Banking on women power

`We do not take collateral for loans but we have hundred per cent repayment.'

M.P. Prabhakar

The Grameen Banking system adopted by the Society for Rural Improvement (SRI) has been doing good work for a decade now, writes

Shyama Rajagopal.

It is the trust in people that has made this banking system a success and it gives the women beneficiaries a kind of self-esteem. The Grameen Banking system adopted by the Society for Rural Improvement (SRI) has been doing good work for a decade now.

It has grown in every sense. From a small centre that was started in Kollengode in Palakkad, SRI now has ten branches in the State and 20,000 beneficiaries.

"We do everything that the commercial banks shy away from," said Manikoth Puthiyaveedu Prabhakar, director of SRI. "We do not take collateral for loans and we do not suggest what they should do, rather we prefer going by their choices. We have had a hundred per cent repayment so far," he said.

In Kochi to speak at a seminar on the `Role of Science and Technology for Economic Empowerment of Women,' organised by `Shakti,' a women's movement, Dr. Prabhakar said they relied on the honesty of the poor rural women. Over the last decade, SRI has given loans to the tune of Rs.30 crore.

Having trained under Nobel laureate Mohammed Yunus of Bangladesh, Dr. Prabhakar says when he came to his hometown Kalyassery in Kannur with ideas about starting a similar centre there, he was told that there is no such poverty in the State.

Finally, he chose Kollengode, egged on by his kin, writer, Eyyangode Sreedharan. It was an uphill task as there was a lot of scepticism. But the toil was worth the effort. It was a different experience from working in the US for 22 years as a professor of Literature and Communication.


SRI works with groups of five members. It has to be a close unit. "We restrict the group to five members as there is always a chance of disagreement if more numbers are included in a group. Each woman in a group can avail of a loan to meet her requirements," says Dr. Prabhakar.

It may be a general loan to start a small unit or it may also be for a marriage. There is a micro-enterprise loan and also an educational loan or a housing loan. The interest varies from 10-15 per cent on various kinds. All the women have to undergo the training imparted by SRI, which talks about the objectives of the centre and how to go about the enterprise they choose.

The initial loan is given only to two women in a group. It may be up to Rs.8000 for a cow-rearing project and up to Rs.5000 for other general loans. Depending on the work done by these women, other women also become eligible for loans.

After three years of being a beneficiary with good track records, they are also given housing loans up to Rs.50,000. The staff at SRI plays a key role in getting to know the beneficiaries. They motivate the women to work towards their goal, said Dr. Prabhakar. Over the years, SRI has kept a part of the profit for giving scholarships for the children of the beneficiaries.

A centre can be started with three to four groups also, though ideally it is preferred that there may be eight groups consisting of 40 women. About 60 centres make a branch of SRI. Dr. Prabhakar says they work with a philosophy of being fair, friendly and firm.

"It is indeed true that women experience more poverty than men. They are more serious about the upbringing of their children and the money they earn will never be squandered on alcohol," he said.

Recommended for you