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Gender inequality is not only a pressing moral and social issue but also a critical economic challenge. India has a larger relative economic value at stake from advancing gender equality than any of the ten regions analysed in a McKinsey Global Institute report, The Power of Parity: How Advancing Women’s Equality Can add $12 Trillion To Global Growth. The report says that if all countries were to match the momentum toward gender parity of the fastest-improving countries in their region, $12 trillion a year could be added to global GDP. Further, India could add $700 billion of additional GDP in 2025, boosting the country’s annual GDP growth by 1.4 percentage points.

The government has announced an increase in funds allocated for the National Rural Livelihood Mission (NRLM) from Rs 4,500 crore in 2017-18 to Rs 5,750 crore in 2018-19. The corpus of funds available to women through self-help groups was Rs 42,000 crore in 2016-17 and would be increased to Rs 75,000 crore by March 2019.

Women empowerment and poverty alleviation through NRLM, of which the basic unit is self-help groups can reposition India’s approach. Unlike the new microfinance paradigm where credit is the sole function of self-help groups, the NRLM avatar’s primary focus is  savings and financial management and loans come later. Savings constitute the first line of defence to help poor households cope with the external shocks, emergencies, and life-cycle events to which they are so vulnerable.

Empowering women is the solution to many problems on a global level starting from poverty. Societies that take the effort to empower women to show better development indices, are better governed, more stable, and are less prone to violence. On the other hand, societies that limit women’s educational and employment opportunities and where women’s political voices are poorer are more prone to corruption.

In India, the self-help group mechanism remains the most popular model for empowering village women through financial access and provision of other services. A typical Indian self-help group consists of 10-20 poor women from similar socio-economic backgrounds who pool their savings into a fund from which they can carry out essential activities. They can borrow money to buy medicine, start a business, purchase animals, pay school fees, buy clothing, buy food during the lean season or invest in agriculture. They meet once a month and discuss issues of mutual importance thereby enriching each other. They are usually small, self-selected, with unrelated members that attend regular meetings and do regular savings. Once groups have mastered the mechanics of savings and lending, and have accumulated a fair amount of capital they began making small loans to members. The women cross-guarantee each other’s debts.

The most significant aspects of these groups are that they are designed to be wholly managed by villagers themselves. The groups do most of the work including, selecting members, electing officers, deciding on their bylaws. The women act as their own bankers, creating their own loan fund, approving small loans to each other as savings accumulate, and making sure loans are repaid. Astonishingly few default. By transferring tasks normally done by well-paid bankers to community women, the cost of administration comes down drastically. Although the value for members is not just in finance, credit remains an important element. It is essential to improve women’s involvement in the economy to change social dynamics.

The phenomenon of “regular meetings” is an important enabling force which gives the woman courage to “lean in”, in multiple household and community settings. The dialogue-based education does not require that women know how to read or write, and learning together strengthens and gives confidence to the group. The disciplined hard work of saving every week and running a group makes them efficient money managers. The self-help groups are seen as an entry point for many other social activities, from school committees to watershed councils. As they mature, the group spark and spearhead meaningful and enduring changes by addressing community issues such as the abuse of women, the dowry system, alcohol, educational quality and inadequate infrastructure.

The self-help groups are the biggest generators of social capital in rural India. Best practitioners in communities become community professionals (CPs) and catalysts for mobilisation, health, literacy financial management, agriculture, leadership livestock, and more. The vast majority of women leaders in Panchayat Raj Institutions have come from self-help groups and most successful sarpanches have had their grooming in these collectives.

It is not that women are purer than men or immune to the pull of greed, but there is almost a certainty that women will channel money into solving more fundamental issues.  Beginning in the benign area of health, the women slowly gains confidence and moves on to other social areas. They begin asking for change from the bus conductor, introducing new farming practices, saving enough money to engage banks and acquire simple irrigation equipment like water tanks, agitating for an improved road (and getting it), mapping the village land and rethinking what’s planted to produce year-round yields and income, demanding the presence of the school teacher, negotiating with local officials for providing services to which they were entitled.

Like termites, they have furrowed the male-dominated power-grid in villages and start heading up the whole patriarchal foundation. Where once participation of women in public meetings was an anathema in rural society it has now become a ritual. These self-help groups have become powerful economic locomotives and have enabled women to find new confidence, agency, and purpose. Refuting village hierarchies, women in many places hoisted the national flag in their villages, despite opposition from men. Women’s collectives have put an end to the brewing of liquor in some villages. SHG women have enhanced their economic position in numerous ways, such as successfully bidding for contracts to fish in village ponds, and developing wastelands to grow fruits and vegetables.

The loss of control that village moneylenders have suffered is a common story now in villages where SHGs have taken root. “For four months a year when there is no work, we were forced to take a loan of Rs300 per month from money lenders at 100 percent interest, women belonging to the Scheduled Castes at Sholapur village told said. Instead, now, women belonging to the Scheduled Caste in Sholapur village, can surpass the lender and borrow within their own group, as they rightly said, “After we formed an SHG, we don’t borrow from moneylenders, but from our own SHG. Even organisations such as Self-Employed Women’s Association (SEWA) feel that through internal borrowing women are empowered. Ela Bhatt, the founder of SEWA, says, “When women have the support of other women, and when they have an income of their own… they are able to fight their own battles in their own way. Bhatt continues, as she speaks of a quiet yet persistent strength particular to women: Once a woman knows what she wants…she’s not afraid to take risks. If they cannot break through, they just find a way around. For poor women, it is a journey towards the second freedom, real freedom, as Mahatma Gandhi dreamed about when he talked of the unfinished agenda at the time of independence.

Moin Qazi is the author of the bestselling book, Village Diary of a Heretic Banker .He has worked in the development finance sector for almost four decades .He can be reached at moinqazi123@gmail.com

 

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