There is nothing more dispiriting than to see fresh young minds alive with entrepreneurial ideas denied the basic finance to get them off the ground simply because they were born and live in some of the world’s poorest places. They don’t want a handout, just a fair chance to make their own way in the world.
It is out of empathy with that frustration that in 2009 I launched Shanti Microfinance, a social enterprise and UK charity that provides access to technology and capital for entrepreneurs in slums and villages in India.
As Director of Venture Capital Relations at Microsoft between 2000 and 2005, I had worked with the VC community in EMEA and the Silicon Valley to help their portfolio companies leverage the NET initiative, access smart funding and go to market. I had been appointed as a liaison between the UK government and entrepreneurs, responsible for helping innovative start-up technology and life sciences companies make the UK their base so that they could succeed globally through strategic partnerships. Before that I had worked with the Edmonton police force, helping children and women to escape domestic violence and assist victims of drug abuse.
Therefore, witnessing how people struggled in all sorts of circumstances all over the world, how they just need a helping hand to turn things around, and how pulling together and pooling resources really makes a difference had become part of my DNA.
Based on what I had seen first-hand, including things that outraged me such as the poor in India being taken advantage of by what amounted to loan sharks under the guise of microfinance organisations charging 80 per cent interest, I think it was inevitable that I would ultimately want to combine business with a philanthropic, socially responsible approach. This is where the idea for a not-for-profit microfinance company took root and grew. The model I adopted provides finance and skills training to people in slums and villages in India so that they can build sustainable businesses and become bankable – in other words we want to enable them to have choices.
The loans we provide are structured so as not to place the recipient in a dependency model – but instead encourage them to scale their businesses and inspire others in their own communities to perhaps follow their example. Partnering with local organisations on the ground ensures that interest rates are capped at an acceptable level of 10-12 per cent overall. On repayment, the interest is used for further loans and local administration. In this way we work with individual men, women, and family run businesses across all religions.
Structuring loans in various sizes, we provide them in a group-plan of four, so each recipient can guarantee their fellow loan recipient(s) at the same time as promoting community unity. We build mentoring and training into our relationships with loan recipients so we can all learn from each other. Helping, learning, cooperating and growing together – it is a simple recipe, but it cuts across borders, cultures and generations and really seems to have struck a cord with everyone who has come into contact with it.
We started out focusing on Gujarat, India, working in three areas as our big project for 2010: funding rickshaw drivers to put a down-payment on their vehicles; funding artisans in rural and urban communities to design and develop their textiles for sale; and funding of eco-sanitation facilities for women farmers that can promote health and enable their daily work in both comfort and dignity.
We obtain funding from banks, corporations, entrepreneurs, venture capitalists, foundations , individuals and even rock bands such as UK rock band ICON (http://www.facebook.com/IconTunes).
Silicon Valley venture capitalist John Hummer of Hummer Winblad, J.P. Rangaswami, Chief Scientist of Salesforce, and Ken Olisa, chairman of Restoration Partners and board member of Thomson Reuters, are just some of those who rallied round and threw their weight behind the project when I set up Shanti Microfinance. We also partner with universities in order to explore and promote sustainability.
I have been fortunate to team up with some prominent and equally committed people to get this project off the ground. Brent Hoberman, co-founder of Lastminute.com and Mydeco, supported my global call to entrepreneurs last year to help us raise money and secure backing to help families in rural and urban Gujarat and then more widely. Money raised will go to provide healthcare and promote education as a lack of these creates some of the biggest barriers to slum entrepreneurs being able to get established and grow.
I am also campaigning for the Shanti Microfinance model to be adopted as a new template for the global regulation of the microfinance industry to help bring down the interest rates charged by some leading organisations. I know they are wedded to the idea of charging high interest rates to help investors make a return on their investment, but there has to be a better, more equitable way of achieving everyone’s goals and dreams.
Given the choice, shareholders in the developed world do not want to profit out of other people’s suffering, wherever they might be on the globe. The rise of environmental consciousness, ethical purchasing and public pressure on big business to deliver corporate social responsibility initiatives gives me reason to be optimistic about this being achievable. There’s no end to the amount of projects we want to work on and with your help we can.
Sheetal Mehta-Walsh is the founder of Shanti Microfinance. In 2005, she was awarded the Asian Women of Achievement Award for her efforts with taking technology to developing communities in India and Africa. The former Microsoft venture capital guru now devotes her time to helping business start-ups in some of the poorest places on earth.