“Every poor person must be allowed a fair chance to improve his/her economic condition. This can be easily done by ensuring his/her right to credit. If the existing financial institutions fail to ensure that right, it is the obligation of the state and the world community to help find alternative financial institutions which will guarantee this fundamental human right. This is basic for the economic emancipation of the poor, in general, and poor women, in particular”
-Muhammad Yunus
Money may not essentially bring happiness but it can certainly help individuals to live with dignity. The world today, is subject to control and domination of finance which gets reflected in all walks of life. When we speak of basic human rights, we talk about our right to live, right to education, food, shelter and health but access to finance is rarely a topic brought up in conversations carried on in this context.
Article (25) of UDHR (United Declaration of Human Rights) adopted by UN in the year 1948 constitutes access to food, shelter and health as basic human rights. This idea of securing human rights majorly became the objective of welfare state. With passage of time and boom in the economy, wealth got concentrated in certain economic centers which resulted in widening of gap between rich and poor. Growth in population reduced the share of resources and added additional burden on the state machinery to protect human rights. A major section of society could not ride the wagon of economic development and remained dependent on the state for their sustenance.
In modern capitalist society, if one is considering equality in access to quality food, shelter and health; money acts as an equalizer. Just like the right to education empowers an individual to claim other rights, access to finance has the power to ensure that an individual can access other entitlements. In the absence of formal financial institutions, people have no choice but to look forward to informal credit sources which make sure that an individual does not come out of the vicious cycle of poverty. According to Muhammad Yunus, poverty is the absence of all human rights.
Access to finance for the poor
In order to provide seamless financial services to the poorer section of the society, government has taken major steps like establishment of Regional Rural Banks (RRBs), Priority sector lending, AEPS (Aadhaar Enabled Payment System) and Business correspondents. However, there is a wide array of problems that came along with it. Even though a lot has been done but when it comes to utilization of these services by the poor people, the condition is dismal.
With limited experience of financial services in rural areas of South Rajasthan, I can say that it takes a lot of guts here, to access your own money. For people living in cities, it is usually a comfortable process. With the advancement in technology, banking has become effortless for an average educated person but it is not true everywhere.
For instance, in Udaipur, visiting a bank is not a painful exercise. There is an ATM in every locality. But, the situation is completely different for a gram panchayat called Bhabrana, 100 km away from the city. There is only one bank and a non functional ATM. In order to avail the banking services, customers get into a queue even before the bank opens. The guard in front of the gate tries to manage the crowd like a herd of sheep.
Getting inside the bank is like getting an access to the sacred shrine where bank officials act like they are God. A warning is displayed for the customers to behave properly or else punitive action can be taken. But there is no message for the employees who crush the dignity of customers on a daily basis. These are same people who would visit the HNI (High Net Worth Individual) clients at their doorsteps just to get their signature and wouldn’t mind to perform their household chores, if asked.
If harassment from bank officials was not enough, Business correspondents (BCs) complement them by exploiting the poor further. They take advantage of the lack of information about consumer rights with those in need. For a simple withdrawal transaction, BCs charge additional amount which is no less than extortion.
It is because of such circumstances that a space has formed for loan sharks (moneylenders) in the village, who charge an unreasonably high interest rate along with one time principal repayment clause. Though there has been a significant rise in the micro-credit institutions in rural pockets of the country who claim to provide loans at reasonable interest rates, they lack the basic sensitivity and respect towards other people. Their objective is to increasing the size of their portfolio and not the protection of customer rights.
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