Poor women do not see finance in isolation, but as one of the resources they use in order to improve their livelihoods, writes Smita Premchander in ‘Multiple Meanings of Money: How women see microfinance’ (www.sagepublications.com).
“Women may not regard economic development (or availing microfinance) as a goal, but see it as a limited means of improving their immediate livelihoods.” And, livelihoods are commonly perceived as comprising assets, abilities and strategies by which households make a living and develop the capabilities to protect their income and assets, the author notes.
She says that in contrast to the subsidised credit and the commercial microfinance models which relegate the poor to the margins by making credit too costly for them. The SHG-bank linkage offers a way out by linking traditional development banking with a new market orientation. “This model has been made increasingly friendly to the poor, with the RBI (Reserve Bank of India) issuing guidelines that encourage banks to adopt flexible and easy procedures for SHG (self-help group) financing, to leave the groups free to manage their own money, to take consumption loans if needed.”
Premchander is, however, critical of the blind spots. Such as, the national credit policies not bringing the SHGs under any banking regulations, and not recognising the financial risks that are inherent in these new forms of association, especially for poor women.
“The banking sector and the Government have formally recognised these as channels of credit and permitted them to have informal savings. However, the proliferation of unregulated SHGs also puts poor women’s savings at risk, calling for further guidelines and measures.”
One of the many evocative narratives in the book is about tribal women in Bastar (Chhattisgarh), who typically walk 6-8 km, carrying a child on the hip and carefully balancing a basket of minor forest products on the head, and maybe even trying to hold a bamboo umbrella to save the child from a drizzle or rain. A journey ‘taken on slippery paths, usually with two or three streams to cross, with at least knee or waist deep water.’
Given that the weekly transactions amounted to Rs 5 to Rs 10, these women rarely saw even a Rs 50 note, and few had seen a Rs 100 note, the author recounts. “When they began to save money, bringing a rupee or two to the group meetings, they did not know who should keep the money in between meetings. When savings reached Rs 100 or Rs 200, they usually divided it between two or three women for safekeeping.”
An interesting extract from ‘field notes’ is about a visit to a group in a remote village in Chhattisgarh. “We walked for three hours crossing two streams… When we reached the hamlet at 3 pm, women welcomed us and first we joined in a tribal dance with 40 of them. It began to pour, so we huddled into a small hut with 25 women for a discussion. As I glanced around, I felt overdressed in a salwar suit and dupatta, while these women wore only a half sari each.”
Then begins a business game of sorts. “I tore pieces of paper from my pad to make serve as currency notes and handed to each different denominations totalling Rs 500 per woman. I explained that this was a loan that an agency was offering them, and asked what they would do with it; it had to be repaid with interest.”
What was their reaction? A hushed silence for some time, Premchander reminisces. “Then one woman slowly counted and returned Rs 400 to me. When I asked her what she would do with the hundred retained, she said: ‘I will use Rs 50 to buy a sari, and with Rs 50, I will make and sell ‘Hariya’ (liquor from paddy). One by one each woman returned some cash; not even one had considered a loan of more than Rs 100…”
Towards the conclusion of the book, the author finds microfinance to be at the crossroads. “The sector has grown to incorporate a very large number of NGOs (non-government organisations), MFIs (microfinance institutions), banks and other public and private sector organisations providing a wide range of microfinance services… Such unprecedented supply should have been fully absorbed given a very large unmet demand.”
The fact that this has not happened can be explained only by understanding the difference in the money offered and the money demanded, reasons Premchander. Since microfinance does not reach the poorer sections of the population, she emphasises that there is no alternative to providing credit at reasonable cost if the poor have to follow long-term sustainable livelihood strategies.