[Assam] Micro Credit ( a true story)

[Mohan R. Palleti]

Here is a real story narrated by my brother-in-law who was a collector in
a small town in South India....

In order to help the poor village farmers he started a scheme and provided
the people not money, but cows to help them in their economic growth, and
they can pay back the money later.

The farmers escaped paying the money back to the government by saying that
the cows died, and therefore they can not pay back the money. The were not
healthy cows it seems.

The next policy was no cows were accepted dead until they showed that they
actually died. So farmers brought in the pieces of torn ear lobes of cows
to prove that they really died and to save the collector from making this
long trip to the village.

One day the collector decided to make a surprise visit to the village. And
what does he see? Entire villages with live cows and missing ear
lobes......

So the government changed the policy again this time. No cows were
accepted dead till they were physically seen dead. The result... All cows
were reported dying on friday nights after the collectors office closed
for the weekend. And since there were no resources for preservations, the
cows were reportedly burried that same night.

The moral of the story is, that farmers are definitely not stupid! But it
is inherent in our sytem not to use the money for what it is intended for.
If  we do not have a system by which a farmer is made accountable the
loans will not be fruitful. It will only bring disaster to both parties.

There should also be a law that holds a loanee accountable for charging
higher than prescribed interests and within some strict guidelines.


Mohan R. Palleti