Some 45 million Indians rose above $1.25 a day: Report
Washington: Nearly nine million Indian households, or 45 million individuals, saw their incomes rise above the threshold of USD 1.25 a day, or Rs 56, in the two decades ended 2010, reflecting the success of microfinance, says a survey.
"A dramatic number of families moved out of poverty between 1990 and 2010," said the report, based on a survey of more than 15,000 Indian households, carried out by the India Development Foundation (IDF), a private trust that promotes market economy.
"This report is good news, coming seven months after a similar survey showed significant progress in Bangladesh," said Sam Daley-Harris, director of Microcredit Summit Campaign, which seeks to create a global environment tuned to eliminate poverty.
"There is significant correlation in both India and Bangladesh between the presence of microfinance and the movement out of poverty in the rural areas of both the countries, especially in the early years," Daley-Harris added.
The report comes in the wake of a hugely successful initial public offering in 2010 by SKS, a private microfinance firm in India, followed by serious charges of malpractices in the country and the subsequent action by the Andhra Pradesh government.
Those who carried out the survey sought to point out that microfinance sector in India barely existed before 1998. At the same time, the survey was largely completed before the microfinance crisis in Andhra Pradesh erupted at the end of 2010.
"While it is clear changes are needed in Indian microfinance, it is also critical we not throw out the baby with the bath water," said Shubhashis Gangopadhyay, lead researcher for the survey.
"Families in rural communities need access to financial services from the microfinance institutions that know their clients and are committed to improvements in their lives," Gangopadhyay added.
Globally, microfinance has been faced criticism from the academic community. A series of randomized control trials have questioned the effectiveness of microfinance as a poverty reduction tool. But these studies have also met with questions of their own.
These surveys are a part of the programes of Microcredit Summit Campaign, a US advocacy, that wants to fulfil the UN Millennium Development Goals of cutting poverty in half by 2015. The survey will be discussed at their summit at Valladolid Spain in November.