The Microfinance Insider is a forum for graduate students engaged or interested in working in the field of microfinance. Through weekly posts and comments we hope to inspire students and foster the creation of a knowledge community of bloggers with a commitment to financial access and first hand industry information.

Friday, May 16, 2008

Mumbai and Dharavi

Visiting Mumbai was the beginning of my exploration of economic development and microfinance on the Indian subcontinent.
Mumbai is the home of Bollywood and the financial capital of India. While plenty of India’s wealth is concentrated in Mumbai, Mumbai is a city of contrasts with the majority of the city’s population living in slums.

I visited Dharavi, the largest slum in Mumbai and said to be largest slum in Asia with over 1 million residents. The infrastructure of Dharavi was much less advanced than the favelas I have visited in Rio De Janeiro, but Dharavi's infrastructure and businesses are definitely more advanced than the upper class residents of Mumbai would ever believe. Dharavi is buzzing with economic activity. From plastic recycling operations and soap factories to leather tanning, there are both large-scale businesses and individual micro-entreprises throughout Dharavi.

I had difficulty finding any branch offices of MFIs but did see an advertisement for a cooperative that offers loans. Microfinance has historically been mostly a rural-focused endeavor. Group lending, which Grameen Bank’s original model was founded upon, is often the model for rural micro-lending. As a result of the difference in community and culture of a city vs. rural village, urban MFIs usually focus on individual lending. There are MFIs like Swaadhar FinAccess in Mumbai or SafeSave in Dhaka, Bangladesh that focus on urban areas only.

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