Just a quick update on the watchman loan situation.
He came this morning, and we had a short chat…mostly because my Hindi is more limited than I’d like to believe. Memo to anyone raising little kids these days: BILINGUAL! Or at least, if you’re in HS or college, study abroad as much as possible and learn other languages. I should re-up on my Hindi classes but that’s another post for another day.
Anyway, I disbursed the 5000 rupee loan this morning, with the following terms (agreed to verbally):
1. Principal-only loan; no interest
2. Repayment moratorium: 12 weeks
3. Repayment schedule: 500 rupees per week for 10 weeks, starting September 9 with full repayment slated to be made by November 11.
4. “Any problems, any delays – just come find me.”
Technical stuff aside, I am also asking myself: why wasn’t my watchman smiling when he got the loan? Simple answer: it’s not a happy occasion. He doesn’t want to have to ask for a loan, and probably not from me. And certainly not to pay his daughter’s healthcare costs. He’s probably a little afraid – what if he can’t pay back on time? What if I tell his bosses or the building society?
It’s tempting to think of lending to the poor in terms of smiling recipients and empathetic lenders. Of course it’s more complex. People need money to smooth irregular cash flows or prevent unexpected shocks from sending them into a poverty trap. Loans to finance a small business are less common than “I need money because I need money.” And these loans may be less fun than entrepreneur financing…but they may be more important, from an anti-poverty perspective.