The Power of Microfinance

Text: Linda Roemer

Photos: Dale Klippenstein

Across the world, women living in poverty are financially vulnerable for many reasons. Especially in rural areas, they often have very limited earning opportunities with an irregular income, or they have none at all. This is accompanied by an inability to access formal financial services and systems such as credits. The Financial Express states: “Gender inequalities in access to formal credit have long manifested in India’s scarce gender-wise financial statistics. For example, distribution of outstanding credit in small borrower accounts shows 24.5% share of female account owners against 72% by men as on March 2017.” Yet, access to financial services is a universal need for all individuals and families for building up a safe future.

One of the goals at Sambhali Trust is to provide women with the opportunity to gain control over their family’s resources through microfinance. The Microfinance Programme has been first introduced in 2009. Now, 10 years later, 104 women in the desert village of Setrawa are currently divided in 6 groups, coming together on a regular basis to discuss problems and to find solutions by deciding who is in need of a loan for goats, cows, medical help, sewing machines or for setting up shops. Every woman pays approximately 200 Indian Rupees per month into a common fund – and by the end of each month, the total amount is counted and the receiver of the loan is chosen. The Microfinance Programme ensures access to loans at an interest rate that is catered to their income - and in the 10 years the Microfinance Programme is operating, not one woman has been negligent in paying back after the loan had been given.

The ability to earn a living transforms the women's lives – numerous tailoring shops as well as vegetable and fruit stalls only exist because of the Microfinance Programme by Sambhali Trust. Women are now able to start their own businesses, and in the past year, many have received goats and cows whose milk they sell on the local market or to their neighbours. This allows them to provide to their families’ well-being and to be financially independent. Meera is one of them. She is now the leader of the microfinance group in Setrawa, successfully guiding the 6 groups towards financial security. Meera, originally from Pakistan, moved to Setrawa 20 years ago. With her husband working far away, in Surat in Gujarat, she was eager to also make an income and to provide for her three children. She started by taking a loan for a small shop inside her house – since she lives right opposite a public school, she thought of selling school supplies and snacks for the students. She was able to pay off quickly – and the shop turned out to be a huge success, which led her to taking loans for a flour mill as well as a sewing machine. Later on, she decided to open another shop in the centre of the village, which served as a tailor shop as well as a place where the villagers could buy accessories and snacks.

Meera

Other women in Setrawa are construction workers – a job that is not only hard labour, but also risky as well as unreliably and badly paid, as it is not continuous work. Being able to have an additional opportunity to make an income, such as through setting up vegetable and fruit stalls or selling milk, gives the women access to continuous financial security, also because there is a constant demand from the villagers for these food items.

Many women in Setrawa were able to set up vegetable stalls through Microfinance

These are examples that prove that the Microfinance Programme strengthens women’s ability to decide over important matters, thus contributing to their self-confidence and independence – in an environment where women and girls are otherwise often suppressed and underprivileged at all levels. “The Microfinance Programme has had a big positive impact on their lives, and is greatly appreciated and respected by their husbands as well”, states Meera.