KOCHI: Growing up in Kizhakkancherry, a small village in Palakkad district, K Paul Thomas, as a child, would be disturbed to see the poverty and the struggles of poor people living in the area. “When I walk to my school, which was 10 kms away, I would see people’s suffering and in misery. I would think, if the God is just, why is it that there is so much inequality all around?”
The thought would continue to haunt young Thomas, born to farmer parents, during his college days as well. “For most students, college days meant fun and carefree life on the campus.” Though Thomas got a job as a marketing manager at fertiliser maker IFFCO immediately after the college, he was convinced that it was not his calling. “I put one condition to my would-be wife before marriage. My long-term purpose in life is something else. Don’t marry me if you are looking at my stable job and income. I may quit the job,” he says.
Thomas set up the ‘Evangelical Social Action Forum (ESAF)’, a non-profit venture, from his rented house in Mannuthy in Thrissur to pursue his charity activities for the poor and the marginalized in 1992, within two years of his marriage. ESAF initially focused on micro-enterprise programmes. But those who attended the programmes started asking Thomas if he could provide small loans to start their ventures. The turnaround came when he attended a workshop on Bangladesh’s Gramin Bank-replication programme in Chennai in 1993. That was the period when Thomas was exploring the feasibility of launching a revolving fund to finance micro-entrepreneurs.
“Initially, I was not convinced about the concept of giving loans as low as `3,000. It took me two years to warm up to the idea,” he says. In 1995, he executed a pilot project in Pananchery panchayat in Thrissur. “We organised 10 women. We told them if you work as a group on mutual guarantees, we can provide a loan,” he explains. These 10 women identified various activities–one would rear a cow, another would rear sheep, one would go for vegetable farming while another would start a small tea shop etc. “We gave them `3,000 each,” he says.
This was a one-year loan, and the women had to repay the loan over a period of one year at the rate of `70 per week. A total of 100 women were assisted in different parts of the state initially. In 1996, Thomas got the opportunity to visit Bangladesh under the international Grameen-replication programme. He got a loan of $40,000 (`15 lakh then) in 1998 under the programme at 2 per cent interest. This was the seed capital for ESAF. Prof Mohammad Yunus, the Bangaladeshi founder of Grameen Bank and recipient of 2006 Nobel Peace Prize, helped ESAF during those days. The seed capital was used to assist 500 poor women.
Thomas quit the job in 2002, and started to expand outside Kerala to Chhattisgarh, Madhya Pradesh, Jharkhand, Tamil Nadu and other states in 2004. In 2008, the lending activities were shifted to ESAF Microfinance and Investments, a non-banking finance company. He believes that the entry into for-profit venture through the NBFC has not diverted from his original plan, which is to help poor people.
The growth was stupendous for ESAF, which got the RBI approval to function as a scheduled bank in 2018, ahead of other well-known peers. ESAF now employs 7,000 people (4,300 in the bank alone) while the first employee came on board in 1994.
In January this year, ESAF Small Finance Bank (ESAF Microfinance has become the holding company) filed for an initial public offering (IPO). Will the attention divert from the original plan of helping people to increasing profits after the company’s shares listed on the stock exchanges? Thomas says ESAF has a triple-P approach–People, Planet and Prosperity. “In the bank we have a separate wing sustainable banking department. We are one of the first banks to take membership in global alliance on banking values,” he says. While its customer base crossed 2 lakh–99 per cent are women borrowers–in 2018, ESAF has nearly 500 branches across the country now. The banking business, meanwhile, crossed `10,000 crore last year. Coming months will see yet another milestone for this big small bank from Kerala–a blockbuster listing on the stock exchanges. That will make Thomas one of the richest businessmen in Kerala. But he’s focused on the job at hand–to help people.
In Thrissur district’s Mannuthy, 56-year-old K Paul Thomas has replicated Bangladesh’s Grameen Bank model, empowering thousands of poor women in their path to entrepreneurship through small ticket loans