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Microfinance instead of alms

Updated August 22, 2013

THE natural calamities that struck Pakistan in the last decade, including the 2005 earthquake, the floods of the last few years and even displacement of people due to military action, led to the formation of many new NGOs, as well as to expansion of activities of existing NGOs and a massive influx of local and foreign aid that was provided in the form of cash and kind to the affected parties. These are all lofty developments which bring a sense of munificence in the general populace but at the same time this can result in the proliferation in our society of the debilitating characteristic of mendicancy.

There is no harm in providing aid to poverty-stricken people but constantly providing financial help can lead to the habit of living in a situation where they don’t have to work, yet they receive financial help. In the long run this may result in the deteriorating of quality of labour which will affect the country economically, as well as result in the development of a psyche of scrounging which can have negative implications for the social fabric of the nation.

Instead of doling out donations, NGOs and relevant government institutions can design micro-financing projects under which the affected people are provided with small businesses in the form of a long-term loan, such as a fruit pushcart or a small pa’an shop or a French fries kiosk, or a few cows to sell milk in case of a rural area.

This is proposed, of course, in addition to education and skill development. The beneficiaries can be provided with the technical know-how of running the business, as well as a plan to take this small loan capital back from them in the form of monthly tiny cash installments.

Once the beneficiary has returned the entire amount, he will feel a sense of ownership in the business venture, he will end up with a running business which can be expanded further based on his personal acumen, the benefactor will get the amount back which can be utilised somewhere else. The habit of being dependent on aid for livelihoods should not penetrate a society that is already fraught with many other evils. As a nation, we have been roaming around the world with a begging bowl at the official level. Let’s build our society with massive micro-financing across the country to make our people self-reliant and prevent mendicity from becoming a national attribute.

M. M. A. Hossain