Sri Lanka's Women Mutual Help GroupsA focus of Sri Lanka's enterprise support programme under the Praja Sahayaka Service has been Women's mutual help groups. The idea is based on the traditional system of savings and and credit in Sri Lanka known as seetu. The participants in such self-managing group contribute an agreed sum of money to a pool on a daily, weekly, bi-weekly or monthly basis. The pooled amount is awarded to one member of the group ata time, either in a agreed order or by drawing lots. Seetu enabkes individuals who find it difficult to save to gain access to a lump sum of money which they would other wise not be able to acquire easily. By using the concept of seetu, the programme is able to make the women feel quickly familiar with the concept of the group.
To be eligible for membership to a women mutual help group, a woman must have a low income, she must reside in a low-income settlement and she must be willing to participate in group activities according to a set of rules and regulations. Only one member of a household can participate in a particular group. The formation of a group and the learning of the rules and regulations take one to two months. During this period, the group establishes a routine of weekly meetings which last 30 to 90 minutes each. At these meetings, the women learn to arrange savings and loans, to keep records of all monetary transactions, to select office bearers, to understand the group constitution, to open a bank account and to manage emergency loans.
Savings is the first activity a group undertakes once it has formed. Each group fixes its own amount of regular savings and each member must deposit this amount weekly into the pool. Once the group has built a fund of Rs.500 it opens a bank account. The group must adopt a standard constitution and all members of the group must understand and sign this document which is a requirement for a group to open a bank account in Sri Lanka. The national Housing Development Authority presents the group with a small "starting kit" of euipment (cash box, account books, stationary etc.) and a small grant: Rs. 5,000 for groups of less than 10 members and Rs. 7,500 for groups of more than 10 members.
The grant is used to issue small loans to each member on a monthly basis with weekly repayments. Each woman is guarateed a loan each month if her group functions well. The first series of loans cannot exceed Rs. 250 per member. If all members make their weekly repayments, loans of Rs.. 375 may be issued. If these loans are again successfuly repaid, each member may borow Rs. 500. This is the maximum monthly loan for any woman of the group. The group levies a service charge of 1 per cent per week on loans and this amount is used to pay the group leader a smallhonorarium for her efforts to organize meetings, collect loan repayments and record financial transactions. The service charge is much lower than the interest of 5 per cent per week levied by most local money lenders.
Loan Scheme of Women Mutual Help Groups (in Rs.)Amount Weekly Weekly Weekly Total Weekly Borrowed Repayment Savings Service Payment ChargeWhen they were asked how they use the credit from the group, women listed the following:
Loan 1 250.00 62.50 5.00 2.50 70.00 Loan 2 375.00 93.75 5.00 3.75 102.00 Loan 3 500.00 125.00 5.00 5.00 135.00
However, the women do not measure the value of the women mutual help group purely by the growth of their enterprise or the increase of their profit. Most increases in income resulting from better access to credit are used to improve the family welfare. For majority of the members, the group is the first opportunity to meet formally, to discuss problems and to develop joint action. The loans and the impact of the loans on their financial situation appear to be secondary tot he benefits which are emerging from cooperative action. The women mutual help group breaks the isolation of the women, because it provides them with an opportunity to come together and discuss their situation.
- to escape from indebtedness to a local money lender
- to pay skilled labour for house construction
- to fill a gap in the running costs of an enterprise caused by a sudden price increase
- to retrieve valuable items which they had pawned earlier
- to purchase school books and pay tuition fees for the children
- to pay seetu debts
- to make bulk purchases of materials used in their enterprises
- to pay for food when the husband is a daily labourer and out of work
Two Case Examples
M. attended school through 'O' level. She is now 41 years old and has five children between11 and 20 years; one of the children is crippled since birth. Six years ago, her husband left her and now she has to earn the family income from sale of stringhoppers. She receives food stamps from the government which cover about one-third of the daily allowance. The family lives in a small one-room wooden house surrounded by a half-high cement brick wall. M. does not have the money to cmplete the house. Every morning, M. used to borrow Rs. 100 from a money lender to buy flour to make stringhoppers. After having sold the stringhoppers, she repays the money lender Rs. 120 every morning. In other words, the money charged her an interest rate of 20 per cent per day! Now that she has joined a wmen mutual help group and she can buy flour in bulk with a loan from the group
V. has eight children between three and twenty-three years old; her husband is severely physically handicapped. The ten members of the family all live together in one small room. The husband and wife earn an income by selling lottery tickets. V. purchases the tickets at a wholesale price and her husband sells the tickets from his wheelchair pushed by his 13 year old son. On a good day when the draw is near or at the end of a month when people have money, they can make a profit of Rs.50 per day. They used to borrow money from a money lender to buy tickets, but with the support from a women mutual help group, V. does not need to borrow money from money lenders and she can now buy more tickets. The increased profit is used to improve the feeding of children and to pay for school.
The group plays an important role in house construction and improvement, when it provides supplementary house construction loans, organizes the collective purchase and transport of building materials, lobbies for common amenities such as water supply and toilets, and enables households to hire skilled labour. As the group gathers experience in working together and grows in internal strength, it may start to tackle other, non-monetary problems such as drugs and alcohol addiction and domestic violence. Teh group is also a channel of information - members tell each other about counselling services which have been established for women victims of violence and drug and alcohol addicts. Any woman or member of her family can be helped bythis service, regardless of whether she is a member of a group or not. The service was initiated by a local organization Women in Need in conjunction with the Federation of Women Mutual Help Groups and Praja Sahayaka Service.
Hari Srinivas - firstname.lastname@example.org
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