After the first day at Swadhaar’s headquarter office, our supervisor decided to put the two of us Ambassadors into the field for two days to get some perspective before starting an office project. I visited a branch office in Malad, a northern district of Mumbai, to see Swadhaar’s work with the individual loan product that is given only to existing businesses, which I learned is a fairly different arena from the traditional group loan product.
The loan officer I went with, Rajesh, told me that he spoke with clients in either Hindi or the regional language of Marathi, and used more Hindi today for my benefit. He first took me to see three good clients who always pay on time.
Our first stop was eyeglasses shop-owner named Rajesh as well (what are the odds?). He was in his fourth cycle (each cycle is a year) of loans. In later cycles, loan sizes are larger, and by the second cycle, he was able to purchase an eye-examining machine for customers, which substantially improved business. He uses the loans mostly to increase eyeglass stock to match the higher demand.
Although Rajesh is overall very happy with Swadhaar’s service, he has one issue that may very well lead him to discontinue taking loans: the monthly repayment installments are too large. Rather than a 12-month cycle, he wants an 18 or 24-month cycle, even if it means a higher interest rate, as long as the monthly repayment is reduced to a more manageable amount. His loan officer is trying to negotiate a change to the company’s 12-month rule, but gives no indication that it is likely. Swadhaar’s current individual loan product is designed as a working capital loan and hence loan terms are restricted to a maximum of a year. The company plans to introduce fixed asset loans at a later date to meet client’s needs for larger loans and longer loan terms.
One minute later in a smaller gully, we reached a grain and rice shop that similarly used loans largely for increasing stock. The customer’s co-signer, his wife, says that they chose to take loans from Swadhaar instead of other readily available sources solely because Swadhaar’s interest rate was lower, but after four cycles of on-time repayments, she feels that they should be rewarded with even lower interest rates. She says they may soon be profitable enough to no longer need loans, but will likely go for a fifth loan cycle.
Ten seconds later (client-zones are generally dense slum areas), we reached Raju’s mobile phone shop. A relatively new client of only six months, Raju used the first loan to purchase a machine that checks whether or not phones are repairable. It was an immediate hit. Customers from the nearby mobile repair shops now come to Raju to get their phones checked.
When I asked him how much business increased since the loan, he laughingly replied, “Business is going on.” And quite literally—throughout our chat, he was assisting at least two customers at once. Lastly, I asked if he had any need for another loan now that he already had the moneymaker machine. “I could use the money to purchase more mobile re-charge cards. I’ll find some use for the loan.”
However, not all client stories were as happy-go-lucky as these three, Rajesh explained. One former customer runs a shoe and coconut shop, and decided to quit loan-taking because he felt that some of the information asked on the loan forms was too personal, such as product sales volume.
After this bit of tourism, I let Rajesh resume his normal duties, which today consisted mainly of door-to-door promotions of Swadhaar’s loan product to small stores and vendors. The loan officers I’ve talked to about their job say that they’re happy with it, and that the work is not easy but not too hard. After two days in the field with them, I see how modest they are. It’s demanding work, both physically and mentally. They’re constantly on their feet all day in the slums under the sun, and the job requires an incredible amount of patience.
Fortunately, it’s been sunny weather the past two days. Today, it looks like the monsoon has started for good. Next week is the monthly loan repayment collections week, I’ll spend at least one day in the field to see it, whether it rains or downpours.