Role of Private Finance Companies in Social Development

"Everymorning I wake up and look through
Forbe's list of richest people.
If my name is not there I will go to work"
- Robert Orben.

Yes, everyman has a dream and one more and another one. And lots of them. These dreams generates aspirations. Man being social animal his aspirations are summed up with his neighbours will become social aspirations.

Social development is a process which results in transformation of social structures in a manner which improves the capacity of society to fulfill its aspirations.

Society develops by consciousness and social consciousness develops by organisations. The structural advances are in the form of new social attitudes, values, behaviours or organisations. Development is a term applied for the "positive" changes which are beneficiary to society.

In development of society the influence of financial firms is tremendous because of their role and magnitude of aid in fulfilling aspirations.

The Society in India is primarily comprised of joint families which are splitting up to nucleus families now a days. Hence we study the influence of finance companies on the three segments of populations, separated by age and their position in the family.

Elderly people are also feeling secured now. thanks to reverse mortgage plans, pension-plans from different firms. Earning members are satisfied because they can save for their old age. They also can build their dream-house. They can have a packaged tour to their place of like. They get a education loan for their kids.( of course beneficiary will repay it.. so no tension!)

Children are happy because their parents can fulfill their wishes. parents can present a bicycle worth of 10k on his/her 10th birthday. The kid gets the best education available around the world, because parents no more worry about finances.

Let us re-examine it based on the income levels.

Private finances have a model for every income groups and assist them in fulfilling their aspirations.

ICICI home-loans has plans for all kinds of peoples of all kinds of income level.

Insurances.. a plethora of plans.. life insurances...! your beloved ones are safe ..even if you are not there any more..! health cover.. make you merry even if you are sick because you are not worrying further about the bills.

Public Transport is still a hell. No problem you can buy your own bike. and have jolly rides on the weekends. You have some more money..? Go for a car loan.. Now you do not need to worry about all that haze and rain, as well your kids are protected from the dust falling in their eyes. (Of course Tatas gave us Nano)

Let us look at the rural areas.. Sundaram finance gives you a loan if a well known person recommends you for one. Sriram chits networked in almost all places. and it is a kind of unconventional investments.. still you gain money (these companies are marking profits consistently since past 10-15 years.

You have a farm and need a tractor? Mahindra finance is answer. crop loans are easy now with nationalised banks or co-operative banks. You do not need to worry about withered crops due to any reason because you have crop insurance at your doorsteps now. But no body supports you in the market, you are at the mercy of brokers. (but they are not financiers. But entrepreneurs.!) wanna grow a commercial crop? You just need to touch base with the right person in the bank!

If you are an entrepreneur, there are many plans and easily available loans, sometime subsidies too.. This easily available finance has reduced the stress of human relations and hence the social bonding is comparatively high.

There is another advantage on social development. Postal Bank agents and insurance agents..? What a network they build. and how the small savings are improved and added together to invest in mega-infrastructure projects..? you know that a penny saved is two pennies earned.

Micro-financing firms and self-help groups are gold rush now. For the low-income group it is multi beneficiary. Either a group of people who have come together with common skills will start a cottage industry kind of an outfit. or the savings are used to do micro financing among the group members for their petty needs at one time. Both aspects gives new dimension to life, either creating jobs or fulfilling small needs without major hassle.

It is evident that money is all pervasive and development engine runs on the fuel of money. The private finance companies fuel the development even in social context.

In the end I could not resist mentioning about the credit collection agents and their ways.. ! But John Paul Getty summarised it as follows:

"If you owe the bank $100 it is your problem. and if you owe the bank $100 million, that's certainly banks problem"