out.

The wicket is far stickier in Noida. Through a meeting with a distinguished Ashoka fellow, Dr Pradeep, who has attained precisely what we envisage and more in Guwahati, we learnt that there exists no regulatory body to license Noida's rickshaws! Dr Pradeep, who has been based out of Noida for the last few years, has met with various bureaucrats in Noida Authority, but to no avail. Post the meeting, we have filed an RTI application on the matter, and are in touch with Parivartan for mapping out the future plan of action. Micro-lending to the pullers is obviously contingent upon the legitimization of the service.

For any suggestions, info on micro-lending organizations or brickbats, please drop an email to Pulkit at


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