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A Women's Self-help Organization for Poverty Alleviation in India: SEWA
India

Keywords: Poverty Eradication
Women & Gender equality

Background

Shri Mahila Sewa Sahakari Bank, a separate bank of poor self-employed women workers was established at the initiative of 4,000 self-employed women workers in the year 1974. The bank is owned by the self-employed women and policies are made by their own elected board. Today it has 51,000 depositors and working capital of Rs.10 crores.

The Sewa bank provides all finance-linked supportive services to its members and has started a work security insurance scheme and a housing programme. The bank is now actively expanding into the rural areas through savings and credit groups. They stay operational by making use of the surplus to promote developmental activities of SEWA.


Narrative

BEFORE
In a survey conducted by the women's wing of the Textile Labour Association (TLA), Ahmedabad, in 1970, it was found that self-employed women not only have insecure employment and earn much less than workers in the organized sector, but also have no support for their work or for themselves in times of difficulties. The survey also revealed instances of exploitation of women workers and the large number of issues untouched by unionization, government legislation and policies.

Prior to the formation of SEWA as a trade union in 1972 in Ahmedabad, the women's wing of the Textile Labour Association (TLA) took up the cause of the women belonging to households of mill workers by assisting them in learning skills of sewing, knitting, embroidery, spinning, press composition, typing and stenography. By 1968, classes in the above trades were established in the TLA centers throughout the city.

In the 1970s the women's movement took a new and more radical turn, with women participating actively in social movements and demanding opportunities in all spheres of life.

The Self-Employed Women's Association (SEWA) was born in December 1971, and after a long-drawn official battle SEWA was registered as a trade union in April 1972. Thereafter, SEWA started functioning as a confluence of three movements, namely, the labor movement, the cooperative movement and the women's movement. SEWA was born in the labor movement with the idea that the self-employed, like salaried employees, have a right to their wages, decent working conditions and protective labor laws.

The SEWA Bank was established in 1974 as a separate bank of the poor, self-employed women workers at the initiative of 4,000 self-employed women workers. These self-employed women workers included hawkers, vendors and home-based workers -- like weavers, potters, beedi-, agarbatti-, pappad-rollers " manual laborers and service providers. One of the main demands of these workers was for credit at reasonable rates which they were unable to obtain from normal banks. The SEWA Bank was started with
the specific objective of providing credit to the self-employed women with a view to empower them and also to minimize the uncertainty of availability of credit through money sharks at exorbitant interest rates.

AFTER

Shri Mahila SEWA Sahakari Bank, a separate bank of poor, self-employed, women workers was established at the initiative of 4,000 self-employed women workers with a capital of Rs 60,000 in 1974. The bank is owned by the self-employed women as the shareholders, and policies are made by their own elected Board. The Bank is professionally run by qualified managers hired by the Board. Today it has nearly 51,000 depositors and a working capital of Rs 100 Million ($ 1 US = Rs 33). It has been financially viable and self-reliant from its beginning, and uses its surplus to further strengthen individual workers as well as their movement.

The SEWA Bank provides all finance-linked supportive services to SEWA members, and with that aim has started a work security insurance scheme and a housing program. In addition, the Bank is now actively expanding into the rural areas through savings and credit groups.

The First Phase
From 1974 to 1977, the SEWA Bank concentrated on mobilizing self-employed women to bank with it and acted as an intermediary to enable its depositors to get loans from nationalized banks. In this period, about 6,000 members were advanced credit of nearly Rs 2,500,000. The interest rate charged by the nationalized banks varied from 9 to 16 percent per annum in the beginning, but later it was reduced to a uniform 4 percent as a result of SEWA's lobbying with the Government to obtain cheap credit for the urban poor.

The Second Phase
In 1976, the SEWA Bank started advancing loans to its depositors from its own funds and gradually withdrew from the arrangement of credit from the nationalized banks. Applications for loans are made by members directly or through the field staff. The Bank staff does the scrutiny and processing of the loans which are available only for economic activity and not for personal use. The applicant's income-generating ability, financial status, soundness of working conditions and ability to repay are carefully scrutinized. This information is then discussed in a loan committee and put up to the Board for sanction.

Schemes
At present the Bank lends to its members in three major areas: (a) for working capital; (b) for work tools; and (c) for housing. Information with respect to the loans given, savings account and total working capital including surplus of the SEWA Bank, as on March 1995, is given in Table 1. The habitat-related cumulative impact details are given in Table 2.

STRATEGY

The operational strategy of the SEWA Bank is based on financial sustainability by making use of the surplus funds to promote developmental activities of SEWA. There are no subsidies or grants, and the Bank borrows and lends at market rates. Institutional and managerial sustainability exists as the Bank's activities are supervised by the Reserve Bank of India. Further, every year, the shareholders meet to take stock. There are also
regular elections to the Board, and a capable professional management team is maintained.

SEWA Bank as a Catalyst
The SEWA Bank has been a catalyst for many changes in laws and practices in addition to the changes in institutional arrangements and processes. It is the first bank of its kind in India and was able to demonstrate that poor women do save, use loans productively and repay loans in a timely manner (in fact better than others). Based on this example, many other groups have taken training at the SEWA Bank and have subsequently started
saving and loaning cooperatives, for instance, the Cooperative Development Foundation, Working Women's Forum and Indore Mahila Cooperative, among many others.

With the help of the SEWA Bank's strategic action, 400 plots of land in women's name under the Act, in giving loans and building housing scheme demonstrate that this Act can in fact be productively used to benefit the poor. SEWA takes pride in such strategic actions.

Another silent revolution is the method by which the Bank acts as an instrument to transfer assets to the names of women. The ILO statistics show that only 1 percent of the world's assets are in the name of women. SEWA Bank insists that since its loans for housing are in the name of a woman member, the house itself should also be in her name. SEWA also recovers mortgaged agricultural land of the family and puts it in the women's name as part of its asset-building program. In this way, houses have been transferred in women's names.

Drinking water is another area where SEWA women have taken the lead. Gujarat being a dry, and in some regions, desert state, water is a major issue for most people. SEWA has helped women to build their own water structures -- wells, ponds, hand-pumps-- and helped them to manage these through their own water committees. Thus SEWA gives poor women control of natural and financial resources.

A major policy change brought about by SEWA Bank is the change in the Reserve Bank of India policy to allow the Bank (which is registered as an Urban Cooperative Bank) to extend its activities to the rural areas. This is the first time that a women's bank in India has been allowed to operate in rural areas. Now, because of this approximately 200 savings groups of SEWA from eight districts of Gujarat will link up with the Bank.

Empowerment of Women
Through the initiative of the SEWA Bank, the poor women have been given control of natural and financial resources. This has, for example, helped them build their own water structures (like wells, ponds, handpumps, etc.).

By establishing a relationship of trust and getting involved with the whole life of the borrowers, high recovery rates have been established. This has not only enabled the members to come out of the clutches of private moneylenders, but has also enabled them to develop the skills of dealing with formal organizations. In the process, their self-confidence has been enhanced. The vicious circle of indebtedness and dependence on middlemen and traders has been broken. This has changed the bargaining position of
these women. They can now organize themselves, bargain for higher wages and, in case of a need, form their own economic units like cooperatives. Most importantly, the Bank provides its members with monetary security (as the members have savings accounts in the Bank) and gives them a the control over their own incomes. It has also provided the badly needed banking infrastructure that serves the self-employed and small businesses.

Gradually the members are trained in the habit of banking. This inculcates a sense of thrift and the members learn to make their money more productive.

Poverty Alleviation
The SEWA Bank has thus contributed directly in achieving, to some extent, the larger SEWA goals of organizing and creating visibility for self-employed women, enabling them to get a higher income and to have control over their own income. A large number of members now have their own hand-carts, sewing machines, looms and tools of carpentry and blacksmithy to work with. Many of them have upgraded their skills and developed
more business. For example, vegetable vendors who used to sell their products with baskets on their heads and now have their own little street-corner shops with a municipal license.

The SEWA Bank is innovative in many ways -- organizationally, institutionally, financially. Its most important contribution has perhaps been to encourage the women to participate fully in all phases of banking, lending and saving activities. The SEWA Bank has targeted its efforts of banking not just towards the "symptoms" of homelessness or poverty and their alleviation, but on the structural causes, including long-term capacity-building of the poor women and their institutions.

Internationally, the SEWA bank is an inspiration for the Women World BAnking. In fact, the Chairperson of the SEWA Bank, Ms. Ela Bhatt, is also the Chairperson of this International organisation.


Impact

60000 POOR WOMEN COULD CREATE ASSETS WORTH RS. 200 MILLION (6.6 MILLION U.S.$)


Sustainability

SEWA Bank as a Catalyst

The SEWA Bank has been a catalyst for many changes in laws and practices in addition to the changes in institutional arrangements and processes. It is the first bank of its kind in India and was able to demonstrate that poor women do save, use loans productively and repay loans in a timely manner (in fact better than others). Based on this example, many other groups have taken training at the SEWA Bank and have subsequently started
saving and loaning cooperatives, for instance, the Cooperative Development Foundation, Working Women's Forum and Indore Mahila Cooperative, among many others.

With the help of the SEWA Bank's strategic action, 400 plots of land in women's name under the Act, in giving loans and building housing scheme demonstrate that this Act can in fact be productively used to benefit the poor. SEWA takes pride in such strategic actions.

Another silent revolution is the method by which the Bank acts as an instrument to transfer assets to the names of women. The ILO statistics show that only 1 percent of the world's assets are in the name of women. SEWA Bank insists that since its loans for housing are in the name of a woman member, the house itself should also be in her name. SEWA also recovers mortgaged agricultural land of the family and puts it in the women's name as part of its asset-building program. In this way, houses have been transferred in women's names.

Drinking water is another area where SEWA women have taken the lead. Gujarat being a dry, and in some regions, desert state, water is a major issue for most people. SEWA has helped women to build their own water structures -- wells, ponds, hand-pumps-- and helped them to manage these through their own water committees. Thus SEWA gives poor women control of natural and financial resources.

A major policy change brought about by SEWA Bank is the change in the Reserve Bank of India policy to allow the Bank (which is registered as an Urban Cooperative Bank) to extend its activities to the rural areas. This is the first time that a women's bank in India has been allowed to operate in rural areas. Now, because of this approximately 200 savings groups of SEWA from eight districts of Gujarat will link up with the Bank.

Empowerment of Women
Through the initiative of the SEWA Bank, the poor women have been given control of natural and financial resources. This has, for example, helped them build their own water structures (like wells, ponds, handpumps, etc.).

By establishing a relationship of trust and getting involved with the whole life of the borrowers, high recovery rates have been established. This has not only enabled the members to come out of the clutches of private moneylenders, but has also enabled them to develop the skills of dealing with formal organizations. In the process, their self-confidence has been enhanced. The vicious circle of indebtedness and dependence on middlemen and traders has been broken. This has changed the bargaining position of
these women. They can now organize themselves, bargain for higher wages and, in case of a need, form their own economic units like cooperatives. Most importantly, the Bank provides its members with monetary security (as the members have savings accounts in the Bank) and gives them a the control over their own incomes. It has also provided the badly needed banking infrastructure that serves the self-employed and small businesses.

Gradually the members are trained in the habit of banking. This inculcates a sense of thrift and the members learn to make their money more productive.

Poverty Alleviation
The SEWA Bank has thus contributed directly in achieving, to some extent, the larger SEWA goals of organizing and creating visibility for self-employed women, enabling them to get a higher income and to have control over their own income. A large number of members now have their own hand-carts, sewing machines, looms and tools of carpentry and blacksmithy to work with. Many of them have upgraded their skills and developed more business. For example, vegetable vendors who used to sell their products with baskets on their heads and now have their own little street-corner shops with a municipal license.

The SEWA Bank is innovative in many ways -- organizationally, institutionally, financially. Its most important contribution has perhaps been to encourage the women to participate fully in all phases of banking, lending and saving activities. The SEWA Bank has targeted its efforts of banking not just towards the "symptoms" of homelessness or poverty and their alleviation, but on the structural causes, including long-term capacity-building of the poor women and their institutions.

Internationally, the SEWA bank is an inspiration for the Women World BAnking. In fact, the Chairperson of the SEWA Bank, Ms. Ela Bhatt, is also the Chairperson of this International organisation.


Contact

    Shri Mahila SEWA Sahakari Bank Ltd.
    Victoria Garden
    Ahmedabad
    Gujrat
    India
    380001
    0091 79 550 7029
    SEWA MAHILA @ AXESS.NET.IN

Sponsor

    Shri Mahila Sewa Sahakari Bank Ltd.
    Victoria Garden
    Ahmedabad
    Gujrat
    India
    380001
    0091 719 550 7074
    SEWA MAHILA @ AXESS.NET.IN.

Partners


    Ela R. Bhatt
    SEWA Reception Centre Victoria Garden
    Ahmedabad
    Gujrat
    India
    380001
    0091 79 550 447
    SEWA MAHILA @ AXESS.NET.IN

    JAYASHREE VYAS
    Victoria Garden Sewa Reception Centre
    Ahmedabad
    Gujrat
    India
    380001
    0091 79 550 7074


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