By Smita Premchander, V. Prameela and Chinnamma Kuttappa
Microfinance Focus, June 7, 2011: Abstract:This paper is written on the basis of Sampark’s experience of working with women who are among the poorest in the rural areas of Koppal district of Karnataka.  Sampark works with 230 groups and 3300 women. Sampark’s groups include 20% SCs, and about 400 of these are devadasis, who ‘dedicated’ to God, thereby denied the right to marriage.  They constitute women headed households most of whom live in extreme poverty. By joining SHGs organized by Sampark, these women have had access to savings and loans, have been able to build assets and come out of poverty.  However, a focus on microfinance is at the cost of attention to gender issues.  While women have been able to negotiate more space for themselves within the household, much more ground needs to be covered where organizational intervention would make a significant difference.  Young girls from poor families still drop out of school early, have to pay more dowry as their age of marriage increases, are more at risk while travelling across villages, and are constrained by restrictions on their mobility even after they receive skill training.  The social and cultural norms for girls are highly constricting and hamper their ability to take market opportunities and get out of poverty. NGOs need to go beyond microfinance facilitation to engage with social change for women to gain both social and economic empowerment.
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This paper is based on Sampark’s experience for the past decade, in working with some of the poorest people in the Koppal district of north Karnataka.  The lessons are shared from in-depth work with 3300 women members of 230 SHGs and 10 cooperatives spread over 35 villages, who have.  In a context where more and more NGOs have transformed into commercial MFIs, and have given up the ‘facilitation’ role in favour of a profit-making role for themselves, focus has shifted to ‘professionalising’ of financial services, resulting in a move away from dealing with gender issues.  Even in an organization which builds community based microfinance institutions, the focus on financial services results in bringing the women increasing incomes, but social arena remains unjust and unequal for women, requiring special attention from external agencies.

I. Poor Women , especially Devadasis, find it more difficult to participate in SHGs and cooperatives

Those who are poor, are slow to benefit from financial services, due to low capacity to participate in groups, save, to take risks, and invest.  Thus SHGs of poor women, and their cooperatives take much longer to stabilize than those of the less poor. In devadasi households, which are women headed, there are usually fewer people in the household, further reducing the capacity to take risks and engage in new IGAs/ enterprises.  This means that NGOs have to take additional steps to ensure that those who are the poorest and most marginalized are able to join and retain group memberships, take loans and slowly build assets.  Over 20% of members in Sampark facilitated groups are from the SCs, and have been able to come out of poverty.

II. Women’s own organizations give them maximum access and control over financial assets

Sampark’s work with women over the past decade shows that they benefit much more if they retain control over their financial resources and organizations.  Thus cooperatives have empowered them much more than if Sampark had taken on ‘profit making financial services’, which would have meant profits for Sampark not for the SHGs and cooperatives. 

1.Donors prefer to invest in externally held MFIs rather than cooperatives

The orientation of donors and government is towards institutions.  It is “Protection of loan funds” rather than “Protection of the funds of those who are poor”.  The latter would lead to different kinds of policies and institutions.

Big organizations lead trends, opinions, and also the crises in the MF industry!  The policy makers turn to attend to them, and the problems they face.  This detracts from the problems that they have in fact created.

By contrast, smaller organizations, such as cooperatives, which are large in number, but dispersed, less organized and less documented, have a lower voice.  They do not come together, do not compare notes, do not collectivize to raise issues of importance to them or their members, and therefore are not heard at policy level as corporate profit making entities are.  Thus corporate MFIs have a greater voice, policy space and attention and cooperative MFIs. 

Funding of corporate entities is perceived to be easier and more cost effective than for cooperatives.  They can absorb large funds, they can show impressive scale and balance sheets.  By contrast, fewer NGOs promote cooperatives.   The data systems are more difficult to set up.  Scale is scattered and collectivization not sufficiently impressive to be marketed.  This has meant that large donor funding has backed private institutions, while the investment in cooperatives has been neglected. This is despite the recent emphasis on re-vitalising the cooperative sector.

Sampark has been able to get some funding from donor organizations to build cooperatives, else it would not have been possible to have the lessons it offers for community based microfinance and women’s empowerment.

3.    Building CBMFIs: An Intensive Endeavour

Self help groups and cooperatives and externally introduced organizations in a rural setting.  Even through SHGs have come of age, and most women are familiar with them, microfinance cooperatives of women are not so common.  Traditionally, agricultural and multi-purpose cooperatives have been the preserve of men, and microfinance models heavily biased in favour of commercial MFIs.  Women, who are poor and illiterate, need to build their capacities to manage SHGs and cooperatives.  To access external funds, these cooperatives have to conform to high standards of creditworthiness, and need data and monitoring systems. These capacity building requirements are time and cost intensive, and need the full attention of a promoting organisation.  Thus a facilitating NGO and also the women, become fully absorbed in creating viable and robust CBMFIs.

4.    The Attention to Social Gender Equality Issues Becomes Difficult

The gender barriers that rural poor women face are many.  Within the household, there are issues relating to decision making, access and control over cash, equal access to food, education, property and other resources.  Girls drop out of school to attend to family chores or go for work, and women are faced with domestic violence and increasing alcoholism of men.  Practices of child marriage persist due to fears about women’s safety, and among the SCs and devadasis, dowry increases with every year that a girl remains unmarried after attaining puberty. 

As facilitating NGOs get more and more engaged with creating women’s financial organizations and access to banks for financial inclusion, savings and loans, social gender issues appear less and less in the conversations between the NGOs and the SHGs/ federations.  The attention to finance crowds out the space, time and capacity to address socially embedded gender inequalities.

Socio cultural gender inequalities are also more difficult to address.  Financial systems are easier to set up; social systems more complex to engage with and influence.  In poverty situations, not only NGOs, but also women prioritise financial issues more than social issues. They believe that with economic empowerment, social empowerment will follow, a belief that facilitating NGOs are happy to share. 

5.    Does economic empowerment lead to social empowerment?

Let us examine this belief.  Rapid studies in Sampark have shown that while economic empowerment does result in some social empowerment, the social impacts are not widely spread and of a nature that engage the whole community.  The Table below gives an overview of impacts which have been possible and those which have not been possible:

Table 1:  Financial and Social Impacts of SHGs and Cooperatives

Several social impacts are seen at the household level, yet SHGs are not yet able to hold the external institutions accountable.  For instance, when banks and government together sanction subsidized loans on a corrupt basis, Sampark groups have objected only once over the past eight years.  It would have been possible to file RTI applications to get information about which groups got these funds, how old they were, and which NGO got the assigned money of Rs. 10,000 per SHG formed and bank-linked.  Sampark staff provides two reasons for not taking such an action: 1. The staff are too focused on getting unsubsidized loans from banks to the SHGs promoted by Sampark, and 2.  Annoying bank officials would mean that SHGs would lose access even to unsubsidized funds.  Clearly, the need for finance has blocked out rights based activist roles.

6.    Can External Organizations Influence Deep Rooted Social Prejudices?

The socio cultural practices that lead to girl children not getting equal treatment, whether related to food, education, skills or property are deeply rooted in patriarchal systems.  Can NGOs hope to influence these systems as external organizations?

We take an example of skill training in Koppal.  Sampark conducted need based trainings for 361 girls and 88 boys in the age group of 15 to 18 who have dropped out of the school.    Most of the girls who are having 2-5 years schooling opted for tailoring, where as boys with 2-5 years schooling opted for driving.  Girls and boys who are passed PUC and continuing bachelor degree opted for computer training.  The table shows the utilization of skills is high in driving (90%) followed by mobile repairing 75% (3 out of 4 trained boys are using the skills and earning).   The full utilization of skills in tailoring is only 32%, which was mainly because girls depend only on the market of their own village.   Though there is a good stitching skill with girls and demand of tailors in garment factories in towns and cities, girls cannot move out of their families to towns and cities for work.  Girls are not permitted to leave their own home and stay away from their parents after reaching puberty, as they are perceived to be at risk.    While boys who got training in driving and mobile phone repairing were able to move to neighbouring towns such Hospet, Hubli and Gadag and work as drivers of trucks, cars and in mobile service shops.   The earning capacity of boys was about Rs 2500/- to Rs 8000/- per month, where as the earning capacity of girls in tailoring is only Rs 500 to 2500/- per month.  Although girls worked hard and learned tailoring, they could not utilize their skills and earn more and have better livelihoods due to cultural constraints.

Significant benefit to women will involve engaging with families and the girls themselves, to create the confidence, and the investments needed so that women’s mobility can be increased.  It is much more complex to positively influence the social enabling environment than to create financial organizations.   A woman who is scared to leave her young daughter alone even at her own home, for fear of her alcoholic husband violating his own daughter, opts for the safety of early marriage.  These are not just matters of changing attitudes, but offering options by which women have safe physical spaces to live in, at home, on the roads and in their villages. 

7.    The Way Forward

Sampark recognizes that financial and economic empowerment is not sufficient to create social empowerment, yet it does offer a few steps forward. Significant change in gender equality and gender justice can be brought about through direct engagement with social norms.  These require different skills and capacities than creating CBMFIs. Women’s empowerment methodologies and their impacts are not documented well, nor are they be learnt as easily as technical skills.  Yet, it is possible to engage with these and Sampark’s met horology involves providing literacy for livelihoods, and thematic inputs such as workshops and discussions on gender issues, as stated in Table 2.

Table 2 Gender and Empowerment Indicators

Sampark’s cooperatives are now already established and well on their way to sustainability, and women leaders are strong, offering an opportunity to work with them and the community to bring about changes in social norms.   The thematic discussions have just started, and it will be possible to share the results in another year.  The lessons will be important in understanding how financial interventions can go hand in hand with social interventions achieving significant impact in terms of creating a conducive enabling environment for women’s empowerment.  Sampark acknowledges the support of Pangea Foundation and Sir Dorabji Tata Trust in enabling it to prioritize women’s social empowerment and build in rights based perspective in its work.
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Note: This paper is prepared for presentation at The Skoch Summit, Session on Session: Gender Issues in Poverty, Financial Services and Budgeting, June 2, 2011, Mumbai