Beyond Money
where adivasis can dare to dream

Savita Narayan highlights a powerful initiative in Kotwalwadi, Maharashtra

The year: 1942. The place: Siddhagad, Maharashtra. Young patriots Bhai Kotwal and Hiraji Goma Patil were shot dead on 2nd January during the freedom struggle. To commemorate their martyrdom, Haribhau Bhadsavle donated 45 acres of land in 1947 to found the Kotwalwadi Trust. Today, the Trust works towards the objective of social and economic progress of adivasis and the poor through primary education, basic literacy, community health and employment.

Adivasis are encountering changes in several areas of their lives as deforestation has depleted income from traditional forestry. “They need self-respect and confidence. Self-reliance is important,” says Sandhya Deosthale, trustee and daughter of Haribhau Bhadsavle. To supplement its finances, the Trust runs Hathmag Kendra whose handloom products have found a ready market in urban areas.

Children of 15 adivasi villages around Neral go to the town for schooling. The Trust runs a hostel that can accommodate 40 of these economically-deprived students. The monthly expense of the hostel is around Rs25,000 and this covers the students food, clothing, educational equipment and medical needs. The Trust is looking for a sponsor for schoolbags and uniforms.

The Trust has also set up Vidhyarthi Sahayak Nidhi (VSN) to give financial help to adivasi children who want to pursue studies beyond class X and for vocational training programmes as laboratory assistants, tailors and such others. Many students, who have availed of loans from VSN, are now voluntarily paying back the money in instalments. The Bank of Maharashtra offers vocational training. The Trust takes its students to the Hadapsar centre of the Bank to provide them training in zardosi embroidery, beauty-care and motorcycle maintenance. There is also a three-month construction training programme for students over 18, conducted by Larsen & Toubro Charitable Trust, on Kotwalwadi farm. This would qualify them for more remunerative jobs.

Rice is cultivated on about five acres of the Trust land during the monsoon, but lack of a perennial source of water makes year-round cultivation impractical. Some seasonal vegetables are also grown. Nakshatra ban or the ‘Garden of Stars’ has plants that are associated with each birth star. These plants have medicinal value and each child is given the care of a plant. These initiatives give the children hands-on experience of agricultural practices and have taught them the value of farming. This five-year old garden has full-grown plants and trees and more facilities are being added for visitors.

Every year, about 100 undergraduate college students of the National Service Scheme (NSS) visit the centre for a week. It is an exercise that serves to motivate both students and teachers. It is also an excellent occasion to underline the issues of environment protection, water conservation and prevention of soil erosion. NSS activists have been involved in building bunds on the hillsides to prevent rainwater running off and the water harvested is being used for drinking and irrigation. The Trust runs a tailoring class for women in the surrounding villages.

One product is godhadi, a quilt—that is made from used saris. The shopping bags, the women make from cloth, are also popular. A health programme focused on women has also motivated young girls to take up paramedical training. The children’s dehydration prevention programme has been successful largely due to the education of mothers and care-givers.

Kotwalwadi is now looking forward to setting up its own knowledge centre on environment, in collaboration with professionals and technical experts. It is envisaged as a practical resource for NSS activists and local students. “I want children to realise how important it is to love their country and to work to see it prosper,” avers Ms Deosthale. In the 64th year of India’s freedom, as adivasi children explore new opportunities they may not have even dreamed of, the hopes of two Kotwalwadi freedom-fighters are being fulfilled.



Mukund Dhaygude

2 years ago

our PM is an Adivasi

Dr Dilip Maydeo

6 years ago

I wish to come to Kotwalwadi and conduct a medical camp .Please call me on 9821041983



In Reply to Dr Dilip Maydeo 6 years ago

Thank you for your support.

Madan and Varsha Arekar

7 years ago

Wonderful legacy taken forward responsibly by Ms. Sandhya Deosthale. A commendable effort for the upliftment of the poor adivasies and instilling the sense of National pride.
We wish all the more success in her new efforts.



In Reply to Madan and Varsha Arekar 6 years ago

These words give me strength to put in more efforts.Thank you

Friday Closing Report: Is sanity creeping in?

Unsupportive cues from across the globe led to a soft opening this morning. Weak wholesale price index (WPI) and weekly inflation data and all-round selling pressure resulted in a steep slide in the market, ending nearly 2% lower.

The market opened on a subdued note this morning on tepid global cues. Selling pressure in IT and technology stocks pulled the markets lower. Higher wholesale price index (WPI) based inflation for September and weekly food inflation figures for the week ended 2nd October added to the woes. The post-noon session was no better, as the market continued its southward journey on intense selling pressure, settling a tad above the day's low.

The Sensex shut at 20,125, down 372.59 points or 1.82% lower. The bellwether index touched a high of 20,578 and a low of 20,090 today. The Nifty closed 114.70 points or 1.86% down at 6,062. The barometer swung between a high-low of 6,200 and 6,050 during the session.

The market breadth was dismal today. Of the 30 Sensex stocks, 29 ended as losers and one ended in the green. A similar trend was seen on the Nifty where 47 of the 50 stocks declined while three stocks edged higher. Among the broader indices, the BSE Mid-cap index declined 1.22% and the BSE Small-cap index was down 0.74%.

NTPC emerged as the lone gainer on the Sensex, up 0.35%. The laggards of the index were Wipro (down 3.58%), TCS (down 3.52%), Infosys (down 3.39%), Hero Honda (down 3.19%) and Bharti Airtel (down 3.10%).

The sectoral space wore a coat of red today as all sectors ended lower. BSE IT (down 3.25%), BSE TECk (down 3.01%), BSE Auto (down 2%), BSE Bankex (down 1.91%) and BSE Metal (down 1.48%) were the top sectoral losers.
Markets in Asia ended mostly in the red on the last trading day of the week, speculating that US Federal Reserve chief Ben Bernanke's speech at the Boston Fed later today will give some inkling about the central bank's proposed stimulus. Besides, a stronger yen has got exporters in the region worried.

The Hang Seng was down 0.40%, Jakarta Composite was down 0.59%, KLSE Composite was down 0.44%, Nikkei 225 was down 0.87% and Taiwan Weighted shed 0.12%. On the other hand, the Shanghai Composite jumped 3.18%, Seoul Composite was up 0.13% and Straits Times gained 0.29%.

Wholesale price index (WPI) based inflation moved up to 8.62% in September, from 8.51% in the previous month on a rise in prices of certain food and non-food items.

The monthly inflation figure for July has been revised upwards to 10.31% from the provisional number of 9.97%.

Meanwhile, food inflation for the week ended 2nd October rose marginally to 16.37% on the back of higher prices of cereals, fruits, select vegetables and milk.

After falling in the previous week, food prices again took a northward trajectory and went up by 0.13 percentage points. Food inflation was 16.24% for the week ended 25th September.

The US markets closed lower, led by banking stocks, as the National Association of Attorneys General said it will conduct a probe among all 50 states to check if banks and loan providers used false documents and signatures to justify hundreds of thousands of foreclosures. A rise in initial jobless claims and an increase in trade deficit in August also weighed on the sentiments.

The Dow shed 1.51 points (0.01%) to 11,094. The S&P 500 fell 4.29 points (0.36%) to 1,174. The Nasdaq fell 5.85 points (0.24%) to 2,435.

Foreign institutional investors were net buyers of stocks worth Rs1,020 crore on Thursday. Domestic institutional investors were net sellers of equities worth Rs694 crore on the same day.

Reliance Industries (RIL) (down 1.64%) today said it has raised $1.5 billion from its first benchmark sale of bonds denominated in US dollars. The Mukesh Ambani-run firm sold $1 billion of 10-year notes and $500 million of 30-year bonds, the company said in a press statement.

Reliance Holding USA Inc, a wholly owned subsidiary of RIL, priced the 10-year notes at 205 basis points, or 2.05 percentage points, more than similar maturity US Treasury notes and the 30-year bond at 240 basis points.

State Bank of India (SBI) (down 3%) plans to raise up to Rs20,000 crore through a rights issue and hopes to launch it before March 2011, a top bank official said.

SBI chairman OP Bhatt said he was hopeful of a final decision on the issue by December-end and the issue would hit the market before the culmination of the current fiscal.

Wind turbine manufacturer Suzlon Energy (down 1.29%) has bagged 168.5MW of orders in India from various entities including corporate, public sector undertakings (PSU) and small/medium business segments. The company has not disclosed financial details about these orders.



Er SS Hari

7 years ago

VIX has risen to 22.65 up 9.95 percent thus fear level has increased.Premium futures to cash is still 20 bps probably cash selling is more and absence of short sellers creating gap.Monday if premium gap narrows those caught on wrong side may join the bandwagon leading to further fall.ETFs are short term players if they run it will create havoc.Govt is interested in coal india IPO till that time may be ok the day it closes top shooting stars may show their presence.TV analyst postmortem talk further spoils the party.

SKS stock price tumbles as MFIs feel the heat

The stock market is nervous about the microfinance sector, particularly SKS Microfinance—the country’s largest MFI—which is suffering for its deeds

Recent incidents are taking a toll on the share price of SKS Microfinance Ltd, probably the country's largest microfinance company. The SKS stock, which listed on the bourses only three months ago, has come under pressure after the company's chief executive was sacked without any proper reason.

On Friday, SKS shares ended 6.8% down at Rs1,130.30 on the Bombay Stock Exchange (BSE), while the benchmark Sensex declined 1.8% to 20,125 points. Even its peer, SE Investment Ltd, was down 1.3% to Rs46. SE Investment also touched a one-month low at Rs44.50, this week.

 There is a direct cause for the sharp fall of the SKS stock price. According to a PTI report, the Reserve Bank of India (RBI) has said it would constitute a sub-committee to look into the functioning of microfinance institutions (MFIs). RBI Governor D Subbarao told reporters in Chandigarh today that the central bank board had discussed the evolving situation in the MFI.

On Thursday, the Andhra Pradesh Cabinet approved an ordinance which seeks to regulate microfinance institutions (MFIs), after a spate of suicides among the rural poor in the state, allegedly due to coercive tactics of recovery agents of these MFIs. The ordinance provides for a three-year sentence and Rs1 lakh penalty for MFIs harassing borrowers in the recovery of loans.

There are several issues associated with the company, from its business model to corporate governance, and serious personal issues related to its founder Vikram Akula.

Now, the issue of MFIs and their lending and recovery methods has raised a political storm. According to media reports, crowds of protestors led by activists of the Communist Party of India (CPI) and Communist Party of India-Marxist (CPI-M) have been on a rampage in Andhra Pradesh, attacking and ransacking offices of MFIs, particularly SKS Microfinance. One report described the kidnapping of a minor girl in Vishakhapatnam district by an MFI.

According to an expert, as long as loans are not being 'marketed', access to money is far more important than interest rates. When the alternative is loan sharks who charge hundreds of per cent per annum and insist on collateral as well, micro-loans from SKS, BASIX, HOPE or any self-help group become attractive in comparison.

Just when SKS shares climbed to a new high (Rs1490.70, on 28th September), the SKS board sacked CEO Suresh Gurumani without giving any proper reason. And even big investors, like Vinod Khosala and NR Narayana Murthy have kept mum all through the controversy. SKS has a limited operational history and no dividend record, but asked a valuation of almost 50 times its FY10 earnings, for its IPO.

Even today, several non-resident Indians (NRIs) still think SKS is a non-governmental organisation (NGO) and that with the right backing it could become a large corporation if it met the basic need of people. The truth is SKS ceased to be an NGO long ago and is now a for-profit organisation that pays fat salaries to its high profile officials. Even as the RBI struggles to find the right candidates, MFIs have recruited ex-foreign bankers and are paying them fat pay cheques in addition to stock options. (read more

When SKS came up with its IPO, Moneylife had said: "An IPO multiple of 50 reminds one of the era of tech bubble. Plus, there are other issues like commitment of the top management, high remuneration paid to top executives, geographical concentration of business and mismatch in its assets and liabilities." (Read more

During the first quarter to 30th June, incremental loan disbursement increased 81% to Rs2,283 crore. Net profit zoomed by 265% to Rs67 crore, as total revenues increased by 81% to Rs314 crore.

On the personal front, Mr Akula is also under attack from his former wife. In a letter to Moneylife this week, Malini M Byanna said that the "corporate governance" issues, or more accurately "power and control" issues, that have been long-standing, date back to our separation and divorce." (read more and Ms Byanna alleged that SKS employees were involved in the abduction of her son, as well as buying air tickets and boarding pass in both her and her son's name in order to file false criminal charges against her in India and in the US. According to Ms Byanna, SKS failed to fully disclose all pending litigation against Vikram Akula in its initial draft red herring prospectus (DRHP), after which she filed a formal complaint with the Securities and Exchange Board of India (SEBI). She said that following her complaint, SEBI asked the company to disclose the information by issuing a second public notice, but the company failed to divulge details of litigations against its directors.

Last month, speaking at the Clinton Global Initiative, Mr Akula said: "SKS loan officers are not incentivised by loan size; we want him to give out the right loan amount. The logic is to create great shareholder value as she (the woman who takes the loan) moves up the ladder to take multiple loans for multiple products. SKS has reduced interest rates from 36% to 24% and in the same period ROE (return on equity) has gone up from 5% to 22%. You can bring these two elegantly together."

Interestingly, he was engaged in a debate with none other than Nobel prize winner and founder of Grameen Bank, Muhammad Yunus, more commonly referred as the father of microfinance. Mr Yunus said: "Microcredit is not about exciting people to make money off the poor. That's what you (Mr Akula) are doing. That's the wrong message completely." (read more

As of end-June 2010, SKS has a network of 2,266 branches across 19 states and a total member base of 7.3 million. Out of its total branches, over 600 branches are in Andhra Pradesh alone. Although SKS has branches in 19 states, its business is concentrated in some five states in the southern part of the country.



Rajan Alexander

7 years ago

Micro-Finance to Face Slow Painful Death. SKS Share to enter Free Fall. Sell, Sell, Sell!

SKS, the Indian micro-finance giant’s IPO was supposed to signal the coming of age of the micro-finance (MF). Instead, it contained the seed for the destruction of the entire industry. Their Rs 10 share on listing attracted a premium of Rs 975 and such was the investor confidence, it touched a high of Rs 1,490 in a matter of days. Then hell broke loose with the industry hit by charges of them profiteering and causing farmer suicides. Its reverberations were so strong that it had been felt by the industry all over the world. The stock plunged to Rs 890 before recovering to be a tad over its listing price and hovering around this range for the last one week. Technically and fundamentally, the share looks bearish and ready for a free fall. We expose the dark underbelly of a Frankenstein unleashed by NGOs.

Read more:

k a prasanna

7 years ago


1. Micro financing started as a social cause enterprise is turning out to be blood-sucking business of the poorest of the poor and hapless sections of the society.

2. There is no concern for the poor. The management is very much concerned about their chair, salary, benefits, ESOPs and wealth creation for themselves. The recent rumblings in SKS, which removed its managing director in an unprofessional manner, speak volumes about its corporate governance.

3. Seventeen borrowers of SKS micro finance committed suicide in Sept 2010, in Andhra Pradesh.

4. MFIs have come into existence as a financial intermediary for the poor; they have actually led to further impoverishment by adopting unethical practices, resorting to multiple lending without due diligence, usurious interest rates and coercive methods of recovery, as per the survey by A P government.

5. The RBI governor has suggested the state governments were the best agencies to regulate the coercive interest rates. This will happen soon.

6. According to the new regulation, the MFIs in A P must register themselves with district rural development authorities, indicate their areas of operation, employees, number of members and credit status. It also asked MFIs to display the interest rates, among other things. Dubious methods followed earlier wont work any more.

7. The proposed ordinance is likely to insist on MFIs being registered with district rural development agencies, apart from imposing a three-year imprisonment and/or Rs 1, 00,000 fines on erring MFIs.

8. The A P government is working out a policy to put a ceiling on interest rates charged by MFIs.

9. Unsustainable business model: The business model will not sustain in the end.

10. No commitment from the promoters: SKS’s founder and chairman sold his shares to Tree Line Asia Master Fund (Singapore) Pte for $12.9 million in Feb. this year.

11. Look at the salary of top executives:

Suresh Gurumani (now sacked) - Managing Director of the Company. The total monthly salary is Rs. 12, 50,000. In addition to the above, Mr. Suresh Gurumani was paid onetime bonus of Rs. 10,000,000, in April 2009.

Dr. Vikram Akula - chairman Rs 70.00 lacs p.a. In addition, ESOP amounting to Rs10.97lacs, totaling Rs 1.79cr p.a. These people are trying to eradicate poverty. LOOK AT THEIR MIND SET.

12. Mohd. Yunus says (The father of micro finance) - “I get very worried when investment funds come to microfinance,” said the founder of Bangladesh’s Grameen Bank, which pioneered the industry by giving small loans to rural women to start their own businesses. “I don’t want to excite businessmen that there is profit to be made here,” And the promoters in India says the business is exiting (exploitation of the poor).

13. The IPO of SKS micro has already made the promoters and other venture capitalists including some P/E funds that have stakes in these companies’ millionaires. The hapless borrowers continue to live in abject poverty and are committing suicide.

14. Government /RBI will not be mute spectators to the exploitation.
They are bound to regulate the segment further. This will make the business un- attractive.

15. Financial inclusion initiatives taken by the public sector banks will marginalize the micro finance business.

16. The average cost of acquisition of shares by promoters of SKS promoters is less than Rs50/-

17. RBI has constituted a sub committee to look into the functioning of MFI sector. Basing on the recommendations of the committee further stringent measures is expected.

18. Most of the favourable research report on MFIs is paid research report. DO NOT BELIEVE THEM BLINDLY.

19. The A P is examining loan swap of MFIs with other banks, thus giving no room for scale up of operations by MFIs.

20. Look at this irony – the wealthiest and the richest industrialists/business men in the country have access to the cheapest credit, around 8% p.a. from Banks and Financial institutions. Where as the poor, the down trodden and the and other unfortunate sections of the society pays the highest interest, anywhere between 30%-40%p.a. when they borrow from the Micro Financial Institutions (MFI). This cannot go on for very long.

21. The multiple lending (the same borrower taking loans from several MFIs), is very rampant, and this bubble will burst one day. Servicing multiple loans every week is not easy, particularly when they are disbursed under group guarantee, creating peer pressure not to default.

22. The poor are vulnerable to emergencies like flood, drought, illness and marriage. So the claim of near 100% recovery by MFIs are either farce or the figures are fabricated.
23. Private equity and the global financial crisis have brought in senior managers from the financial world at what is considered exorbitant salaries to the world of microfinance. This is temporary phenomena.
24. Thus, there is a danger of microfinance not only being unable to remove poverty but end up as debt enlarging institutions.
25. MFIs clarification that their rate of interest is lower than the rate charged by the local moneylenders holds no water. The truth is, in the name of helping poor, the poor is being exploited by these MFIs.


7 years ago

I don"t see much difference between MFI and personal loan concept if MFI are charging almost 30% interest-it is new name for personal loans which got a negative name few years back and MFI has come as new bottle to fill the vacuam.

R Balakrishnan

7 years ago

Normal NFBC stocks should be valued at between one to one and a half times book value. Given the regulatory environment and the certainty of providing for bad loans, this is the typical band for valuation. Anything more than that is akin to treating this sector as a stamp collection or a picasso.
And in a business that is totally non transparent, full of frauds, cash collections, forced insurance selling and non scalable, even this band is generous. Dividend discount models are the ideal ones to value these kind of companies. And a local business, when scaled nationally, in this industry, actually should dent valuation severely. Wonder when ANALysts will understand this.

k a prasanna

7 years ago

What our Narayan Murhty of Catamaran Venture Fund has to say about the rumblings in SKS, the blood sucking organization of the poor. One do not understand what made him to put his money in SKS which charges interest of 30% p.a. on the money lent to poor.



In Reply to k a prasanna 7 years ago

Mr Narayana Murthy is a business-man and a shrewd investor first. He lent his "brand value" to SKS by investing (through Catamaran) and in return got very cheap stock (compared to IPO price). He is fully justified in making money through this "investment".

Most romantic notions of Narayana Murthy are the media's perception and one shouldn't get confused by those. Murthy can be lauded for international blue-chip standard corporate reporting, overall transparency and the western MNC standard marketing and brand building. Expecting him to be a "voice of conscience" over anything under the sun doesn't do anybody's intelligence justice.

k a prasanna

In Reply to Ganesh 7 years ago

Mr. Narayana murthy is on the advisory committee of SKS. However,the values,for which Infosys and Narayan Murthy are are famous, is missing in SKS. Sometimes, the color of currency overrides many things.


In Reply to k a prasanna 7 years ago

You bet! I couldn't have put it better than you. Mr Murthy - by just spending 1% of his wealth on funding free open source software R&D could have changed the face of computing, atleast in India where his fame carries a lot of (atleast marketing) weight.

But he is a product of the corporate world and justifiably has total discretion in how he spends/invests his money and brand. This just teaches us retail investors not to be swayed by such marketing and be extra careful where we put our money and as individuals, support which causes.

k a prasanna

7 years ago

The business is unethical and un sustainable. First Choice had indicated all these while analyzing the IPO. The RBI, Central and State governments, Ministry of Finance are likely to implement to more measures to rein in these modern day shylocks. The MFI bubble will burst in the very near future.

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