IN ONE OF the most disadvantaged parts of rural India, ordinary citizens are coming together to break the cycle of poverty caused by dependency on money lenders and exacerbated by traditional gender roles.
Innovative savings groups, run by local women with the aim of helping communities to save money together, has loosened the grip of bonded labour over some of the world’s most vulnerable people.
The groundbreaking Women’s Self-Help Groups (WSHGs) were established in the southern Indian state of Tamil Nadu by local charity Social Change and Development (SCAD) with the support of Irish development charity Gorta – which matched the funding provided by SCAD to help set up to local schemes, allowing the programme to be adopted by poor communities across the state.
In a cramped room in a village in rural Tamil Nadu, Muthulykshmi sits cross-legged in front of a huge wooden loom used to weave saris, the main local industry. “We used to depend entirely on our husbands for money, for everything,” she says. “Now we don’t need the permission of our husbands if we need money. We can make our own decisions.”
Muthulykshmi is the leader of the Ambidai women’s self-help group, one of two such saving and microfinance initiatives in her village alone, which empowers women in underprivileged areas by helping them to fund their own education, healthcare and business needs – without resorting to money lenders which typically charge 30–120 per cent interest.
For many families, the WSHG initiative has been life-changing. Approximately 80 per cent of the population of Tamil Nadu relies on agriculture for survival, but the majority are landless and survive on less than $1 a day – as such, the most families lack the assets or capital required to apply for loans with an official bank. By offering a fair, democratic savings initiative, the WSHG scheme has allowed poor families to cut ties with money lenders that prey on poverty.
As well as falling victim to loan sharks, many vulnerable workers in the area had been locked into exploitative labour situations, earning too little to have meaningful control over their lives. However, with the advent of the women’s self-help groups, real change has begun: “We used to always work for someone, we used to be labourers, but now we are independent,” says Muthulykshmi.
Today, 3,500 women’s self-help groups are active across Tamil Nadu, with 50,000 women saving more than £7.8 million (€9.3 million) to secure their families’ futures so far. The increased security brought by the scheme has allowed options for personal development and education – and, for many women, their very first taste of financial freedom.
More than that, the savings have also served as security against more significant loans with banks – which has allowed individuals and groups to invest in their studies or set up their own businesses. This essential support is helped by SCAD, set up by Dr Cleetus Babu and his wife Amali in Cheranmahadevi in 1985 with the help of Gorta, and which continues to initiate schemes and vouch for successful groups which apply for loans with banks.
Despite rapid changes to India’s global economic profile, the chasm between the rich and poor remains significant, as does the country’s caste system. The women of Muthulykshmi’s village are weavers and continue to produce silk and cotton saris in the traditional manner – which can take up to three days – over cheap, industrialised production methods.
However, things are changing.
The traditional craftwork undertaken by the village women allows their self-help group to commit to saving 100 rupees each month (approx €1), which they will put towards providing better lives for their families. Despite generations of weaving – the only work older villagers have ever known – they declare that the next generation will not follow in their parents’ footsteps.
The community is agreement: money being saved by the groups will be used to fund children’s education – to open the possibility of new jobs, and new ways of life, to them.
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