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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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