The availability of credit and the conditions attached to it play an important role in determining livelihood strategies of these people. Households without any savings frequently borrow from various informal credit organizations. Reasons for taking loans vary widely; reasons can include daily consumption needs as well as building of livelihood assets like the purchase of land or to meet exigencies such as a 4.
However, it is exceptional for households to have any kind of savings account—either in a bank or a post office. Among landowners and share croppers, loans for agriculture are most significant, whereas small consumption needs, especially in the lean season during the monsoons, dominate among the landless.
Role of the mahajans The most significant source of informal credit in the chars is the moneylender, locally called the mahajan. Even though people pay a high interest rate of Rs 50 to Rs 60 per Rs 1, each month to the mahajan, the poorer families still depend on them. The obvious reason for this is that there little or no access to formal credit from banks.
The other reason is more psychological—a faith or trust in the old system and the advantages of taking out a quickly repayable loan. The moneylenders also prefer short-term loans as they believe that the poor cannot repay longer-term loans.
It becomes difficult for the farmers to repay the loan if profit is low from a crop due to a fall in the price level or due to accidental damage of the crop by drought, flood, or pest attack. For this reason, the moneylenders selectively judge the repayment capacity of the borrower. Unfortunately, the poorest of the poor sometimes do not get a loan even from a moneylender.
To ensure repayment from the poor, some businessmen- cum-moneylenders prefer special conditional loans called dadan. Dadan on chars Dadan is a traditional advance-lending system that continues to play an important role in the subsistence economy of the chars. Here, the farmers borrow the total amount required to produce a certain crop in cash from the mahajans, who are also wholesale businessmen selling agricultural goods.
Some portion of this loan may be in kind, as agricultural inputs. The interest rate is commonly set by the mahajans depending on his personal relations with the client—his familiarity with and trust in him or her as a borrower. The essential condition of dadan is that the farmer is required to sell the crop only to the respective mahajan. As a result, in a year of low prices or crop loss, the farmer may have to give away the entire harvest to repay the loan.
Some moneylenders may even buy the produce lower than the market price. In spite of these exploitative pre-conditions, for a number of reasons char- dwellers prefer dadan over the usual form of loan from moneylenders.
Mahajans generally try not to lend to the farmers whose repayment capacity is poor, whereas a dadan loan is accessible even to poor farmers. Another reason of preferring dadan is the possibility that the mahajans would be lenient and allow one more year for repayment if the farmer is in real distress.
The mahajan may also waive off the additional interest. This mutual faith and trust add a positive dimension to dadan. The oldest group is the Bhasapur Gram Samiti that was formed in by three or four early settlers. The Samiti now has shareholder members scattered over Char Bhasapur and six other adjoining villages. These societies are not registered and can, therefore, be considered illegal.
Few people are prepared to discuss these informal credit groups in public, and not everyone has a clear idea of how these groups operate. Usually such societies are run by a core parichalan samiti or management committee comprising six to ten members depending on the total number of member. The membership of the committee changes every three years. All monetary transactions getting loans, repayments, and dispute resolution are carried out at monthly meetings in the presence of all the members.
Core members are also selected in those meetings to be the office-bearers for three years. In March , this committee had a capital of Rs 14 lakh—a substantial increase over the initial capital of Rs 1. This capital is kept in a nearby bank in an account jointly held by two or three founding members. These informal credit groups operate much like an informal bank, and people living on the chars use them for both credit and savings.
These groups flourish not only because char-dwellers are unable to access the banks without citizenship papers; even those who could are reluctant to use banks and prefer to use these groups.
The reluctance is rooted in the large amount of paperwork required by banks, which is conducted in English, and going to the bank is a daunting task for the illiterate poor. Others, who use credit for cropping, benefit from the shorter application and loan processing time of these informal institutions.
Effectiveness of informal credit systems When we asked individuals about the effectiveness of these informal credit mobilization systems, responses were varied. Families with more land usually benefit more from these credit groups: they can procure a short-term loan, especially just before a cropping season more easily and can immediately repay with interest after the harvest.
Some relatively better- off families also use credit as a way to build up savings. The poorest families prefer this source of credit as no assets are required to be mortgaged. Peer pressure to repay these debts is also great. Some families that are unable to repay debts experience extreme peer pressure from other villagers—as most of their money is also with this group as public shares.
There are cases where extremely poor families have had to sell their cattle or part of their land to repay the loan and accumulated interest. The positive aspects of the system of informal credit are several; the poor can access cash when needed and they can do so reasonably quickly, and no longer have to depend on local moneylenders and be subject to their exploitation.
The negative aspects, however, relate to the nature of the char communities and the purpose of the credit. Managing Money at Home To understand the financial lives of the char households, we adopted the techniques used by Collins et al.
The diaries were kept for two months during the last year of our study, that is, , and we took one lean season month during the monsoons to balance one peak season month during the cropping.
This gave us a better idea of financial management at times when plenty of work was available as well as when work opportunities were limited.
Due to the limited literacy of survey participants, we took local char dwellers as research assistants to visit each household on alternate days to note the details of income and expenditure. We also tried to understand both short- and long-term financial strategies. The resultant data revealed great complexity in household financial behaviour.
This paper presents data for four selected cases illustrating how different the micro financial policies of the people on chars are and how each household negotiates the challenge of survival differently. Household one: Landless labourer Gopinath Kirtania came to India from Bangladesh with his parents in at the age of 4.
After four years in a refugee camp they moved to Char Bhasapur on the Damodar river in , where his father bought some land at the cost of Rs 60 per bigha. Gopinath did not get the opportunity to go to school due to the isolation of the chars at the age of 20, he married Minati, a girl from the same village producing five sons and four daughters, three of whom are now married.
Two of their older sons work, whereas the two other boys and one daughter go to school. He and his two grown-up sons work as agricultural labourers.
Minati supplements the cash income by raising a animals for milk and meat. Gopinath sometimes earns by performing kirtan devotional folk singing during the lean season at small gatherings in other chars. Gopinath and Minati have a savings account in the bank where they deposit small amounts of extra income earned during the peak season. Examination of their day-to-day income and expenditure pattern reveals that, in the peak season November to March , the combined wages bring in on average Rs 7, to Rs 8, per month.
During the peak season, they spend regularly on groceries and vegetables. They are able to afford protein with their meals and offer sweets to visiting relatives. As rice is usually cheaper in the peak season, the family invests by buying rice to store for the lean season. In the remaining months, their income comes down to Rs 2, or even lower.
To feed the family three meals a day, they must get additional incomes from other sources. Gopinath earn Rs from his performances. On the expenditure side they only bought groceries at a minimum level on a regular basis, often on credit.
During the lean months the household made do with produce grown in their courtyard. They faced another critical situation in one particular month when they had to find money for some medical expenses for Minati and one of their sons. With regard to their long-term financial management, whilst they always tried to save some money in the peak season in their bank account to cope with the lack of work in the lean season they are not able to save money consistently.
We saw that during the marriage of his first daughter, he lost his agricultural land on bandaki. For the marriage of his second daughter, Minati sold the few gold ornaments she had. They also sold some big trees in their courtyard for a little money. For the third daughter, they did not have any assets to sell, so Minati sold her only cow and they also borrowed some money from the local informal credit group.
One of their sons has recently started to work in the sand quarry on the riverbed where wages are higher than those paid for agricultural labouring. Subhas came to the Damodar chars from Bangladesh in the s and has lived on Char Bhasapur since. After primary school Subhas began to work in the fields and when he was 20, married Champa, a girl from the same district of Bangladesh, through an arranged marriage. After the birth of their two children, Subhas built a bamboo-mud hut where he moved his family.
It is based on the private correspondence and diaries of Jacob Schiff and Takahashi Korekiyo, which provide a closer look at the problem of conducting the war. It also shows the first moment when Japan confirmed its position as a world power, becoming the first Asian country which was treated as an equal partner by the Western powers. Nevertheless, not much has been written about the financial recourses that were used for waging the war.
At the beginning of the 20th century, Japan was still conducting its modernization under the rule of Emperor Meiji. This modernization was visible in all spheres from daily life, to policy, economy and business. In Japan was only 36 years after the start of the Meiji Restoration. So, the main aim of this article is to answer this question: how was it possible to gain financial support for the war with Russia, and how did Japanese-American relations help to win the victory in this war?
The aforementioned question of Japanese-American relations is relevant, because they always seemed to be unequal, and emphasized the power of the United States over the other countries, especially those from Asia. To answer those questions I will analyze the correspondence and private diaries of two people who contributed towards the financial support of the war, namely Jacob Schiff and Takahashi Korekiyo. In this institution was given a monopoly on controlling the money supply, and so the other banks were transformed into commercial banks.
In the first emission of the banknotes issued by the Bank of Japan took place. Two years later Japan adopted the gold standard4, which allowed financial transactions to be conducted worldwide. Takahashi Korekiyo became the seventh president of the Bank of Japan, and during his activity as vice-president of this institution, he gained funds for the warfare with Russia.
Takahashi Korekiyo was born on July 27, in Edo the former name of Tokyo. From the early years of his life he studied English. In he gained a job as a dogsbody in the London India and Chain Bank, which won him a scholarship to continue his English studies in the United States of America.
In Takahashi started his job as an interpreter in the Ministry of Finance, and one year later he moved to the Ministry of Education. After the establishment of the Institute of Trademark Registration as a part of the Engineering Department in the Ministry of Agriculture and Trade in , it was headed by Takahashi.
In , Takahashi became the head of the Patent Department, but in the same year he left Japan for Peru to run a silver mine. In , Takahashi went on another journey abroad, and one year later he took the position of vice-president of the Bank of Japan. His main task was to gain financial support for the increased expenditures on armaments, associated with the approaching war with Russia. Bank, who became an ally of the Japanese side in the Russo-Japanese War, mainly because of his suspicion of Tsarist Russia, which was conducting an anti-Jewish policy.
The Kishinev pogrom9 in , as well as those which took place two years later in Bialystok and Odessa, caused an influx of Jews community to the United States from areas under the control of the Tsarist authorities. Emigrations of similar intensity occurred in the s, and caused the creation of a special commission by the then President Benjamin Harrison, the aim of which was to examine this case.
Among the members of this commission, and one of its initiators, was Jacob Schiff. The anti-Jewish activities in Russia were a reason why Schiff became a supporter of Japan in the war, which started in Jacob Schiff was born on January 10, in Frankfurt am Main, as the son of a rabbi. When he turned eighteen he moved to the US, when he started his job as a banker. Before returning to Japan, Takahashi took part in an official dinner, where he told Schiff about his fears that the loan would be refused.
Schiff privately abhorred the Tsar, because of the Kishinev pogrom. Despite this conversation, Takahashi forgot about the meeting with the banker, and so when he received a message that Schiff wanted to meet him, he did not remember who he was. A powerful force on the world money market, a main element of international capital.
At first, the banker proposed a loan of 5 million pounds14, but finally the sum was increased to million dollars. He was received by the Meiji Emperor and was the first foreigner in history to be awarded the Order of the Rising Sun. The day after our arrival in Tokio, the Emperor received me in special audience, bestowed upon me the Order of the Rising Sun, and gave a luncheon in my honor for about fifteen people. Schiff died two years later in New York. Two years later, for the first time, he became the Minister of Finance, a position which he held six times.
In the South Africa example provided, each area had a sample of 60 households that was covered by two fieldworkers one of each gender. With a total of three areas, six fieldworkers were required. Time: Comprehensive financial diaries require bi-monthly data collection for one year. Cost of Assessment: This will be determined by the number of households included in the sample and the context in which the data collection is taking place.
Training: Not specified, but all enumerators would require training on the use of the questionnaires. Geographic Targeting: The method can be applied for any geographic area. The South Africa example provided is based on the entire country, with stratified sampling across provinces.
Type of Data Collection: Previous diary methodology studies have been mostly qualitative, involving unstructured interviews and open-ended discussions. The revised methodology uses a combination of closed- and open-ended questionnaires in order to enhance the quantitative output. There are roughly 28 pre-defined financial instruments that each has its own questionnaires that define different aspects of the instrument.
Degree of Technical Difficulty: This method is time consuming but not extremely complex. Enumerators must understand which questionnaires to use, but regular tracking of the same households will make the process simpler to follow. Complements other Resources : Information collected could provide critical insights into vulnerability analysis and modeling the impact of shocks or interventions.
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