What is Financial Vulnerability?

One of our Nanubhai Scholars, and her family, live here:

Not Poor but Vulnerable

At Nanubhai, we’ve made a conscious decision to use the terms “financial vulnerability” and “financially vulnerable,” particularly when we’re talking about our Nanubhai Scholars. We use these phrases instead of more loaded terms like “poor” because they’re more accurate.

But what, actually, is “Financial Vulnerability?”

The short answer: the opposite state of being financially secure.

The long answer: From an American perspective, our Scholars would fit the definition of “poor” (the average family income for our Scholars is $384/year). But there are millions of Indians who are “poorer” than our Scholars.

So why did we select these girls?

Besides their academic merits, we chose them because they come from families who want them to be more. They believe in the power of education and can see the opportunities that become available for their daughters once they complete university.

These families will do what it takes to get their girls into university. If that means taking a loan to do so, they’ll sign on the dotted line. But there’s a problem: banks in India seldom give loans to people who actually need them. Instead, most people get loans in one of two ways:

  1. from family and close friends
  2. from unscrupulous moneylenders who will charge up to 50% interest.

When your family and friends are also earning $384 a year, they generally don’t have an extra $1,575 (the average cost of 3 years attendance for our Scholars) sitting around.

If you go with option #2 and find a moneylender who will only charge you 40% interest, its still going to take you the rest of your life to pay back that loan.

So what do you do? Do you deny your daughter her chance at financial security or do you spend the rest of your life in debt?

But what if there was a third option?

Nanubhai Scholars isn’t a loan program. Instead, we subscribe to the idea of “pay it forward.” This is how we expect to recoup our costs:

  • These girls graduate and take jobs that pay well enough to create a financial safety net for themselves and their parents
  • When they’re able to kick in money to help younger family members pursue their own higher education
  • Whenever our Scholars talk to a younger girl about the importance of education and becomes a role model and mentor in her community

What do our Scholarships actually accomplish?

Every time we switch a Nanubhai Scholar from “Financially Vulnerable” to “Financially Secure,” rural India takes a step away from endemic chronic poverty and towards upward mobility.