The microfinance companies where poor people like Shobha Vakade, right, go to for loans are now being viewed with suspicion.
The microfinance companies where poor people like Shobha Vakade, right, go to for loans are now being viewed with suspicion.

Poor conditions for borrowing in India



Of the 26.7 million active borrowers from private microfinance institutions (MFIs) in India, some 54 have ended their lives in recent months.
Whether that should be considered a large number or not depends on what it is being compared with: the national average for suicides is 10.8 deaths per 100,000 people, and by that measure the crisis is not alarming.
But each death viewed as a statistic is a tragedy for the immediate family. The state of Andhra Pradesh, which accounts for 35 per cent of outstanding microfinance loans nationwide, has passed immediate measures to restrict private MFIs.
There is no evidence to suggest the suicides occurred because borrowers were unable to pay back their loans, or that the loan recovery methods were coercive or aggressive. But the industry that was supposed to help lift the poor out of poverty is now being viewed with suspicion.
The measures Andhra Pradesh announced include preventing private MFIs from granting loans to borrowers who had already borrowed from state-supported self-help groups, unless they have obtained a no-objection certificate, and stopping MFIs from organising weekly loan recovery meetings in which officers meet borrowing groups and recover loan instalments.
Andhra Pradesh officials have couched their intervention in humanitarian terms. They point out private MFIs charging "usurious" interest rates (between 24 and 30 per cent).
That SKS Microfinance, one of the leading private MFIs, recently launched an initial public offering and raised US$350 million (Dh1.28 billion) in capital has also not gone unnoticed.
The reasoning goes: something is wrong when for-profit MFIs prosper from lending money to some of the poorest people in the world. The law, the state argues, is meant to protect borrowers from harsh lenders driven by profit and bottom line.
If only it were that simple. The law has been challenged and may not survive in its current form. But as Vineet Rai of Intellecap, a social sector advisory that recently published a report on the crisis points out, the real issue is who owns the poor: the state or the private sector?
The poor are a market to be served, over which the state has enjoyed monopoly. The loans state financial institutions have made to them have often not reached them because of endemic corruption. There are significant leaks in the system, because of which repayment and recovery are sluggish.
One consequence is the absence of a culture of credit, which means the rural poor are seen not as borrowers, but as recipients of grants.
Their unpaid loans tend to be waived in the run-up to elections, and when their support is needed, political parties force state-run institutions to increase lending to them.
Those bursts are sporadic and the rural poor need money regularly. The absence of a reliable flow of credit forces many of them to borrow money from traditional money lenders. The interest rates they charge are significantly higher than the 30 per cent that private MFIs charge. Their loan recovery methods can also turn violent.
When Muhammad Yunus launched the idea of microfinance in neighbouring Bangladesh through the Grameen Bank decades ago, his aim was to liberate the poor from the clutches of such money lenders in his country.
But the difference between the Yunus model and the private MFI model is that Grameen raised funds from donors, whereas private MFIs raise capital from stock markets.
Investors in private MFIs want profits and good returns; their interest in investing is not necessarily social development.
Could the pressure investors apply on the employees of private MFIs to earn ever-higher rates of return force the MFIs to deploy unethical means? That is an interesting question in theory, but as yet nobody has accused private MFIs of using force on their borrowers.
Indeed, SKS Microfinance says that while 17 of its borrowers ended their lives, none of them was in arrears, suggesting it is simplistic to argue that the borrowers committed suicide because they could not afford to service their loans.
In any case, the growth of private MFIs is inevitable. Indian banks are required to lend about 40 per cent of their portfolio to the so-called priority sector, which includes lending to the poor.
Many Indian private banks are urban-based and lack the infrastructure, capacity and expertise to service a large number of labour-intensive transactions, with poor borrowers spread out over a vast territory.
Private MFIs become effective intermediaries in this area, and they bear the transaction costs of being in regular contact with the borrowers, collecting money periodically.
Bankers have long observed that the surest and most effective way to ensure loan recovery lies in disciplined contact with borrowers, and private MFIs do just that.
But this becomes a novel experience for some borrowers, who are used to lending by the more lackadaisical state-linked financial institutions, or SHGs, in which their employees have little incentive to perform, and where political exigencies can prevail.
Rolling over loan portfolios becomes politically convenient. By disrupting that equilibrium, private MFIs are changing the rules of the game, which politicians resent.
Private MFIs have access to capital (from banks which must lend to the priority sector), and their recovery model is disciplined (some MFIs talk of a 98 per cent recovery rate), which makes them attractive investment bets in stock markets.
They can raise far more capital than non-profit non-government organisations. But it is that success, and the riches it has brought to stock-owning employees of newly-listed companies such as SKS, which has raised questions about the industry.
In this, MFIs are also partly to blame: they have created the hype that microfinance and microcredit are the panacea for all ills, and that their borrowers can unleash an entrepreneurial revolution in rural India. The fact remains that a large proportion of the borrowing goes to pay for transactional costs, or to pay back older loans; only a small amount of the money borrowed is for starting businesses.
There are other sociological consequences which the industry will not talk about. Microfinance rests on the principle of lending money to women, because research shows that women borrow money to pay for their children's education or health, or to set up small businesses.
However, empowering women in this manner changes the equation within families, and social activists have reported cases where far from emancipating women, they have been endangered, with many of them subject to violence from husbands or male relatives who want access to the money they have borrowed.
And a recent report in The Wall Street Journal suggests that many women who would like to continue repaying loans are being forced to stop doing so by their male relatives, who argue that if they don't pay back the loans, the state will bail them out.
As many of the officials in Andhra Pradesh who took the decision to get tough with MFIs are also men, sociologists are concerned that this is yet another way the traditional male patriarchy is preventing the economic independence of women.
Clearly, microfinance is not the only solution to the intractable nature of rural poverty. But restricting private microfinance is suicidal: it will force the poor to choose between sometimes corrupt and often inefficient state-run institutions, or usually more expensive and sometimes violent money lenders. Instead of liberating the poor, this intervention will enslave them. Trust them, offer them choice, and they will make the decision that is in their best interests.
 
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Company name: myZoi
Started: 2021
Founders: Syed Ali, Christian Buchholz, Shanawaz Rouf, Arsalan Siddiqui, Nabid Hassan
Based: UAE
Number of staff: 37
Investment: Initial undisclosed funding from SC Ventures; second round of funding totalling $14 million from a consortium of SBI, a Japanese VC firm, and SC Venture

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Director: Rajkumar Hirani

Cast: Ranbir Kapoor, Vicky Kaushal, Paresh Rawal, Anushka Sharma, Manish’s Koirala, Dia Mirza, Sonam Kapoor, Jim Sarbh, Boman Irani

Rating: 3.5 stars

The major Hashd factions linked to Iran:

Badr Organisation: Seen as the most militarily capable faction in the Hashd. Iraqi Shiite exiles opposed to Saddam Hussein set up the group in Tehran in the early 1980s as the Badr Corps under the supervision of the Iran Revolutionary Guards Corps (IRGC). The militia exalts Iran’s Supreme Leader Ali Khamenei but intermittently cooperated with the US military.

Saraya Al Salam (Peace Brigade): Comprised of former members of the officially defunct Mahdi Army, a militia that was commanded by Iraqi cleric Moqtada Al Sadr and fought US and Iraqi government and other forces between 2004 and 2008. As part of a political overhaul aimed as casting Mr Al Sadr as a more nationalist and less sectarian figure, the cleric formed Saraya Al Salam in 2014. The group’s relations with Iran has been volatile.

Kataeb Hezbollah: The group, which is fighting on behalf of the Bashar Al Assad government in Syria, traces its origins to attacks on US forces in Iraq in 2004 and adopts a tough stance against Washington, calling the United States “the enemy of humanity”.

Asaeb Ahl Al Haq: An offshoot of the Mahdi Army active in Syria. Asaeb Ahl Al Haq’s leader Qais al Khazali was a student of Mr Al Moqtada’s late father Mohammed Sadeq Al Sadr, a prominent Shiite cleric who was killed during Saddam Hussein’s rule.

Harakat Hezbollah Al Nujaba: Formed in 2013 to fight alongside Mr Al Assad’s loyalists in Syria before joining the Hashd. The group is seen as among the most ideological and sectarian-driven Hashd militias in Syria and is the major recruiter of foreign fighters to Syria.

Saraya Al Khorasani:  The ICRG formed Saraya Al Khorasani in the mid-1990s and the group is seen as the most ideologically attached to Iran among Tehran’s satellites in Iraq.

(Source: The Wilson Centre, the International Centre for the Study of Radicalisation)

Company Profile

Name: Nadeera
Based: Abu Dhabi, UAE
Founders: Rabih El Chaar and Reem Khattar
Sector: CleanTech
Total funding: About $1 million
Investors: Hope Ventures, Rasameel Investments and support from accelerator programmes
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Sly Cooper and the Thievius Raccoonus

Developer: Sucker Punch Productions
Publisher: Sony Computer Entertainment
Console: PlayStation 2 to 5
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Company profile

Name: Maly Tech
Started: 2023
Founder: Mo Ibrahim
Based: Dubai International Financial Centre
Sector: FinTech
Funds raised: $1.6 million
Current number of staff: 15
Investment stage: Pre-seed, planning first seed round
Investors: GCC-based angel investors

Confirmed bouts (more to be added)

Cory Sandhagen v Umar Nurmagomedov
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Michael Chiesa v Tony Ferguson
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Mackenzie Dern v Loopy Godinez

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• Looming global slowdown and recession in key economies

• Russia-Ukraine war

• Interest rate hikes and the rising cost of debt servicing

• Oil price volatility

• Persisting inflationary pressures

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• A resurgence of Covid?

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Uefa Champions League semi-final, first leg
Bayern Munich v Real Madrid

When: April 25, 10.45pm kick-off (UAE)
Where: Allianz Arena, Munich
Live: BeIN Sports HD
Second leg: May 1, Santiago Bernabeu, Madrid

All Blacks line-up for third Test

J Barrett; I Dagg, A Lienert-Brown, N Laumape, J Savea; B Barrett, A Smith; J Moody, C Taylor, O Franks, B Retallick, S Whitelock, J Kaino, S Cane, K Read (capt).

Replacements: N Harris, W Crockett, C Faumuina, S Barrett, A Savea, TJ Perenara, A Cruden, M Fekitoa.

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Vanuatu: $130,000

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Benefits:  No tax, no restrictions on dual citizenship, no requirement to visit or reside to retain a passport. Visa-free access to 129 countries.

Company Profile

Name: Direct Debit System
Started: Sept 2017
Based: UAE with a subsidiary in the UK
Industry: FinTech
Funding: Undisclosed
Investors: Elaine Jones
Number of employees: 8

Company Profile

Company name: Hoopla
Date started: March 2023
Founder: Jacqueline Perrottet
Based: Dubai
Number of staff: 10
Investment stage: Pre-seed
Investment required: $500,000

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Equestrian

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Judo
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Cycling
Safia Al Sayegh (women's road race).

Swimming

Men: Yousef Rashid Al Matroushi (100m freestyle); women: Maha Abdullah Al Shehi (200m freestyle).

Athletics

Maryam Mohammed Al Farsi (women's 100 metres).

Sting & Shaggy

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Politics in the West
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Scoreline

Switzerland 5

COMPANY PROFILE

Name: Xpanceo

Started: 2018

Founders: Roman Axelrod, Valentyn Volkov

Based: Dubai, UAE

Industry: Smart contact lenses, augmented/virtual reality

Funding: $40 million

Investor: Opportunity Venture (Asia)

Results

6.30pm: Maiden (TB) Dh82,500 (Dirt) 1,200m; Winner: Major Cinnamon, Fernando Jara, Mujeeb Rahman

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9.25pm: Handicap (TB) Dh87,500 (D) 1,400m; Winner: Sharamm, Ryan Curatlo, Satish Seemar

SPECS

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Power: 181hp

Torque: 230Nm

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Starting price: Dh79,000

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Etihad, Emirates and Singapore Airlines fly direct from the UAE to Singapore from Dh2,265 return including taxes. The flight takes about 7 hours.

The hotel

Rooms at the M Social Singapore cost from SG $179 (Dh488) per night including taxes.

The tour

Makan Makan Walking group tours costs from SG $90 (Dh245) per person for about three hours. Tailor-made tours can be arranged. For details go to www.woknstroll.com.sg

Student Of The Year 2

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1.5 stars

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Transmission: 8-speed auto
Power: 470hp, 338kW
Torque: 620Nm
Price: From Dh491,500 (estimate)
On sale: now

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Rayan Yaslam
The Al Ain attacking midfielder has become a regular starter for his club in the past 15 months. Yaslam, 23, is a tidy and intelligent player, technically proficient with an eye for opening up defences. Developed while alongside Abdulrahman in the Al Ain first-team and has progressed well since manager Zoran Mamic’s arrival. However, made his UAE debut only last December.

Ismail Matar
The Al Wahda forward is revered by teammates and a key contributor to the squad. At 35, his best days are behind him, but Matar is incredibly experienced and an example to his colleagues. His ability to cope with tournament football is a concern, though, despite Matar beginning the season well. Not a like-for-like replacement, although the system could be adjusted to suit.

Mia Man’s tips for fermentation

- Start with a simple recipe such as yogurt or sauerkraut

- Keep your hands and kitchen tools clean. Sanitize knives, cutting boards, tongs and storage jars with boiling water before you start.

- Mold is bad: the colour pink is a sign of mold. If yogurt turns pink as it ferments, you need to discard it and start again. For kraut, if you remove the top leaves and see any sign of mold, you should discard the batch.

- Always use clean, closed, airtight lids and containers such as mason jars when fermenting yogurt and kraut. Keep the lid closed to prevent insects and contaminants from getting in.

 

PREMIER LEAGUE STATS

Romelu Lukaku's goalscoring statistics in the Premier League
Season/club/appearances (substitute)/goals

2011/12 Chelsea: 8(7) - 0
2012/13 West Brom (loan): 35(15) - 17
2013/14 Chelsea: 2(2) - 0
2013/14 Everton (loan): 31(2) - 15
2014/15 Everton: 36(4) - 10
2015/16 Everton: 37(1) - 18
2016/17 Everton: 37(1) - 25

In-demand jobs and monthly salaries
  • Technology expert in robotics and automation: Dh20,000 to Dh40,000 
  • Energy engineer: Dh25,000 to Dh30,000 
  • Production engineer: Dh30,000 to Dh40,000 
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  • HR leader: Dh40,000 to Dh60,000 
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  • Senior reservoir engineer: Dh40,000 to Dh55,000 
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Other promotions
  • Deliveroo will team up with Pineapple Express to offer customers near JLT a special treat: free banana caramel dessert with all orders on January 26
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