Slum entrepreneurs get little bank help

CHENNAI AUG. 10. Nearly half of the 12,600 women from slums trained under the State-run Entrepreneur Development Programme have not been able to kick-start their petty business due to a reluctance on the part of participant-banks to advance loans.

These women are part of a Tamil Nadu Slum Clearance Board's component of the programme, launched two years ago, with the Women's Development Corporation as the nodal agency, for the development of women entrepreneurs.

Banks, an integral part of the training programme, were expected to be involved right from selection of beneficiaries to providing of credit linkages. But officials have their own explanation. ``These women are misinformed,'' says a Chennai Corporation official, who helps process loan applications. ``They think that they will get a loan once they do the EDP.''

In rural areas and smaller towns, where most trainees belong to women self-help groups which have proved their capacity for savings, banks are usually willing to extend loans. They are especially impressed with the SHGs for their systematic functioning and a repayment record of over 95 per cent.

In cities such as Chennai, however, where the SHG concept is new and where most trainees start businesses as individuals rather than in groups, the banks are apprehensive about repayments. They are wary about the programme itself.

``EDP is a big word for a one-week programme,'' says the Corporation official. ``It is just a bunch of concepts thrust on the women and is unlikely to help them become successful entrepreneurs. It is at best a good motivational programme.''

But, the failure of the programme in urban areas to yield results has unsettled the dreams of women like Vasantha, a resident of a Pulianthope slum.

With a 30-year-old mentally retarded son and a rickshaw-puller husband whose legs could give away anytime, Mrs. Vasantha was pitching her hopes of a livelihood on business skills she acquired recently.

An evaluation study by the Tamil Nadu Slum Clearance Board for the first project in 2001-2002 reports that 90 per cent of the women who had not started ventures cited lack of finance as the reason. In the following scheme too, during 2002-2003, about 2,000 of the 5,000 women who underwent training said they could not set up businesses owing to lack of finance.

``What is the use of continuing such a programme if its planners cannot ensure its objective,'' asked an EDP trainer as the programme entered its third phase this month. ``Even among those women who started businesses, many have folded up because they could not sustain their shops without loans," she said.

The studies have also established that about 90 per cent of the trainees started individual ventures rather than group activities which the banks were willing to finance.

Despite these hiccups, the EDP is loaded with success stories. Mrs. Vasantha herself is one, as is another group of 20 women in Chennai who are into retailing rice.

Need for a revamp

However, with the Government not able to achieve the complete potential of the programme's declared components — skill training, entrepreneurship, credit linkage and market support — many are in favour of a revamp.

``The authorities should first identify groups of women who are thirsting to start businesses and train them specifically, instead of luring them randomly with false promises or stipends,'' says an official. ``The programme duration should be extended, it should be more vigorous and include technical education.''