India: Microfinance Movement Tackles Poverty, Empowers Women

India: Microfinance Movement Tackles Poverty, Empowers Women

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By Allen Clinton

“We might not know much about the world, but we understand our rights,” says Anasuyamma, president of a 12-member women’s group in the small Indian village of Dharmajipet located two hours from the city of Hyderabad. “One match can be easily broken but put them together and they become stronger. There is power in numbers and that’s the philosophy of our group.”

Sitting on floor mats in Anasuyamma’s house, she and the women in her group all have a great deal in common: they are the poorest of the poor; they are mothers who want something better for their children; and they are beneficiaries of microfinance – loans they use to start businesses, which CARE and local partners provide along with courses on human rights and business management skills. 

“Our lives have changed,” Anasuyamma says. “We feel good about ourselves. We are proud women.”

Her women’s group has taken out five loans in the past seven years, using the money to buy cows. They sell milk, repay the loans and make a profit. Working together with other women’s groups representing 20 nearby villages, they’ve formed a larger federation. They formed this federation because smaller groups have access to smaller loans. As a federation with 2,500 members, they have access to more money to start bigger businesses. This is one of 72 federations in the state.

Members of this federation, led by Anasuyamma – who was elected federation president – first did their market research to identify the right product and soon after started a soap making business and began their own marketing. Their “Uttam” brand soaps quickly became the most popular in their district. One type is for dishware and the other is clothes detergent. The 19 workers in the Uttam factory produce 3,200 bars a day, each selling for 5 rupees.

According to Praveena, CARE’s microfinance manager: “It’s easy to become convinced that lending money to marginalized women in the developing world can transform lives. Big changes are happening. Families are eating better quality food. Girls are treated as equals. There is better distribution of power and 90 percent of kids in these villages are in school.”

For the illiterate and women with no collateral, microfinance loans are a great alternative to banks, where interest rates are higher. CARE aims its microfinance support to women, who boast a near 100 percent repayment rate and have shown they are more willing to use their earnings for the well-being of their families. To provide added security for their families, women in the groups are also able to buy insurance for a rate of 30 rupees a year that CARE helped negotiate through a local company.

Anasuyamma, who has two sons and a daughter, realized she needed to do some things differently within her own family.

“I understand now how important it is that all my kids go to school,” she says. “We talk about this in the group. Most of us never went to school. But our children need to get ahead.”

She admits she used to have different feelings. She initially didn’t want to send her daughter to school as she felt her daughter would just get married and go to another family, which was of no use to her.

“We all felt the same way,” she says. “We used to all work at a local factory earning about a dollar a day rolling cigars. We cooked, we cleaned and we rolled cigars. That was the life of a woman. There was never unity among women.”

She felt that if 10 women could get together, they could change things. At the dismay of her husband, she organized a group and they each started saving 10-20 rupees a month. “We would talk and save. That’s how it all started. During that time we began to realize our dignity and started fighting for the future of all our children.”

Today, her children, including her daughter, have all finished school. The group’s treasurer said her daughter is now finishing medical school. Another woman says her daughter is studying computer science at the university. Clearly there’s a domino effect to empowering mothers.

But Anasuyamma didn’t stop with her daughter’s education. Five years ago, when her daughter was to be married she refused to pay the 10,000 rupee dowry. She felt strongly that it degraded women. After several confrontations with the in-laws and her husband – one involving her being doused with kerosene with a lit match close by – she pulled in support of her women’s group to help them see her point of view without involving the courts. The situation was soon resolved and the marriage took place without a dowry. And, other women in her group have also followed her example.

Her husband says, that before he felt that what Anasuyamma was doing was not a woman’s role. He now feels his wife is equal because she is bringing in money to support the family. 

Anasuyamma, president of a microfinance group, holds a women’s group meeting at her home.