Visit with Vijay Mahajan - BASIX Chairman
Trip Start
Jul 26, 2008
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35
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Trip End
Sep 27, 2008
Hyderabad,
India
Monday, August 25, 2008
Niranjan indicated that Vijay has been a great motivator to many emerging & committed microfinance program in India such as Nirantara, Nirmaan Bharati (which I am visiting in Lucknow), Arohan (which I am visiting in Kolkata), etc.
Vijay has been a great mentor to Niranjan who set up my visit with this extraordinary contributor to the world of helping alleviate poverty in this country that has the greatest number of poor people of any country in the world.
Here is the BASIX Logo and I encourage you to study it and read about its meaning
Vijay Mahajan - Chairman BASIX
.Here is a link to the services of BASIX. BASIX serves 1.6 million people (including 321,000 borrowers) and has 2,500 employees.
Over a private lunch in his conference room I asked him to share with me his story and approach. For the next hour and a half I had the privilege of being with a Master and the joy of learning from and interacting with him.
Here is some of what Wikepedia has to say about Vijay - "Vijay started work in rural economic development in 1981. In 1983, he founded an NGO, PRADAN. Today, PRADAN is one of India's more effective NGOs, specializing in rural livelihoods and micro-finance. It works with over 100,000 rural poor households.
Thereafter, in 1991, Vijay decided to work as an independent trainer, consultant and researcher and to focus exclusively on the issue of rural livelihood. Realising the need to attract mainstream financial resources, Vijay conceptualised the establishment of BASIX, which he founded in 1996. BASIX is a new generation institution devoted solely to promoting rural livelihoods. It is among the first micro-finance companies in the world to attract commercial debt and equity investments, both internationally and from within India."
When Vijay realized that he was not satisfied with existing programs he decided to strike out on his own and start by studying various other programs. He visited Muhammad Yunus and studied the Grameen Bank Program
Vijay
. He visited Fazle Abed and studied what BRAC was doing - both in Bangladesh. He visited other countries and studied their models.The result was he founded BASIX which became the leading edge and largest microfinance institution in India - but using a new and innovative model of providing services. Those who are interested in the details of BASIX's "Livelihood Triad" model are encourage to visit their website.
I was particularly interested in the "Financial Inclusion Services" and to be able to compare it to other forms of credit delivery - Grameen/BRAC models, SHG's, Cooperatives, etc.
Vijay spoke of how he feels that the Grameen Model is not optimal for India because most of India's poor work is involved with farming - which is different than in Bangladesh.
BASIX forms groups of people within a village that often focus on a particular aspect of farming and these 4 to 6 people become part of groups that are responsible for each others loans if one member of the group can not pay. Each members first loans are $200 and for a period of 12 - 18 months at 21% interest rate - declining balance. The groups meet monthly and only for the purpose of making their monthly payments on their loans. The groups of 4 - 6 do not particularly hang together or work as solidarity groups - even though they must cover for each others loans if one does not pay. What actually happens is that if one member is unable to pay on time - other members loan this person the money for that payment -which is later repaid
A Magic Moment for Me
.In the "Livelihood Triad" BASIX provides lots of other services and support particularly to the farmers. These other programs are central and critical to the BASIX program which provides much more than just credit.
Vijay and I discussed the Progress out of Poverty Index which is being promoted by The Microcredit Summit and Grameen Foundation USA. Vijay indicated that Mark Schreiner, the head of the statistical model is both a very competent statistician and very knowledgeable and in tune with development programs. Vijay indicated that the Indian Government Statistical base on poverty statistics is very good (that really amazed me) but that Indian politicians have corrupted the system by adjusting the line of who is and is not in poverty as a political tool to get elected. BASIX will not be using the PPI.
Vijay requested that I return to BASIX on another trip when I have more time and that he would like to personally take me to the field to experience the BASIX programs. What a privilege that will be.
He also accepted my invitation to be a video conference guest lecturer on the programs that I am creating to the University of California Social Business Institute and/or the University of California at Santa Barbara Social Business programs. Vijay has done this with other American Universities and considers this a time and cost effective way to share this work.
Comments
Thanks
Hi Martysb
first of all thanks so much for this addition. I have worked for BASIX is past . Mr. Mahajan is an icon,and larger than life figure . Its great to read about him and his work.