> Posted by Cara Forster
The Microfinance Network’s annual conference brought me to India this year, as it was hosted by SKS Microfinance, which graciously arranged for us to visit some of their clients in Agra. I had been warned that the places we would visit were filthy and the poverty in India overwhelming. However, I found the homes of the SKS clients we visited to be rather decent, especially in comparison to what had been forecast.
We visited one woman whose business is sewing bridal veils from crimson organza embellished with all manner of gold colored trim. She makes 3-4 veils a day, earning her about $1. The way I saw it, her problem was that she sells the veils to a middleman from whom she obtains her inputs. We asked her what it would take to free herself from the middleman, but she replied that the middleman was necessary, that the ladies themselves could not sell their work in the market because they couldn’t get a permit for a stall, that she was comfortable with the way things are. She was staunchly defending the status quo.
The seamstress lived in two pink rooms in a cement apartment building with her husband and four children. From my perspective – based on years as a Peace Corps Volunteer in rural Nicaragua -painted cement walls indicate relative prosperity. I was somewhat surprised to see the painted walls, gas cooking stove, and wooden bed frames.
But more than their physical assets, I was surprised that this lady could spend 9 or 10 hours a day sewing lovely veils and make only $1 for her trouble. It seemed to me that if progress is to be made in expanding the income of people like the seamstress, it will take more than credit – some restructuring of the current value chain might be required. This is not the kind of assistance that is usually packaged with commercial microfinance, but it is receiving increasing attention. The whole third day of the MF India Summit, dedicated to livelihoods, focused on Inclusive Value Chains. Perhaps in the seamstress’ neighborhood there is an unemployed son or husband, or even one of the women, who could take over the responsibilities of the middleman. With some organizational assistance, someone from the neighborhood could obtain a permit and operate a stall, collect and transport the veils, etc. This could provide a living for that person as well as return more of the profits from their labor to the women. Hopefully this increased emphasis on value chains by practitioners will translate into real increases in income for the laborers, like the seamstress, who work at the very end of the value chain.