Socio Economic Growth in Low Income Group
Published: May 22, 2019
West Meets East
“THERE IS NOTHING NEW ABOUT POVERTY. WHAT IS NEW, HOWEVER, IS THAT WE HAVE THE RESOURCES TO GET RID OF IT.”
-MARTIN LUTHER KING JR.
‘Financial inclusion’ has been one of the more popular socio-economic growth concepts in India. The term has been defined as providing financial services to the low-income group who are unable to access these through mainstream institutions. While there have been extensive initiatives taken by both public and private sector organisations for ‘banking the unbanked’, the north-eastern region of our country has not received the same degree of attention and investment compared to the rest of it. How can we hope to achieve economic liberation while excluding more than 50million of our people?
Exclusion = Denied Opportunities
Decision-makers sitting in big metropolitan cities are geographically too distant and culturally unaware of the situation in the far east. Ignorance further leads to assumptions based on misinformed or outdated information, creating mistrust and uncertainty. NER (north-east region) receives extremely limited interest from public and private financial institutions. Unemployment is rather widespread because of lack of income avenues. It’s no surprise this region falls far behind in socio-economic indicators compared to the rest of the country. Although there has been an increase in grant support from the government, does this imply they are solely responsible to bring economic enhancement?
Inclusive growth begins at the end of your comfort zone
An opportunity presented itself for us at Capri to explore this uncharted territory. Crossing over 3000kms, we reached a hilly city named Kohima in Nagaland. For the first time in our company’s history, we took a chance and leaped forward to take on a partnership that served more than just our business interest. Looking back at the reasons for our existence, we were reminded of our core value: inclusive growth. This was our chance to take risks and pave the way for other public and private institutions to join us and help achieve this common goal.
Insights we’d like to share from our experience:
Everything we had heard about Nagaland was far from reality. We found it to be safer than many ‘known’ states in India. People are extremely kind, hospitable and welcoming. Having visited multiple districts and villages, this remained consistent throughout.
The region lacks entrepreneurism. People are highly dependent on agriculture and government jobs for wages. However, we got to witness a wave of change in their mindset. Our development partner Entrepreneur’s Associates is the driving force behind this. Therefore, opportunities for financial intermediaries to help mould this region’s economy through entrepreneurship, guidance and strategic partnerships is limitless.
Mechanical exercises of frivolous assumptions of work processes will take over the human instinct of justifying real success. Will there, then, prevail the shield of human considerations in business transactions, those that compel the seamless progress of instinctive human ingenuity?
The banking potential is enormous but remains untapped. Due to inadequate outreach from mainstream institutions, NBFCs have a huge role to play in financial empowerment and development in this overlooked region.
NER is endowed with abundant natural resources in terms of forests, biological diversity, hydroelectricity, highly fertile and organic farmlands. However, it is far behind in infrastructure, connectivity and communication. This has proven to be a significant constraint for the region as they are unable to capture economic value of this natural wealth.
This region occupies strategic importance for trade. It shares international boundaries with Bangladesh, Bhutan, China, Myanmar and Nepal which is a whole new avenue to increase productivity and employment.
Financial Inclusion goes beyond accessing banking services. It is geared towards helping people improve their income, quality of life and social well-being as a whole. Although working in NER comes with its own challenges, we are positive that our joint effort with our local partner, Entrepreneur’s Associates, will create ripples of long-lasting sustainable change.