BASIX Social Enterprise Group - Vijay Mahajan

Year founded: 1996

Country: India


BASIX promotes sustainable livelihoods for the rural poor and women through the provision of financial services and technical assistance.

Focus: Microfinance, Rural Development

Geographic Area of Impact: India

Model: Social Business

Recognition: Schwab Fellow of the World Economic Forum


While the concept of microfinance institutions (MFIs) spread rapidly in neighbouring countries such as Bangladesh and Indonesia, India had a slower start. Until the early 1990s banks were nationalized and mandated to reach the poor with subsidized loans. While the intention was laudable, in practice loans to the rural poor by the banking sector were riddled with corruption and red tape, limiting what could have been a powerful economic intervention for social change. In 1992 India started to reform its banking system to restore financial health, and as a result the number of small loans going to rural areas decreased rapidly, since they were less profitable. BASIX was established in 1996 with the ambitious target of disbursing microcredit to one million of India’s rural poor.

Innovation and Activities

BASIX is the first MFI in India and among the first in the world to attract commercial equity investments internationally and within India. By successfully lobbying for changes in the Indian regulatory policy framework, BASIX helped create a viable institutional space for MFIs in India. The mission of BASIX is to promote a critical mass of opportunities for the rural poor and to attract commercial funding by proving that lending to the poor can be a viable business. BASIX tailors its lending techniques and distribution channels to different customer groups and arranges technical assistance and support services for its clients. It aggressively uses IT applications to process large numbers of transactions and support innovative delivery channels, such as franchise agents using hand-held devices to serve poor borrowers. BASIX does not confine its loans to the landless poor and self-employed as do most other MFIs, but rather argues that most of the poorer population groups prefer to be employed. Thus, providing credit to the micro-enterprises that can employ them is as important as providing credit to the poor themselves. Studies show that on average, the income of BASIX borrowers increases 20-30% in 2-3 years, and that they also generate substantial wage employment for others.

Based in Hyderabad, in the state of Andhra Pradesh, BASIX has approximately 250 full-time employees, mostly in rural districts, and over 400 village-based customer service agents reaching +7,500 villages in more than 40 districts in nine Indian states. BASIX works with nearly 95,000 borrowers, including women in self-help groups (SHGs) and federations. It has cumulatively disbursed over 137,000 loans worth +US$ 33 million, 41% of which are loans to SHGs. BASIX’s pioneering work with SHGs and its advocacy for microcredit have been two of the factors that led Indian banks to extend over US$ 44 million worth of microcredit to more than 12 million rural poor women since 1998.

The Entrepreneur

Vijay Mahajan was educated at India’s Institute of Technology in Delhi, the Institute of Management in Ahmedabad, and is a Fellow at Princeton’s Woodrow Wilson School of Public and International Affairs. He could have chosen many different life paths and lucrative careers, but instead chose to channel his talents and education to improve rural Indian society. In 1983 he co-founded PRADAN, one of India’s most respected rural development NGOs, and in 1998 co-founded Sa-Dhan, the association of Indian MFIs. In 2001 he helped found the Andhra Pradesh Mahila Abhivruddhi Society (APMAS), a capacity-building institution for the +500,000 women’s SHGs in the state. Mahajan has published a book on the rural non-farming sector in India and more than 50 articles on rural development and microfinance.