Micro- finance for new and small businesses

 (Athwaas)

PAY IT FORWARD WITH MICRO-LOANS

Our micro-loan program, known as Athwaas, is delivered through our partner, the Iqbal Memorial Trust, in Kashmir.  We provide small loans to the most vulnerable and needy communities in Kashmir to ensure their basic livelihoods are met. Donate today to make a difference.
 

Why We Started This Program:

Following the devastating floods in the valley of Kashmir in September 2014, a dire need was identified to help very small to small business owners recover from the financial crisis they would face given the devastation they faced. These were self-employed individuals who with minimum capital could quickly get back on their feet to start earning their livelihood and continue to meet the needs of their family and be prevented from the threat of looming abject poverty. These individuals were often one’s who had also lost their homes to the flood, had no form of insurance and were often solely reliant on a single form of income through their small business of e.g: running a cab, minicab (auto-rickshaw), poultry farm, hand-driven cart, tea stall etc.

The impact was profound:

1. The flow of cash in the economy reduced significantly, with those having disposable cash curtailing its use owing to near term uncertainty, pushing the economy towards a liquidity crunch. 

2. The out of state skilled and unskilled labor (estimated to be anywhere from 50,000 to 80,000 in number) left Kashmir, leaving the place without a workforce that could be utilized effectively in reconstruction activities of homes and businesses. The remaining local workforce lacked building and construction vocational skills and was not as productive as the immigrant labor force. 

3. The enabling “technology and tools” of the economy like transport services, repair shops, service provider cooperatives, looms, and carts used by pullers to haul provisions were significantly compromised due to either direct loss of tools and organized places of work or indirect pressure on workers to first rebuild or make their own homes habitable.

Three factors, mainly Capital, Labor, and Tools/Technology determine the size or growth of an economy. Kashmir was hit with a triple-whammy that seriously compromised these three levers.
 

Brainstorming Solutions

Project Philosophy: Teach a person to learn to fish, rather than give him fish

Inspired by the famed Nobel Peace Prize winner Muhammad Yunus’s Grameen Bank, pioneering the concepts of micro-credit and micro-finance, Revive Kashmir partnered with its implementation partner, Iqbal Memorial Institute- Sakhawat Center, to contribute towards a pay it forward interest free micro-loan project, wherein several such small businesses would be given an interest free small loan to re-establish their basic livelihood, and be in a position to start paying back the loan amount in small installments in an effort to use the capital towards helping another small business.

We measure the project by understanding how many businesses start paying back the capital provided in an interest-free form i.e. “pay it back” and how many businesses pay back the full amount i.e. “pay it forward”. In both cases, the capital received back is used towards helping a new benefi ciary, in an attempt to create a healthy business ecosystem.

Project Milestones

The project was initiated in early 2015, through which until the end of 2018, 102 beneficiaries were identified and served with micro-finance (loan) capitals in the range on INR 10,000 to INR 50,000 (approximately $175-800) per individual business. These beneficiaries were located in various districts of Kashmir valley.

By the end of 2018, 52 beneficiaries were paying it back and 6 of the beneficiaries had already paid it forward. The beneficiaries not being able to pay back were identified as facing extreme financial hardship or had not been able to utilize the funds for livelihood purpose.

The initial results of the project has encouraged us to invest in this project further to fulfil our mission

Our Future Vision

Revive Kashmir plans to reach a total of 500 beneficiaries by year 2020, through:

• Additional funding and additional recovery from the micro-credits that would be able to benefit more small businesses.

• Identify beneficiaries with criteria that have a higher chance of success as indicated by the data in earlier phase.