• Pledge Your Support
• Your Voice Counts
• India Bound ?

We found that they were using these loans to return loans they took from money-lenders which were at exorbitant rates of interest (40-60% per annum). Others were taking loans to help with their family business or for an income generating activity. The repayments were being done in monthly installments and they had to pay to the women's group Rs 2 interest for every Rs 100 that was outstanding every month . We found that there were no absentees while repayments were collected and this is probably because no outside money was involved -- the women were circulating their own money amongst themselves and therefore the village dynamics ensured that they'd repay or else face the wrath of other women in the group.
(Picture: Laxmi from the Boradapeta village savings group took a Rs 1000 loan to plant sugarcane in her field)

Why is a small interest being charged?

The womens group needs some money for printing pass books and if they can't do the accounts themselves someone has to be paid to do that. With the small interest and enough number of groups mushrooming this can all be done by the women themselves with no funds coming from the outside. Moreover half the interest collected would be circulated back to the women as interest earned on their savings. Thus their money would grow as well.

Did the groups spread to other villages? How are we handling the work-load?

Within months after the Manthini groups started, there was a demand from several neighbouring villages to start groups there too. Now 4 more groups have started along the same lines. Some of them have already started giving out loans. For the first 6-7 months nobody was paid any honorariums. After this one person from the village, Mr Naidu, who was handling the accounts of 3 groups was paid Rs 250 per month. However there are requests to start more groups. Seeing the success the couple Varalaxmi and Suryanarayana who were making fortnightly visits have decided they'd return to their native village near Manthini (scheduled April/May 2000), and with the help of AID and the local organization GRASS that's taken off due to this effort, they will coordinate the whole program. Ravi and Aravinda from AID will visit once every two months to help with the progress. By thus meeting the challenge of growth it is hoped that we will soon have about 50 savings and loans groups started in a self-reliant way handling lakhs of ruppees in 1-2 years.
(Picture: With much enthusiasm the Bibi Fatima savings group starts in Ponduru Mandalam.)

What are some of the problems on the way?

One problem is that the government has its own savings programs and various schemes in nearby villages. In these programs, women have to save some token amount, and a much higher amount comes from the government to the group (say Rs 25,000 if their group is in existence for a year). The idea is that this money can also be given out as loans. But what happens is that due to corruption, only a part of this Rs 25000, say Rs 15,000 reaches the womens group, though the entry in the books will be the total amount. So when only so much is given, repayment is expected for the entire Rs 25,000. This puts the program in jeapordy even before it starts and people stop repaying the money, share the government money, and the group collapses. Learning about government schemes, Manthini women also ask us to get funds from the outside or from government since they have now saved for over a year. So we have to really sit and talk with them to convince them that in the long run this isnt effective, and they know that too -- that other groups have collapsed since they were not self-reliant. But this issue comes up every now and then whenevr some woman or an onlooker brings it up by saying "all this is fine, but will you also get us some schemes...."

Has this self-reliant model been tried elsewhere? How does the scaled up version look?

We learnt about this self-reliant method in the AID-India conference where Kalpana, Franco and others of the Pondicherry and Tamil Nadu Science Forums told us about the Malar and other savings programs. These programs have thousands of womens savings groups which then become members of a federation of groups. While giving outside money directly to the savings groups may not work well, the federation gives loans to its member groups that the groups have to repay. This model seems to work well and is the next step for srikakulam once it has about 50 groups. They women will also feel happy because in some sense some schemes would come through to them -- but now they will come through a bigger group they themselves form and are accountable to.

From savings to holistic development: