Empowering women is the solution to many problems. In India, the self-help group mechanism remains the most popular model to empower village women through financial access and provision of other services
Gender inequality is not only a pressing moral and social issue but also a critical economic challenge. India has a larger relative economic value at stake from advancing gender equality than any of the 10 regions analysed in a McKinsey Global Institute report, The Power of Parity: How Advancing Women’s Equality Can add $12 Trillion to global growth. The report says that if all countries were to match the momentum towards gender parity of the fastest-improving countries in their region, $12 trillion a year could be added to global GDP. India could add $700 billion of additional GDP in 2025, boosting the annual GDP growth by 1.4 percentage points.
In this year’s Budget, the Government increased the allocation for the National Rural livelihood Mission (NRlM) from Rs 4,500 crore in to Rs 5,750 crore. The corpus of funds available to women in self-help groups (SHGs) was Rs 42,000 crore in 2016-17, which is expected to increased to Rs 75,000 crore by March 2019.
NRlM is a powerful programme to reposition SHGs as core to India’s approach to women empowerment and poverty alleviation. Unlike in the new microfinance paradigm, where credit is the sole function of SHGs, emphasis of SHGs in its NRlM avatar is on savings and financial management, loans come later. Savings are integral to poor households’ risk management strategies; they constitute the first line of defence to help poor households cope with external shocks, emergencies and life-cycle events to which they are so vulnerable.
Empowering women is the solution to many problems on a global level, right from poverty. Societies that take the effort to empower women show better development indices; are better governed; more stable; and are less prone to violence.
In India, SHG mechanism remains the most popular model to empower village women through financial access and provision of other services. It is in practice for more than two decades and has transformed the lives of millions of women, several of whom now occupy important positions in village administration.
A typical Indian SHG consists of 10-20 poor women from similar socio-economic backgrounds who pool their savings into a fund from which they can borrow money to buy medicine, start a business, purchase animals, pay school fees, buy clothing, food and invest in agriculture. They meet once a month and discuss issues of mutual importance thereby enriching each other. The common characteristics are: Self-selected and unrelated members, small size, regular attendance at meetings, regular savings by members, peer pressure to enforce repayment of loans and simple and transparent procedures.
Once the groups have mastered the mechanics of savings and lending, they begin to ask: What’s nextIJ When they have a fair amount of capital, it starts making small loans to its members. Women cross guarantee each other’s debts. They gradually come to believe tomorrow can be different from today. Significantly, these groups are designed to be wholly managed by villagers themselves. Groups do most of the work-selecting members, electing officers, deciding on their bylaws.
Women act as their own bankers, create their own loan fund, approve small loans to each other as savings accumulate and making sure loans are repaid. Astonishingly, few default. By transferring tasks normally done by well-paid bankers to poor people, the cost of administration comes down drastically. Although the value for members is not just in finance, credit remains an important element. You can’t change social dynamics without women’s involvement in the economy. The phenomenon of ‘regular meetings’ is an important enabling force which gives the woman courage to ‘lean in’, in multiple household and community settings. Dialogue-based education does not require that women know how to read or write, and learning together strengthens and gives confidence to the group. The disciplined hard work of saving every week and running a group makes them efficient money managers.
SHGs are seen as an entry point for other social activities — school committees to watershed councils. As they mature, the group sparks and spearheads meaningful and enduring changes by addressing community issues such as abuse of women, the dowry system, alcohol, educational quality, inadequate infrastructure.
SHGs are the biggest generators of social capital in rural India. Best practitioners in communities become community professionals (CPs) and catalysts for mobilisation, health, literacy financial management, agriculture, leadership livestock and more. A vast majority of women leaders in Panchayat Raj institutions have come from SGHs and most successful sarpanches have had their grooming in these collectives. It is not that women are purer than men or immune to the pull of greed. But there is almost a certainty that women will channel money into solving more fundamental issues.
Beginning in the benign area of health, women slowly gained confidence and moved on to other social areas. They began asking for change from the bus conductor, introducing new farming practices, saving enough money to engage banks and acquire simple irrigation equipment like water tanks, agitating for an improved road (and getting it) mapping village land and rethinking what’s planted to produce year-round yields and income, demanding the presence of the school teacher, negotiating with local officials for providing services to which they were entitled.
like termites, they have furrowed the male-dominated power-grid in villages and are heading up the whole patriarchal foundation. Where once participation of women in public meetings was an anathema, it has now become a ritual. SHGs have become powerful economic locomotives and have enabled women find new confidence, agency and purpose.
Refuting village hierarchies, women in many places hoisted the national flag in their villages, despite opposition from men. Women’s collectives have put an end to brewing of liquor in some villages. SHG women have enhanced their economic position in numerous ways, such as successfully bidding for contracts to fish in village ponds and developing wastelands to grow fruits and vegetables.
The loss of control that village moneylenders have suffered is a common story now in villages where SHGs have taken root. For poor women, it is a journey towards the second freedom or the real freedom, as Mahatma Gandhi said when he talked of the unfinished agenda at the time of Independence.
(The writer is the author of Village Diary of a Heretic Banker)
