| Article @ SandeshIndia | |
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| Headline : Micro credit, macro hype |
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Despite the best of intentions, little sustainable progress is made through small finances.
October 2002, Jaipur, - Go to any village in India and what you will find, besides leaky hand pumps, parched fields and bony cattle, is the ubiquitous self-help group. Going by several names - from 'thrift' and 'credit' societies to microfinance, the self-help group (SHG) is now a fixture in the lives of rural women. Take the case of Rajasthan. As in other parts of India, scores of SHGs under schemes like the Indira Mahila Yojana and the Mahila Samriddhi Yojana have been in existence since the 1980s to provide credit facilities to the poor, especially women, in both urban and rural areas. And if it is officially decreed to make self-help a mantra, who are mere employees to demur? Every government wing - from the forest department to the village anganwadi (child-care centre), is obliged to set up an SHG. Many women are members of five or six SHGs! "What to do, madam, we have to make SHGs. We know that extension workers make false lists, but what can they do - they also have to meet targets to keep their jobs," admits a harried official from the agriculture department in Banswara. The 'Swayamsidha' or the Integrated Women's Empowerment programme (IWEP) launched in the Women's Empowerment Year (2001) with the objective of "all round empowerment of women" is yet another scheme that represents the lofty but unrealistic thinking in official circles. The IWEP currently operates in 27 blocks of Rajasthan. It functions as an alternative to the village moneylender, and not the source of social and economic empowerment of women by "ensuring their direct access to, and control over resources". In keeping with the project document, the groups are 'homogeneous', which translates into single-caste and class groups, since 'ability to repay' is one of the criteria of group formation. 'Below Poverty Line' (BPL) families, with a monthly family income of less than Rs 1,100 are generally dalit or tribal groups. Of course, it is another matter that any family can get a certificate of BPL for a price. In some villages, we were told, it was the higher castes who had declared themselves as BPL and were cornering all the government schemes and subsidies. The feudal values that are still deeply entrenched prevent the lower castes from protesting. The implications of facilitating the formation of homogeneous caste/religion groups in these communalised times apart, these groups do provide a measure of relief from exploitative usury arrangements in villages (sometimes as high as 20-25 per cent every month). The 'success' of this approach was due, in no small measure, to the finding that loan repayment rates among women is extremely high. However, to assume that SHGs result in the empowerment of members is illusory. Far from "empowering" women, the SHGs, with about 20 members each, are mostly occupied with intra-loaning among members. The reasons for the loans vary from school fees and uniforms, blasting wells and buying fodder, to childbirth and weddings. As numerous "success" stories of SHGs testify, women are also able to buy more consumer goods - from televisions and radio to double beds and dressing tables. Nonetheless, the women are frustrated. Indira Devi, president of an SHG in Hatai Village in Dungarpur is no longer satisfied with rhetoric. "What empowerment?" she asks bitterly, "We are only extending loans amongst ourselves. No business, no self-employment. The economy is at a standstill." Adds Suraj Devi, a Sathin (village level worker under the Women's Development Programme), "We can use the SHG as a medium to learn and teach, disseminate information, but there is no guidance forthcoming." "There is no water in the village. There are no avenues of employment," say the women in Hatai, a dusty village where women in the summer months walk 2-3 kms everyday for water. Everyone wants training, and everyone wants work - whether it is weaving durries, rolling papad or making agarbatti (incense sticks). But the Sathin raises a pertinent question: "Once the training is done, then what? The Department goes and we are left. What about marketing? We cannot sell goods amongst ourselves - everyone is too poor to buy. We need outside avenues for marketing." And herein lies the problem. Progress in microfinance activity is predominantly measured in terms of numbers covered, amounts saved, amounts lent and repayment rates, but not by results achieved in genuine economic development. The generation of sustainable livelihoods can come about through involvement in community development projects, through regular jobs or through self-employment. The latter is generally seen to be the predominant option for the rural poor - this was the gist of the 1997 World Microcredit Summit. The task of finding viable microenterprises for millions of poor people is stupendous, simply because it is not all that easy to find so many feasible opportunities, or for the poor to manage their businesses and market what they produce. The experience of government-controlled marketing outlets has not proved viable in the long run, while the option of linkages with corporations is fraught with the danger that the poor, with little direct access to the market, will be exploited. The odds are stacked against the self-employed in the global marketplace, where consumer trends fluctuate wildly and are influenced to a large extent by advertising. Aggressive brand selling and marketing coupled with the strong financial clout of corporations places the poor, especially women, at a particular disadvantage. According to Nan Dawkins Scully, head of the Women's Microcredit Accountability Network - WOMAN - "Donors and advocates consistently over-exaggerate the power of microenterprise credit and related assistance, while ignoring key structural issues that are far more pertinent to the long-term problem of women and poverty i.e., agrarian reform, programmes favouring export production (typically male-dominated) over subsistence crops (typically female-dominated), and trade agreements structured in the interests of transnational corporations." The cumulative effect of rising costs, declining demand, and competition from both cheap imports and increased entrants into the sector leads to shrinking profits in informal-sector trade, says Scully. Microcredit must perforce take a macro view of the economy. The Indian experience too has shown that structural adjustment policies themselves create a burgeoning informal sector by destroying small enterprises. It is ironical that the World Bank, a votary of structural adjustment, is also the sponsor of schemes like 'Swayamsidha'. There has been a perceptible shift from "development as charity" to the potentially more profitable "development as business" model. It is no coincidence that the World Microcredit Summit in 1997 was supported by an array of financial and development institutions. A fall-out of this approach is that women are often terrorised into loan repayment. Says Indira Pancholi of the Mahila Jan Adhikar Samiti (Committee for Women's Democratic Rights), Ajmer, "Women take loans from money-lenders on huge interest rates so that they can pay their instalment to the SHG. For them, to be listed as 'defaulters' means they are out of the running for any development schemes." Along with a growing spiral of indebtedness engendered by microcredit, the day may not be far away when women are imprisoned for non-repayment of loans, like in Bangladesh, which has one of the longest histories of microcredit in the developing world. If the objective is poverty 'alleviation' rather than elimination of poverty, microcredit may at best provide micro solutions. To quote Scully, "As long as microenterprise development is offered as a substitute for meaningful social development, for employment that offers real security, for viable small-farm and enterprise production, and for fundamental changes in the economic policies prescribed by institutions such as the World Bank and the IMF, it will only impede progress toward finding real answers to the very real problem of poverty in the developing world." |