As we embark on a new year, I have been thinking about what it takes for a person or a society to act decisively in a world of endless challenges and obstacles. Throughout my professional life, I have witnessed many triumphs against the odds, extraordinary achievements that often start with a small group of people trying to solve a problem. In the best cases, local communities, government and the private sector align and invest in programs and policies that create more opportunities for these groups to thrive.
The extraordinary success of women’s self-help groups in India represents one of the best results in this field. Created by women determined to build a better future for themselves and their families, these groups have prospered thanks to innovative financial and infrastructural support from the Indian government. With more than 80 million women participating in 7.5 million groups, the country is supporting the world’s largest community development program, which has become a key component of its economy.
Raising a woman’s economic power strengthens her personal autonomy and empowers her to play a greater role in her family and community
Especially in rural areas, women face gender barriers to fully participating in their communities and earning a living. Many, unable to open a bank account or access credit, rely on informal loans from relatives, friends or moneylenders. Furthermore, traditional family structures and social norms limit women’s participation in activities necessary to start or expand a small business.
Access to savings and credit
At first, the new groups relied on their members, albeit often impoverished, pooling what little money they had to start their activities. The Indian government has done its part to alleviate this difficulty by offering unsecured loans without the need for a formal, registered business entity. An important factor is that these loans are offered at a very competitive interest rate of 12%, which is reduced to 7% if the group pays off its loans within 30 days of the due date. With this support, each average self-help group was able to borrow about 200,000 rupees (2,266 euros), and in 2021 the limit for unsecured loans was increased from 10,000 dollars (9,395 euros) to 25,000 (23,489 euros).
Many women, unable to open a bank account or access credit, rely on informal loans from relatives, friends or moneylenders.
Over the last decade in India, more than $60 billion has been made available to self-help groups, and the women in these groups have saved a total of about $6 billion. Access to low-interest loans continues to help a growing number of women create sustainable sources of income, accumulate assets and savings, and strengthen their financial security. And individual members of those groups are developing more than financial skills; they are also raising their self-esteem and influence within the community.
For example, a self-help group in the village of Chak Singar Barari, in the State of Bihar, was able to structure their venture so that each member received between Rs 3,000 and 4,000 per month. Each woman has her own story: Sunila Devi enrolled her children in private schools, Chitrekha Devi is studying for a high school diploma, and Pushpa Devi has started her own ambitious mobile sound system rental company, enabling her to employ to other people.
Increased economic power
If we multiply these stories by millions, we can gradually understand the effects of these groups on society. As each woman contributes more to her household income, she has more say in the respective decisions. And, as a collective, they show what is possible when responding to one of the biggest barriers to gender equality: the rise of women’s economic power.
The goals should be clear: in this case, making credit affordable and accessible, developing and strengthening women’s financial skills and credit histories, as well as their financial security. And the different actors must support decisively. If we look closely at the details of self-help groups in India, we will see the dedication by all parties involved – the various economic sectors, states and organized interest groups – to bring people, resources and tools together necessary to be successful on this scale. Federal and state government entities participated, along with banks and other financial institutions, researchers, and a broad collaborative network of voluntary and nongovernmental organizations in communities across the country.
This combination of determination, collaboration and political will can be applied to other barriers to gender equality. One of the most persistent I hear from women, most recently during a visit to Dakar, Senegal, is that women entrepreneurs also need business development services, skills training, and access to markets and supply chains. India’s program shows that this is feasible: about 20% of SHG members now have these additional supports, and initiatives are being implemented to promote cooperatives and women-owned businesses.
We all deserve the opportunity to live a healthy and productive life. My purpose this year is to continue to be inspired by the determined initiatives of individuals and by our collective ability—as demonstrated by the remarkable success of self-help groups in India—to innovate as we strive for a healthier, happier world. and fair.
