Opportunity International Australia Blog

Opportunity Ambassador and former Premier of NSW, Kristina Keneally, and Managing Director of Opportunity’s Indian subsidiary, KC Ranjani, spoke at a series of lunches and dinners across Melbourne, Sydney and Brisbane. The women spoke of the empowerment that microfinance and support services provide for women living in poverty and the benefits seen by their families and communities.

Our thanks go to 4impact Group, Deloitte, Macquarie, King & Wood Mallesons, Freehills, PwC, RBS Morgans, First Samuel, AIIA and FINSIA for hosting these events and encouraging even more people to reach out to women in need in developing countries.

Mosman Council also held a ‘Connecting Girls, Inspiring Futures’ breakfast in honour of International Women’s Day, with an inspirational talk from Opportunity Ambassador Philippa Tyndale.

A number of ‘Opportunity Swap’ clothes swap’s have also been held around the country this month to help women gain access to microfinance loans. With these small loans, women are able to start a business, earn an income and provide for their families. In Sydney’s Chippendale, 10thousandgirl hosted a clothes swap and high tea – check out photos from the event here.

It’s not too late to get involved!
Even though International Women’s Day has passed, you can still host an ‘Opportunity Swap’ anytime during March. If you don’t have enough time to organise a swap, why not sell unwanted items on eBay or perhaps hold a garage sale and give the proceeds to Opportunity’s work?

To get started, visit www.opportunityswap.org.au today!

Another said: “My children are going to school, and I want them to be able to move out of here.” Then another asked me if I had children. I told them I had two boys, aged 13 and 11, and they smiled and nodded approvingly, more duly impressed by my role as a mother than as a former chief minister. We’d found our shared understanding. We loved our children. We wanted the best for them. 
 
I asked them what their husbands thought about the loans. They all smiled or laughed. Some said their husbands were really happy – it meant that there was still money, even if the husband couldn’t work. In a country where girls are not always educated and where women sometimes only eat if there is food left over after the men finish, these sentiments are pretty significant.
 
One woman said to me ”We want the loans – not grants. The loans we pay back. It makes us feel good that we pay it back. We want to make it on our own, not with money just given to us.” I've been a feminist pretty much my whole life, but I’ve never heard such a strong assertion of female empowerment.
 
I asked them what difference the life and health insurance that comes with every loan from Annapurna makes to their lives. Two women, both looking too young to be widows, told me that their husbands had died. The life insurance pay-out was the difference between their children staying in school or dropping out to become rag pickers. 
 
We stayed for about an hour. After photos and hugs and clasped hands, we left. I will admit, I was sad to leave them there, but also relieved to escape the flies and the stench. Even some of our more experienced and local Opportunity staff found this slum hard going. Yet Annapurna works there regularly; delivering microfinance and basic health education. All of Annapurna staff are female, and mostly young, recent social work graduates or women from the local community trained up to be client service officers.
 
We then followed the Annapurna women to a category four slum, a place not on a rubbish tip, and where most dwellings are constructed with bricks and the most basic of necessities, including electricity. We crammed into an upstairs one-room dwelling, 20 of us, including a few children. This was a client meeting, where the monthly repayment was made and recorded by each client. Microfinance organisations like Annapurna have needed to create their own infrastructure and systems: application forms, repayment records, receipt books, insurance cards, etc. It’s an entire paper-based system that is eventually fed back to the head office and entered into a computer system. It’s a rigorous banking system invented and maintained in an otherwise chaotic world.  
 
That was day five. The preceding day was one of high level meetings with Chief Executive Officers of major corporations and banks, trying to convince them (with some success) of the benefits of microfinance and the need for corporate social responsibility in India. It’s an emerging idea in India, with companies like Axis Bank setting up a Foundation that receives one percent of the bank’s profits. Their goal is to ‘create one million livelihoods in 5 years’.
 
Days four and five were an example of the two India’s that exist: one, the fourth biggest economy in the world posting strong growth, and the other, where one-third of the world's poor live.

Kristina Keneally, MP
Opportunity International Australia Ambassador

www.opportunity.org.au
@OpportunityAUS

No words to describe
India is a country where superlatives seem inadequate. Words fail to convey the enormity of any particular dimension. The streets, buses and footpaths aren't just crowded; they are extremely crowded, teeming with people. The traffic isn't just chaotic; it’s maddening and terrifying chaos. The dust, rubble and haphazard buildings with random wiring aren't just everywhere; they are inescapably so, the most haphazard landscape of this most haphazard country.

And the poor are so very poor. Unimaginably so to a westerner. Today we visited a slum south of Delhi. In terms of the physical conditions, it was all I imagined and more. Single-room houses, built with the barest minimum of brick, concrete and tin. Each house (that seems to be the wrong word - maybe shack?) is smack right up next to its neighbour. Narrow, sometimes one-person-wide, dusty paths separate the rows of homes. An open canal of running water/sewage runs along the path, right under each home's open doorway, with stepping stones precariously positioned over. People and flies are everywhere, especially at the 'children's playground' - a couple of swings placed around a large dug-out area in which a large pile of rubbish sits.

The presence of a 'playground,' which was full of children, not to mention the 'infrastructure' of the canal and the electricity that seemed to be connected to each dwelling, indicates a functioning community in the midst of such poverty. It also points to the tenacity of India's poor. The slum we visited is not 'official' - it is not recognised as an area for residential dwelling. No NGOs work there, no government services are provided. The residents are literally eking an existence out of nothing. This is where people living on less than $2 a day live.

In 2008, Opportunity International Australia, through its Indian subsidiary - Dia Vikas Capital, gave capital to a local microfinance start-up, Shikhar. Shikhar's intrepid and indefatigable founder is Satyavir Chakrapani or ‘Satya’, who began his work riding a motor bike around Delhi looking for people to help. He came upon this slum where no one else was providing assistance. He started talking to the women there. Many of them were trapped in extreme poverty by crushing debt. The only way families in this 'unauthorized area' could borrow money was from the village money lender, who was charging 800% interest. One of the women he met had taken out a loan for 5000 rupees ($100). Due to the interest rate and how the repayment was structured, she had paid back 7000 rupees ($140) and not even touched the principal. This was debt she would never escape. Satya had found the first group of five women to whom Shikhar would loan money.

Today we met 10 women, each time in groups of five inside one of the hardscrabble dwellings. The buildings are immaculately clean and incredibly, compactly organised. We sat on rugs on the cement floor: Satya, Opportunity's CEO Robert Dunn and Marketing & Communications Director Helen Merrick, Dia Vikas' Managing Director Ranjani, Shikar's Branch Director Nittan, me, and five women. In the second house, Rob and Satya had to wait outside. There wasn't enough room. Yet it was home to a family of 7. 

Again, superlatives fail. To say these women were confident in their business skills or optimistic about their futures is an understatement. They needed little invitation to tell us how microfinance has changed, and is changing, their lives.

Before Shikhar, many of these women were indebted to the village money lender. They didn’t earn money, and their husbands would work when they could. Their children didn’t attend school. They had no savings. Some of them, literally, had no official identity. The first time they saw their name in print was on the loan papers.

But from these dire circumstances, so much has changed - and with microfinance, these women are making the positive changes for themselves.

One woman has put a roof on her home and built a second room. She now rents it out for a steady income. She has five children. She tells me that she is using the income to pay for ‘private tuition‘ for her children. In a school system where teachers only show up part of the time, private tutoring is the only way to guarantee a consistent education.

One woman started a juice shop, and then a second business, a mobile juice stall.  Now she's employing others.

We visited an egg shop run by an older woman. She buys eggs at 2 rupees each, hard boils them, and sells them for 5 rupees each. She took Ranjani and I to the back of her shop to tell us that she makes 250 rupees ($5) a day. She says to us "I am making so much money!" and points out all the new inventory she now sells - tea and some snacks. Then she hugged us both.

A few houses later I climb up a bamboo ladder to a room built on top of a dwelling. It’s about the size of an Australian suburban bathroom. Inside is one woman, one sewing machine and hundreds of pieces of woven plastic sheeting. She is sewing them up in order to hold sugar, salt and other commodities.

She tells me she started with one customer. Now she has six, a second location and seven employees. She says she felt very proud that she is creating jobs for others.

One of the women, a mother of five, had opened a very tiny, but successful general store wedged in between two dwellings and in the shadow of piles of shipping containers. I asked her whether her neighbours had noticed the changes in her family and if they were wanting to get microfinance for themselves. She said, "Oh yes, they see my kids have better clothes, better food and go to school. We are ambassadors for microfinance in this community."

They are ambassadors for microfinance. They are also ambassadors for hope. Superlatives fail me again in describing how amazing these women are. So inspiring, positive, confident, creative, powerful, purposeful, and so very hard-working. I was awed in their presence.

Today Shikhar has 13 branch offices, and 14,000 active borrowers. From those first five women in 2008, today Shikhar is bringing microfinance - very small loans and insurance - to thousands families living in poverty.  But more than that, Shikhar – and Opportunity’s other microfinance partners – is opening a door to an opportunity for a better future. And the women we met - and thousands more - are walking through that door, creating a future for themselves and their families. What better ambassadors could there be for living with hope and optimism?

Kristina Keneally, MP
Opportunity International Australia Ambassador

www.opportunity.org.au
@OpportunityAUS

Day two in India starts, as most overseas parliamentary trips do, with a political and economic briefing by the Australian High Commission. We joined the Deputy Australian High Commissioner, Mr Lachlan Strahan, and Ms Caitlin Bell, Third Secretary (Political), as well as First Secretary of AusAID, Mr Russell Rollason, at a 7am breakfast meeting. We were also joined by Ms KC Ranjani, Managing Director of Opportunity International Australia's Indian subsidiary, Dia Vikas Capital, and its Executive Director, Mr Saneesh Singh.

The discussion confirmed much and provided additional understanding, including more stark numbers in a country that never seems to fail to impress when it comes to startling statistics.

According to AusAID, a third of the world's poor are concentrated in five Indian states. 

There is a $1 trillion backlog in infrastructure in the country, across all areas: schools, roads, water, transport, and electricity. Water sanitation is a challenge, but so too is water security. By 2030, we were told, India’s demand for water will be double its available supply. Electricity is another example of India’s forward thinking and yet challenging present. Currently, between $6-8 billion is being invested in renewable energy in India every year, yet 40% of electricity is lost on the country’s electricity grid.

AusAID spoke to the Independent Review of Aid Effectiveness and confirmed that the intent of the Government is to phase out its Indian aid program. At present, the Indian aid budget is $6 million a year, and is part of a total government spend of some $22 million on India.

What the Commonwealth Government will do, AusAID indicates, is continue to invest in regional multi-lateral programs.

In reality, this does mean that Australian aid will continue to flow to India, albeit in a more roundabout fashion. Given Indian’s dominance in the region, any multi-lateral regional agreement will see Australian aid still reaching India. At what levels, and how well directed it is, remains to be seen.

Meetings

The first external meeting of the day was with Mr Jay Panda, Member for Kendrapara in the Lok Sabha (lower house).  He is a member of the Biju Janata Dal (BJD) Party, and is currently an opposition MP. His district is in the state of Odisha (Orissa). Opportunity funds two microfinance institutions in Orissa, and Mr Panda expressed his support for microfinance for the role it plays in improving the lives of women in Orissa.

Mr Panda would like to see the Government put in place a strong and rational legislative framework to support the growth of microfinance in India. However, he laid bare the stagnation of several key pieces of legislation – including an Ombudsman Bill – meaning that it is unlikely the Microfinance Legislation will be dealt with quickly.

Our next meeting was with the Federation of Indian Chambers of Commerce and Industry (FICCI). As an industry body that has extensive contacts with Members of Parliament and Ministers, FICCI is a key body that can help move the Microfinance Legislation through the Parliament.

FICCI updated us on their financial inclusion agenda. They are also keen to see the Microfinance Bill be passed by the Parliament and understand its importance to provide confidence in microfinance institutions so they grow sustainably. Ms Vij, Assistant Secretary General, indicated FICCI’s support for socially focused microfinance as a way to solve the problem of poverty.

Lunch was in the Australian Deputy High Commissioner’s home, with representatives of major Australian companies operating in India. We were able to discuss Opportunity’s work in India, serving some 1.5 million families through 18 partner organisations, and the notion of corporate social responsibility in India. Several of the companies present expressed strong interest in supporting Opportunity’s work, and the Deputy High Commissioner spoke supportively of the benefits to both India and Australia in what Opportunity does.

After a few other meetings, we set out for an early evening tour of the Parliament of India, or Sansad Bhavan. Its three chambers – the Lok Sabha (lower house), the Rajya Sabha (upper house) and the Central Hall (used for joint sittings), symbolically represent Indian and Commonwealth history. It was a special privilege for me to sit in the seat the Prime Minister occupies in the Lok Sabha (lower house). On the desk are plaques observing that ‘J Nehru’ and ‘Indira Ghandi’ occupied this seat. An amazing chance to touch a piece of Indian history.

Kristina Keneally, MP
Opportunity International Australia Ambassador

www.opportunity.org.au
Twitter: @OpportunityAUS

People are everywhere and they all seem to be selling or buying something: food, books, clothes, mobile phones, toys, weapons, homewares, and shoes. Every possible portion of free space on footpaths and curbs seems to be taken up by vendors.

Today we visited the Red Fort, built by Shah Jahan, the Mughal Emperor who shifted his capital from Agra to Delhi in 1638. Being Sunday, enormous crowds of families and visitors and special tour groups from other parts of India were also taking the chance to see one of Delhi’s great landmarks. Big groups, men, women, children, happy families – there were people everywhere: laughing, talking, taking photos, eating, sitting, standing, walking.

The crowds and the traffic and the vibrancy – or seeming chaos, depending on your point of view – is something for a westerner to get used to, but the most difficult adjustment is the in-your-face approach of women and children begging for money. Alongside the crowds of well-nourished and (seemingly) adequately resourced people were some of India’s large number of very poor people. Tapping on the windows of cars, asking for one rupee, complaining of hunger. Mothers with babies on their hips, children weaving through traffic to approach cars stopped at intersections. Whether giving money is the right – or safe – thing to do is hard to know in any given circumstance. But the confronting, direct face-to-face interaction between the haves and the have-nots is something we comfortably avoid in Australia. 

To be sure, Australia has poverty, but not on this scale in numbers or severity. We also have beggars, but they tend to be older men sitting quietly in Martin Place in Sydney. And we have safety nets, such as the pension and Medicare. Our safety nets may not be fool-proof, but there aren’t many holes in them. Here, for India’s poor, no such nets exist.

Tomorrow we have a series of meetings about microfinance. We will talk about how microfinance is helping India’s poor, what role it can play as a way to deliver Australian aid efforts in India, and how it can be strengthened to expand in India. The women and children who knocked on our car windows today haven’t been caught up by India’s economic growth. They aren’t sharing the benefits. And there are 900 million more like them in this country. Begging for a few coins in Delhi traffic isn’t going to lift them out of poverty. It will take something that gives them a chance at an income, and the basics like food, clean water, shelter and education for their children.

Kristina Keneally, MP
Opportunity International Australia Ambassador

www.opportunity.org.au
Twitter: @OpportunityAUS
 

The number of people in the world who live in extreme poverty has halved since 1981. Nonetheless, more than one billion people in the world live on less than US$1.25 a day.

A significant challenge remains in raising the living standards of the world’s poorest people.  Economic growth, international aid and charitable giving all have a role to play in meeting this challenge.

Amongst the nations of the world, India is a standout with stark numbers – both in terms of economic success and economic hardship.

In the midst of global economic uncertainty and difficulty, India’s economy powers ahead. Last year, India posted 9% economic growth, and the International Monetary Fund projects 8% growth next year. However, this economic success is labeled ’jobless growth’. Employment in urban areas has grown only by 1.36% since 2004/05, and the number of jobs in the agricultural sector is declining.

According to Forbes Magazine, India boasts the 4th highest number of billionaires, behind the USA, China and Russia, and it accounts for 4.5% of the world's billionaires. Yet India is also home to one of the world’s largest populations of people living in poverty. More than nine hundred million Indians live on less than US$2 a day. The United Nations estimates that 421 million Indians live in ‘extreme multi-dimensional poverty‘, more than the combined total of the 26 poorest African countries.

Numbers of such scale illustrate India’s challenge of ensuring the benefit of its economic growth is shared by its citizens more broadly. Prime Minister Manmohan Singh is taking up this task, making ‘social inclusion’ the focus of India’s current five year plan. 

Australia must pay attention to such developments in India, as India’s impact on the political, economic and social stability in our region is significant.

India is an important trading partner for Australia. The bilateral merchandise trade between India and Australia has grown annually over the past five years at around 22%. In 2009, trade reached $16.5 AUD billion, which is an increase of 7.3% over the previous year.

In 2009, India ranked 6th as Australia’s trading partner with a share of 4.2% in terms of overall trade. India ranked as the 4th Australian export destination with a share of 7.4% of the total imports. 

But perhaps even just as important for Australia is the potential for social and political instability in India, and the implications of that for regional security.

How Australia best supports the Indian Government’s social inclusion program, and efforts to spread the benefits of economic growth within India, is a matter that requires serious consideration. 

The Australian Government is rapidly increasing its spend in the Aid budget from 0.33% of GNI, approximately $4 billion, to 0.5% of GNI, approximately $8 billion, by 2015/16. Yet it is unlikely that any of this new funding will go to aid and development work in India.

The Independent Review of Aid Effectiveness, released in April 2011 by the Foreign Minister, observes that India does not wish to continue to be an aid recipient nation. The review recommends that India is not a priority for Australian aid into the future. 

If the Commonwealth adopts this recommendation, Australia will need to rely on other mechanisms, such as diplomacy and economic investment, to carry out development efforts in India.

Charitable giving is another tool that the Australian Government could rely upon more heavily to support development efforts in India. Many Australian charities and NGOs operate in India, using a variety of models, to assist India’s large population of people living in poverty. 

Some charities, like the Steve Waugh Foundation, raise money outside Australia and direct it through a local Indian charitable body. In the case of the Steve Waugh Foundation, monies raised support a girls’ wing at a centre for children affected by leprosy.

Opportunity International Australia operates under a different model, by raising tax-deductible donations in Australia to use as equity and loans for microfinance institutions serving the poor in India, as well as Indonesia and the Philippines. 

Microfinance is the provision of basic banking services to the poor. It can include a range of financial products and services, including small loans (microcredit), savings accounts, insurance and money transfers. Microfinance assists the entrepreneurial poor who are unable to access services in the mainstream banking sector.

Microfinance is innovative and effective in solving the problem of poverty. Rather than a hand-out, microfinance provides small loans to people living in poverty to help them start a business, earn an income and provide the basics for their families: food, clean water, proper shelter and an education for their children.  

Microfinance is not new, but it is still relatively young in its use as a development tool. Opportunity has been working with people living in poverty for more than 40 years, partnering with local microfinance institutions. The organisation currently serves more than 2.7 million people.

The average loan size for an Opportunity client is $200. Clients run businesses such as small grocery stores, farms, fruit and vegetable stalls, bakeries, engage in animal husbandry, work as tailors, carpenters or make jewellery. The average repayment rate is 97%, which means the funds can be recycled to assist others.

Ninety-four percent of Opportunity's clients are women. Women still make up a disproportionate majority of the world’s poor. Yet Opportunity’s experience in microfinance shows that women are often the ‘change-agents’ of communities, investing in their households and becoming leaders in their villages.

Studies on the impact of microfinance, conducted by the World Bank and others, demonstrate that microfinance provides many benefits, including: higher and more reliable income and savings; better nutrition; improved access to healthcare; greater female empowerment; better housing; and more children being placed in school.

Microfinance in India has not been strongly regulated in the past, and in some circumstances – particularly where for-profit enterprises have entered the microfinance arena – problems have arisen, such as clients taking on debt levels they cannot repay. Opportunity is a not-for-profit operation, and the organisation and its partners have successfully avoided such problems.

The Indian Government recently introduced regulations to provide protection for microfinance clients, ensuring the focus of microfinance services is more on the social good than profit-making. Further, there is currently a Microfinance Institution Bill before the Parliament of India.  Passage of this legislation would provide further confidence in the microfinance sector and ensure the sustainable growth of microfinance services in India.

My trip to India is an opportunity to consider how Australia can assist the largest single population of poor people in our region to move out of poverty. In particular, the trip is a chance to explore how Australian NGOs and charities can play a more significant role in achieving that goal.

This trip is also a chance to work with Opportunity International Australia and its microfinance partners, as well as Members of the Parliament of India and relevant agencies, in relation to the Microfinance Institution Bill.

However, the expansion of Australian charitable efforts in India is not only affected by Indian Government regulations and legislation, but also Australian Government policy. This trip is an opportunity to understand the potential impacts of two possible policy changes: the Independent Review of Aid Effectiveness and the potential for the reinstatement of the ‘in Australia’ principle in tax law as it applies to the not-for-profit sector. This has been foreshadowed by the Assistant Treasurer.

Most importantly, this CPA trip is a chance to meet some of the women who are clients of Opportunity’s microfinance partners, as well as the girls who are living and studying at the Udayan Centre, supported by the Steve Waugh Foundation. It will be an opportunity to witness the real and transformative effect these two Australian organisations are creating in the lives of these women and girls. In particular, as an Ambassador for Opportunity, I look forward to using my experience on this trip to support Opportunity in its fundraising efforts in Australia.

Kristina Keneally, MP
Opportunity International Australia Ambassador

Acknowledgements
I am traveling to India with the support of the Commonwealth Parliamentary Association. I am grateful for the CPA’s support.

I also am very appreciative of support from Opportunity International Australia in organising the trip, and traveling with me to India. I also thank the Steve Waugh Foundation for arranging for me to visit the Udayan Centre in Kolkata. 

Links for more information

Opportunity International Australia: www.opportunity.org.au
Twitter: @OpportunityAUS

Sources:

http://www.theage.com.au/business/india-growing-strongly-but-poverty-gap-widens-20111017-1ltck.html

http://www.forbes.com/wealth/billionaires/list?country=&industry=-1

http://www.indianconsulatesydney.org/australian_trade_brief.htm

Commonwealth Government's Independent Review of Aid Effectiveness: www.aidreview.gov.au/report/executivesummary.html

Treasury's Not for Profit Reform:
http://www.vicsport.asn.au/Assets/Files/Treasury%20NFP%20Newsletter%20-%20October%202011.pdf

Indian Ministry of Finance Draft Microfinance Legislation:  http://finmin.nic.in/the_ministry/dept_fin_services/micro_finance_institution_bill_2011.pdf

12 September 2011, Sydney, Australia – Chief Executive Officer of Opportunity International Australia Robert Dunn announced today that the Hon. Kristina Keneally, MP, has been appointed to the role of Ambassador for Opportunity International Australia.

Opportunity International Australia is a non-profit organisation that helps provide microfinance and other support services to people living in poverty in developing countries. It supports local microfinance institutions in Indonesia, India and the Philippines, helping them provide small loans (sometimes as small as $100) and other services to families living in poverty, helping them start or grow a small business. With the income they generate, recipients of the loans are able to provide food, water, shelter and an education for their children. 97% of loans are repaid and 94% of the people served by Opportunity International Australia are women.

Ms Keneally will be travelling to India with the organisation in November 2011 to visit microfinance clients and see the impact of small loans firsthand.

"We are delighted that Kristina is joining Opportunity International Australia as an Ambassador," Mr Dunn said.

"Kristina is an influential role model within Australia, and as an MP and as former Premier of New South Wales, she has demonstrated her commitment to helping people. Her passion, experience and drive for social justice, both at a local and international level, will be valuable to us as we build on our previous achievements reaching out to our neighbours in need in the Asian region."

Ms Keneally said, "Opportunity International Australia does amazing and innovative work with incredibly vulnerable people. By using microfinance it is giving not just charity, but hope, and as such, is transforming lives and transforming communities."

"In particular, I’m proud to be associated and assist with an organisation that is making such a difference to women, who still make up a disproportionate share of the world’s extremely poor people."

Opportunity International Australia is currently serving more than 2.8 million people living in poverty – 1.5 million of which are in India. According to the UN Human Development Report 2011, 41.6% of India’s population struggles to survive on less than US$1.25 a day.

About Opportunity International Australia
Opportunity International Australia has over 40 years’ experience in providing microfinance and other support services to people living in poverty in developing countries. The organisation sees 97% of its loans repaid, which go on to help other families break the cycle of poverty, year after year. Each successful business can feed a family, employ more people and contribute to the entire community.

Ms Keneally’s husband, Ben Keneally, currently holds a non-remunerated position on the Board of Opportunity International Australia, having been appointed as a non-executive director in May 2010.