Banking on self-reliance

Naturally, when they gathered to celebrate the bank8217;s silver jubilee, their faces were bright with the glow of success. Starting with 4,000 working women, each of whom contributed a share capital of Rs 10, the bank has come a long way. It has 24,000 shareholders, 1.5 lakh depositors, 34,000 loanees, a share capital of Rs 1crore, a working capital of Rs 26 crore and its turnover in the past 25 years has been Rs 600 crore.

More important, the bank has changed the lives of thousands of women who live in slums and chawls, and on the pavements of Ahmedabad. It freed them from clutches of moneylenders and middlemen by providing cheap and easy credit; it gave a sense of dignity and security to poor women who could never take for granted small things like latched doors, a cemented floor, a proper roof, clean water and a lavatory.

Take, for example, Champaben, 50, vegetable vendor, who lived in a slum which still has no public lavatory. So, all the women in the slum used to wait till night, when they would go to a nearby crematorium to ease themselves. Small loans ensured individual toilets, ending the daily ordeal of the long, uncomfortable wait for the night and the fear of sexual assault.

Noorjehan Mansurwallah, 48, a block printer who has a paralysed husband, used to earn her living through assignments given by smallmerchants in 1981. 8220;After paying more than half of my daily earnings to the merchant whose equipment I was using, there was just Rs 10 left for me and my four children,8221; she recounts. Thanks to the bank8217;s help, she now owns a house, has her own equipment, and her daily earnings have increased to Rs 60.

Examples can be multiplied. In fact, behind most of the loans, which are small by the standards of nationalised banks, there is a success story. The bank8217;s emphasis is on women8217;s ownership of assets. Whether the loan is for land, or a house, some equipment, or a gadget, it has to be registered in the woman8217;s name. This has given the women a sense of confidence.

In a state where quite a few cooperative banks have sunk in recent years because of mismanagement, Sewa Bank stands out for its good performance. Says B.R. Katara, Joint Registrar of Cooperative Societies: 8220;Sewa is doing better than other urban cooperative banks because it is run not by mere professionals, but by dedicated people.8221;

Although thebank is servicing the poor, its recovery rate is a healthy 96 per cent, as compared to the 72 per cent in case of welfare schemes run by nationalised banks in the state. 8220;The women are sincere about repayment, and having workers in the field and group leaders from among the trade helps,8221; says Managing Director Jayshree Vyas.

According to Vyas, a majority of the defaults are due to an actual crisis in the family and circumstances beyond the women8217;s control 8212; sickness, widowhood, accidents, maternity, floods, riots or fire. 8220;Our non-performing assets are due to sickness or accidents,8221; she explains.

The bank is trying to cut down on defaults by adopting a two-pronged approach, which is also helpful to women. On the one hand, it arranges medical care for the women and runs day-care centres for their children.

On the other, it has worked out insurance schemes in collaboration with the Life Insurance Corporation and the United India Assurance Company to support the women in times of crises, like death,sickness, widowhood, and loss of household goods or tools in case of flood, fire, riot or storm. Premiums range from Rs 7.50 to Rs 30, and the benefit varies from Rs 5,000 to Rs 12,000. Before the bank was started, nationalised banks were the only source of finance for these women. But getting loans was not easy because the banks insisted on collateral and their staff did not know how to deal with illiterate women, completely ignorant of bank procedures, who would walk in in torn clothes with a bunch of children, recalls Ela Bhatt, chairperson of the bank.

It was at a meeting that the idea of starting a bank of their own came from the women, who were fed up of the indignity of being treated as second-class citizens. And though Bhatt had some misgivings, she decided to go along with them.

8220;Almost everyone from the industry said the idea was suicidal,8221; she says. How could a bank of poor, illiterate women work?

But work it did, and very well, as the women learnt to overcome their handicaps. Photographswere used instead of signatures for identification and group leaders sat up nights to learn to sign their names without error.

Not that it was all smooth sailing. During the Emergency, when the late Indira Gandhi waived off private debts of the poor, the bank faced its first real crisis. 8220;The women, mostly prompted by the men in the family, were not ready to see the difference between bank loans and debts. Repayments almost came to a total stop,8221; says Bhatt.

Hardly had the bank regained its poise when it received another blow. In 1981, the Textile Labour Association withdrew its institutional support, taking away Rs 26 lakh, which was a big amount those days. But the women rallied around. They sold lands, drew money from PF, raised whatever little money they could and, within 10 months, the bank was back on the track. Since then, there has been no looking back.y