One of Aastha's beneficiaries continuing her bandage tie
and dye work while on a visit to the branch with her SHG.
and dye work while on a visit to the branch with her SHG.
Microfinance and Education: Potential for Increased Female Empowerment in India
I never anticipated the life-changing potential housed in 5000 rupees. In America, 5000 rupees translates to roughly 90 dollars at the going exchange rate. Now imagine starting up a business with 90 dollars. Impossible? Not for the 221 Self-Help Groups Aastha Credit Co-Operative Society Ltd. has funded with a starting loan of 5000 rupees over the last three years in Jodhpur, Rajasthan. “Manush-ji,” I asked as I looked into her kind face, “Has Aastha changed your life by giving you access to credit?” As my translator and site director, Madhu, quickly relayed my question to Manush in Hindi, a wide smile spread across her face, “Yes, we are really happy. All of the ladies say that it has changed their lifestyles because they’re busy and they can earn each month.” While interning for Aastha during the summer of 2012, I witnessed the continual flourishing and eventual expansion of Manush’s bandage tie-dye business as she and her fellow Self-Help Group ladies applied for a second loan of 10,000 rupees. Aastha’s Self-Help Group loan structure, offered primarily to women below the poverty line, consists of 10 women who take out a group loan, invest that loan in raw materials for a craft business, and use profit from the business to pay back the loan. By creating jobs for women and allowing them to eventually accumulate profit and save, microfinance institutions like Aastha play a hugely successful and popular role in current initiatives to empower women. Despite implications inherent in the Self-Help Group loan structure, it serves as the most effective vehicle for women’s economic empowerment in India, and by providing educational initiatives for basic literacy and mathematics with microfinance options, this structure can build the capacity of its beneficiaries and be further improved.
Although current critiques of microfinance situate it within the discourse of shadow industries, emphasizing these institutions’ notoriety for exercising hegemonic control over poor populations, I did not observe any such implications throughout my nine weeks in India. However, I did observe small-scale operational and logistical problems inherent in the Self-Help Group system. Lamia Karim’s argument encapsulates the notion of microfinance institutions acting as shadow industries. Karim argues that because microfinance institutions provide credit, jobs and sustenance to financially poor populations, they possess dangerous power consistent with that of the states. This power holds the potential to, “regulate people’s behavior and subject them to NGO mandates and priorities” (2008, p.4). Expanding on this preliminary thesis, Karim asserts that microfinance utilizes Bangladeshi cultural notions of women’s honor and shame to further their capitalist goals. Because each family’s honor depends on the behavior of its women, if a woman fails to repay her month’s share of the Self-Help Group loan, she bring shame upon her entire family (2008, p.6). This threat of shame helps to ground the microfinance operations in Bangladesh, but overtly takes advantage of cultural norms. Within the Indian context, however, the microfinance sector operates devoid of Karim’s “economy of shame,” (2008, p.6). Though the Indian government’s rampant corruption inhibits the (Asadullah and Yalonetzky, 2012, p. 1159) successful implementation and regulation of pro-poor policies as well as dissemination of health care, creation of jobs, and educational opportunities, the government takes responsibility for providing these services rather than NGOs. Thus, Indian NGOs do not possess the unequivocal power of those in Bangladesh and cannot act as Shadow Industries to the same degree. Furthermore, Indian microfinance institutions do not ground their future success and sustainability by taking advantage of cultural norms. The notion of female honor, though present to a smaller degree in Indian culture, is emphasized more heavily within the Bangladeshi cultural context and does not provide the security microfinance institutions in Bangladesh seek.
While the aforementioned deeper implications observed by Karim in Bangladesh do not coincide with the realities of India, I observed smaller operational problems within the Self-Help Group structure over the course of my internship that is dually noted in academic discourses of development. While interviewing a Self-Help Group specializing in bangle making, the beneficiaries often noted that they would, “work through the night,” to complete orders for the shopkeepers who bought their wares. J.A. Brett notes that this strain put on women due to the combination of domestic duties and Self-Help Group business enterprises can result in implications for either their business or health (2006, p.12). Furthermore, women’s reliance on the cooperation of forces outside their control such as public transportation for obtaining raw materials and bringing finished goods to the market draws uncertainty into their aim for success. Other more systematic problems afflicting the Self-Help Group structure I observed pertained to the documentation of paying members and the resulting accountability or lack thereof. Manush’s bandage tie-dye Self-Help Group proved to be an exception in that a small number of members were literate, and thus could document in writing the women who had and had not paid each month. The majority of the Self-Help Groups I interacted with stamped their thumbprint onto their legal documents when taking out loans because they could not write their own name. Thus, the problem of female literacy heavily implicated the success of microfinance Self-Help Groups because without documentation, Self-Help Group leaders struggled to enforce accountability for all of their members’ payments.
To counteract problems of accountability inherent in the Self-Help Group loan structure, basic literacy and math educational initiatives should be disseminated with micro finance services, thus training women not only to document finances and uphold accountability, but also providing them with the skills to read and comprehend financial documents and policies that pertain to them. This emphasis on practical literacy stems from the works of Paolo Freire, who reasons that, “literacy is the fundamental of education as a whole” (“Paolo Freire: An Incredible Conversation,” 1996). Freire additionally advocates for practical education, teaching and tuning skills they will use in their daily life after their education. Mahila Abhivruddhi Society Andhra Pradesh Hyderabad (APMAS) and the Center for Microfinance (CMF) in Jaipur, Rajasthan advocate for a similar dual approach to microfinance as offering both credit and educational training in basic math and literacy, “Self-Help Groups must be…accompanied by basic math and literacy programs for beneficiaries” (2006, p.5). While these agencies noted the need for educational initiatives as a vehicle for improvement, they continued to argue in favor of Self-Help Groups because of the savings habits they promote among beneficiaries, easy access to credit they provide, increases in family income resulting from participation in these programs, the ability to be free from money lenders who charge high interest rates, and the employment generation these programs create (2006, p.6). Thus, micro finance must continue to expand into areas in need, but grow intelligently by providing educational initiatives alongside their credit programs.