Our work the last week or so has consisted of visiting several microcredit groups and seeing how Rohitash and Gopal facilitate the meetings, as well as talking to the group members (with translation by Rohitash and Gopal) about the groups and their benefits. We have also been working on a brochure for the organization, which means we wrote concisely our mission, working goals, long-term strategy, etc. This has been a very useful and informative process, for which a good friend with vast experience in Indian NGO work, one Syed Ghalib Hussein from Patna has been a tremendous help. Ghalib is very good at getting people talking about the organization and its ultimate purpose or focus. He is also good at distilling what he hears into concise statements that make clear to the outside what is at the heart of an organization. It has been great to have him with us.
So, some details (more to come later):
Microcredit groups: first of all, as James Arnott pointed out to me in the past, what our organization does is not strictly microcredit, but microfinance, as the women can take the money and use it for medicine, school uniforms and other things that will not give an immediate profit that can be used to pay the loan back. Microcredit is where small loans are taken to buy things that could yield profit with which the loan could be paid back, e.g. livestock that will yield milk to be sold, seeds that will yield at the harvest, etc. Our groups do this, but they allow others types of loan, hence we are technically doing microfinance.
A recycled photo from James' visit to the microcredit group in Berki, which we also visited this week.
How the groups work: Rohitash and Gopal will first an initiate a conversation with members of the village in which they want to work. After this they will come back several times to discuss the benefits of such groups, and usually the village decides to allow the start of a group. Once this is done, Rohitash and Gopal meet with the women who come to the group and tell them about the purpose of the groups. Then the women discuss amongst themselves and decide the parameters of the groups: when and for how long the group meets, how much each member contribute to the groups central fund each month, how long the length of loan should be, what the rate of interest should be (more on this below) what the penalty is for late payment, etc. The basic idea of our groups is that women come together monthly and contribute a set amount, say Rs 50, to the central fund of the group. From the central fund the members of the group can take loans for the purposes mentioned above and others. The women who takes a loan has a set amount of time, say 3 months, to pay it back with interest. Interest is charged at some annual rate, say 24%, to grow the groups’ funds. I must emphasize that the interest is not being charged by any bank and is going directly into the groups’ central fund, so it is benefiting the members by expanding the amount of credit they have available.
A penalty is implemented for late payment, say 10 Rs per thousand rupees loaned per day. This is of course to insure timely payment of the funds. Provisions are made for uncontrollable circumstances, such as a poor monsoon that wipes out any gains that might have been made from a purchase of seeds. In such a case the group members decide collectively what should be done. Usually an extension of the loan period is given. Rohitash and Gopal have told me that in their experience it has never happened that someone could not pay back the money some how (I think this is partly because of extensive family networks) and that the groups can always reach a consensus on what to do in such extenuating circumstances. Note how group discussion is at the crux of the group operation.
Besides the economic benefits of these groups, they are vehicles for social change. For the two hours that the group meets, the members discuss issues that face them and are open to discussing these issues with the NGO workers. Discussion can range over topics such as the importance of sending girls to school, to the importance of voting, to the exercising of their rights, e.g. the use of those government programs that are available to them without paying bribes, and so forth. Additionally, the women become more aware of their own power through such discussions, realizing that they have the ability to make certain decisions (e.g. when their daughters get married), the ability to do basic book keeping and hence become economic caretakers of the family (this is surprisingly powerful), and much more.
A picture of a group member writing in the ledger that tracks the groups' monthly contributions and loans taken out. The group has their own ledger and we have our copy as well. Each group member also has their own personal book in which they track their contributions and loans. The goal is to train the women in the workings of the group via the monthly meetings and intensive trips to the NGO office in which the issues of women's empowerment are even more strongly emphasized.. We want to pass off complete control to them within 2-3 years, with the literate women in the group taking care of the ledger.
This is the subtle benefit that is almost impossible to measure but is almost certainly the most important part. I will post photos of the women who take loans and what they took the loans for, as I think it is important to track and see the concrete economic benefit. However, I will also post pictures of the group discussions and I would invite those of you reading this to consider coming to Rajasthan to see them yourselves. To me, my heart is greatly warmed by the sight of these rural, largely sequestered women coming together and thoroughly debating and discussing the issues before them. To me why they work as social vehicle is clear just from watching this. Rohitash and Gopal have seen the social change in their 17-year careers, where at the beginning they had to talk with villages for very long periods of time in order to even be allowed to start the groups. This was because the women were basically never allowed out of the houses and to socialize with people outside the family. Now it is a relatively rapid process to start such a group because the benefits have been seen, and women can much more openly move about and talk with outsiders, both Indian and foreign.
As I'm writing this Gopal has pointed out a few more things to me: all group members from different castes sit together and one space and are equals in the groups. This, in addition to urging of gender equality, creates an environment that nurtures a sense of equality that will help rid this part of India of the great evils of caste and gender inequality. They also help with social justice issues, such as advising group members of where they can take advantage of legal advice for some problem they might have. Great stuff.
I’ll have another post about the brochure and long-term strategy soon. I’ll also try to get some more pictures in this post at some point soon.
