Archive for the ‘Loans’ Category

Traditional moneylending – informal, flexible, trust based and changing fast

As Microfinance Grows in India, So Do Its Rivals is the title of a recent WSJ article by Ketaki Gokhale which begins so,

The practice of making tiny loans to poor people, or microfinance, was supposed to help drive traditional village moneylenders from rural India.

Instead, traditional moneylenders, who typically charge high interest rates, are thriving, even in areas most heavily targeted by microfinance, [..]
Even as the government and nonprofit organizations came together to create the Indian microfinance market in the 1990s, traditional moneylenders’ share of total rural Indian household debt grew to 29.6% from 17.5%, according to a government survey.
[…]
One potential reason for their growth: Some microfinance borrowers say they need village moneylenders to help them pay their debts on time. Some academic researchers believe the moneylenders are keeping afloat many microfinance groups.

Peer pressure to pay back microfinance loans is intense, because microlenders almost always require borrowers to join small, tightknit groups. If one member defaults, none can get another loan. Microloans have a stellar repayment rate — close to 100% — and some analysts believe a hidden reason is the stopgap provided by moneylenders.

Drive out the village bania, a caricatured movie villain whose like has not graced the silver screen for quite some time. Before we continue to look at the anecdotes in the WSJ article, it behooves us to take a fair and balanced view of the village moneylender in India

There are 34,000 money lenders – and they have lent money to more than 2,00,00,000 farmers. They account for nearly 30% of the rural credit flows – and more credit than all the nationalized banks put together.

They charge between 18% to 36% p.a. interest generally. Lesser than what most ‘educated’ credit card users pay – and what ‘modern’ banks charge their English speaking customers.

So much about ‘usury’ by money lenders.

even while the WSJ’s own Indian arm loses all rights to call itself an objective observer of society.

The article seems to imply that traditional moneylenders charge far more interest than MFIs quoting the CGAP on this “fact”,

But the rates are still lower than those offered by the traditional
Indian moneylending industry, a chaotic jumble of pawn brokers, gold merchants and other private moneylenders — some licensed, most not. For centuries they have monopolized rural Indian credit markets but have been accused of fleecing people who don’t have access to formal banking by charging exorbitant rates and seizing all their belongings as collateral. They typically charge between 24% and 120% annually, according to CGAP.

I’m sure that no one had access to “formal banking” during those very centuries an extensive, sophisticated yet simple system of indigenous banking that extended credit and enabled trade to flourish across India.

I found it fascinating that this article set out to show why the informal economy had to be wiped out by the formal MFI one, in order to better serve the poor, only to support the exact opposite argument anecdotally. Perhaps its MFIs which need to be driven out of rural India’s villages?

One lender, who wished to remain anonymous because his business is unregistered, gives borrowers short-term, collateral-free loans “as quickly as an ATM gives money,” he boasts. Interest sometimes has to be paid on a daily basis and works out to an annual rate of 48%.

The poor use his loans as a stopgap when they can’t make their weekly microfinance repayments because their income was less than expected, he says.
[…]
The difference, however, is that the moneylenders give loans faster, without asking the women to form groups and serve as each other’s guarantors, as microfinance lenders do in order to ensure a higher repayment rate. They also charge significantly more than the four microlenders serving the neighborhood.

“Group pressure makes us go to moneylenders” to cover their microfinance loans, says Baleshwari, who goes by only one name, as does her sister. “We get small loans for 15 days to fill the gaps when we can’t pay. If you lag behind, the rest of the group members can’t get new loans.”

This dynamic is why some analysts believe the village moneylenders are actually floating the microfinance lenders.

The inherent conflict between the schedule of payments and the irregular income stream of income is the crux of this research. Rural MFI consultant and CGAP consultant  Brett Matthews had pointed out over many emails that MFIs prefer not deal with seasonality yet it was an overwhelming aspect of rural life,

But here in Mahabubnagar, few women have started their own businesses. Some of those in business have to rely on moneylenders. Microloan repayments begin the week after the loan is disbursed and continue with weekly payments. Most businesses don’t produce instant profits, and many are seasonal, so moneylenders can help when funds are tight.

This challenge was observed in The Philippines during fieldwork and discussed here  – specifically pointing out that MFIs expect repayment to start the week following the loan, an additional burden if the business for which the loan was secured needed some lead time to get going. One wishes the author had shared her source for this insight as it would have been interesting to follow up and explore other findings in this subject area in greater depth, if available.

Where microlenders, relative newcomers to rural India, rely on peer pressure for repayment, private moneylenders have historically been conservative in their practices: extending loans based on an intimate knowledge of people’s finances, and building their client bases over many years,

 

Trust.

The most critical element of doing business within rural communities everywhere as well observed among the urban BoP. What are the odds that your neighbourhood moneylender would be open to negotiation on smaller payments made as and when cash was in hand since he knew how and where you made your money?

But since microfinance took off in Mahabubnagar, he has seen moneylenders start to “adopt the methods of microfinance” — small loans, large volumes and regular repayments — “to scale up their business.”

In summary, it seems that traditional ways and means which offer speed, flexibility and trust are definitely in danger from their rivals, the
microfinance organizations but not that of being pushed out. Instead we
find they too are taking on the practices of high volume micro loans to
scale and compete with these newcomers.

Banking on Trust

Following up on the Reserve Bank of India announcement mentioned below to allow small shops and phone kiosks, etc to handle basic services on behalf of banks – I directed questions around potential receptivity today.

I spoke to a woman who runs a terracotta pot making business. It is unusual in this area for a women to do so but her husband is an alcoholic so she manages the operation herself. She currently uses a local community savings scheme on which she receives interest if she makes regular payments for 5 years. She can also take a loan from the scheme to cope with seasonal fluctuation in earning – at slightly lower rates than banks. I carefully described the upcoming developments and her response was that she wouldn’t use shops, etc for banking as a few years back many people in her area got burnt after using outside middlemen for banking services for 6 years and lost all their money. One imagines that perhaps over time she would use such a scheme but she certainly wouldn’t be an early adopter.

This raises the issue of trust in new banking ventures… and indeed any new services.
I noted in the
white paper from the CGAP blog about their initiatives in Malawi that they have: “found that catering to local opinion leaders, developing a road show to build brand awareness, and utilizing radio as a key medium of communication are important components of their strategy that have evolved through their experiences.”

These communities are very close knit and trust is not won easily but is essential to adoption of new services. A further concern was access to her money anytime – which she has with her savings scheme if an emergency arises and is another reason she cited to not wanting to use a formal bank in its current capacity.

My informant also mentioned that she preferred her private savings scheme as she fears a bank account could be accessed by her husband (Indian banks probably need to a better job of countering this assumption if indeed it is not the case). She seems quite successful in keeping her family’s money safe from him but he does menial work at a local liquor store in exchange for alcohol.

Although she doesn’t own a mobile phone… many men and women in the area do. One notes that Indian mobile banking does not include as inclusive initiatives as M-Pesa. It seems that this is partly because the RBI approved banks over mobile network operators to conduct services. The resulting offerings haven’t effectively reduced barriers for the unbanked at the bottom of the pyramid.

Seasonality and its influence on rural BoP household financial management

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Fallow field, Sawai Madhopur, Rajasthan India  January 2009

I first noticed the influence of seasonality on income halfway during the Indian fieldwork. On one hand, its but natural that the seasons are linked to a farmer's cash flow, dependent as it is on the harvest. But it was when I met the silversmith that I realized that even his income was influenced by the harvest season simply because so many of his customers were farmers. This led me to start asking everyone else that I met whether they noticed any pattern of change in their income over the course of the natural year. Just about everyone could identify the high points and the lows, regardless of whether they themselves owned land or were farmers themselves. We could stop at this point with the assumption that rural economies are linked to the seasons and impact the majority of the closely knit community.

However, I found that in The Philippines, Jesse the furniture maker, could also identify seasonal ups and downs in his income over the year, but his pattern of months was very different from the rest of the community. Instead of being linked to the "dry" and "wet" seasons (this was a rice farming region) his peak times were dependent on the holiday seasons of the balik bayan or migrant workers. They would use their home leaves to improve their houses, tending to order new furniture in conjunction with the renovation or building work done during this time.

This leads me to say that while one could define seasonality as solely the influence of nature on the land, in the context of learning about irregular incomes, I'd prefer to expand the definition to include any reasonably predictable patterns in cash flow based on the earner's prior experience. This would then differentiate known changes in cash flow from the truly unpredictable – natural disaster say or the random – how many bottles of wine might be sold today.

Thus, in rural communities, such as those studied, one might hazard a guess that the various mitigating behaviours, such as maintaining multiple streams of income or managing a portfolio of "deposits" that could be converted into cash at different durations of time, emerged from the experience and knowledge of the known, natural rhythm of the larger cycle of seasons but is also used to smoothen the volatility of the random and unpredictable in the shorter time spans. Nature would teach that there are things beyond the control of the human being, but experience would permit the control of that which could be managed.

Some thoughts on community based models for sharing costs

We found that the key factor that makes 'prepaid' payment plans
(whether its for electricity, mobile phones, water etc) so attractive
to the BoP customer, in the context of their own behaviour patterns
regarding the management of their personal finances. This is the fact
that this model puts significant control over time – frequency and
periodicity and money – varying amounts, in the hands of the customer
and thus fits in with their need to manage their varying cash flow from
multiple income sources with a great degree of flexibility.

Furthermore,
among rural communities in the low income demographic, trust or social
capital – that is, the community ties and social networks – plays a
significant role in the success of existing informal yet traditional
means of borrowing, lending and sharing wealth and expenses.

Therefore, our analysis of the user research conducted across BoP communities
who manage on irregular income streams and the subsequent synthesis leads us to conclude that payment strategies most likely to succeed
would be those that are:

  • Flexible
  • Robust
  • Self sustaining
  • Involve the participation of the community in the decision making

AND critically,

Places significant control over the actual timing of the payments and the amounts paid in the hands of the participating community.

Quick summary of workshop findings

Our workshop officially ended today although there's still a lot of 'mopping up' to be done not to mention the final documentation. We had the opportunity to analyze groups of users observed and interviewed by me in rural Rajasthan (India) and a barangay in Iloilo (Philippines) as well as some basic personal financial management information on users sent in by John Lumbe from Malawi. Here is the quick and dirty, summary of our findings:

Broadly speaking, we saw far more sophisticated cash flow management than has either been expected or assumed by those who live on "irregular and unpredictable" incomes. In fact, one future task is to parse out whether the terms "irregular and unpredictable" can even be applied – at this moment, it seems as though it would be far more accurate to say that they do not manage on a 'fixed amount arriving on a predicted day/date' i.e. a salary. The second element to be reconsidered is whether those at the "BoP" especially in rural  communities can even be accurately called the "poor" – living on $2 a day is one thing, but quite another when much of the hyperlocal economy may not even be based on actual cash.

Cash flow and working capital is managed by manipulting a combination of elements such as experience – a farmer can look at his fields and guesstimate the next harvest's yield and approximate timing; social capital in the community – whom to lend, borrow from or do 'business with'; spreading risk across multiple sources of income and finally, the control over two key elements – time: as in periodicity and frequency and money: as in amount and also "form" (is it cash or a good?).

The aim of all of this complex maneuvring is essentially to:

Increase the ability to plan

AND

Decrease the variance between Income and outgoings

That is, we observed a pattern of behaviours across the various geographies and range of "bop" income levels (the Indian community being the 'wealthiest' while the Malawians living closest to the edge) such as:

1. Maintaining multiple sources of income simultaneously
2. Allocating multiple resources (for the same function) according to cost
3. Managing a "portfolio of investments" that act as deposits maturing over different durations of time (the shorter turnaround of a chicken ready for sale or consumption versus the longer term investment in a harvest of wheat)

All of these behaviours also serve to provide a cushion against the impact of shocks, both predictable and random.

In essence, it was pointed out to us that this demographic we were studying displayed patterns of fiscal management closer to that of diversified corporations than individual customers.

Sudhir Venkatesh and the rise of the “other” BoP

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Photo credit: Jim Wilson/The New York Times

Even as we observe and study those who live on irregular and unpredictable incomes in the lower income strata of the developing world, articles in the media this week catch our attention to inform us that these challenges are not simply for the 'poor' but in fact, being faced by people in the richest parts of the world as well. This New York Times article "Cities deal with a surge in shanty towns" show the scenes we're far more accustomed to seeing in urban India or Africa are now visible in Fresno, California. Here's a context setting snippet from this 26th March 2009 article,

As the operations manager of an outreach center for the homeless here, Paul Stack is used to seeing people down on their luck. What he had never seen before was people living in tents and lean-tos on the railroad lot across from the center.

“They just popped up about 18 months ago,” Mr. Stack said. “One day it was empty. The next day, there were people living there.”

Like a dozen or so other cities across the nation, Fresno is dealing with an unhappy déjà vu: the arrival of modern-day Hoovervilles, illegal encampments of homeless people that are reminiscent, on a far smaller scale, of Depression-era shantytowns. At his news conference on Tuesday night, President Obama was asked directly about the tent cities and responded by saying that it was “not acceptable for children and families to be without a roof over their heads in a country as wealthy as ours.”

As we've often discussed, a great majority of the work in the area of social and economic development, social entreprenuership and "design for social impact" are usually among the far more 'glamourous' poor in teeming India or crisis ridden Africa. Yet one man continues his ground breaking work in understanding the informal economy (hidden or underground as the case may be) in the urban 'slums' of the world's richest nation. And his insights are becoming increasing visible in the media as the challenges to deal with these same issues spreads across the world.

Sudhir Venkatesh, a Professor at Columbia University, has just been interviewed by Forbes magazine on the 25th March 2009, and one snippet stands out about the impact and influence of the interstitial space between the formal and informal, as we'd discussed earlier in this blog. From the article titled "The Other Chicago School",

The underground economy includes a vast array of people providing services that are off the books but otherwise legal. Venkatesh enumerates those having a harder time in the face of the recession: office cleaners, squeegee men, informal security guards, "canners" who scavenge for recyclables (there's less consumption now, so less to recycle) and nannies whose employers have been laid off. And as business contracts, underground workers face certain problems unique to their status. They have no unemployment insurance or other benefits, and, with little protection from law enforcement, they tend to resolve disputes by physical means.

Venkatesh prefers to leave detailed prescriptions to policymakers but nevertheless ventures a few. Microcredit loans, as well as education on risk management and planning, could help shift some black market entrepreneurial zeal above ground. He heartily approves of the proposal by Barack Obama–a fellow pickup basketball player at the University of Chicago when Venkatesh studied there–to expand the Earned Income Tax Credit to give a bigger break to low-income parents. Sales taxes also hit the poor hard, he says; one way to help would be to let them use prepaid cards to buy goods tax free.

Venkatesh is struck by how much the black market resembles the wider society in which it is enmeshed. In the same Parisian banlieues that erupted in riots in 2005, he observed an "almost aristocratic," highly centralized criminal operation. In the ghettos of Chicago, by contrast, he observed underground workers convene an ad hoc court to solve a dispute. His dismisses the "culture of poverty" theory, which suggests that poor blacks in America don't work because they don't value employment. "People in America want to work," he says. They do so ever so industriously, even when they're breaking the law.

This culture of entreprenuership has been observed among the low income demographic across the world, a recent nextbillion.net post "Entreprenuership for survival at the Base of the Pyramid" states,

For those of us living in developed countries, the idea of
entrepreneurship is very romantic and idealistic. It's often thought of
in the vein of "Making your dreams come true!" and "You can change the
world!"  I would almost go so far as to say that entrepreneurship as we
know it in the developed world is a luxury. (Not that this is bad or
anything.  This is just the form that entrepreneurship takes in very
rich and stable countries.) 

Not so in the developing world.  The motivation for entrepreneurship in the developing world is often for survival, not business opportunity.  An interesting point made in the Global Entrepreneurship Monitor in 2006
was that "early-stage entrepreneurial activity is generally higher in
those countries with lower levels of GDP." Why is this? The report
further elaborates that many in the developing world "are pushed into
entrepreneurship because all other options for work are either absent
or unsatisfactory (necessity entrepreneurs)."
 

In this context, there seems to be an indication that Venkatesh's work provides excellent rationale for the design and development of policies or processes that enable innovation or entreprenuership among the urban poor in the developed world as well, as a necessity for survival not simply a "luxury" for the Bay Area denizens. From a 2007 NPR interview "Urban poor cope with help from the informal economy",

The book just does an outstanding job of providing information on the way people have to make ends meet and how people survive," Wilson said. "And the importance of using different strategies."

Off the Books portrays a neighborhood where economic need blurs the lines between legitimate business and criminals. A beauty parlor rents out its space to drug dealers to run dance parties. A pastor lends money to help start a gypsy cab service.

It's also a world where business owners cooperate with one another to a surprising degree. They lend one another money and workers, and swap information about money-making opportunities. Venkatesh talks about a pastor he met who ran a school janitorial service. He was given the chance to take a contract in another neighborhood — one that would have brought in a lot more money.

"But he won't do it because it's the ghetto that enables him to survive, and he feels that if he goes out to a neighborhood where he doesn't know anyone, he's not going to have friends, he's not going to have friends who support him," Venkatesh said. "I mean, it's a very peculiar sort of thing to watch."

Venkatesh says that is one of the big downsides to the underground economy. People who work off the books for long periods can end up afraid to leave that world and isolated from the broader economy — which limits how much money they can make. He says that's an issue that society will have to address if it ever wants to bring real growth to the inner city.

In summary, two key points come to mind after evaluating the information gathered here:

One: That social networks (in the real world) are the key to survival – trust, community as insurance and credit, all the elements of close knit social behaviour observed at the BoP in the developing world are echoed in the nuances of Venkatesh's observations, underlining the critical importance of these values.

and crucially, imho,

Two: That all the learnings and development work being done for the BoP elsewhere now really require the realistic evaluation of their portability back to the developed, where the system are already in place, unlike in the emerging markets, as some of the snippets above demonstrate, and work against the needs of the earners in the informal economy.

Interestingly, taking a leaf from CK Prahalad's recent observations in BusinessWeek about dominant logic and the cross pollination of innovations from the emerging markets to the developed world, what are the lessons from the decades long focus on improving the plight of the poor in far away places that can provide insights to the design and development of solutions and systems for the 'emerging' BoP right here at home?

There can be no shortcuts at the BoP

Cabatuan, Iloilo Province, The Phillipines, March 1st 2009


This is not meant to be a complaint about any one organization so much as an observation made by happenstance while in the field. As written about earlier, my hostess in provincial Philippines is a micro entreprenuer running a small village shop which she started with the support of a loan meant to empower women at the BoP. Her story of the entire experience struck me enough to look up online how exactly Grameen had designed the microloan process, for some things in her narrative seemed to imply that the system itself was hobbling the growth of her business.

What I learnt opened my eyes – there seems to be a disrepancy between the original methodology as laid down by Mohd Yunus and the process followed in the field in rural Philippines. A step or two in the process have been removed, specifically this one,

Groups of five prospective borrowers are formed; in the first stage,
only two of them are eligible for, and receive, a loan. The group is
observed for a month to see if the members are conforming to the rules
of the bank. Only if the first two borrowers begin to repay the
principal plus interest over a period of six weeks, do the other
members of the group become eligible themselves for a loan. Because of
these restrictions, there is substantial group pressure to keep
individual records clear. In this sense, the collective responsibility
of the group serves as the collateral on the loan.

This cleared up the confusion I had when I was listening to the details of how the capital loan worked for my hostess, she said they were initially placed in groups of 5 – why, I asked, and she said she had no idea because no, there was nothing involved with the original group of 5, they were only given a loan when the group reached the minimum size of 20 and all 20 were responsible for each other’s performance. That was another major sticking point with the end users – the women who took out the loans because while you may come up with a group of 5 whom you know very well and can recommend, to be responsible for the performance of 20 people, some of whom you may not know as well with respect to their financial acumen or entreprenuerial ability meant that the system was already set up to work against the concept of, to quote,

there is substantial group pressure to keep
individual records clear. In this sense, the collective responsibility
of the group serves as the collateral on the loan.

Imho, there is a difference in peer pressure and collective responsibility involved in a group of 5 versus a group of 20.

Still, as I said in the beginning, the point here isn’t to make a complaint but simply to wonder at what point did the system evolve away from the original successfully working model leading to the challenges that were being faced by the local entreprenuers? And why? Especially since Grameen’s original methodology states in point number 5 on design and development,

The system has evolved gradually through a structured learning process, that involves trials, errors and continuous adjustments.

A clear articulation of the user centered design process where the original prototype of the model was tweaked and changed based on real world field testing and observations in order to evolve into a model that worked, and one assumes, could work across regional and cultural differences. (except perhaps the weekly payment plan but that’s not a reflection of this model so much as a questioning whether only fixed durations are required for those on irregular and unpredictable income streams)

This observation gives rise to the question of scaling and implementation – if a model has been designed and tested and developed into a successfully tested working model, how do you ensure that what are perceived to be expedient shortcuts but could end up being critical to the success of the process do not occur randomly ? Particularly since this user experience resulted in a word of mouth local opinion that its better to not take a loan if you’re interested in working capital to start a business?

This will be something to be discussed during the design process – is it possible, if at all, to strip the insights down to some basic fundamental principles that result in something simple and easy to understand and replicate for continued successful implementation without the need for quality assurance?

The ability to choose your tradeoffs is empowering

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Sari shop, Old Delhi, India, January 9th 2009

Sonia is just 26 years old. She went to work at age 9, when other little girls were going to school. She didn't say if she started working as a gofer in a beauty parlour after school and actually graduated, though it seems likely since she sounded polished and literate for someone whose father runs the neighbourhood ironing stall. But that can be misleading as Professor Higgins would be wont to say.

She is the eldest of five – two brothers and two sisters. Her mother passed away when she was very young and her father is a drunkard, as they say. The household rests upon her shoulders, and still, she smiles as she talks to me about her work and the choices she has made in life and the decisions that she has taken. There is a strong sense of 'shakti' here, although at one point she gazed sightlessly across the road to tell me that these days, she cannot sleep at night, financial worries keep her uneasy, tossing and turning.

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Friendly neighbourhood ironing guy

Let me tell you her story. I only found out about the real hardships later, after she had left, for in our conversation which lasted over three hours, never once did she let slip the true extent of what was happening in her daily life.

Head of household – single, 26, female, trained only as a cosmetician. Skilled physical labour, not casual, mind you, pedicures, manicures, facials and all of that stuff. Works on demand, on call, by a roster of regular clients who invite her over to their homes to give them personal service, not a fulltime job at a parlour. A decision she made for the flexibility that this gives her to manage her household's needs, her family obligations and all the domestic challenges and chores. The difference in income? Significant enough to raise my eyebrows since her reputation among the parlours in New Delhi is such that she could walk into any one of them earning three times as much as she does right now.

Such are the tradeoffs we make.

Was it worth it, I asked, when you could make so much more? The bleak look is momentarily fleeting and her eyes sparkle as she emphasizes what being mistress of her own time means to her right now with no employer to answer to or beg for time off in the event of an emergency.  Even though, even though, her financial burdens are such that would crush anyone.

Her younger sister has made an excellent alliance with a good family, the marriage is to be in the spring. Everything was planned, they were ready to do good by her, it would make her future. Sonia had been putting Rs 2000 away every month in a 'savings scheme' circle in her neighbourhood over the past few years, scrimping just for this day. She was to receive 250,000 rupees in time for the wedding when the person in charge of the funds disappeared into thin air taking at total of 20 million rupees that the members had invested. Whom can you trust in the city, she said, its not like the village you know where you can't really get away with these kinds of things, after all, how far will you go and besides the rest of your family is still there.

Hm. 

Such freedom and flexibility come at a high price but for Sonia the tradeoff has been worth it, empowering her as it does to be mistress of her own time and working hours, permitting her to structure her days as she sees fit. Her focus is her choice. Her mobile phone her lifeline.

She already knows that she will never marry. She tells me, even as we grin at each other in recognition, that now, after having run her household (including fighting her family's battles with her father and taking over the decision making), making her own decisions, earning money as and when it suits her needs, she doesn't think that it would work for her in the context of her social class, culture and ethnic heritage in general. No, I said, unless you get lucky, eh? She shakes her head and we both know the reality of the chasm that seperates our individual opportunities and lifestyles. She is, after all, a member of the BoP and second generation migrant worker at that. I am simply a second generation migrant worker.

A woman’s work: one widow’s story

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Widow Lady in blue, Dastkar workshop, Ranthambhore, January 1st 2009

I was widowed at a young age. My in-laws were very poor and could not afford to support my three small children and myself but I refused to go back to my maternal home (in shame). I would somehow find a way to bring them up. Initially, managing my own kitchen was very hard. Before this Dastkar was set up, I had to work for a pittance doing hard labour on a daily wage. At night I would sew pieces to sell for what little I could get.

When I had some cash in my hand I would buy necessities like oil, flour, dhal in small amounts, just for 3 or 4 days at a time. Even then, I managed to put little little bits aside, I had a daughter to marry off and two sons to educate. I had to think of them and their future. There was no one to help me.  I think that women think of the future even when they have to manage on daily earnings, but the men don't. If there is cash in their pocket they will spend it.

Then Dastkar came after a few years and I joined the women's cooperative. At that time (18 years ago), everyone in the village was against this scheme. What? Women should not be going out there to earn money. It would spoil them, it was disrespectful, it would bring shame. During all of that, I was going there because then I had no choice. I had to find a way to support my children.

Today of course things are different. They saw how we earned our income working here but still maintained our dignity and self respect. We are not 'loose women'. I have established a bank account, I built a pukka house, I got my daughter married off well. I didn't educate my elder son too much, he had no head for it (ROI) – he's now got a shop selling caps and tshirts (outside the Tiger Sanctuary) but my younger one is studying. He helps his brother in his business as well.

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The widow's daughter-in-law in yellow (privacy requested)

See, now that the child is weaned, I have brought my daughter-in-law to be trained here as well. Money empowers a woman, she can spend it as she likes and save it too. Its her money to do as she likes. Nobody can tell her what to do with it. She has earned it herself.

We (the senior women at the cooperative) have begun a lending circle among twenty of ourselves. We charge each other interest for borrowing against the common pool of money that we have deposited at the bank as security against these loans. Yes, its an extra 2% a month on top of the bank's interest rates but we see it as a way to make our money earn for us and deposit it back into the account. Our lumpsum has grown tremendously and we started with just Rs 200 per member. This gives us a chance to draw a major loan against our own money for weddings or building a house or some other major expense.

(She beams shyly yet with pride, her innate strength and determination that led her to this respected status in her community, though a widow, obvious in her every word and gesture.)

Subsistence farming: managing on two harvests a year

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Photo credit: Goverdhan Meena, January 3rd 2009

We have two harvests a year. One near Deepawali (Oct/Nov) and one near
Holi (March). This one is our expensive one, I've planted wheat,
mustard and horsegram.

Wheat
take 5 parts of water compared  to 2 parts for mustard and only one
part for the lentils. The cost of running the diesel engine to irrigate
my land from the pump has been rising and rising due to the cost of
diesel. I have to run this pump, just for my land alone for 36 hours a
month and it can cost upto Rs 100 an hour.

We look to feed
ourselves first before we sell anything. I keep sacks of wheat in the
house, I'm educating a son in college (in a town 50km away) and a
daughter in high school with my aunt (in another village). See here, my
son has come home because he needs flour for his daily bread and also
fees – I will sell a sack now for some cash. We plan our year around
the two harvests. Of course, only He knows if the harvest will be good,
whether the rains will come and if insects get into the fields but this
year it seems it will be a good harvest. We plan marriages and other
big expenses around the harvest. Those are the only times of the year
we have the money. The rest of the time we simply manage, if an
emergency arises, I'll take a loan and let the monthly interest accrue
until the next harvest.

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Why are you educating your daughter?  What is your thinking how book learning will help her as a farmer's wife?

See
here, my mother and wife are illiterate. You see how they are unable to
even communicate with you, I have some book learning so I can talk to
you in proper language (Hindi, rather than the local Rajasthani
dialect). They cannot go anywhere alone, they are unable to make out
even what the signs say at the train station or bus stop. Education
means that my daughter will not always need someone there with her, she
will be able to understand and make her own way, understand the
medicines the children might need and so many other things. Times are
changing, the young men are not farmers anymore. I don't want my son to
be a farmer like me, no, I will never sell this land, it has been in
our family for generations, but it can always be sharecropped. He is
studying Commerce, a bachelor's degree, it will make him eligible for
good jobs. We will look for a literate wife for him, so in turn, my
daughter too should be educated, no?

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Yes, we have a mobile phone, so does my son. We can stay in touch.
Incoming calls are free and I just fill airtime when I have an
important call to make or there is some reason, otherwise it just stays
at it is. Its made a difference, we can stay in touch with our
community and the village, before sometimes months would pass before
news of a death or birth would reach us.

No,
there are no profits to be made as a farmer. I am self sufficient, I
can feed and clothe and educate my family but there is little left over
once all the seeds, the fertilizers, the diesel and all have been
bought. We do actually have another harvest, the one near Deepawali,
which we call the "free one" – we grow various grains that don't
require as much water or fuel or fertilizer and are easier to grow and
sell. Those profits are the little extra cash we make each year. This
upcoming harvest with the wheat and the mustard, its our investment
harvest, it costs a lot but the wheat is our staple and our savings. It
is our "gold".

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