The Mahila Milan Credit SchemeThis is a credit mechanism by Mahila Milan (which means 'women together' in Hindi), a federation of collectives of women pavement dwellers in Bombay, with the assistance of SPARC (Society for Promotion of Area Resource Centres). They have designed four programme:
- forming a cooperative, Milan Nagar, to seek an alternative land site for their housing;
- opening bank accounts and beginning to save money for new homes;
- providing each family with essential food and clothing;
- dealing with crisis, for example providing emergency loans or helping with police-related problems.
The credit system, entirely self-managed by women pavement dwellers, has the following characteristics:
This system is self-managed on a voluntary basis, and does not therefore entail any financial expenses. The maximum credit granted is approximately 500 rupees (around 20 USD). If they want to obtain more, they would have to join forces.
- savings can start as soon as a woman is able to save one or two rupees (3 to 6 cents);
- money saved remains their own property;
- the savings are collected at the local level in the following manner:
As the women are illiterate,a system has been devised using coloured squares of paper to represent their savings. Red represents one rupee, yellow two rupees, green five rupees. The Mahila Milan movement provides each woman with a plastic pouch, which at the beginning is empty. When a woman has saved ten rupees, her pouch will therefore contain two green papers. The representatives of each local group collect the money daily, then the plastic pouches for each local group are collected together in a larger, black-coloured pouch. A person trained by Mahila Milan manages the entire system. The money remains available at any time, for each saver, and as each member knows one another, mutual trust and control play a major part. In the slums, units organize themselves around small groups of fifteen households, and each one of these groups nominates a woman to become a member of the system's management committee. Her task involves collecting the savings and repayments from the fifteen households in her local group, and submitting any credit requests. The committee appoints three people to manage the overall mechanism and it also decides on the rules and regulations.
The persons asking for credit need to state how much they want, for what purpose and how and under what terms the repayment will be made. The committee of delegates then decides whether it is possible to grant this credit under the proposed terms. The system functions perfectly and the borrowers are careful not to spend unwisely.
In view of the fact that there are a very large number of women in this savings and credit system, the movement as a whole has been able to collect sufficient funds to get the national institutions, notably the Housing and and Development and Finance Corporation to treat them as a body through which State credit can be distributed in order to improve living conditions for slum dwellers.
- Vincent, Fernand, Alternative Financing, Volume I. Geneva: Development Innovations and Networks (IRED), 1995.
Hari Srinivas - firstname.lastname@example.org
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