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In 1997 Spandana Sphoorty Financial Limited was founded by Padmaja Reddy and a few close associates who believed that systems could come into being that would enable the poor to harness their entrepreneurial spirit. The inspiration to establish a Microfinance Institution came out of Ms. Reddy’s determination to help the less fortunate to become self-sufficient. The seed of this undertaking was planted one morning in Hyderabad, India. Padmaja, while on her way to work, passed a rag-picker woman and became preoccupied with finding a way to help this woman. An investigation revealed that the lady was actually paying an exploitative daily rent that cumulatively far exceeded the cost of buying scores of carts. A lack of a capital outlay, that would be a mere pittance, was the obstacle that prevented this lady from achieving financial independence and a sustainable livelihood. A bank loan was not an option to this woman, and the moneylender was too exploitive an alternative. Padmaja decided to lend her the money, to buy the cart off, if the woman would promise to pay it back in timely and reasonable repayments from her new earnings. The old woman complied, started her new self-owned enterprise, and also spread the word that there was a lady who was helping people with loans. Not long after, many others in need waited to meet Padmaja at her doorstep throughout the day. Padmaja decided to devote herself to mobilizing funds to create capital that she could then disburse as small loans for the poor. This was an uphill task, as very few institutions were ready to help her. Padmaja spent the next two years selling old newspapers herself, in order to raise capital for her new ‘clients’.

Spandana envisions itself as a financial service provider to markets not optimally served. It focuses on poor and unbanked households in rural, semi-urban and urban areas. The transformation of Spandana over the last decade is unprecedented. It began as an NGO that raised its own funds and gave loans to the poor and now is India’s largest Microfinance institution that has support from most mainstream institutional lenders. With ambitions of being the foremost service provider for its clients, it is uniquely poised with an operational efficiency and a customer understanding that has become the benchmark in this sector. Spandana currently serves over 2.5 million clients across 165 districts in 8 states. They have always listened to their clients, and don’t ever underestimate their clients’ intelligence or tenacity - a sense of mutual respect runs right through Spandana’s system for everyone. Listening to their clients made Spandana instinctively innovative with development of products and services. The diversity of our growing client base represents the realization they are now servicing not just the poor, but also slightly larger, established entrepreneurs. They anticipate the market to evolve into a stage where the term ‘MFI’ would become redundant.

“When the Rich are too rich there are ways, when the poor are too poor there are ways… and that way will come soon.” ~ Pearl S. Buck, “The Good Earth”

Padmaja Reddy can be found on the Madison Who’s Who Directory where she is looking forward to networking with you.