Effects of credit access in smaller communities

By July 22, 2019 Credit Access

It was a Tuesday afternoon and I was headed to meet with the statutory auditors of the company. One of the company advisors were with me and he shared a story with me. A story of a small community and the effect Rs 100 (the equivalent of $1.45) had on it.

The Story

It was an early morning in a small village. A milkman gets a visit from a friend who gave him a 100 rupee bill and told him that he’s come to get it back when he needs it. The milkman had no money. He thought it was the god who sent the man to solve his problems. The milkman happily agreed. He stuffed the bill in his pocket and continues with the daily task of being a milkman.

Shortly he ran into his neighbor who he owed 100 rupees to. The neighbor asks for his money and the milkman politely hands him the 100 rupees bill as he had the money with him anyway. A neighbor is a lonely man who eats his breakfast at a small street-side food cart every day. As he walks past the vendor on the street, he remembers that he owed 100 rupees to the vendor. He hands the 100 rupee bill he got from his neighbor the milkman.

The vendor is happy and he heads out to buy groceries for the food preparation in his food cart. He goes to a small grocery store where he is a regular and he pays for groceries at the end of every week as he’s a regular and the shopkeeper maintains a ledger for his regulars. He greets the shopkeeper and hands him the list. The total amount of for the entire week was 600 rupees. He pays the man and heads home with his groceries.

The shopkeeper closes shop at a little afternoon and goes home for a lovely lunch prepared by his wife. He hands whatever he earned to his wife which included the hundred rupee bill the vendor gave the shopkeeper. The wife puts the money into a small silver container and keeps it in her kitchen shelf. That day around 5 PM, the shop keepers wife heads out to get milk for the family. Even though her husband the shopkeeper sells packaged milk, she prefers to buy it directly from the milkman. Just like every other small vendor, the milkman maintains a ledger for his regulars and guess who was on the list. Yes. The shop keeper’s wife and she owed him a 100 rupees. She comes by to pick up the milk and paid what she owed him.

That same evening the milkman gets a visit from the friend and asks for his 100 rupees back. He gladly pays the man and goes back to being empty-handed.

If you observed carefully, the characters involved neither earned or lost any money. However, all of their debts were cleared. Everybody paid what they owed, everybody is happy and that 100 rupees are off to change lives in another community.

It seems like a normal occurrence but it is fascinating to think about. Introducing a small amount of money into a community solves problems on a massive scale. Even a sophisticated analytics platform cannot predict how a particular amount of money will be used and what kind of ripple effect it will create.

Conclusion

This only possible by making sure people from even the remote places of the country gets access to credit. This is one of the reasons I started Jaysel. Through the company we will be able to let the common people access credit very easily and at a very affordable cost. Lending will always be one of the main pillars of Jaysel regardless of the market of operation. Because we believe access to credit not only created new opportunities in a market but is capable of directly transforming the lives of the borrower and indirectly transform the lives of people around them.

Key takeaways

  1. Introducing money into a community can create a ripple effect and transform the lives of the people.
  2. People deserve access to credit regardless of race, language, culture, location, and others that separates us.

Do you have more to add to the story? Share it in the comments below. 

iamvasee

iamvasee

Just a guy sharing his views on the fintech revolution.

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