[nukkad] first rural cooperative bank of its kind

[Satya <>]

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The secret of happiness is total disregard of everybody.
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Its an extraordinary story of success of marginalised
women who displayed keen economic,marketing and social
understanding ...a story of empowerment of illetrates
by helping them become enterpreunars.

Its on the similar line of microcredit movement in
Banglaesh.

This is what we need.

..Satya
ps:I have pruned the mail,for knowing the whole story
use the link:

http://www.indiatogether.org/economy/articles/prisen0902.htm

September 2002

The Mann Deshi Mahila Sahakari Bank 
***********************************

The Mann Deshi Mahila Sahakari Bank (Mann Land Women's
Cooperative Bank) of Mhaswad village is unique in the
fact that it is the country's first rural cooperative
bank of its kind – for and by women.

The absence of a formal education has not deterred
these women from managing a system of microcredit that
is suited to their needs when the big nationalized
banks have failed to see any value in serving them. 

Now, even the big nationalized banks want them as
clients


It is the first such rural Mahila Bank in all of
Maharashtra, the Indian state that includes Mumbai
(formerly Bombay).

Eighty percent of the MDMSB's customers are from the
marginalized classes. 

In less than five years, since it was founded in
August 1997, the MDMSB has transformed the Mann
subdivision, enabling women to emerge as powerful
catalysts of change.

  

The MDMSB was founded by illiterate, rural women who
won a hard-fought battle for a banking license from
the Reserve Bank of India (the top regulatory bank in
India). Since then, it has grown from having an
initial shareholder capitalization of 600,000 rupees
(US$12,260) to a bank with total assets that reached
30 million rupees (US$613,380) this year, with 2.4
million shares outstanding. At the end of the current
financial year (March 31), MDMSB posted a net profit
of 400,000 rupees (US$8,178), signifying that it has
produced a surplus after recapturing all of its
initial and current operating costs.

The MDMSB's customers are drawn from the region's
unorganized sector of women who are small producers –
vegetable vendors, milk vendors, nomadic goat and
sheep farmers, cottage industry entrepreneurs, casual
laborers and daily wage earners – a multihued,
essentially asset-less, and uneducated client base.


The number of men who were migrating out of the
village during the dry season was soaring. 


"Women were the worst hit by the migrations," Sinha
said. "It left them holding the baby and the bathwater
as well!"


She(Sinha) created the Mann Vikas Samajik Sanstha
(Mann Social Welfare Organization). In 1992 she used
the organization to launch a general credit
cooperative society that provided a weekly savings
scheme for women from the marginalized classes. The
women pooled their savings from one week and went as a
group to the weekly market where one of them bought a
goat.

"We started with a minimum contribution of 5 rupees
(US$0.10) per person, but the women came up with at
least 10 rupees weekly," Sinha said. "The recovery
rate was excellent – almost 100 percent," she beams.

The women were now doing business, and their groups
spawned Self Help Groups (SHGs) that consisted of at
least 20 women each. The SHGs expanded and concretized
the concept of inter-credit facilities, allowing the
women's collectives to go beyond generating capital
and assets – forging linkages in the market and
developed a bargaining clout that they could use to
their advantage.

  
Women emerged from the SHGs as leaders and they soon
created a federation.

Today, the SHGs have spread to 126 villages in the
Mann subdivision, covering an area with a population
of 250,000. The federation acts as a pressure group
that influences market forces and supports expansion
of income-generating activities. Federation members
are emerging as local political leaders.

Unfortunately, the loan and credit facilities of
India's nationalized and private banks are mired in
red tape. They immediately disqualify illiterate
women, especially when they lack assets that would
serve as solid collateral, and the paperwork and
processing is beyond their comprehension. 

In any case, no bank would be interested in extending
a loan to buy a goat or a garden umbrella, Sinha
notes. So Sinha approached the Reserve Bank of India
for a license to start a women's bank. She was
initially met with a firm refusal.


After two years of persistent effort, the Reserve Bank
of India relented and the MDMSB became a reality. In
retrospect, Sinha says, "You just need to have
shareholders come together and create a capital. Even
poor people can create such collectives and improve
their lives without outside interference. We started
with 500 women who put in, on an average, 500 rupees
each and managed to come up with the initial 600,000
rupees (US$12,266)."


Making the MDMSB profitable, and ensuring that the
women had money to save, required understanding,
creating and developing the market, Sinha said. It
also was vital to create a discipline of saving and
planning for the future within the community, she
said.

Its plans to offer an old age social security scheme
and link-ups with insurance companies for subsidized
policies have been well received. "An accident
insurance policy which we had introduced has worked
very well, and there haven't even been claims," Sinha
noted.

The MSMSB team found that women work with the smaller
goats and sheep in the animal markets, and sometimes
even buffaloes, while men work with the bullocks that
are used to till land. But bullocks have lost their
market value with the decline in agriculture.

With men migrating out of the villages in droves, the
women were left to tend the bullocks – a
labor-intensive job that is pointless in times of
drought. Thus the MDMSB decided to emphasize animals
that women can control as an asset and that generate
income, such as milk cows, goats and buffaloes.

But now that the MDMSB is extending loans to women
only, and has launched an effort to create nine Mahila
dairies (women's dairies), women are selecting the
type of cattle that is best suited to them. The women
supply milk to the Mahila dairies, which ensure that
they receive a fair price and that proceeds are
disbursed in their name.


The MDMSB identified the growing and vending of
vegetables as a second area of income generation for
women, and many women have opted to grow and sell, or
buy and sell vegetables. 

Today, there are hundreds of success stories. 

Dhaure took a loan of 30,000 rupees (US$612) from the
MDMSB to start a business of selling sprouted lentils
and beans, which are considered cheap yet highly
nutritious food items in India, and are consumed
liberally. 


Kamal Jaisinh Gore, a vegetable and milk vendor, is a
widow with two children. She took a loan of 5,000
rupees (US$102) from the MDMSB to buy a buffalo. She
managed to return the money before the expiry date of
repayment.

One of the lessons learned was that goats eat a
certain kind of cactus during the summer months, so
this was adopted as one of the fodder crops.


The MDMSB identified selling bangles as a third
promising area for women. 


Other ideas followed. The MDMSB extended loans for
sewing machines because they are portable. 


These women are discovering new possibilities for
generating income generation with the provision of
small loans for making packaged powdered spices,
potato and lentil wafers, buying chutney-making
machines, etc. The MDMSB is considering financing a
Mahila Bazar (women's bazar) that would be run
exclusively by women.

"You'd be surprised," Sinha said. "There are four
computer institutes in Mhaswad. Three of them are run
by local women today who have started them with loans
from the bank."

By custom, the majority of women who have developed
businesses were not entrepreneurs, and their incomes
were way below the poverty line. 

Sinha agrees. "We have definitely been able to
influence two things: education and awareness of basic
rights. Once women are economically independent, they
are empowered and have decision-making powers."

  
Sinha is aware that there is a risk of saturating the
market. Thus, she is determined to begin involving
government agencies to help look for ways to ensure
that all these entrepreneurial activities do not
cancel each other out. 


Partner as Collateral

When making large loans, the MDMSB cleverly uses a
husband as collateral. In case of default, he is held
as much responsible as the wife. 


One reason for the MDMSB's profitability is that its
spread is higher than nationalized banks-the client
base that is-and therefore profits have risen quickly.



The secret of the MDMSB's success lies in the various
products and services it offers, and the manner in
which credit is extended with an eye to income
generation and sustainable development, Sinha said. "

The MDMSB's future plans include financing a mobile
veterinary service, developing a federation of the
Mahila dairies, distributing thermometers to milk
vendors to assess quality of milk, issuing identity
cards to MDMSB customers to make them socially and
economically visible, and working closely with the
government to raise awareness about the value of this
type developmental finance.

One major breakthrough has already occurred at the
policy level where some nationalized banks now
approach women served by the MDMSB, offering credit
with for animal husbandry. The MDMSB's success made
them realize that these women are also quality
customers.


Pritha Sen 
September 2002




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You shall know the TRUTH and the TRUTH shall set you free. 

John 8:32

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