I am very familiar with Dalits and caste system in India. A good friend of mine is leading an interesting new movement with the goal of breaking the India caste system. If you search for “dalit” on my blog, you’ll find a bunch of posts that I’ve made.

My experience with MFIs in India is that their clients are the poor irrespective of their caste or religion … although with a strong basis towards woman. When I interviewed borrowers many are dalits.

Interestingly, dalits can often be better off than most OBCs (other backward castes) and tribal peoples in India as the ruling class has often co-opted these groups via preferences to buy votes.

I agree that most MFI borrowers are focused on running businesses which they know or “should do” based on their caste. The most entrepreneurial of them, though are breaking out from these mindsets and starting new kinds of businesses. This is more likely to happen in the urban environment.

Much of the tragedy of India and other poor countries are cultures leading to corruption and oppression. In India you have the cast system, which is no longer official, but still vital in the society. With MFIs in India you will probably find that most of the lenders reinvest in their own occupation due to cast thinking. This is strongly reducint the possibility of entrepreneural thinking. It would also be interesting to see how the Dalits (former “untouchables”) are granted loans. Giving these people loans would probably be a violation to the Hindu religion and would therefor be found more rarely. I can’t find much info about Dalits and microfinance, but if you’re speaking about “bottom of pyramid” in India and forget to talk about the cast system, you have a problem. A search for “Dalit” on YouTube would be recommended. Solving these cultural and religious challenges would give a new major release of microfinance (but I wonder if we Humanistic Western people are ready for it…..)

kristoffer