Women –The Key Motors In Rural Financial Democracy
By Moin Qazi
18 January, 2016
Countercurrents.org
Poor women now plan the village development agenda. Poor people are bonsai people. There is nothing wrong with their seeds. Only society never gave them a base to grow on. - Muhammad Yunus, Nobel Laureate
In remote crannies of developing countries, poor women are pooling their talents and resources to build a new synergy of collective empowerment to transform their lives. These small clusters or collectives of women are known as Self-Help Groups.
A Self-Help Group is a group of a few individuals—usually poor and often women—who pool their savings into a fund from which they can borrow as and when necessary. Such a group is linked with a bank—a rural, cooperative, or commercial bank—where they maintain a group account. For a period of time in the beginning, the women only save money. They deposit a small sum, ranging from 20 rupees to 50 rupees (67 rupees equal one U.S. dollar) each month. After six months, the women are eligible to take small loans. These loans can either come from the group savings account or through the bank. The group helps determine if the loan is appropriate for each member and serves as a screening point for the bank. Because the liability of the loan is shared among the group, it is in each member’s interest to ensure that all other members are capable of paying back a loan on time.
Loans are then given out to individual members from these funds upon application and unanimous resolution drawn at a group meeting. The bank permits withdrawal from the group account on the basis of such resolutions. Such loans, fully funded out of the savings generated by the group members themselves, are called ‘interloans’, and have a short repayment period, usually three to six months.
After recording regular loan issuance and repayment for a minimum period of six months, the bank begins to lend to the group as a unit, without collateral, relying on self-monitoring and peer pressure within the group for repayment of these loans. The maximum loan amount is a multiple (usually 4:1) of the total funds in the group account. Once the group matures, and graduates to a business enterprise, the financing is more need-based and is directly linked with the capital needs of the business.
These women have now traversed a long path and are now part of the development landscape. Many of them have become panchayat leader and village pradhans in India’s villages and have become active The Self Help Group revolution which is also known as India’s indigenous microfinance movement has redefined the contours of women’s empowerment in the grassroots institutions that are engaged in village planning and development., The SHG movement which is India’s indigenous model for financial, social, and political empowerment of poor village women has proved to be a game changer for women’s destiny. The women of Self Help Grops have brought about a new transparency and imparted a vibrancy to rural governance .They serve as watchdogs to safeguard the development agenda of the grassroots government administration.
Participatory development has now adopted a more pragmatic approach . Participatory projects can also differ from one another in their nature and objectives; there is no easy single answer to how to implement them, but looking at what pitfalls to avoid can be a place to start..The ‘bottom up’ approach is about living and working with the poor, listening to them with humility to gain their confidence and trust. Their trust cannot be bought outright or manipulated with money, or by grafting urban assumptions of development onto existing rural practices, which in fact may destroy existing workable structures. We must first understand their economy at a granular level and, most important, thoroughly understand their local culture. That approach is a welcome contrast to the grandiose foreign-aid schemes that do more harm than good. Experiences show that governments too often derail the money intended to help the poor to pad the pockets of civil servants instead. Mired in bureaucracy and corruption, the benefits rarely reach those who needed them the most.
The bottom-up approach means that local actors participate in decision-making about the strategy and in the selection of the priorities to be pursued in their local area. Experience has shown that the bottom-up approach should not be considered as alternative or opposed to top down approaches from national and/or regional authorities, but rather as combining and interacting with them, in order to achieve better overall results.
The heroic stories of tenacious women scripting tales of economic success are great signs of a brighter tomorrow .For a world where people live on less than a dollar a day this is an important step. The journey of a thousand miles starts with a step. Truly, there is change in the air. Though not dramatic, not a headline grabber, it is a slow and quiet transformation that definitely is underway in remote and far-flung villages. Women who so far had been diffident and withdrawn are gradually shedding their earlier reticence and stepping out of the four walls of their homes to acquire an identity of their own. It is a silent effort in the country that is bound to accelerate progress on any indicator—economic, social, or political—the last fairly visible with most of the one million women elected over the years at the panchayat level coming out of the self-help groups.
This may not be a revolution- but at least it is a start.
Moin Qazi is a well known banker, author and Islamic researcher .He holds doctorates in Economics and English. He was Visiting Fellow at the University of Manchester. He has authored several books on religion, rural finance, culture and handicrafts. He is author of the bestselling book Village Diary of a Development Banker. He is also a recipient of UNESCO World Politics Essay Gold Medal and Rotary International’s Vocational Excellence Award. He is based in Nagpur and can be reached at [email protected]