STREEDHAN: Banking with Rural Women

That the poorest of the poor, particularly women, can be trusted
with management of money is unacceptable to most bankers even
today.  Grameen Bank of Bangladesh and hundreds of women's
savings and credit groups [Self-Help Groups or SHGs in bank
parlance] in different parts of our own country have amply proved
the contrary.  Toiling women have shown that they are not only
credit worthy but are also capable of improving their life if
credit is available to them, on reasonable terms.

Streedhan, a programme strengthening resources in women's hands
through organising savings and credit groups of women on the
pattern of Grameen Bank of Bangladesh, was started in Malshiras
and Mavdi villages in 1991 by MASUM (Mahila Sarvangeen Utkarsh
Mandal), an organisation working for women in Purander taluka in
Pune district of Maharashtra.  The Streedhan activity has since
been extended to two more villages, namely Naigaon and Rajuri, of
the same taluka.

The progress of the project upto 31st May 1994 was as follows:

          No. of villages covered              4
          No. of groups                      103
          No. of members                     775
          Loans disbursed            Rs.9,51,000
          Savings received           Rs.1,94,401
          Interest earned            Rs.  84,163
          Repayment received         Rs.5,12,892
          Savings withdrawn          Rs.1,10,581
          Outstanding loans          Rs.2,70,258
          Net savings                Rs.  83,820

The response from the women and their repayment behavior has
beenconsistently good in all the villages.  The repayment has
been 96% in spite of the serious drought situation prevailing
until the end of October last year.  Even in the case of a woman
who died of severe jaundice last year, the dues were paid off by
her husband.  Another woman from that family has now joined the
group in her place (since two women from the same family are not,
as a rule, accepted in the same group).

How it Functions
Only women can become members of Streedhan.  Six to ten women
from the same neighbourhood form a group.  No two members of the
same household can be members of the same group.  They can join
two different groups.  Each group gives itself a name and the
members choose a chairperson and a secretary from amongst
themselves.  Group meetings are held in the neighbourhood on a
fixed date every month.  All transactions are carried out as well
as entries made in passbooks during the group meeting itself.

Every member has to put in at least Rs.5.00 per month as savings.
Their savings earn an interest of 10% per annum and the member is
free to withdraw her savings (part or full) any time she wishes
to.  After saving for three months the member becomes eligible to
get a loan from Streedhan.  For the first year the maximum amount
of loan is Rs. 500, whereas this amount is increased to Rs. 1000
in the subsequent year.  The loan amount has been deliberately
kept at a low figure.  It helps women get used to handling funds
and, more importantly, it keeps the men and the rich farmers
away.  Some men do attend meetings but they are not allowed to
interfere in decision making by the women.

Only one member of a group gets a loan at one time and the
chairperson and the secretary get it the last.  The preference in
getting loans is decided by the women themselves.  The women
availing loans have to pay interest @ 18% per annum.  Failure to
pay loan instalments, interest charges and savings on the day of
meeting invites a fine of Re. 1.00 per month.  No collateral is
necessary for getting a loan.  Only two members need to sign as
guarantors.  If any member defaults in repayment of loans in a
group, the other members of the group are also denied further
loans.  This activates the group to bring collective pressure on
the defaulter.

Of the 18 per cent interest, 6% goes towards running expenses of
Streedhan, 6% goes back to the community in the form of community
development activities and the balance 6% goes to enhance the
rolling capital of Streedhan.  The women have to decide upon the
mode of utilisation of the development fund.  Not many
suggestions have been put forth by them so far.  A creche has
been started at Malshirs so that the women or school-going girls
do not have to remain tied indoors, looking after younger kids.

In two of the four villages, the monthly meetings of all the
groups and the routine functions are entirely managed by the
local women and we are training women in the other two villages

Circle meetings are held once in three months in every village
where chairpersons and secretaries of all the groups in the
village meet together.  We have also been inviting general
members to these meetings so that the Streedhan ideas can be
dispersed widely.  Policies of Streedhan as well as programmes of
socio-economic development of women are discussed in these
meetings.  The circle meetings have received a very good
response, with over 80 women attending each meeting and taking a
keen interest in the proceedings.

The discussions and decisions in the circle meetings during this
year are highlighted below.  These indicate how the group
functions beyond meeting just economic interests of its members.

In view of the prevailing drought situation in the area, no woman
will refuse drinking water from her well to any other woman.

No mother-in-law of a member of Streedhan will harass her
daughter-in-law and no daughter-in-law of a member of Streedhan
will tolerate harassment.

Larger loans of Rs.5,000-10,000 will now be made available, only
for productive purposes.

The provision of emergency loans as well as that of utilisation
of development fund (1/3rd of interest earnings) for community
purposes were explained and minuted.

Illiterate women members of Streedhan who become literate will be
entitled to a 2% higher than usual interest rate on their

Their Own Bank In barely three years of its existence Streedhan has created a distinct place in the lives of rural women in its area of operation. The women have started identifying with Streedhan as their own bank. They enjoy the exclusive space it gives them, where men cannot interfere. The growing confidence among women, of managing moneys on their own and their access to credit without men having any role, has not been accepted without resentment by the latter. They have tried to assert their `Karta' image in group meetings as well as in some circle meetings saying, "please do not create discord in our `happy' families by giving loans to women when the husband says no or by denying loans when the husband asks for a loan and the woman says no". By allowing men to vent such feelings without aggressively countering these and still staying firm on the women's right to decide for themselves has helped to dissipate likely tensions. The purpose for which these loans may be utilised is left to the women. Their need is important since it is their bank. In the beginning, when the women applying for loans were asked about the purpose, they came up with the standard reply `for goats and sheep', which they have been taught by the government functionaries handling IRDP loans. We, therefore, stopped asking the purpose and explained to them that it is not a government programme. This approach created confidence among the women that they can have access to credit for their need, whatever the need might be. Later, from a small survey, we found that in 1993 about 40 per cent of loans were being used for productive purposes. The other purposes were paying for health care, purchase of children's books and stationery, payment of examination fees of their children, for marriages and other family functions or for payment of old, high-cost debts. The work of Streedhan has attracted many visitors this year from other voluntary groups which wish to start such activity with women in their own areas. We have also been participating in the network of women's savings credit groups working in different parts of Maharashtra. The distinctive `small neighbourhood group' pattern of Streedhan seems to show many advantages over other experiments involving large groups of 25-30 women.
Moving Forward In the next few years we wish to expand Streedhan activity to more villages to take it to a level of self-sufficiency and self-propagation from its internal resources, generated through interest earnings and savings. We wish to expand Streedhan activities to five times of its present level in the next two years. During the year 1994-95, we will add eight more villages (i.e. 2 units) to the present Streedhan strength. The remaining eight will be added later on, in 1995-96. This expansion will take the coverage of Streedhan activities to 20 villages. We plan to organise these villages in five units of four villages each for ease of management in a decentralised fashion. Ramesh Awasthi FRSH Newsletter Vol Vill, No. 3, May-June, '94

Hari Srinivas -
Return to the India Page
Return to the Virtual Library on Microcredit