It's been almost three months since I have been living in rural Tiruchirappalli and I couldn't have expected it go any better. There is so much to learn about the economics and culture of the people from the villages I live in and visit. The microfinancing institutions I work with here, Gramalaya Microfin Foundation (GMF) and Guardian, do an excellent job of reaching out to the people and providing them with the much required resources. Thanks to microfinance, there is now a growing appreciation of the 'empowerment' dimension of finance, of the extent to which it can give ordinary people and the poor access to opportunity and the ability to escape ossified social structures. GMF lends for the purpose of starting small scale enterprises manufacturing agriculture allied products or to rear cattle, while Guardian lends to people who need the money to get water connections in their homes or build sanitation facilities. The unique feature of such lending is that they are given to only women and that too only in groups. Five women from a locality together form a Joint Liability Group. The benefit of such groups is that in case of any default of any member, the others cover up for her. Surprisingly, both these organizations have a record of hundred percent recovery to date. They have formulated thousands of JLGs in and around Trichy district and now are expanding to other districts as well. It is wonderful to see the kind of effort that they put in from forming a JLG to getting their loan amount through to running around, doorstep to doorstep, recovering the funds. In addition to providing the loan, GMF also trains women in various trades, like making wire bags, pickles, biscuits, artificial jewellery etc. In fact, it is precondition to providing the loan, so that the borrowers don't end up wasting the money on household expenditures that won't help them generate any income. Enabling women to generate income is the motto of GMF. I am amazed by how organized women are, in terms of the networks they create and the kind of influence they yield on the policies of the local Panchayats here. Before coming here I'd only read about Self-Help Groups, as my friend rightly pointed out, in class Xth Economics text book. I've now had the opportunity of observing how they actually function as a unit. Most of the women employees of Gramalaya, the renowned NGO that works out of Trichy on spreading awareness regarding Safe Drinking Water and Sanitation, and also the parent organisation of GMF and Guardian, have been part of such groups. There is the presence of really strong Self-Help Group Federations here. Gramalaya, for the past twenty-eight years, has had a major role to play in organising women into such groups. Typically, a group has anywhere between twelve to twenty women. In India, the women SHG model is the home-grown model for poverty reduction and women empowerment with strong emphasis on savings and credit. The success of the SHG movement in India was never a sudden surge in the microfinance sector. The microfinancing institutions, like GMF, rely on these SHGs to identify women who need the such micro loans to generate income of their own. The tremendous success of the SHG movement relied, and continues to rely, heavily on promoting institutions to mobilize, train, and support groups. Here, the Tamil Nadu state government supports these SHGs financially and with infrastructure. It organizes training for the leaders and members of such groups and also has timely appraisal of their structures. The women work in coordination with the Panchayats and table issues that need their attention and resources. They also take trainings together and encourage women to do certification courses that would help them gain financial independence. Inter-group lending, ability to negotiate with higher level structures and to gain greater bargaining power were reasons why informal SHG networking was initiated by NGOs. The National Bank for Agriculture and Rural Development (NABARD) has taken special interest in the formation of JLGs from these SHGs all over the country, covering various districts. They've allotted Rs.2,000 towards each JLG formation to cover the operational costs. The funds are allotted to banks that route their funds towards micro credits. There is so much more to learn about SHGs and JLGs, and the economics of the middle class and the poor in urban and rural areas. So, I surround myself with books these days, and talk to anyone and everyone, to understand as much as I can. So, when I do get there, I shall present more accurate data in another post. The thought is exhausting, there is so much to know about everything in the world and there is so little time!
Self-Help Groups, empowering women in the truest sense