“MICROCREDIT: A FINANCIAL INNOVATION AND ITS WELFARE EFFECTS” Dr. Alpana Trehan, Reader, IMS,DAVV, Indore, India : [email protected] co. in Ms. Devika Trehan, Student MBA (FA), IMS,DAVV,Indore,India : [email protected] com Ms. Kshama Jaiswal , Lecturer, Renaissance College, Indore, India : [email protected] com ABSTRACT “Microcredit is the extension of very small loans (microloans) to those in poverty designed to spur entrepreneurship. Microcredit is based on different set of principles, which are distinguished from the general financing or credit.
Micro credit emphasizes building capacity of a micro-entrepreneur, employment generation, trust building and help to the micro entrepreneur on initiation and during difficult times. ” This paper has discussed about the Micro credit which was introduced in India during eighties. It had a great impact to the urban poor community since they were not considered “creditworthy” enough. In such a scenario, micro-credit came as a blessing because micro-credit institutions lend small sums of money at a reasonable interest rate without any collateral to people who need it the most which led to the development of this financial innovation in India.
This paper also discusses about the welfare effects of microcredit, which plays an important role for the social and economic development of the country such as reduction of vulnerability, formation of micro clusters, to eradicate poverty, child labour, helps in skills training, women education and empowerment, creation of wealth and assets and alleviate the rural masses from the clutches of poverty hence improving their standard of living. INTRODUCTION:- If we are looking for one single action which will enable the poor to overcome their poverty, I would focus on credit” – Grameen Bank’s founder, Dr. Muhammad Yunus Microcredit: “Microcredit is the extension of very small loans (microloans) to those in poverty designed to spur entrepreneurship. Microcredit is based on different set of principles, which are distinguished from the general financing or credit. Micro credit emphasizes building capacity of a micro-entrepreneur, employment generation, trust building and help to the micro entrepreneur on initiation and during difficult times. The poor and vulnerable continue to face a dearth in banking and financial service in India- the number of household facing financial exclusion in the country is at around 120 million. Over the past decades microcredit has played an important role in filling this gap. Micro finance Institutions are uniquely positioned to facilitate financial inclusion, and provide microcredit to a clientele poorer and more vulnerable than the traditional bank clientele. There is no comprehensive regulatory frame work for the microfinance sector in India: MFI’s exist in many legal forms.
Many mid size and large MFI’s are, however, acquiring and floating new companies to get registered on non banking financial companies which will help them achieve scale. The term microfinance refers to small scale financial services both credit and saving- that are extended to the poor in rural, semi-urban, and urban areas. The poor need microfinance to undertake economic activity, smoothen consumption, mitigate vulnerability to income shocks (in times of illness and natural disasters), increase saving and support self empowerment.
Microcredit is the extension of small loans to enterpreneurs too poor to qualify for traditional bank loans. It has proven an effective and popular measure in the ongoing struggle against poverty, enabling those without access to lending institutions to borrow at bank rates, and start small business. Microcredit is a programme extending small loans, and other financial services such as savings, to very poor people for self-employment projects that generate income, allowing them to care for themselves and their families.
In many developing countries the self employed comprise more than 50% of the labour force. Access to small amounts of credit- with reasonable interest rates instead of exorbitant costs often charged by traditional money lenders- allow poor people to move from initial, perhaps tiny, income generating activities to small micro enterprises. In most cases microcredit programs offer a combination of services and resources to their client including savings facilities, training, networking, and peer support. In this way, microcredit allows families to work to end their own poverty- with dignity.
Microcredit programs around the world, using a variety of models have shown that poor people achieve strong repayment records often higher than those of conventional borrowers. Repayment rates are high because through a system of peer support and pressure used in microcredit models, borrowers are responsible for each other’s success and ensure that every member of their group is able to pay back their loans. Micro credit is the most common product offering. Microfinance in India is synonyms with micro credit; this is because savings, and micro insurance constitute miniscule segment of the microfinance space.
In India, most microfinance loans are in the range of Rs 5000 to Rs 20000 (the Development and Regulation Bill, 2007, defines microfinance loans as loans with amounts not exceeding Rs. 50000 in aggregate per individual/ small enterprise). It is estimated that around 120 million households in India continue to face financial exclusion: this translates into credit demand of round Rs. 1. 2 trillion. MFI’s are the main players in the microfinance space in India; their primary product is micro credit. MFI’s are organized on the basis of three models -Self-Help Group (SHG) Model – Grameen Model/Joint-Liability Group (JLG)/ Solidarity Group Model. Individual Banking Model Currently there are following organisational forms of MFI’s which provide Microcredit: • Banks • Financial Corporations • NBFCs regulated by the RBI • Trusts, Societies, Co- Operative Societies and Section 25 companies • Non- banking corporate ORIGIN OF THE CONCEPT: The roots of microcredit can be found in many places, but the best known story is that of Muhammad Yunus and the founding of Bangladesh’s Grameen Bank. Muhammad Yunus, an economist was teaching at Chittagong University in southeast Bangladesh.
The famine brought him an disillusionment with his career. In 1976, Yunus started a series of experiments lending to poor households in the nearby village of jobra. Which help the villagers start simple business and then he realized that not only the borrowers were profiting greatly by access to the loans but they were also repaying reliably. Microcredit was one of those small ideas that turn out to have enormous implications. The movement has grown through cross pollination and has spread globally claiming over 133 million clients at the end of 2006.
The movement has replicated itself in all the developing economies and it has grown exponentially: |Developing Economies |Number Of Active Borrowers |Gross Loan Portfolio | | INDIA |10,215,007 |1,376,152,526 | | CHINA |32,103 |13,318,490 | | RUSSIA |1,61,672 |1,667,238,417 | | BRAZIL |754,970 |524,773,103 |
Nabard Market Mix MICRO-CREDIT IN INDIA: Microfinance served a client size of 76. 6 million against last year’s 59 million. MFI’s have recorded about 8. 5 million clients during the year 2008-09, a growth of 60% over the previous year. More than 50 percent of low income households are covered by some form of microfinance product. The total outstanding microfinance loans posted a growth rate of 30% or 359. 39 billion over the last year’s level of Rs 229. 54 billion. The SHG loan outstanding has increased by Rs. 1. 5 billion with an addition of 6. 9 million clients. At the current growth rates, MFIs might outstrip the SBLP in portfolio volumes. MFIs so far reached 234 of the 331 poorest districts identified by the government. SBLP registered a decline of number of women SHGs from 82. 5% in March 2007 to 80. 4% in March 2008. The microfinance penetration index shows especially in Bihar, Madhya Pradesh, Rajasthan and Uttar Pradesh compared to extraordinary levels reached in Andhra Pradesh, Karnataka and Tamil Nadu.
In India, however, financial services especially for the rural poor had an evolution, starting from the earliest cooperative societies in 1890. The core problem of rural finance which was high transaction costs to the banks in financing a large number of small borrowers who require credit frequently in small quantities. Besides the high transaction costs, the perception of risks in financing small borrowers ho were unable to offer physical collateral, articulate their case or submit proper loan proposals, the urban orientation and the lack of flexibility in their operations were the other constraints which restricts the outreach of the formal banking system for the poor. The poor also often perceive banks as the alien institutions which exist to serve the needs of “other”. The result was that financial services of the formal banking system remained unaccessible to the majority of the poorer sections of the rural population in the most developing countries and their reliance for credit was mainly provided by informal credit channels.
The types of Informal Credit Suppliers found in India (including financial intermediaries): Chit Funds recognized by Chit Fund Firms, Finance Corporations, Hire Purchase Firms, Nidhi’s, Wholesalers and Other Intermediaries, Arartiyas or Commission Agents, Angadias, Indigenous Bankers or Shroffs, Brokers, Pawn Brokers, Money Lenders, “Piggy- Bank” Intermediaries. In the year 1961: 83% , 1971:71%, 1981: 39% of debt of rural households came from informal sources . Share of informal credit in urban areas was 30% and informal money lenders covered 70% of farmers credit needs.
The average lending rates in the year 1979 and 1984 in the formal sector were close to 16. 5 per cent and 18. 0 percent and in the informal sector were around 23. 4 per cent and 25. 3 percent. Due to these exorbitant interest rates charged by the lenders of the informal sector there arose a need to develop a supplementary credit delivery mechanism to reach the poor in a cost effective and sustainable manner. Then the formal development of Microfinance in India which had two dominant forms SELF-HELP GROUP and MFI’s. While no definitive date has been determined that as and when the Self- Help Groups were conceptualized and propogated.
In the year 1980 they were noticed and the Government of India bestowed national priority to the programme through its recognition of microfinance. Slow and steady this scheme got the attention of many financial institutions and the banking system comprising public and private sector commercial banks, regional rural banks and cooperative banks joined hands with several organizations in the formal and non-formal sectors to use this delivery mechanism for providing financial services to a large number of poor. In the year 1992 National Bank for Agriculture and Rural Development (NABARD) introduced a pilot project or linking 500 SHG’s with banks. The operational guidelines from NABARD were deliberately kept flexible to enable the participating banks and field level bankers to innovate and contribute to building and strengthening the project. Pilot Project on SHG – Summary Progress Report: The pilot project made considerable progress 637 groups have established credit links with 16 commercial banks and 12 RRBs; the total loan sanctioned by banks amounting to Rs. 7. 9 million and refinance released by NABARD amounted to Rs. 7. 6 million.
Some good features came to light such as shift in credit from consumption to acquisition of income generating assets, use of credit for non- traditional economic activities, increase in income levels of group members, development of thrift and self help among members, reduction in transaction cost for both banks and SHG members and an almost 100% recovery of loans. PROGRESS UNDER THE SHG-LINKAGE PROGRAM: Through the SHG Linkage program the RBI and NABARD tried to improve and promote the relationship between the poor and the bankers. The SHG Linkage program had been increasing its outreach substantially.
Together the commercial banks, cooperatives and regional rural banks had succeeded in linking 114,775 SHG’s by March 2000. With an average size of 20 members per group, the program had reached over 2. 2 million households. A large majority (85%) of the SHG’s linked to banks were essentially women’s groups. The years, to achieve an outreach of about 31 million families through women’s membership in about 2. 2 million SHGs by March 2006. While the size of the programme continued growing in 2005-2006, the rate of growth of loans to new groups declines sharply to 15 percent.
The rate of growth of repeat loans also declined although by not as much as that for new loans (repeat loans grew by 34 percent in 2006 as against 50 percent in 2005). Thus the proportion of repeat loans in total loans, and repeat lending in total lending, increased to 36 and 48 percent respectively. Also, average loan size of both kinds of loans increased to Rs 37,574 and Rs 62,960 respectively. This translates to average loan size of Rs 2,684 for first loans and Rs 4,479 for repeat loans per group member, given average group ize of 14 months. Since the original target announced for the programme, of linking 1 million groups, by March 2007 had already been almost doubled. Although the programme is still heavily skewed in favour of the southern states (AP, Tamil Nadu, and Karnataka) the share of the new loans for the four southern states came down from 49 percent in 2005 to 44 percent in 2006, and of cumulative loans from 58 to 54 percent. The number of new loans actually came down in AP, from 107,351 in 2005 to 94,311 in 2006.
As further 686,408 SHGs were linked during the year, bringing the cumulative number of SHGs that had ever been linked (provided with the bank loan) to 2. 92 million by March 2007. Assuming average group size of 14 members this translates into coverage during the year of another 9. 6 million persons, over 90% of them being women, and the total number of SHG members who have ever benefitted from the programms are about 41 million. The number of new SHGs linked this year represent an increase of about 11 percent over those linked last year.
This represents only a slight decelaration of the rate of growth of loan to new SHGs from 15 percent last year. The increase in the number of repeat loans however, was exactly the same at 33 percent. Lending under the program increase by 48 percent over last years new lending which had grown by 50 percent over the previous year. The average siz e of first loans made to new SHGs went up by 18 percent to about Rs. 44300 per group, or to an average of about Rs. 3200 per member. The average size of repeat loans, on the other hand grew up by 25 percent to almost Rs. 79000 per group or 5650 per member .
The SHG Linkage program entered into a phase of consolidtion in the year 07-08. The number of new group credit-linked with banks decline to 0. 552 million during the year 07-08 compared to 0. 68 million groups in the previous year. The cumulative number of groups that have borrowed from a bank atleast one has increased to 3. 48 millions by the end of March 2008 from 2. 92 million, at the same time last year. The number of members of such groups increased to 58 million as indicated by NABARD but with a smaller average nmber of members of 13 per group, the membership is estimated at around 45 million.
The fall in the number of new groups linked by about 0. 13 million is attributed to the slowing down of Self Help Group Linkage in the southern states and the failure to gather momentum in other states. The extent of finance availed by these new SHGs amounted to Rs. 42. 28 billion. The average loan to new groups increased by Rs. 1500 to Rs. 45900, and repeat loan to existing groups increased by Rs 11,500 to Rs 90100 when comapred to the previous year. The number of groups financed during the year was around 1. million; the flow of loans, however being more than Rs 80 billion as against 65. 7 billion in the previous year. NABARD provisional data for 2008-2009 has indicated that 1. 7 million groups had been financed including those which had availed repeat finance. The disbursement made during the year to SHGs reached a new high at Rs 127. 06 billion, up from Rs 88. 49 billion last year, an increase of 43 percent. The number of outstanding SHG accounts increased to 4. 145 million. Thus the banking sector has added 6. 9 million clients through membership of SHG into a formal finance .
The total number of members linked to the banking system through the SHGs is estimated to be around 54 million. The total number of outstanding loans in the name of SHGs was about 3. 62 million with a total outstanding of almost Rs. 170 billion. At the end of March 2009 the provisional information indicates that the disbursment during the year to SHGs would have been about Rs 171. 4 billion and the outstanding at the end of March 2009 has reached a level of Rs 241. 9 billion. REGIONAL SPREAD AND SKEWED DISTRIBUTIONS ACROSS STATES: The program since its initiation has shown severe spatial preferences.
It has been predominant in certain states namely, Andhra Pradesh, Uttar Pradesh, Tamil Nadu, and Karnataka. These four states accounted for two thirds of SHG credit linkages, with Andhra Pradesh alone accounting for 40% of these four states , only Uttar Pradesh had a higher poverty ratio (31. 15%) than the national average of 26. 1% the awareness and acceptability of the program was relatively higher. Kerela, Maharashtra, Bihar, Rajasthan, Madhya Pradesh, Orissa, West Bengal, and Gujarat together had 23. 6% of SHG Linkages while the remaining states and the union territories had only 1. 47%
In 2005 NABARD identified 13 priority states accounting for 70 percent of India’s poor for special efforts and location- specific strategies. Table 2. 2 shows that the number of groups linked in these states increase by 68 percent in 2005 and 51 percent in 2006. As against an increase of 49 percent in number of new SHGs linked country wide in 2005 the number went up by 54 percent in the north east, 45 percent in the west, and 44 percent in the east. Growth in the central, northern and southern region ranged from 15 to 20 percent. Of these three regions, acceleration of growth in the central region deserves the highest priority. 06-07) In the SBLP expanded by 37 percent in 13 priority states which account for 67 percent of the rural poor. Growth was particularly rapid in Maharashtra, as a result, the western region experienced the fastest growth (63 percent) of all the regions, and its share in the total number of groups linked is now only 5 percentage points behind its share of total number of poor. The two regions which have the most catching up to do are the central and eastern regions, whose share of groups lag behind there share of the poor by 21 and 11 percentage points respectively.
Growth in the east was 33 percent, about the same as over all national growth of 31 percent and well below the previous years growth of 48 percent. Growth in the central region was only 24 percent. (07-08) The regional share are undergoing a gradual change. The share of southern state in the number of groups linked to the bank declined to 48. 2 percent in March 2008 the first time ever that its share was less than 50 percent. The last three years progress shows that while southern region is loosing its share (about 6% between March 06 and 08), the western and northern region areimproving their shares.
The central region had a lower share in March 08 when comapred to March 06. The eastern region (26. 5%) had caught up with south (27. 6%) in the share of new group linked in 07-08. Growth rate of new group linked was the best in the western region with (38%) driven by good performance in Maharashtra. Against the all India growth rate of 19 percent, the south had a much lower growth rate of 10 percent. The growth in the 13 priority states did not come up to the expectation, indicating the need for intensive work.
The growth rate of SHGs linked was better than the national average in 7 of the 13 states. Chattisgarh, Maharashtra, Assam and Orissa ad healthy growth rates while other states did not justify the priority tag. The 13 priority states, which had a share of 47 percent of SHGs linked to the bank in March 2007 have a higher share of about 51 percent of the SHGs in March 2008. (08-09)The southern region continues to lead in terms of share in client outreach as well as loan disbursment and outstanding the share of southern state increased to 55 percent from 52 percent between 08-09.
The share in loan outstanding in southern region increased to 69 percent in 2009. However soome of the states in other regions such as West Bengal, Orissa, Uttar Pradesh, Uttarakhand and Assam have been posting better growth rates. Of loans disbursed by banks to SHGs in 08-09 of Rs. 127. 07 billion, 59 percent went to two states AP and Tamil Nadu against an all India average disbursment of Rs 74,000, the average loan disbursed in Harayana, Uttar Pradesh, Uttarakhand exceeded Rs 1,00,000. Haryana with average disbursment of Rs 1,43,000 led the pack.
On the other extreme Maharashtra had average disbursment per SHG of Rs 31,300. Agency Wise Performance: SHG-Bank linkages |Banks |Number |Percentage of total |Total loan (Rs. in |Average loan per group| | | | |millions) | | |C. Bs |51,619 |55 |1278. 33 |24,765 | |RRBs |38,998 |41 |574. 9 |14,736 | |Co. Bs | 4,028 |4 |76. 90 |19,091 | | | | | | | |Total |94,645 |100 |1929. 82 |20,390 | Reserve bank of India and the government lend support to the SHG-Linkage program through policy formulation and regulation while the NABARD acts as a facilitator and refinancing agency.
The program at the grass root level was executed through a network of commercial banks, regional rural banks (RRBs), district central cooperative banks (DCCBs), and primary agricultural credit societies (PACS). Commercial banks have been found to be more suitable for microfinance because they are regulated and fulfill the conditions of ownership, financial disclosure, and capital adequacy and they have the necessary physical and financial infrastructure to support the program. A study of the participation of commercial banks in SHG financing revealed that they were egularly involved in SHG financing since 1996-97 upto 2000 and had estabilished 51,619 credit linkages. The State Bank Of India had the maximum coverage, followed by Andhra Bank and the State Bank Of Hyderabad. The commercial banks were predominant, with the highest credit links in 12 states. The RRBs also responded well to NABARDs initiative for extending their outreach to SHGs. 41% of the SHG linkages were estabilished through the participation of 84% of the RRBs. The RRBs were predominant in 8 states having a credit linkage size of 38998 SHGs.
It is revealed from that three-microfinance finance agencies, namely, Commercial Banks (CBs), Regional Rural Banks (RRB) and Cooperative Banks played an important role in the formation of SHGs-bank linkage program in different states of India. The Commercial Banks and Regional Rural Banks formed the maximum number of SHGs in Andra Pradesh. It is also observed from that the Co-operative Banks formed the highest 12 number of SHGs in West Bengal. The distribution of the number of SHGs is concentrated in the southern states.
Andra Pradesh ranks first, Tamil Nadu ranks second and Karnataka the third position in the number of SHGs formation The coverage of cooperative banks in the SHG Bank linkage program was minimal. Only 26 PACS had joined the program; the Hoogly DCCB in West Bengal had maximum linkages(1,311), followed by Bidar in Karnataka (827), and Krishna in Andhra Pradesh (827). Some of the reasons identified for the lower participation of cooperatives were slow reforms, a lack of proper infrastructure, especially training centres, and a lack of specialized staff to pursue microfinance.
In this section an attempt has been made to review the credit linkages estabilished by NGOs with banks for March 1999-2000 as against 550 NGOs during 1998-99, 718 NGOs were involved in the SHG linkage program in the year 1999-2000. The number of NGOs participating in the program had increased by 30% over the previous year. (06-07) The respective share of commercial banks, RRBs and Cooperatives in financing SHGs. The share of commercial banks has gone up in 2006-07, both in respect of number of loans and amounts disbursed. In 2005-06, public sector banks accounted for 93 percent of commercial bank financing and 20 private banks for 7 percent.
Among public sector banks, the SBI linked by far the highest number of SHGs during the year (142,034) followed by Indian Bank (30,632) and Canara Bank (18,445). According to the study by NABARD in March 2005 SBI accounted for 40 percent of all active clients. Similarly, 20 out of the total of 196 participating RRBs served 50 percent of active clients, and cooperative banks in three states ( Tamil Nadu, Karnataka, and West Bengal) accounted for 82 percent of those served by the cooperative banks. (07-08) Commercial banks continued to account for a major part of SHGs linked and financed.
The Regional Rural Banks ( RRBs), even in the midst of their amalgamation and consolidation excercises continued linking of SHGs. Through the cooperatives had turned in a much better performance than the last year, the share of cooperatives continued to lag behind despite larger presence across all districts and the extensive network of constituent primary societies. (08-09) Commercial Banks have a lion’s share of the number of SHGs provided with credit during the year (55 per cent) as also the amount of loans (64. 4 per cent) that had been disbursed.
The RRBs with a much smaller network and ootprint have supported the SHGs more than the cooperative banks had managed. RRBs had 26. 5 per cent share of loans disbursed with a share of 26. 5 per cent of the number of SHGs that were provided loans during the year. There are some states in which the cooperative banks have taken a leadership position (such as Maharashtra, WB, Orissa with regard to SHG Linkage. The average loan disbursed by cooperative banks to SHGs was about Rs 37,300 which was 45 per cent of the average size of loan provided by commercial banks.
Microcredit And Its Welfare Effects Khandker (133-144) concluded that microcredit programs were more cost-effective in delivering financial services than state-controlled agricultural development banks. Furthermore, he concluded that microcredit is more cost-effective than formal rural financial intermediation, targeted food interventions and rural infrastructure development projects in developing countries. “Among the economically active poor of the developing world, there is strong demand for small scale commercial financial services—for both credit and savings.
Where available, these and other financial services help low income people improve household and enterprise management, increase productivity, smooth income flows and consumption cost, enlarge and diversify their microbusiness and increase their incomes. ” Women’s education in particular is among the most powerful determinants of trends in public health and child mortality. Income-poverty reduction is a function of two factors: the rate of growth and the distribution of income. Education generates important benefits in both areas.
It is positively associated with the rising productivity and innovation upon which economic growth depends. Equally importantly, improved access to education can help the poor to participate in markets on more equitable terms, improving the distribution of income in the process. Globalization, and the associated emergence of increasingly knowledge-based systems of production, is strengthening the links between education and poverty reduction, both nationally and internationally. Microcredit (increased incomes) and Basic Education both have a significant impact on number of births.
The impact of an increased income is less than that of education; however, the impact for education only becomes significant after 6 years of schooling. Thus, a microcredit program would have an immediate negative impact on births (and would continue to have such an effect) while the impact of an education program would only start to take effect after a period of 6 years (but the impact would be larger). Infectious diseases are responsible for almost half of mortality in developing countries. These deaths occur primarily among the poorest people because they do not have access to the drugs and commodities necessary for prevention or cure.
Approximately half of infectious disease mortality can be attributed to just three diseases – HIV, TB and malaria. These three diseases cause over 300 million illnesses and more than 5 million deaths each year. None of these diseases has an effective vaccine to prevent infection in children and adults. In addition to suffering and death, these diseases penalize poor communities, as they perpetuate poverty through work loss, school drop-out, decreased financial investment and increased social instability – creating sizeable social and economic costs. Immunization is ne of the most cost effective health interventions in existence. If polio is eradicated by 2005, it has been calculated that US$ 1. 5 billion per annum will be saved on immunization costs alone. Similarly, it is estimated that the eradication of smallpox in 1979 led to direct savings of US$ 275 million per annum. Immunization reduces the social and financial costs of treating diseases, offering opportunities for poverty reduction and greater social and economic development. we find that women’s credit has a large and statistically significant impact on two of three measures of the health of both boy and girl children.
Credit provided (to) men has no statistically significant impact…A 10% increase in (latent) credit provided to females increases the arm circumference of their daughters by 6. 3%, twice the increase that would be expected from a similar proportionate increase in credit provided to men. Female credit also has a significant, positive but somewhat smaller effect on the arm circumference of sons. Female credit is estimated to have large, positive and statistically significant effects on the height-forage of both boys and girls. ” No statistically significant effects were found for Body Mass Index (BMI).
Conclusion Microcredit has existed in many forms for decades, has garnered attention as a commercially viable activity that can offer real opportunities for micro entrepreneurs. The Scheme of Micro-credit has been found as an effective instrument for lifting the poor above the level of poverty by providing them increased self-employment opportunities and making them creditworthy. Microcredit has also increased women empowerment which is reflected by greater assertiveness and participation in decision-making and a greater desire to manage their own affairs.
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