The Bridge Foundation
The Bridge Foundation (TBF) is a micro-finance lending institution that works in Bangalore and Madras, two major cities in South India. TBF operates like a traditional micro-fianance institution, but with one unique twist. TBF encourages the creation of sangams amongst their clients, which are small communities of clients who assume a shared liability for paying one another's loans. These sangams are usually about 25 people in size, and mostly female. During 1999, TBF achieved nearly a 100 percent loan repayment rate, despite the fact that TBF is a trust and cannot take legal action against defaulters.
In order to understand the impact TBF was having within the communities they were operating in, TBF conducted 25 interviews with clients, ranging in age from 18 to 45 a drawn from diverse regions. The interviewers asked three open-ended questions.
In the course of the interviews, it became clear that something unique was happening within the social dynamics of the sangams. To the first question, one would typically expect a self-interested response along the lines of, "Well, I wanted to be able to receive a loan in the future, so I paid my loan on time." However, practically every interviewee answered that they did not want their fellow sangam members to lose their ability to take out loans. Over 50 percent of those interviewed also emphasized the importance of working with the other sangam members and the importance of having the sangam's security and strength behind them. The sangams were interested in their fellow members beyond mere business matters as well, as over half of those interviewed recounted incidences when sangam members stepped in to help them meet their family and religious obligations.
Keeping in mind the idea of development as community, the success of TBF is to be evaluated based on the development of community amongst those who received loans. Clearly, the sangam groups achieved this end, and the results translated into development by traditional standards. Many of these people interviewed are now autonomous business owners, which has obvious implications for their economic well-being. Interviewees also reported better treatment by local authorities and community due to their increased social standing. This gives them greater autonomy in local affairs and enables them to make a greater contribution to civil society.