A bank for, by and of Indian rural women

Mann Deshi Mahila Bank has helped nurture the entrepreneurs and samaritans that conventional institutions wrote off as housewives

  • Chetna Sinha with former Indian president Dr APJ Abdul KalamImage Credit:
  • Sinha with US President Barack Obama after a business meeting.Image Credit:
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Vanita Pise (40) came to Mhaswad, (a village in Satara district of Maharashtra) as an 18-year-old bride. Her husband managed a small cloth store and to add to the family income, he also reared poultry.

In 1997, when the poultry business suffered a loss of Rs55,000 (Dh3,297), Vanita stepped out of her house to work in fields as a daily labourer.

After the day’s expenses were met, Vanita was left with a few notes. She stashed it in a dabba in her kitchen. It would come handy on a rainy day, contemplated the mother of three.

Around that time in Mhaswad, there was excitement over the opening of a new bank, Mann Deshi Mahila Bank, (MDMB) the first of its kind, not only in Mhaswad but also in India.

This bank opened doors to women who though illiterate made an income every day as street vendors, daily wage labourers or ran a shop from home. Interestingly, the bank was ready to take a daily deposit of something as low as Rs5 and Rs10.

Until then Vanita had never seen the inside of a bank, leave alone have an account on her name. The idea of a savings bank account appealed to her. Wasn’t this a better idea than putting her daily savings into the kitchen dabba, she wondered. Besides the bank offered loans.

“I was a little worried in the beginning,” recalled Vanita, at present a board member of MDMB, “yet decided to take a risk with Rs10 to open my account.”

She also joined a self-help group organised by Mann Deshi Foundation, the parent body of MDMB.

In 2004, Vanita purchased a buffalo with a loan of Rs15,000 from MDMB. Selling milk door-to-door augmented the family income. Before she knew it, she cleared her loan the next year.

“I aspired for a good education for my three children,” said this mother, who failed in class ten. “So when an opportunity for training in making paper cups was offered by MDMB, I grabbed it.”

Along with ten other women, she trained at a factory in Kolhapur for two days. On return Vanita applied for a loan of Rs15,000 and purchased her first machine. With raw materials supplied by the Kolhapur factory, her home venture in making paper cups commenced. Vanita climbed the next rung when she took on the dealership of the machine and assisted 17 women from her village in setting up their own units.

Yet, nothing prepared her for the adulation that followed in 2006, when she received the CII-Bharti Woman Exemplar Award, presented by National Confederation of Indian Industry to honour poor, underprivileged women.

In 2007, the Reserve Bank of India (RBI) invited her to speak at a meeting, (her first of many that followed) to motivate women to dream of a better tomorrow.

Vanita’s business has grown to include 16 machines and a team of six people. She also teaches at Mann Deshi Business School.

On the home front, her eldest daughter, Nikita (22), is doing MCA, son Minesh is in his third year of engineering and younger daughter Gowri will soon be joining college for a degree in agricultural engineering.

Of course there were roadblocks.

“In the first year, the factory stopped supplying raw materials and I had to look for an alternative source,” remembered Vanita.

“Solving problems has become a habit now. I am no longer fazed by life’s uncertainties.”

Her business gets a boost during wedding season when demand for disposable cups increases. “Today I am able to save Rs1,000 every month,” she said.

Vanita stands tall today as a successful entrepreneur and a role model for many.

“I am now fluent in Hindi and can manage a smattering of English too,” she said. “My mother in law, who used to scold me earlier, treats me with respect and even helps in packing finished products.”

Vanita owes it all to Dr Chetna Sinha, founder and chairperson of MDMB, whom she fondly refers to as “bhabi”.

Count Vanita as just one among a thousand benefactors of MDMB.

Kantabai’s woes, the spark for MDMB.

Born and brought up in Mumbai, Chetna Sinha was influenced by the ideals of late Janata Dal leader Jayaprakash Narayan during college years at Mumbai University. As a leader of the youth wing of the party, she actively worked for the welfare of rural and marginalised communities during Indira Gandhi’s Emergency period.

Chetna found her life’s calling during her two years stay at Bodh Gaya, (Bihar) where she was involved in the landless-labourer movement carried out by the Chatra Yuva Sangharsh Vahini.

Like Vanita Pise, Chetna Sinha too arrived in Mhaswad following her marriage to Vijay Sinha, also an active member of the youth wing then.

“My husband is a farmer here. I found life completely different from Mumbai,” recalled Sinha. “It opened my eyes to the plight of people at the grassroots level and the challenge of working for their benefit came with the idealism I had grown up with.”

What then triggered off a bank for women?

Chetna narrates the story of Kantabai, a blacksmith from Mhaswad, who made tools and earned between Rs100-200 a month. Kantabai wanted to save money, so she approached a bank. But she was turned away.

“No bank was willing to open an account on her name,” recalled Chetna, who was selected for the first class of Yale University’s World Fellows Program in 2002.

“I was surprised to hear that. So I accompanied her to banks and was told that since Kantabai saved less than Rs5 a day, her account was not affordable. That’s when I thought: ‘Why not start a bank for women like her?”

Accompanied by a few women from the village, Chetna travelled to Mumbai with a proposal to set up a bank for women and to be managed by women. RBI rejected the proposal.

“How can we issue a license to promoting members who were illiterate?” that’ is what RBI officials asked.

“I was very upset that day,” said Chetna, “but the women were resolute. They told me, ‘so what if we are uneducated. We can still learn.’ That night we started literacy classes for women.”

Helmed by community leaders who took on the mantle of teachers, classes were held after 8pm and went on till 10pm. Six months later, Chetna and her team of women visited RBI office again.

This time the women told the officials, “We are ready to calculate interest rates. You can test us, but we challenge your officers to calculate along with us, but not using a calculator. Let us see who is faster.”

That day, the women proved themselves worthy of a cooperative banking license from RBI.

Mann Deshi Mahila Bank was set up in 1997 in Mhaswad. It was the first rural bank in India, started without outside capital. Six hundred rural women raised a capital of Rs600,000 in the first year.

SCLALING HURDLES

After the initial euphoria came the first stumbling block. Women stopped coming to the bank. “We found out that they could not afford to lose hours of work by coming daily to the bank, so MDMB decided to go to them,” explained Chetna.

‘Doorstep Banking’ was started immediately. “Today there are 250 field officers who visit account holders’ homes for collection of daily savings and recovering loan amounts, sometimes travelling as far as 20 km,” chipped in Vanita Shinde, Chief Administrative Officer, MD.

Every day around Rs 12,000 is mobilised. From a start-up share capital worth of $15000 (Dh4,087), MDMB has grown to own assets worth of more than 50 million. It boasts of a repayment rate of 99 per cent and a clientele numbering 185,000, which continues to grow.

The average monthly savings of the women is Rs 75. Around 70 per cent of them are from backward castes and scheduled tribes and they, as shareholders, play a role in deciding the bank’s policy at annual general body meetings.

Vanita Shinde, a homemaker till 2006, joined the bank on the suggestion of her husband, Jayakumar Shinde, (co-founder of Mann Deshi Foundation) as Computer Officer.

“I was brought up in a conservative home and had never ventured out alone, but with MDMB I travelled alone abroad for the first time. I could not believe it was me,” said Vanita Shinde.

The second stumbling block came in the form of passbooks at MDMB office. 
“The women did not want to disclose their savings to their spouses who would squander money on alcohol. How could we take custody of so many passbooks? asked Chetna. “We then came up with a smart card.”

The e-cards of every account holder stores data and allows them to view their account balance.

Globally recognised for uplifting the lives of rural women, Chetna received the 2005 International Ashoka Changemakers Innovation award and was the finalist of the Schwab Award in 2007. Last year, she received the Social Entrepreneur of the Year from the Indian government.

If Keera Bai’s request for a loan to buy a cellphone to connect with her children while grazing sheep away from home sowed seed for a business school, then a fifth grader’s request for a part-time job to afford herself a bicycle kick-started the “freedom ride” under Mann Deshi Foundation. (See Box).

Rekha Kulkarni, CEO, said, “Loans are given to the women at weekly markets at a lesser rate of interest compared to money lenders, who charge 30 per cent or more. Our aim is to launch one million rural women entrepreneurs by 2020. We also intend taking this movement to Gujarat, Bihar and Jharkand,” said Kulkarni, who joined MDF in 2000 as a clerk and has moved on to conduct board meetings and deliver lectures at Harvard Kennedy School and the University of Portland.

Praising the rural women’s fortitude, Chetna said, “They are my teachers. I have learnt more from them than in any university.”

As for Kantabai, who was living on the road-side with her family in 1997, she lives today in her own house. Her six sons and six daughters are married too. Maybe if you passed by Mhaswad, you could catch this 55-year-old grandmother in the company of her grandchildren.

visit: www.manndeshibank.com

BETTERING LIVES

Shobha Raut (35) runs a store dealing in women’s inner wear, stationery and snacks from home. Polio-afflicted as a 10-month old child, Raut, a commerce graduate, says, “I began by selling provisions. With loans I expanded my store and put my brother through college. Last year for his wedding I borrowed Rs200,000. Today I am independent and take care of my parents.”

Archana Rasal had no other option but to go through a divorce to ward off her father-in-law’s sexual motives. With a baby daughter in tow, life looked intimidating until a loan of Rs5,000 from MDMB changed her destiny. Purchasing a sewing machine, Archana set rolling the wheels of her home business. Today, she runs a tailoring unit with eight assistants in Mhaswad market area and a stationery store too. Her teenaged daughter studies at a boarding school in Pune.

MARKING MILESTONES

Working hand in hand with MDMB is Mann Deshi Foundation (MDF), an NGO established in 1996. Through various programmes, it has transformed the lives of rural women.

2004: MDF convinced the Maharshtra Revenue Department to include women’s names on stamp papers. Until then, women had no share in the family property. Subsequently around 7000 women have benefited with a share in their household property, besides protecting them in the case of a divorce. Encouraging women to buy property, the foundation offers them a rebate of 1 per cent on loan interests.

2006: Mann Deshi Udyogini, a business school for rural women, trains them in technical, financial and marketing skills and equips them to launch their own enterprises. HSBC is the founding sponsor. The Deshi MBA Program aims to create 10,000 rural women entrepreneurs through mentor training. Mentors chosen by the foundation guide other women in starting ventures and helping it grow. Last March, 71,499 women graduated and 60 per cent of them started their own enterprises. The financial literacy course here imparts training on loan repayment and educates women on the importance of savings, pension and insurance. Mobile schools operate in buses fitted with computers and sewing machines to reach women in remotest villages.

Cattle camps are organised to support livestock owners during drought periods. During the 2012 drought in Mhaswad, the cattle camp hosted farmers, families and 14,000 animals from 52 villages.

Freedom ride initiative was kicked off in 2004 when a fifth grader approached Chetna for work during the holidays.

“She wanted to buy a bicycle so that she could go to high school some kilometres away. Young girls can avail of interest free loans to buy bicycles.

2006:Pension schemes for rural women werre created in partnership with UTI Mutual Fund by the Foundation.

2011: Mann Deshi Chamber of Commerce for Rural Women was launched at the Global Clinton Initiative, held in New York, bringing together more than 16,000 rural entrepreneurs

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