SEWA Bank : Women Empowerment/ Poverty Alleviation, Gujarat
1. Sector
Services
2. Sub-sector
Financial Services
3. Policy/ Area
Women Empowerment/ Poverty Alleviation
4. Program Title
SEWA Bank, Gujarat
Description
Self-employed women (like hawkers, vendors, weavers, potters, beedi-rollers, agarbattirollers, pappad-rollers, manual laborers and service providers) have insecure employment and earn much less than organized sector workers. They also have no support for their work, or for themselves in times of difficulties. They have to pay for health -care and face the consequences and expenses involved in maternity, accidents, death and calamities out of their meager earnings.
The Self-Employed Women's Association (SEWA), Gujarat, recognizing the need for supportive services and social security, has taken a number of initiatives and succeeded in providing services to its members. Swashrayi Mahila SEWA Bank established in 1974 is one such initiative. It is the largest and most successful co -operative venture of SEWA membersoffering savings, loans, insurance and financial counseling services to the members.
Perhaps the most important lesson from these initiatives is that poor women are ready to pay for services and that these services can indeed become financially via ble. They do not have to remain dependent on subsidies.
Sewa’s Goal |
A brief description of SEWA organizations is presented below.
Organizations |
5. Executive Summary
Situation before practice
Self-employed women are mainly involved in production, trading and the service sector. However, in spite of their hard work and their contribution to the country's gross domestic product, they do not have access to financial services, which would help them to upgrade their own work and productivity.
Self-employed women face two major financial problems:
·Lack of working capital.
·Non-ownership of assets
Encounters and Challenges
When a financial institution in the form of a bank for self-employed poor women was proposed, the Reserve Bank of India was apprehensive of the idea expressing doubts about the financial viability of the institution.
Strategy
The SEWA Bank opened in 1974, to provide banking services to the Self-Employed Women's Association's trade union members in Ahmedabad. It was intended to operate as a cooperative bank, owned by its members. All of SEWA Bank's clients are self-employed women. The bank offers them varied services including savings, secured loans, unsecured loans and several types of insurance.
SEWA has been advancing loans to women involved in various trades like block printing, handloom weaving, embroidery, fish and vegetable vending, etc. SEWA has empowered them to improve their skills, income and self-esteem. Solidarity among urban microcredit group members can help them solve many of their common problems of security, drinking water, sanitation, sewerage, etc. effectively.
In July 1993, SEWA Bank started banking activities in the rural districts of Gujarat. This activity is ca rried out through the formation and development of women's savings groups, known as self-help groups (SHG). These groups, regularly meet, collect the saved money from their members and deposit it in SEWA Bank. Financially stable groups are facilitated with credit options for their individual members. Eventually, a district level savings and credit federation of unregistered savings and credit groups (SCGs) is registered at the district level.
The operational strategy of the SEWA Bank is based on:
· Financialsustainability by using surplus funds for developmental activities of SEWA.
· Borrowing and lending at market rates - no subsidies or grants.
· Institutional and managerial sustainability due to supervision by the Reserve Bank of ndia.
· Stocktaking during annual meeting of shareholders.
·Regular elections to the Board.
·A capable professional management team
Results
It is the first bank of its kind in India to demonstrate that poor women do save, use loans productively and repay loans in a timely manner (in fact better than others).
SEWA Bank, which started with 4000 depositors, has 2,00,000 poor women in 10 districts of Gujarat. Women as depositors and a working capital of Rs 62.54 Crore in 2002. They can obtain loans ranging from Rs. 5000 to Rs.25000.
Sustainability
Both the urban and rural banking operations of the SEWA Bank are self-sustaining. The services of the Bank are being increasingly sought after and such services have helped a large number of self-employed women by empowering them economically and socially.
Lessons learnt
a. Poor women can save, if motivated and facilitated.
b. Poor do Repay Loans can and do repay loans provided their repaying capacity is assessed properly.
c. Poor do pay market rates of interest.
d. Poor need suitable delivery mechanisms like door to door services, simple procedure, assistance in filling forms, matching of collection schedule with cash flow.
e. Continuous contact is the key for success.
f. They need to be informed and educated about all the services, products and procedures to be followed.
g. There is a need for a financial counseling service, catered for them.
h. They need financial counseling for four types of financial services.
· Savings services for the events which they can plan,
·Insurance Services for uncertainties
·Credit for business needs and
· Counseling for planning ahead.
i. Banking with the poor can be financially viable.
j. When the poor own the organization, they feel more responsible towards it.
k. Controls, regulations and inspections often help institutions to improve efficiency and procedures, which ultimately leads to the growth of the organization.
l. Poor women need a suitable environment and integrated support to come out of vulnerability and poverty. Other support services like health care, child care, marketing support, capacity building, legal aid, policy interventions, and backward and forward linkages are required for achieving the overall objectives of poverty
alleviation and empowerment of the poor.
Replicabilty
Many other groups have taken training at the SEWA Bank and have subsequently started saving and lending cooperatives, for instance, the Cooperative Development Foundation, Working Women's Forum and Indore Mahila Cooperative among many others.
6. Initiative/ Case Study
6.1 Title
SEWA Sahakari Bank, Gujarat
6.2 Descrip tion
One of the main demands of self-employed women workers was for credit at reasonable rates, which they were unable to obtain from normal banks. The SEWA Bank was started with the specific objective of providing credit to the self-employed women with a view to empower them and also to minimize the uncertainty of availability of credit through money sharks at exorbitant interest rates. It has been financially viable and self-reliant from the beginning, and uses its surplus to further strengthen individual workers as well as their movement.
The SEWA Bank was established in 1974 as a separate bank of the poor, self-employed women. 4,000 self-employed women took the initiative with a capital of Rs.60000.
The self-employed women as shareholders own the bank. Their own elected Board makes policies. Qualified managers hired by the board professionally run the Bank.
The bank aims at providing all finance-linked supportive services to SEWA members. The bank offers several schemes both in urban and rural areas. All the schemes are directed towards empowering self-employed women for improving their businesses and income, improving their housing and infrastructure, improving their knowledge and skills and financial counseling under the overall umbrella of SEWA.
An assembly of self-employed women under SEWA |
6.3 Key words
Key Words: SEWA Organizations, Swashrayi Mahila SEWA Bank, Door-step Banking, Handholder, Banksaathi, Savings and Credit Groups
7. Contributors and References
7.1 Key Architects
Smt. Elaben R. Bhatt - Founder, SEWA Bank
7.2 Implementers/ Stakeholders
Under the overall umbrella of SEWA, Swashrayi SEWA Sahakari Bank operates as a cooperative bank. All self-employed women members of the bank are the stakeholders.
7.3 Documenting Authors
Annual Reports and Information posted on the web pages.
7.4 Sources/ References
1. http://www.gdrc.org/icm/makiko/sewaE6.html
2. http://www.unesco.org/most/asia1.htm
3. http://www.indiatogether.org/2003/oct/pov-credscene.htm
4. http://www.sewabank.org/
5. www.sewahousing.org
6. www.sewamart.com
7. www.banascraft.org
8. www.kutchcraft.org
9. www.earthquake.sewa.org
10.www.sewa.org/gss
11.www.sewa.org/smm
12.www.sewa.org/gsmscf
13.www.anasooya.org
14.www.sewa.org/insurance
15.www.sewaacademy.org
16.www.sewaresearch.org
17.www.videosewa.org
8. The organization
A Board of Directors manages the bank. Most directors are self-employed women in different occupations. SEWA Bank is a cooperative established in Gujarat State.
Work Security Insurance Scheme |
Address
Shri Mahila SEWA Sahakari Bank Ltd.
109,Sakar-II, Opp. Town Hall, Ellisbridge,
Ahmedabad -380006, Gujarat, India.
Phone: +91-079-6581652,6581597
Fax:+91-079-6576074
Email: mail@sewabank.org OR sewabank@wilnetonline.net
9. Project Design
9.1 Key Objectives
· To provide financial services to poor self-employed women in order to free them from the vicious cycle of eternal debt and unce rtainties.
· To improve their socioeconomic conditions through financial counseling, training.
9.2 Outcomes
· The bank has nearly 47000 depositors and a working capital of Rs.10 crore.
· 12000 members were covered under Social Security Insurance Scheme in 1994,
· Housing finance worth Rs 8262000 to 1162 women, with technical assistance has been provided. In Ahmedabad 158 women received own plots under the Urban Land Ceiling Act.
· Provided health care to members through health insurance scheme.
· 60000 poor women could create assets worth Rs. 200 million.
· A large number of members now have their own hand -carts, sewing machines, looms and tools of carpenter and blacksmith to work with. Many of them have upgraded their skills and developed more business.
· As on 31 March 2001, 1422 Self-Help Groups with 33600 women members and accumulated savings of Rs.1, 10,54,946/- promoted in 11 districts of Gujarat. Total amount of credit provided is Rs. 79,81,753/-. The loan recovery rate is 92%.
· The poor women have been given contro l of natural (like wells, ponds, handpumps) and financial resources.
9.3 Strategy/ Approach
Adopting Client-friendly Service Delivery in Urban Banking and Promoting Self-help Savings and Credit Groups in Rural Banking are the main strategies adopted by the SEWA Bank.
These are described below.
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Banking in Urban and Rural |
9.4 Critical Success Factors
a. Client-friendly delivery system
b. The outreach system are the critical success factors for the SEWA Bank operations.
9.5 Conceptual Framework
While collections from members are a major requirement in urban banking, formation of savings and credit groups is a major requirement in rural banking. Economic development of self-employed women is the goal in both cases. Loan is a major instrument that brings about this development.
The conceptual frameworks for rural and urban banking operations in the SEWA Bank are presented below.
Rural Banking |
Urban Banking |
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