For some time we have been eager to help the children’s mothers improve their financial situations. So many tell us that their husbands, if they do earn any money, drink it before the family can benefit.
So, how to get money into the women’s hands?
We’ve read about the way in which many women -- particularly in Bangladesh -- have been empowered by the opportunity to start small businesses with interest free loans.
Sounds like such a good idea for the women of Muttom. But we have no experience running a project like this. How to begin? We started by doing some Internet research, but really couldn’t find any useful information – except how to invite Grameen Bank to set up in our area! Well, that could take awhile, so we decided we would have to use our own common sense plus Selvi’s wealth of experience with the Muttom community.
Selvi, Adrian and I discussed our concerns about the project. Muttom villagers have plenty of experience taking out loans. In fact, they live on credit. But they seem to have little experience repaying the money and sanctions appear to be few. Their attitude to most things is “live for today”. They don’t save money or have insurance against a rainy day. When the Tsunami, hit nobody had any insurance. Any money they get they spend immediately on food, drink, and new clothes with not a thought for tomorrow.
A friend told us about a study he did amongst 120 very poor slum dwellers in Chennai. They had had sold their kidneys for fairly large sums of money. When he asked why they still lived in the slums with no improvement in their living conditions, they told him they had spent the money on a big feast for family and friends, new clothes and alcohol! Not one family had used the money wisely (by our standards).
So if we lend money to the Muttom mothers, will it simply disappear? Will anyone really benefit or will it be yet another case of westerners being an easy touch for money? After all, all westerners are wealthy!
In spite of these reservations, we have decided to take the risk. There’s no doubt that these are intelligent, articulate women who have simply lacked the opportunity to explore their potential. Two women are very eager to learn stitching when the tailoring centre starts up and another wants to learn to use computers. Maybe others will follow their example.
One articulate mother, when she asked Selvi to admit her child to the Centre, said “I want my daughter to have a decent education so that she can make something of herself, unlike me.” This particular woman is a widow with three children. She sells fish on the seashore. It’s hard to believe that she is illiterate. Younger women are generally excluded from selling fish unless they are widows.
After we decided to undertake a microcredit initiative, Selvi invited the local mothers to a meeting. They all came except one. We enjoyed a long discussion with them about the idea of a microcredit scheme, our concerns about whether they would pay the money back or walk off with it, what ideas they have for setting up small businesses.
Experience from other schemes shows that lending money to individuals is not productive so we explained that they would need to work in groups of six or eight. They divided up into four groups from different parts of Muttom, Jamesnagar, and Katyarpattinam (the villages beside the center) to come up with simple business plans. We asked them to tell us (a) who would be in their group, (b) what would they sell, (c) how much money they wanted to borrow and (d) how the finances would work.
The women came back within half an hour and we were very impressed with their ideas and planning skills. We asked each group to now appoint a leader and a deputy who would be jointly responsible for managing the money. We invited them to come back the following week with more detailed plans. One group will buy and sell saris, one will sell coconuts, one will trade in masala (spices) and the fourth will trade oil, rice, flour, soap etc. Each group asked for 10,000 Rupees (about 120 pounds.)
Eight women came back the following week. They are very eager to get started before Christmas and seem grateful to be given the opportunity to start businesses with a zero interest rate. They explained that they would buy the goods as a group and divide them equally. Each member of the group is responsible for selling her share. Each week they will meet and repay their loans to the leader of the group. At this point, they’ll decide how much capital to repay and how much to distribute as profit. As the capital is paid back, they will buy more products. Two groups also said they would like to give a percentage of their earnings to the Centre, as they are so grateful to Selvi for what she is doing for their children.
Each group leader will report to Selvi once a month to go over the accounts. We explained that although the money belongs to the Centre, it is an indefinite loan to them and in essence is their money to help them improve the quality of their lives. Each group signed a contract, which embodies these principles, and they seemed very happy with this. They met with Selvi on December 6 and set off with their money. Will any group make a success of this? I do hope so.
I would like to thank Jim James (my son, who currently lives in Beijing, China) for generously donating 500 pounds to start this microcredit scheme.
We are very excited about this womens’project and will watch their progress with great interest. We know that the children are so happy to see their mothers involved with the Centre. We will keep you posted.
-- Jill Hemmings
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Posted by: Consulting service | 27 March 2010 at 07:53