India has 400
million poor people, more than any other country in the world.
These poor live on the brink of subsistence. To cope with
their vulnerability, the poor often take small loans, during
crisis periods, from money lenders who charge exploitative
rates of interest. Interest rates can run as high as 72% per
year, placing the poor in a debt trap. This debt trap, in
turn, often results in the poor mortgaging themselves or their
children in bonded labor--a system of indentured servitude in
which a person "sells" his or her labor for a year
in exchange for a loan.
If poor people are given access to low interest loans during
times of crisis, they can avoid falling into such a debt trap.
However, bureaucracy and corruption in the banking and
government sectors prevent the poor from gaining access to
affordable credit. SKS attempts to address this problem by
bringing microfinance to the doorstep of the poor, thus SKS
seeks to alleviate poverty through the provision of small,
affordable loans for emergency needs, income generating
activities, and more.