Microfinance

Action begets equal and opposite reaction

By Tensing Rodrigues

Newton’s Third Law states that “For every action, there is an equal and opposite reaction”. When post its IPO the services of CEO of SKS Microfinace, Mr Suresh Gurumani were abruptly terminated, a can of worms opened. The sector, the organizations and their promoters that were once holy cows, suddenly turned into black sheep. The sordid stories that emanated from nowhere where more than shocking; the microfinance institutions were even accused of abetting suicides of borrowers; something that was the prerogative of only heartless foreign banks till then !

microfinance

Action = Reaction

The reaction from the government and the media was equally drastic. The media gave a free play to their investigative talents to unearth the “scams” that were going on in the name of social service. The government did what it is best at : chop the head to cure the headache; it simply “outlawed” microfinance, or almost.

I am no advocate for the discredited sheep of the microfinance sector; nor am I trying to deny the fire beneath the smoke. But my simple question is : where was all this goodwill, or ill will, depending upon from where you are looking at, before that fateful Monday morning of October 4, 2010 ?

The point is reality did not change over a weekend; white was white, and black was black, before and after. But what was politically right before, turned to politically wrong over the weekend. Let us be frank : no one ever liked microfinance; I mean, no one in the establishment, be it media or the government. So, once someone threw the first stone, they had no reason to wait; unfortunately the first stone was thrown from inside.

The reason for such a rancor is easy to understand. The downtrodden are a precious lot for the establishment; it thrives on them. The establishment is the self-appointed saviour of the downtrodden. You serve them, sacrifice for them, the establishment will cheer you, sing paeans to you. But, in no case lift them out of the gutter. Because, if you do that you render the establishment purposeless; whom will it save ? It is therefore natural and perfectly justified that establishment should strike in vengeance if you attempt to minimize its constituency.

The Malegam Committee Report, whether it finally consummates into the proposed Micro Finance (Development and Regulation) Bill or not, is a pointer to the will of the establishment to reclaim its lost territory. How dare you Akulas, Reddys and Kumars trespass into the territory that is our exclusive preserve ?

The empire is bound to strike back !

1 Comment

1 Comment

  1. Ramakrishnan Venkateswaran

    March 7, 2011 at 12:43 pm

    Excellent perspective.. All points very true and even if there is a chance and Micro Finance industry revives, there is always the possibility that there would be some other actor from the establishment who would then decide to play the messiah’s role and play a different tune to destabilise or bring about another challenge.

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