Sitting on the New Delhi sidewalk selling his range of salted snacks, Shabbir Khan does not know of Nobel Prize winner Mohammad Yunus, and it doesn’t really matter.
The model invented by Yunus for providing loans to Bangladesh’s rural poor, has been implemented and improved upon in India and is touching the lives of millions in the villages. But there are tens of millions of others whom the government forgot about: the urban poor.
“A shop? How do you think I can buy a shop? Do the poor get loans in this city? My family has to save on food and clothes and marry off two daughters first,” said Khan, 50, as he packed salted peanuts for a customer in New Delhi’s Connaught Place.
Yunus, 66, set up the Grameen Bank in 1976 to give small loans without collateral to poor women in Bangladesh’s villages. Such microcredit systems have helped the poor in more than 100 countries. The poor in India’s 640 cities and towns, however, are not among them.
“Largely, the concentration (of financing for the poor) is in villages. In the cities, the number of projects is miniscule,” said Vinod Rai, special secretary in the government’s Department of Banking.
In many ways, India’s urban poor are much worse off than those in the 6,38,000 villages. While there are more opportunities in urban centres, the poor there often do not exist in any government records, have few rights and facilities, live in ghettos of deprivation, and have no access to bank loans to better their lives.
“At least the state accepts that it has some duties towards the rural poor. But the urban poor don’t exist for the state except as illegals,” said development activist Harsh Mander. “It is futile to think that there will be luxuries like credit for them.”
The numbers of the urban poor in India are unclear. More than 42 million people live in slums, but that number does not include tens of millions of others without an address — including squatters, temporary workers and those in illegal or extremely poor neighbourhoods.
Urban poverty also spawns other social problems, experts say. “When young people are left to be poor, you are not depriving them of a meal per day but killing their dreams. That’s the bedrock of evils like terrorism,” said Lakshmi Venkatesan, head of Bharat Yuva Shakti Trust, which provides loans without collaterals to disadvantaged youth.