This is a very interesting story so please read on till its conclusion. Lately the Ceylinco Grameen Bank concept of lending money to women to build businesses has also come to Minneriya and Hingurakgoda.
So assume a woman is lent Rs 20,000/- at 12% interest, or she promises to pay the principal and interest at the end of 12 months. So she has to payback Rs 22,400/- in a year.
She promptly goes out and buys a gold chain for Rs 20,000/- as Grameen does not appear to follow up on loan as long as she meets the repayment schedule on time, which is also underwritten by a group of women who borrow together. She then pawns the chain to Bank of Ceylon, which at the moment gives the highest percentage on pawned value, and gets Rs 15,000/-
She then lends the money to her husband or another farmer on a scheme where he promises to repay the money and give her 15 bushels of paddy as interest on harvest. So in 4 months she receives her Rs 15,000 back and if she sells her 15 bushels(bushel is 21 kg), she gets about Rs 7,875.(at Rs 25 a kilo) Now she has Rs 22,875. She then keeps Rs 2,875 and relends Rs 20,000 again for 4 months and gets 20 bushels at the end of the 4 months as well as her principal. The 20 bushels gives her Rs 10,500. She then redeems her jewelery paying Rs 15,000 for the principal and Rs 1,750 as interest. She has Rs 13,750 from her most recent transaction, when added to the earlier Rs 2,875 becomes Rs 16,625. From farm labor etc. she has been able to save an extra Rs 5,775 in the year or approx Rs 500 a month, to pay the loan and interest. So at the end of the year she has a gold chain, and she is a good credit risk and she is now given a loan of Rs 30,000 having proved herself.
Her husband was not told about the Grameen transaction or Gold chain, just that she managed to borrow from a money-lender, so she ensures he pays her loan on time. Now that is a smart women who takes Grameen for a ride but also enriches herself too in the process, saving her family from misfortune and a Gold chain now worth Rs 30,000 for future emergencies.(village credit terms are 1 bushel per Rs 1,000 lent per crop)
I must say I was impressed by the innovative use to which our rural women put the Grameen loan without doing any work, except to save Rs 500 a month, a days labor a month should see to that. Now that is a story????
