/* Written 7:48 PM May 3, 1998 by [EMAIL PROTECTED] in web:reg.india */
/* ---------- "India: Micro Credit & Women (Part 2" ---------- */
Asialink - Electronic Newsletter
Information Exchange for Social Change
Issue No. 10 (May 1998)
Dear Friends,
This in the second in our two-part series on micro-credit. The
following facts, culled from "Micro-Credit: Economic Empowerment
of Women," by the Comet Media Foundation, Mumbai, 1997, suggest
that micro-credit, however promising it might be, still reaches
relatively few Indians:
... Up to December 1995, RMK (Rashtriya Mahila Kosh, the
central pool of micro-credit for women) had sanctioned
credit of Rs. 1,406.28 lakhs (about 140 million rupees or
four million in US dollars) to 73 NGOs to benefit 82,474
women.
(Participants included self-help groups, 75 percent of which
are women's groups,) linked to 28 commercial banks, 60
regional rural banks and seven co-operative banks in 16
States and two Union territories.
... (Promoted by SEWA, in Ahmedabad, the programme) operates
in eight states and its support to underprivileged women has
been routed through 93 NGOs. FWWB credit has reached nearly
44,000 women, and a total amount of Rs. 40.7 million has
been lent through the supporting NGOs since 1990 ...
***
Grameen in Bangladesh and SEWA in India are examples of micro-
credit schemes that encourage women's participation. Both have
seen some big successes, so it's no wonder that so much is
expected.
Still, we need to ask what micro-credit really means for poor
women? Just how far does it go towards alleviating poverty? Are
all participating NGOs indeed following in the footsteps of SEWA
and Grameen?
Not everyone has hopped on the micro-credit bandwagon. The
following viewpoint, excerpted from "Micro-Credit: Band-Aid or
Wound?" by Kavaljit Singh, Nan Dawkins-Scully and Daphne Wysham,
explores some of the downside of micro-credit:
... A global campaign to ensure that 100 million of the
world's poorest families receive credit for self-employment
by the year 2005 was launched at the three-day Micro-credit
Summit in Washington, D.C., on February 2-4 1997. Organised
by RESULTS Educational Fund, a US-based non-governmental
organisation (NGO), this summit was supported by an array of
financial and development institutions, including the World
Bank, the International Fund for Agriculture and
Development, and transnational banking institutions like
Citicorp, Chase Manhattan and American Express.
Although it is too early to comment on the outcome of the
summit, the available reports suggest that the summit was
successful in mobilising financial and political support
from international aid agencies and financial institutions
to reach 100 million of the world's poorest families with
credit for self-employment by year 2005.
Suddenly, it appears, everyone is jumping on the micro-
credit bandwagon. The reasons for this are as varied as the
players. Micro-credit has the support of many women's
advocates who view expansion of micro-credit as a potential
bellwether for women's empowerment as poor women gain
greater access to financial resources.
Multilateral development banks, in an era of budget cuts and
disbursement reductions, are embracing micro-credit as an
opportunity for them to move away from the capital-intensive
"development as charity" model to the potentially more
profitable "development as business." But perhaps most
significantly, the financial community has woken up to the
fact that there is a great deal of money to be made in
micro-lending, where interest rates can range from 20 to 100
percent.
Micro-credit is often portrayed as a "win-win" option,
wherein investors profit handsomely while the poor gain
access to resources that allow them to help themselves. The
reality, however, is not always so rosy.
In India, a number of self-help groups (SHGs) were created
in the 1980s to provide credit facilities to the poor,
especially women, in both urban and rural areas. These SHGs
stumbled upon a surprising finding: by targeting women,
repayment rates came in well over 95 percent, higher than
most traditional banks. Impressed by the repayment rates,
institutions like National Bank for Rural Development
(NABARD) and the Small Industries Development Bank of India
(SIDBI) began increasing their lending to SHGs in India.
However, the lending rates of SHGs to borrowers were not
cheap. For example, (SIDBI) lent to NGOs at nine percent;
NGOs were allowed to lend to SHGs at a rate up to 15
percent; and SHGs, in turn, were allowed to charge up to 30
percent to individual borrowers. Although such high-interest
credit is touted as a vehicle for poverty alleviation,
wherein the poor use the funds to undertake commercial
ventures, various studies have found that the loans are
largely used by poor people to meet their daily consumption
needs.
Nevertheless, similar micro-credit operations are now being
established in India, with liberal grants from international
donor agencies like the Ford Foundation, UNDP and the Swiss
Agency for Development and Cooperation (SDC). This seed
money, in turn, will attract additional capital from the
corporate sector and financial institutions. Loans are to be
provided to borrowers through a network of subsidiary
lending institutions. In order to assure investors a good
rate of economic return, these corporate entities will lend
at market rates. Critics charge that such micro-credit,
rather than resulting in poverty alleviation, will simply
keep the poor on the treadmill of debt or bypass them
altogether in favour of those who can afford credit at
market rates.
This criticism does not take into consideration that there is
really no wall that separates consumption loans from productive
loans in a poor household or that the alternative credit
available to the women has rates which often run to ten percent
per month.
***
According to "Micro-Credit: Economic Empowerment of Women," NGOs
participating in micro-credit schemes work under considerable
constraints:
Currently a number of credit programmes such as those of the
Rashtriya Mahila Kosh (RMK) operate through NGOs.
However, it has been observed that many NGOs do not have the
adequate knowledge, training and infrastructure to handle
large sums of money. In addition, there are high
administrative costs as the frequency of the reports to be
sent to the donors is very high. They add to the
administrative burden of the organisation and adversely
affect their core activities.
***
The longer a self-help group survives, the better its chance of
serving its members well. This is no less true when it comes to
micro-credit, as the following comments from activist Sunita
Bagal show. Ms Bagal's experience includes working with many
SHGs, mainly in Maharashtra, Orissa and Bihar.
... Old self-help groups have been able to ensure
subsistence support to stabilise life ... Being able to take
consumption loans for organising the basic food supply of
the family has given a steadiness to family responsibilities
of self-help group participants in many areas. In Vardha a
nine-yard saree-clad woman has been doing photography and
earning her livelihood. The earning she does is seasonal but
she gets good work.
***
It is heartening to see women breaking with stereotypes as they
earn a livelihood and look after the family. But such spirit gets
dampened because women have to work for contractors and cannot
work independently as artisans.
A few year back the YWCA offered electrician's training, but
women students had a hard time getting work. What work women
actually get following loans or training needs more exploration.
According to Daivashala Giri, a victimised Adivasi teacher now
fighting for justice and for a livelihood in rural Maharashtra,
because women do not know much about market economy and the
outside world, even when they do get loans, the money can easily
end up in the hands of their husbands, ultimately to be dispensed
by the men.
***
Our last piece gives micro-credit mixed reviews. It's taken from
"Bodies called Women: Some Thoughts on Gender, Ethnicity and
Nation" by C.S.Laxmi and appeared in The Economic and Political
Weekly, November 15-21 1997.
Are women credit worthy? The question was usually answered
in the negative in the past. Now the answer is changing at
least so far as micro-credit for rural women is considered.
The various studies of self-help groups in India indicate
contrary to this stereotype, women are indeed credit-worthy,
in spite of a lack of guarantee and surety. Nevertheless,
the funds which have been accumulated through the efforts of
NGOS and even government agencies as part of poverty
alleviation programmes have not always come back to the
women and initiated a self-sustained cycle of investment in
productive processes.
There has been comparatively little work on SHGs in urban
areas, barring some noteworthy exceptions like SEWA in
Ahmedabad and SPARC in Bombay. A group of individuals
working in the city of Bombay have been working together
trying to work out a plan for providing productive loans to
women without surety.
In India women have no access to land. They rarely own land
and even if they do also they do not have any decision-
making power related to land. Family mediates ownership and
the real actor and power-holder is the male head of the
family. That is our Indian tradition irrespective of
religion. Moreover, all the laws related with personal
matters are based on religious laws or customs and so women,
constituting half of the population and two-thirds of the
producers, do not have any ownership and title to the means
of production. Can the micro-credit schemes provide funds to
get the access or ownership to land or to productive assets
and then sustain that access? That seems to be the million
dollar question.
The thing is that we live in a society around us which
obstructs us. The nature of work we get through micro-credit
is not very far different from what society considers
women's work. How do we link the two?
... (A) woman who preferred to remain anonymous ... wrote in
1948 (when India won political independence from Britain)
that ... women do not want to be deified or worshipped, but
to be respected. If women continued to be thus, she
declared, India has not really attained its freedom ....
That anonymous statement often returns to mind when one is
participating in gender and development policy seminars. In
one such seminar held sometime back, terms like woman's
natural inclination and programmes to give sewing machines
to widows, kitchen gardens for women and so on began to
sound words of abuse after a while. Some of us wrote on the
huge blackboard: no more sewing machines and kitchen gardens
for women for the next twenty-five years ...
Last year the World Bank launched its own micro-lending arm, the
Consultative Group to Assist the Poorest, (CGAP) with the goal of
"systematically increasing resources in micro-finance." World
Bank President James Wolfensohn announced this program at the
1995 Fourth World Conference on Women in Beijing, claiming CGAP
would improve access to micro-credit for "the globe's poorest
citizens, particularly women."
We leave you with a question: so long as women in India have no
real access to land and other means of production, how much can
we expect from micro-credit and other self-help schemes?
(End of Part 2)
We welcome your comments.
Curious about who we are and why we're publishing this
newsletter?
Send your questions or comments to
Jagdish Parikh ([EMAIL PROTECTED])
***
