urmee mehta mankarThe Challenge

Nearly two thirds of India’s more than 1 billion people live in rural areas, and almost 170 million of them are poor. Although urbanization is on the rise, three out of four of India’s poor live in the vast rural regions of the country. For more than 21 percent of the population, poverty is a chronic condition.  A major cause of poverty among rural communities is a lack of access to productive assets and financial resources. High levels of illiteracy, inadequate health care, and extremely limited access to social services only aggravate the situation.

Swadhaar is a new microfinance institution (MFI) which operates primarily in the urban slums of Mumbai – largely regarded as one of the most difficult areas to alleviate poverty. According to the 2001 Indian Census, 54.1% of Mumbai’s residents live in Mumbai’s slums, generally without even basic amenities such as running water or indoor plumbing. Until very recently, urban microfinance was thought to be impossible — especially in Mumbai, regarded as one of the most complex markets due to its client base.

The Entrepreneur and the Solution

Swadhaar is changing all of that. Headquartered in Mumbai, Swadhaar opened its doors for business in March 2006 and already serves 2,500 individuals.  Swadhaar is a nonprofit organization whose mission is to assist the poor in building their own capacity in breaking out of poverty through access to financial services. Swadhaar provides an average loan of $85 USD and enjoys high repayment rates.

“We formed Swadhaar to bring opportunity and hope to the hardworking poor people of Mumbai trapped in poverty. A strategic partnership with Unitus and microfinance expertise from ACCION will move us much closer to our goal of providing financial services to 195,000 clients by 2011,” says Urmee Mehta Mankar, Swadhaar. “Historically, the urban poor have been chronically underserved by microfinance institutions in India – Swadhaar is hoping to change that.”

Swadhaar commenced operations in March 2006. In the next fiscal year (through March 2007), Swadhaar hopes to open two more branches. By the end of 2011, Swadhaar has the visionary plan of reaching 195,000 clients with access to microfinance services. Unitus is excited to partner with Swadhaar as they enter into the field of microfinance. Even as a recent start-up, Swadhaar already boasts an impressive pilot project history, a strong management information system and the willingness to invest in the technology and professional expertise that will make their institution a success.

The X-Interview

Global X interviews Urmee Mehta Mankar, who works with Swadhaar in Mumbai. Even though this microfinance institution is quite young (it was launched only two years ago), there is lot to be learned from this interview: why she loves Unitus, why she thinks that you should "get out into the field and learn about the market reality," and why a 12-year old boy who was selling tissue paper boxes at a Mumbai intersection became her mascot.