Women banking with women, since 1974

March 08, 2013

Ahmedabad

Before the upcoming all-woman PSU banks, a cooperative precedent in Gujarat. Today is International Women’s Day Jyoti Makwana begins her day walking through the alleys of Ahmedabad’s Gulbai Tekra slum, where she lives. She meets a neighbour, makes small talk with her and goads her to pay the instalment on a bank loan she had taken. As she moves on to the next house, Jyoti smiles. Mohan Makwana, an idol-maker, has asked her if men too can get such a loan.

Shri Mahila SEWA Sahakari Bank Ltd is run entirely by women, over 200 of them, and serves only women. Jyoti, who sells toys for a living, also works as a bank saathi.

The country’s first all-woman public-sector bank, announced in the Union budget, is due to come up in November. The SEWA bank has been running for decades, a cooperative set up under a trade union in 1974.

Jyoti hands over the day’s accounts to Nikita Rawal, "a hand-holder" with the bank. Nikita takes a survey of the area once every 15 days, prodding loan defaulters and savings accounts holders, at times gently, at times sternly, over cups of tea and between small talk.

Jyoti is one of over 100 women from needy backgrounds working with the bank that began under SEWA (Self Employed Women’s Association), a trade union that grew out of the textile mill labourers’ movement. It was founded by Gandhian and lawyer Ela Bhatt. Beginning with an initial capital of Rs 1 lakh collected by 4,000 women, it today has seven branches in Ahmedabad and Gandhinagar that serve four lakh needy women, most of them small trade workers (vendors) and daily wage-earners.

"With no blueprint on banking for needy women, we started by offering vanilla loans and small savings schemes that initially made losses," says Jayshree Vyas, the SEWA bank’s managing director.

"Over the years, we studied the financial needs of women and their lives, and improvised," she says. "Now, we first try and get them not to borrow from moneylenders and loan sharks at high interest rates of 10 or 11 per cent. Later, we educate them on saving small amounts from their daily wages everyday. We get them to chart out their life goals and then customise their loans according to these goals, ranging from Rs 1,000 and going up to lakhs. These women are nearly always saving for a rainy day, and the rainy day keeps coming in the form of a natural calamity, a festival, an illness, a fraud or even bad business."

The bank has developed a simple financial counselling approach through communication tools and neighborhood ‘bank saathis’ such as Jyoti. These women have easy access to customers’ homes and are from their communities. Every day, two bank saathis of each area in Ahmedabad move about to collect savings or loan instalments and deposit these with the hand-holders, who get the banking process started.

"Once they open a bank account, we start financial literacy classes through simple communication tools such as films and mobile vans," says Vyas. "We have created simple banking solutions — passbooks with an image characteristic of the loan they have taken, numbers written in Gujarati on a passbook, a savings plan explained with an ant-grasshopper story, a pension plan as kamao dikra (a son who will take care of you in the old age)."

The bank is governed by a council of 15 members, of whom the women customers themselves elect 12. "I remember not knowing how to count, and opening an account with Rs 5, and taking a loan of Rs 5,000," recalls board member Lakshmiben Makwana, 56, who lives in a chawl. "I went on to rope in 400 women. Today, I have got my three daughters and my son settled."

Apart from various savings plans, group loans and recurring deposits, the bank offers insurance for life, health, natural calamity, accident, death in the family and widowhood, sickness and assets, besides floating schemes for the entire family.

"These women are counted as high-risk in insurance, which is why we have linked savings, credit and insurance together to make it simpler for them. The interest earned from fixed deposits, too, is sent as premium for insurance," says Nikita Rawal, the hand-holder.

"The bank saathis originally were groomed from among SEWA members, but the more recent recruits have usually been savings account-holders who are well known in the area where they operate," she adds. "Sixty per cent of the bank work happens on the field, done by bank saathis who then report to the 100-odd bank executives called hand-holders."

The bank today has a share capital and reserves of around Rs 40 crore, besides a balance of Rs 200 crore. It is waiting for a licence from the RBI to open branches across the state. It recently introduced the CBS (core banking system). It has applied to the National Payment Corporations of India for linking 10,000 ATMs for its 200 debit cardholders.

One ATM is at the bank’s main branch, housed in a corporate building near the river Sabarmati. Inside are the all-women staff serving women customers. On the walls are black and white photographs of women workers in various industries in the 1930s.

And one of these frames shows current finance minister P Chidambaram, inaugurating the bank’s first pension scheme in 2006.

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