Banking for beggars!

In fact there are different kinds of beggars seen mostly begging near a mosque or a railway station, bus terminals or even at graveyards -- sometimes in a group, sometimes alone with disability. Sometimes there are many circumstantial beggars not the hardened professional ones. Survey reports by many NGOs say there are more than 300,000 circumstantial beggars in rural Bangladesh. In recent times we have also come across many child beggars in the city who often fall prey to many of the professional beggars who would engage them as their wage earners.

Because of their sheer illiteracy, igno-rance and poverty, most of the poor people cannot find any other way out to support themselves or their family. Some also finds this an easy way out for maintaining livelihood, without being included in the work force. There are even beggars who are found ad-dicted to drugs and are involved in drug trafficking or other unso-cial activities. There are also lots of congeni-tally or otherwise handicapped poor people in our society who would beg just for their survival. Furthermore, often many poor people have chosen begging suffering from old age crisis who are left at the mercy of their near rela-tives or neighbours.

It was a major question cropped up in our mind: can a nation make any progress without transforming this significant number of poor people in to a productive workforce? The society cannot progress unless the poorest of the poor -- the beg-gars, are made productive mem-bers of society. However, wife of a legislator once told me-`it is impossible to transform a beggar into an active worker, begging being the easiest job '.

This writer also had the same impression, before coming across a presentation on `banking for beggars' at the Metropolitan Chamber of Commerce & Industry (MCCI). There is no doubt that it was an impeccable challenge that was first taken in 2002 to support the beggars in the country by Grameen Bank founder Professor Mohammad Yunus. The Grameen Bank's new venture for the struggling members (beggars) was probably launched when Prof. Yunus had realised that while micro business can very well help the poor people it could also be used as a tool to help the poorest. It was a revolutionary initiative taken by Prof. Yunus who first announced the struggling members programme, to reach out to the beggars at the inaugural conference of the Business School's Centre for Global Business and the Economy. By launching this initiative in 2002, today Grameen Bank has started lending money to beggars at easy repayment rates, to wean them off the streets and into small scale ventures.

We -- a nation as a whole -- got to address this pressing issue "whether it is really possible to transform Bangladesh's beggars into entrepreneurs" in order to drive out poverty by bringing the poorest to the mainstream business. To answer this question, we must review the whole scenario. If we see the success stories of microcredit it had started with a small number of poor women in very few villages, who took the advantage of micro-loans and gradually became entrepreneurs.

It was a real experience of mine when I have once interviewed a woman at Singair, Manikganj engaged in a cow-fattening project. To my utter surprise I found that the woman stood up with a very courageous answer when asked about conservative social obligations or norms that restrains most of the poor Bangladeshi women from working independently outside home. She had the courage to raise her voice against the society when she was left alone after her husband deserted her . It was the simple micro loan offered by Proshika through which she has survived and supported her family.

We might as well take the signal from many such success stories over the last few decades and how it had an extraordinary effect on the status of women in their families and communities. To some extent, beggars are a minority group who cannot often be compared with the general poor people who would prefer an honourable way of living and not live at the charity of others. The model of banking for the beggars can help rehabilitate the beggars, create self-employment and a respectable life for the poorest but the question remains whether it is always acceptable to the beggars to choose shunning their current profession. If a professional beggar is earning more than he would be getting by taking a loan then he might as well continue begging. So is there enough incentive for a beggar to shun begging? Or is it their illiteracy and ignorance that is the main obstacle to bring them under the shelter of an institution that may offer them a respectable source of income? Or is it their lack of confidence in their new livelihood or are coerced by local professional beggar groups to stick to begging?

The banking for beggars with microcredit can very well attempt to rehabilitate the beggars and take them to the next stage of being productive members of the society. It can create an option of respectable life for a beggar through offering interest and collateral free flexible term microcredit, providing basic literacy and peer support to the struggling members, holding discussion programmes to harness information on the challenges to overcome and innovative solutions for creating opportunities.

The current formalised Struggling Members Programme of Grameen Bank began in July 2002, though the bank's trying to reach the beggars had been going on since its inception. Each of the Grameen Bank staff was also asked to recruit one beggar into the programme. In 2004 the goal was to reach 25,000 members. Now the programme has over 38,000 members. The programme has given out US$350,000 in loans of which US$150,000 have already been repaid. The struggling members have collectively saved US$25,000. The repayment rate is 100 percent. Grameen Bank absorbs the cost to service the loans to the beggars. It also provides life insurance services at no cost to the beggars. To date, more than 380 members have quit begging and found an alternative, respectable source of self-employment. The number may seem not too significant but the residual impact from the programme would be a lasting approach to respecting the socially and financially vulnerable and creating a mechanism for alternative income generating activities for the poorest, the beggars.

The life of a beggar is often like a parasite so to rehabilitate them with the banking for beggars may have a strong focus on replicability, worldwide if successful, by independent organisations hoping to reach the hardcore poor with rehabilitative financial, educational and social services delivered through a microfinance framework.

Taking the story of a lady, Sufia Khatun, who was the first beggar member of Grameen Bank. She lived in the village Zobra where Grameen Bank began an action research project. No one else in the village wanted to take Sufia in their group. When time came for group members to propose an income generating activity and apply for their first loan, Sufia requested for only 10 Taka. Other group members thought she was making a mockery out of the system by requesting such a paltry sum. But, Sufia, a beggar, had never handled any money and had no idea how to spend more than ten Taka. Her group members insisted that she take at least 100 Taka, but to no avail. In the end, Professor Yunus mediated and Sufia took 30 Taka as her first loan. She repaid that loan within weeks.

The current Struggling Members Programme began as a voluntary service on behalf of Grameen Bank employees. All the employees were requested to mentor one beggar in their locality and attempt to inspire the beggar to opt out of begging and choose an honourable self-employment. Many of the beggars who enrolled in the programme eventually gave up begging and begun selling goods in their former begging routes.

The principle of the banking for beggars has a very simple approach. While providing interest-free, collateral-free microcredit at flexible loan terms as decided by the struggling members on their self-evaluation of repayment ability Providing basic literacy and financial literacy training acquaint them to their loan terms and financial obligations. The programme creates an opportunity and presents an alternative option to begging for its members to help them find a dignified livelihood, send their children to school and graduate into entrepreneurs over. The beggars can also have an identity of being the respected members of a reputed organisation.

When we can see most of the people in our country are living below the poverty line, this is just a step forward to stand by the poorest and raise awareness to reduce poverty. It has been figured out there will be thousands of more beggars entering into this programme. Thus banking for beggars may create a huge impact in addressing poverty. It may be one of the most innovative models to reach the hardcore poor with rehabilitative, financial, educational and social services delivered through a microfinance framework.

Mamun Rashid is a banker. He is grateful to Dipal Barua of Grameen Bank and Mehreen Mahiuddin from Citigroup for invaluable insights.