Alleviating Poverty in India Through Microfinance and Financial Literacy
Poverty levels are well documented in India, and it is estimated that the country is home to at least one-third of the world’s poor. Furthermore, up to 87% of the poorest households in India do not have access to credit, and there are potentially 250 million to 380 million people in need of microfinance services in India. The urban poverty of the country is extreme, but it is actually the country’s rural poor who are the most isolated from financial services that could enable them to work their way out of poverty.
Over the past five years, UPS has contributed $945,000 to Opportunity International to support programs including its transformational microfinance work in India. Through this partnership, Opportunity India has implemented a new social investment strategy that supports the growth of Indian microfinance by partnering with, and investing in, povertyfocused microfinance institutions (MFIs) and encouraging start-ups that operate in India’s most underserved areas. As a result, more than 1,600 new clients have received loans—averaging $136 for the first loan—and accompanying counsel, positively affecting nearly 7,000 people.
In 2011 The UPS Foundation also supported the provision of 1,134 school fee loans that were disbursed to families to keep young girls in school, bringing education within reach for children in struggling communities. Financial services alone are insufficient to ensure that clients are escaping poverty. Along with loans and insurance products,
UPS and Opportunity India provide financial education as well as family health and nutrition, justice, and other relevant training such as the following:
- Promoting Justice—In partnership with International Justice Mission, Opportunity provides previously bonded laborers with the tools to improve their lives, including loans and business training.
- Preventing Suicide—Opportunity and SNEHA educate Trust Groups on the subject of suicide prevention and possible solutions to depression.
- Preserving the Environment—Along with Silver Star Papers and NEEP Consultancy, Opportunity teaches about recycling and reusing materials.
- Ending Domestic Violence—Opportunity and the International Foundation for Crime Prevention and Victim Care (PCVC) bring light to the deep-seated assumptions and attitude toward women. PCVC conducts seminars on domestic violence, challenging assumptions and leading open discussions.
UPS is the world’s largest package delivery company and a global leader in supply chain and freight services. This grant is funded through The UPS Foundation’s diversity focus area. This initiative focuses on helping underserved communities through economic literacy programming that teaches the fundamentals of free enterprise and the foundations of economic education.
The UPS Foundation supports emerging entrepreneurs through grants to innovative microenterprise organizations, like Opportunity International. The UPS Foundation is responsible for facilitating community involvement to local, national, and global communities. With UPS in its second century of service, The UPS Foundation has realigned its global strategy to strengthen its impact and better leverage the intellectual and physical assets of the company. The four focus areas of Diversity, Environmental Sustainability, Community Safety, and Volunteerism are built upon its rich experience and are aligned with UPS’s vision for the future.
[Editor's note: This article is part of The Role of Business in Emerging Markets.]