How India?s ?untouchable? entrepreneurs use capital to fight caste

When Prashant Tambe sought a loan to expand his private college last year, the bank didn?t turn him down outright. ?It was just red-tape-ism,? the young entrepreneur said, using a popular Indian expression for business death by a thousand bureaucratic hurdles.

His brother, Avinash Tambe, had an identical experience seeking funds to build his coal import firm. They have no illusions about the source of the banks? reluctance: It began when they wrote their surname on their loan applications.

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The name Tambe identifies them as Dalits ? the people once known as ?untouchables,? at the bottom of the Hindu caste system. And so despite the fact that the brothers have eight post-graduate degrees and two successful businesses between them, they struggle to get access to capital and chafe at the opportunities they are missing.

They recently had an opportunity to share that frustration, and to seek out new partners, at a first-ever trade fair organized by the Dalit Indian Chamber of Commerce and Industry.

?It?s a strange irony and it tells you a lot about the ground reality of India,? Prashant Tambe mused as they set up their stall in a vast Mumbai exhibition hall ? it?s popular wisdom in the country today that the booming economy will end the influence of caste, but the best way they can find to be part of that economy is to join a caste-based business association.

The Dalit business lobby, founded in 2005, has 1,000 members; 180 of them came from across the country to exhibit and network at the three-day fair. There were companies making solar-power systems, military uniforms, car parts, pharmaceuticals, pesticides and industrial piping; there were also small financial-service companies and construction firms.

The DICCI slogan is ?fighting caste with capital.? But many business owners at the fair said they share one key problem: They can?t get their hands on that capital.

As the Tambes and others described, Dalit business owners struggle to obtain conventional bank loans. Sometimes it?s malice from dominant-caste bank employees who do not want to see a Dalit business succeed, said Prashant Tambe; other times it?s simply that the bankers doubt that a first-generation Dalit business owner will have the acumen to be a safe loan risk.

Almost always, they lack collateral ? while Dalits are a sixth of India?s population, they control only an estimated 1 per cent of the country?s wealth. The vast bulk of the population continues to be landless labourers working for occasional daily wages of one or two dollars.

And they have no access to the other key source of funding for Indian entrepreneurs; loans from extended family or their caste community ? ?internal funding,? as it?s known here. The Tambes? father was the kind of general labourer called a ?peon? here and their mother was a nursing assistant with a primary-school education; the cousin who is a co-owner of the coal business is the son of a cycle rickshaw driver. They pushed their sons to seek education, but they had no funds to bankroll their good ideas.

The Indian government has attempted to address the issue through a Dalit-focused national finance-development corporation, but it provides only small loans of up to $5,000 ? enough, as DICCI chairperson Milind Kamble put it, to buy a large photocopier and set a family up as a corner copy shop, but not enough to bankroll an entrepreneur whose ambitions stretch beyond that.

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