Development, Divinity and Dharma

The role of religion in development and microfinance institutions

and Ashis Kumar Sahu

Intermediate Technology Publications Ltd

trading as Practical Action Publishing

Schumacher Centre for Technology and Development

Bourton on Dunsmore, Rugby,

Warwickshire CV23 9QZ, UK

www.practicalactionpublishing.org

First published in 2007

ISBN 978 1 85339 655 7

All rights reserved. No part of this publication may be reprinted or reproduced or utilized in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without the written permission of the publishers.

Cover design by XXX

Typeset by SJI Typesetting

Printed by Replika Press

Acknowledgments xx

About the authors xx

List of abbreviations xx

Introduction xx

Chapter 1: Religion and development − can they go together?

Religion and development institutions xx

Can religion help? xx

Links to local institutions and communities xx

Leadership and management xx

Chapter 2: How does religion affect the ‘BINGOs’?

South Canara district xx

The banking tradition xx

The Shri Kshetra Dharmasthala Temple xx

The origins of SKDRDP xx

Reappraisal and restructuring xx

SKDRDP’s programmes xx

The Pragathi Bandhu groups xx

The JVK Women’s groups xx

Alcohol de-addiction xx

Community development programmes xx

The origins of SKDRDP’s microfinance programme xx

Raising bank finance xx

The power of groups xx

Financial results xx

Microinsurance xx

Microfinance is not enough xx

Group businesses xx

Chapter 7: The sevanirathas

The role of the sevanirathas xx

Moneppa Gowda, a successful household xx

The impact on the community xx

Future challenges xx

Chapter 10: What explains SKDRDP’s success?

Breaking the rules xx

The divinity factor xx

Chapter 11: Islamic development practice

Examples from Bosnia Herzegovina and Hyderabad xx

Akhuwat of Lahore xx

Muslim development NGOs – some tentative conclusions xx

Chapter 12: Christian development practice and some examples

‘Catholic Bank’, or the Chotanagpur Catholic Co-operative Society xx

The Holy Cross Social Service Centre, Hazaribag xx

Catholic Bank and Holy Cross – some comparisons xx

Some common features xx

Strengths and weaknesses xx

‘Sustainability’, of a different kind xx

The lessons of experience xx
Figures

2.1 Local vs. multinational and faith-based vs. secular xx

3.1 Map of India, showing location of institutions described xx
Tables

2.1 Some UK-based faith-based and secular NGOs – some comparisons xx

2.2 Some US-based faith-based and secular NGOs – some comparisons xx

5.1 SKDRDP’s loan portfolio, expenses and grants xx

5.2 Group and member numbers, March 2006 xx

5.3 Outreach xx

5.4 SKDRDP and its groups: financial indicators for years ending 31 March xx

5.5 Sampoorna Suraksha xx

6.1 SIRI’s sales turnover in 2006−7 xx
Boxes

4.1 Pushpavathi xx

4.2 Maimun Nabi xx

4.3 Dharanamma xx

4.4 Sidappa Gowda the drunkard xx

4.5 The misfortunes of Tania and Kamala xx

5.1 Madiga Harijana xx

5.2 Koragappa and the SHG Federation xx

5.3 Narayan Gowda the defaulter xx

5.4 Kuruppa the returned migrant xx

6.1 Southegadde Pragathi Bandhu group xx

6.2 The women’s plastic folder workshop xx

7.1 Pushpa, a sevaniratha xx

7.2 Savitha d’Souza, project officer xx

12.1 Raphael Kullu, a typical member xx

12.2 Thomas Beck, a regular borrower xx

12.3 Sobhani Devi and her handful of rice xx

12.4 Parvati and her mortgaged land xx

12.5 Learning from bitter experience xx

Acknowledgements

First, and so often forgotten, we should like to acknowledge the help we received from so many clients and members of the various organizations whose work we describe in this book. Some of their names are given in the text, but most are not. They are most unlikely ever to read the book, or indeed to have the time or inclination to do so, but we are very grateful for their time and their frank accounts of how their lives have been influenced by the programmes of the development institutions.

Dr Manjunath and Dr Veerendra Heggade of Shri Kshetra Dharmasthala Rural Development Programme first suggested that such a book should be written, and we must thank them for that, and them and their colleagues also for all the time they gave us when we were studying their work.

Fathers Marianus, Peter Jones, Michael Bogaert, Emanuel Baxla and Alex Ekka of the Society of Jesus provided valuable information about the Chotanagpur Catholic Co-operative Society, and we are particularly grateful to His Eminence Cardinal Telesphoro Toppo, Archbishop of Ranchi, for allowing us to study the institution. Saqib Aftab of Akhuwat Lahore, and Sister Rosily of the Holy Cross Social Service Centre in Hazaribag, gave us information and a great deal of their valuable time. We are grateful to Mr. A. Ranga Rao, Convenor, Andhra Pradesh Satya Sai Trust for sharing his intimate knowledge of Satya Sai Baba and the Seva Organization. We are very aware that it is more important to do good things than to write about them, and we hope that their work did not suffer as a result of the time they gave us.

Kim Wilson of Tufts University used her incomparable networking skills to lead us to numerous useful informants, and Kimberly Beth Priore of the Harvard department of theology assisted with data and analysis from American ‘BINGOs’. S. Lalita Rao, microfinance consultant of Bangalore, dug deep into the history of Dakshin Kannada, Robb Davis of Freedom from Hunger and lately of the Mennonite Central Committee provided valuable insights on the reality of faith-based multinational NGOs, Y. M. Niranjan Babu helped with the material on SKDRDP and Rick James of INTRAC in Oxford showed the way to work of his own and others which helped us to avoid ‘reinventing the wheel’.

The Livelihoods School generously allowed Ashis Kumar Sahu to give time to this work, and Shiela Rao, Kate Bulman and Uschi Kraus-Harper were usefully critical at various stages of the work. Many thanks to all of them.

BPL below poverty line

CAPARV Council for Anti Poverty Action and Rural Voluteers

COVA Confederation of Voluntary Associations

CRS Catholic Relief Services

DWCRA Development of Women and Children in Rural Areas programme

ESAF Evangelical Social Action Forum (of Kerala, southern India)

FBOs faith-based organizations

GDP gross domestic product

HCSSC Holy Cross Social Service Centre

IRDP integrated rural development programme

JVK Jnanavikasa Kendra – women’s groups run to raise awareness

LEAP Local Enterprise Assistance Programme (of the Association of Evangelicals of Liberia)

MDGs Millenium Development Goals

MMC Mennonite Central Committee

MMW4P make markets work for the poor

NABARD National Bank for Agriculture and Rural Development

NGOs non-governmental organizations

NMS Norwegian Missionary Society

RUDSETI Rural Development and Self Employment Training Institute

SGSY Swarnjayanti Gram Swarozgar Yojana – a government self-employment programme

SHG self-help groups

SKDRDP Shri Kshetra Dharmasthala Rural Development Programme

UNHCR United Nations High Commissioner for Refugees

Far in the south of rural Karnataka state in India, in a valley among the wooded hills and valleys that lead down to the Indian Ocean, stands a temple. It is a fairly modest building by the standards of such places, and is surrounded by a collection of hostels and shops that serve the thousands of pilgrims who visit the temple each and every day. The place is called the Shri Kshetra Dharmasthala, or, loosely, the ‘place that is the abode of charity’.

There are many such places in coastal Karnataka. Shri Kshetra Dharmasthala is one of the more popular of them, and has many very special features. It is polytheist, and is revered by Hindus although it was established and has for six hundred years been managed by a Jain family. Their religion is one of the three Dharmaic faiths, together with Hinduism and Buddhism, but is strictly non-Brahminical and opposed to any notion of the hierarchy of caste.

This book, however, is not mainly about the history of this unusual institution, nor is it directly about the faith that is practised there or the pilgrims who visit it in such large numbers. It is about what is happening beyond the temple and its surrounding facilities, in the beautiful steeply sloping forests of the western ghats, the steep ranges of hills that stretch for many miles north and south of the temple.

The people who live around most temple towns in India, like similar places elsewhere in the world, may be spiritually blessed. In material terms, however, such places are usually notable for the contrast between the wealth and splendour of the holy places and the grinding poverty of the people who live around them. Millions of people, most of whom are poor, flock to them for spiritual sustenance, and some may perhaps also scrape a living by selling services to the pilgrims, or by begging. They do not expect, however, to acquire ‘sustainable livelihoods’. They come for alms or grants, but not for loans which must be paid back.

Shri Kshetra Dharmasthala, however, is doing something very different. It is assisting almost half a million people who live in the surrounding area to escape from poverty, not with grants and handouts, but with one of India’s lesser known but most successful and most comprehensive rural development programmes. This book is about this work, and the work of similar agencies which combine religion with development. Our purpose is to examine the role of religion in this work, and that of other faith-based development agencies, and to identify how their religious links strengthen, or perhaps weaken, their ability to help poor people to escape from poverty. We compare some aspects of ‘multinational’ faith-based development non-governmental organizations (NGOs) with the work of smaller local institutions, and our findings should help people who work in or support such agencies to take advantage of their undoubted strengths, to minimize their weaknesses, and thus to drive forward their mission of alleviating poverty.

We hope that the book will help faith-based development agencies, and perhaps SKDRDP itself, to see their future more clearly, in the context of the difficult environment which they face. It should also be useful to secular institutions, which can learn a great deal from their faith-based counterparts, to students of development, and to those who are responsible for making decisions about which agencies should be funded to undertake what types of work, with which kinds of client communities, over what periods.

This book does not in any sense claim to be a rigorous comparison between secular and faith-based institutions. There are too many contextual variables for such a study to have any meaning. What we do aim to do, however, is to examine certain issues, relating to the origins, governance, funding, staffing and above all the actual development activities and the clients of these institutions.

This examination is particularly important at this time, when development thinking runs so much against much of the basic philosophy of many faith-based institutions. The current trend in development is to aim for ‘sustainability’, which is in some sense the antithesis of long-term charity, and to work with businesses, or at least to hand over the development functions to for-profit businesses, as soon as possible. This is particularly difficult for faith-based institutions, whose origins lie in their founders’ belief that it is morally good to give to the less fortunate, to be ‘charitable’. The Sanskrit word dharma indeed includes the sense not only of religion, but also of charity, giving to those who are less fortunate than oneself.

It is true that charity, service to others, is usually portrayed as sacrifice, but can be of as much value to the server as to the served, and may even seriously damage those whom the servers profess to help. Professionals in the international ‘aid trade’ are often guilty of putting their own interests above those of them they purport to serve, and those who work for faith-based institutions are no more innocent than secular ones. Their good works sustain them, even as they profess to provide sustainable livelihoods and other benefits to the poor.

There are thousands of development agencies throughout the world whose overall aim is to alleviate poverty. Some are small and operate only in one village, others are large global institutions with multi-million or even billion dollar budgets, and operate worldwide. Some started in the country where they operate, while others were set up in wealthy countries, to help poor people in so-called ‘developing countries’. Some are owned and run by governments, some by business corporations, and some by voluntary agencies, charities, or NGOs, the commonest if also the least informative label.

The difference which this book aims to examine, between faith-based and secular development agencies, is not clear-cut, but it is usually quite easy in practice to decide whether a given development institution is or is not ‘faith-based’. In general, the institutions which most people would agree are faith-based, some of whose work is examined in this book, seem to share one or more of the following characteristics:

• 
  They have been started by a temple, a church or other religious institution, or by an association of such institutions, or by an individual whose religious convictions have played an important part in his decision to start the institution.
  
• 
  They work through or in close collaboration with locally based religious institutions, such as churches, mosques or temples.
  
• 
  They raise most (but, quite importantly, not all) of their resources from members of the same faith, individually or through their home-based churches, temples or mosques.
  
• 
  They often, but not always, incorporate the name of their religion, or some term associated with it, in their title.
  

These include:

• 
  They do not restrict the benefits of their work to people who share the same faith. Some or even the majority of their clients may hold quite different beliefs, which in other contexts compete with the faith of the development agency.
  
• 
  They do not depend wholly on funding from members of the same faith, or from funds raised by their institutions.
  
• 
  Their staff, even at quite senior levels, do not necessarily share the same faith as that on which the agency is based.
  

The book examines the experience of Shri Kshetra Dharmasthala in south India and a number of other institutions of this type. They include Muslim, Hindu and Christian institutions, some of which operate internationally, and others only within one country, or more locally, in one part of a country.

We chose these three religions because they are by a large margin the world’s most popular faiths. According to one estimate (www.adherents.com) there were in 2006 about 2.1 billion Christians, 1.3 billion Muslims and 900 million Hindus, making up 68 per cent of the world’s total population. No other religion exceeds 500 million adherents.

We start with a brief financial analysis of a small sample of some of the largest ‘multi-national’ development agencies, both faith-based and secular, in order to find out if there are any broad indications of important differences in their fund-raising and remuneration policies.

We then examine the rural development work of Shri Kshetra Dharmasthala in particular detail, because it includes so many different activities and is apparently so successful. There is a great deal to learn from the work of SKDRDP, the development arm of the temple, but we also aim to throw some light on faith-based institutions in general. The Shri Kshetra Dharmasthala is actually a Hindu religious place managed by a Jain trustee in the Heggade’s name. Jainism is in some respects similar to Hinduism, and many Jain communities share Hindu temples. This is something that different sects within other religions, such as Islam or Christianity, usually feel unable to do, and such openness is probably one of the features which enables SKDRDP to be so effective. Jainism only claims some four million adherents worldwide, and very few of these are themselves served by SKDRDP, which does not aim to reach only or even primarily its own adherents.

It is generally agreed that the best way for poor people to become less poor is to acquire ‘sustainable livelihoods’. The institutions whose task is to assist the poor to become less poor should according to contemporary wisdom preferably themselves be businesses. They may need subsidy, or charity, but only for a limited time. The eventual goal, according to some adherents of the neoliberal paradigm, is to ‘make markets work for the poor’ (or, ‘MMW4P’ as this has become known in some circles) so that they can earn a living, and pay the full cost not only of their personal living expenses, but of water, schooling, health care, transport and other basic services which have traditionally been provided by governments. There is not a long-term role for charity in this scenario nor for traditional development agencies, particularly for faith-based institutions such as the Shri Kshetra Dharmasthala which is firmly based in a temple and totally and inseparably linked to the place where it stands.

Faith-based institutions are also challenged by the secularization of society which affects both those who finance and work for development agencies, and also their clients. This does not necessarily mean that people are less generous, or less willing to work long hours for very little in order to help those who are less fortunate than themselves. It does, however, mean that an appeal based on faith, for funds or for labour, has less resonance.

Similarly, today’s clients of faith-based development agencies are more likely to question their motives than their parents. Religion is no longer ‘the opium of the people’, and it is sometimes easier to help people who are drugged than those who are fully alert. Faith-based institutions have to avoid being marginalized, being left with the more conservative and perhaps less progressive sections of society. This can happen to their sources of funding, to their staff and to their clients.

The growing radicalization of many religions also poses a major problem for faith-based development agencies. ‘Fundamentalism’ is affecting Christianity, Buddhism and Hinduism as well as Islam. In the short term, some people may be attracted to donate their money and their time to an institution which they believe will promote an extremist agenda, and clients may also be attracted by promises of radical societal changes in their favour. On the other hand, religious labels can often be misread, and any indication of an affiliation to a particular faith may be interpreted as being dangerously radical. When religious labels are suspect, it may be safer to work with secular institutions.