Establishment of Micro-Finance Networks for Poor Tribal Women in India

Introduction
Since 1998 ICPRD has initiated its micro finance advocacy campaign for the poor and tribal women in the remote and backward districts of Jharkhand. ICPRD’s intervention in a poor and backward state like Jharkhand is a trailblazer due to the challenges in Jharkhand in terms of HDI reflecting structural poverty, systematic exclusion, social disintegration, amongst poor/marginalized groups such as women, tribals in a caste ridden feudal economy.

Given the severe field conditions in the macro and micro-environment in Jharkhand and Orissa, project intervention to be successful required building up of local tribal capacities (not merely infuse outside inputs) as envisaged and sustained by ICPRD.    To  build financial systems, which are alien to their informal culture, the process has been extremely challenging.   Through initiating Self-Help Groups of poor women in the area and building their capacities through trainings and exposure visits, the ICPRD project has succeeded, to a large degree, in establishing micro finance networks in the project area - a hitherto unserved / backward agricultural area.  Also savings/thrift habits and on-lending has been initiated of the savings within groups and through banks (30.03%).  NGOs have begun to process forms for accessing loans.

The intervention strategies devised by ICPRD has been providing a momentum to the micro finance and self help group movement of poor women in Jharkhand and Orissa at the local levels (in Deoghar, Dumka, Godda and Jamtara districts in Jharkhand and Mayurbhanj district in Orissa) ICPRD  collaborated and partnered with 15 local NGOs,  working in these communities to build local capacities.

Project Environment: Before
Low levels of literacy (even upto 2% for tribal women), extreme poverty and backwardness, lack of road connectivity leading to isolation of the project area, a monolithic feudal system, patriarchy and gender inequity coupled with naxalism – these were the difficulties and challenges that ICPRD had to contend with when it first entered the project area. 

The women here were shy of speaking to strangers and communicated through sign language, their faces hidden in veils and could not even sign their own names.   

Non-existent or non-functional SHG groups, NGOs not capacitated to handle these groups,  very little access of these groups to mainstream banking institutions ( banks were either reluctant to give loans to these groups or did so only through middlemen who charged money to do so) was the situation that existed.
Braving these impossible odds, the project has made great strides forward in the two years of its existence and changed the profile of the women of the area and through them, of the community.   On the economic front, the project succeeded in establishing micro finance networks and initiated social entrepreneurship with women advocates striving to establish institutional stability in terms of mobilizing savings/credit towards livelihood promotion in remote, isolated areas. About 3400 tribal   women have access to credit and have initiated their own income generation activities in agriculture / allied activities through micro-credit. Through 110 self help group members’ trainings (3400 members) organized under the project, local capacities have been built: they have imbibed the nuances of financial management, accessing financial resources, familiarizing with financial system and linking them with formal banking institutions.

On the social front, it has emboldened the shy and timid women of the area to take on the entrepreneurship mantle and social problems of their communities; stand up to any kind of injustice and inequity. 

Boosting Agriculture Sector
The project objectives were to strengthen the local level agricultural economy, micro entrepreneurship for processed foods / households items (from agriculture and allied occupations including animal husbandry, sericulture; micro-enterprises relying on land based activity such as bio-fertilizers / composts and/or alternate employment to boost lean agricultural season employment (puffed rice processing, chick pea flour (i.e. vegetable protein), jaggery or brown sugar substitute; cattle, sheep / goat / pigs /  hen rearing, fish farming and so forth). This has helped create small savings / thrift, accumulate capital in hitherto poor agricultural families that have very little alternatives to the moneylenders but to mortgage land in lean seasons  to cope with shocks  (young men and women here are so desperate  that choices often were either joining Civil strife movements (Naxalism)  or being trafficked for sexual exploitation or domestic labour). Further, farmers’ families distress is also sought to be prevented by this project that “kept small credit / capital flow ongoing through developing local informal credit funds out of savings in villages as an alternate credit source

ICPRD project in Jharkhand / Orissa  supported the local agricultural economy by building local capacity for providing timely micro credit (through 260 self help groups) to manage credit / thrift / savings, interloaning for agricultural purposes, processing with value addition, etc.  It also showed the way that alternate employment can be developed during lean seasons through petty loans given to women members by SHGs or through on-lending with their savings - a preventive strategy in India where over 3 million farmers have committed suicide due to indebtedness, coping mechanisms for the poor to absorb shocks and lack of quick credit at non-exploitative terms.

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