Self-help, multiple gains
We are brought up with piggy banks, Children’s bonds and the notion of ‘saving money for a rainy day.’ Savings, investments, loans, mortgages and new-fangled tax-free options are part of everyday life for many. For a vast majority of the world’s population, however, bank accounts are out of reach and out of mind.
The Grameen bank of Bangladesh, and others like it, changed the face of banking in the developing world in 1976 when Professor Yunus launched a program to enable groups, to take loans, create cooperatives, and invest their hard earned savings. This was the start of ‘micro-credit’.
Since the 1970s, micro-credit has been a feature of developing countries where vast numbers of people are excluded from banking as individuals. Micro-credit works on the theory that groups of people rely on each other and are, therefore, more likely to pay back loans.
Creating a basis for empowerment through micro-credit, or aptly named self-help, groups, micro-credit’s biggest impact has so far been on women and their families in south Asia and parts of Africa.
One of the pioneers of micro-credit in India is PRADAN, which is based in New Delhi. Last year’s figures illustrated their work with over 7000 micro-credit groups in the surrounding areas.
It is rare to see a man directly involved in micro-credit groups. In fact the Department for International Development in the UK claim that ‘poor women usually have the best credit ratings. In India, women are less likely to default than men.’
Providing women with banking opportunities leads to financial gains and economic progression within the household and society. They are able to provide extra income to their household and borrow loans for emergency situations.
Self-help groups created through the passages of micro-credit tend to provide more than just economic gain. Empowerment, both economical and social, have been direct outputs of self-help groups.
As a Kenyan adage conveys, “Sticks tied together cannot be easily broken”. The power of group action cannot be underestimated in societies where women might only see the back of society, or in many cases, the back of its hand.
Self-help groups can act as arenas for education and training, political mobility and technological advancement. UNICEF aims for ‘women empowering women’ and self-help groups are a prime example of this aim in action.
CAMFED International run a micro-credit scheme called the seed money programme which ‘is uniquely run by young women for young women, creating a bond of female solidarity that is integral to its success’. The most successful self-help groups are often those lead and advised by women.
PRADAN explain that their efforts lead to ‘new and acquired capabilities and linkages [which] enhance the women’s self-confidence and status in the family and community.’
With this elevated status, women are able to make changes to issues that affect them and their children, as well as the lives of their male counterparts.
Rural Education and Action Development (READ) based in Tamil Nadu in Southern India has organised over 11,000 women into self-help groups since 1994. Concurrently, READ has worked with these groups of women to provide schools and education programmes for their children, health and sanitation camps for women, HIV/AIDS prevention schemes, consumer awareness sessions, and training in new agricultural techniques for farmers (often the women’s husbands).
Similarly, the Ghanaian organisation, WomensTrust doesn’t limit its work to credit and lending, but it ‘integrates[s] supplementary programs of education, adult literacy, and healthcare’.
By using the self-help groups as starting blocks for collaboration, women are enabling each other to make their own decisions and empower themselves and their communities.
International agencies recognise the accomplishments of micro-credit. UNICEF's State of the World's Children 2007 report states: ‘By challenging and defying discriminatory attitudes in their communities, women's groups can advance the rights of girls and women for generations to come.’
Through creation of an idea, discussion, action and successful implementation, self-help groups are ensuring the women within them are becoming more valuably recognised in their societies. And this is a huge step towards gender equality.
The success of self-help groups has proved that micro-credit is no longer just limited to the developing world. The first Grameen bank in New York was opened on 25th April this year.
From a concept that only came into existence in the 1970s aimed at the rural corners of Bangladesh, to the first American-style Grameen bank in 2008, micro-credit’s presence is ever more evident throughout the world.
It has yet to be seen how micro-credit will change the face of banking in the developed world. Will the indicator of female empowerment be measured to the same degree? Will the greater empowerment of low-income people be achieved?
Or perhaps, as bank loans become less accessible to those on low incomes, and personal debts increase, self-help groups will provide another option to those in need, in our world of savings, investment, loans, mortgages, ISAs, bonds….
The Grameen bank of Bangladesh, and others like it, changed the face of banking in the developing world in 1976 when Professor Yunus launched a program to enable groups, to take loans, create cooperatives, and invest their hard earned savings. This was the start of ‘micro-credit’.
Since the 1970s, micro-credit has been a feature of developing countries where vast numbers of people are excluded from banking as individuals. Micro-credit works on the theory that groups of people rely on each other and are, therefore, more likely to pay back loans.
Creating a basis for empowerment through micro-credit, or aptly named self-help, groups, micro-credit’s biggest impact has so far been on women and their families in south Asia and parts of Africa.
One of the pioneers of micro-credit in India is PRADAN, which is based in New Delhi. Last year’s figures illustrated their work with over 7000 micro-credit groups in the surrounding areas.
It is rare to see a man directly involved in micro-credit groups. In fact the Department for International Development in the UK claim that ‘poor women usually have the best credit ratings. In India, women are less likely to default than men.’
Providing women with banking opportunities leads to financial gains and economic progression within the household and society. They are able to provide extra income to their household and borrow loans for emergency situations.
Self-help groups created through the passages of micro-credit tend to provide more than just economic gain. Empowerment, both economical and social, have been direct outputs of self-help groups.
As a Kenyan adage conveys, “Sticks tied together cannot be easily broken”. The power of group action cannot be underestimated in societies where women might only see the back of society, or in many cases, the back of its hand.
Self-help groups can act as arenas for education and training, political mobility and technological advancement. UNICEF aims for ‘women empowering women’ and self-help groups are a prime example of this aim in action.
CAMFED International run a micro-credit scheme called the seed money programme which ‘is uniquely run by young women for young women, creating a bond of female solidarity that is integral to its success’. The most successful self-help groups are often those lead and advised by women.
PRADAN explain that their efforts lead to ‘new and acquired capabilities and linkages [which] enhance the women’s self-confidence and status in the family and community.’
With this elevated status, women are able to make changes to issues that affect them and their children, as well as the lives of their male counterparts.
Rural Education and Action Development (READ) based in Tamil Nadu in Southern India has organised over 11,000 women into self-help groups since 1994. Concurrently, READ has worked with these groups of women to provide schools and education programmes for their children, health and sanitation camps for women, HIV/AIDS prevention schemes, consumer awareness sessions, and training in new agricultural techniques for farmers (often the women’s husbands).
Similarly, the Ghanaian organisation, WomensTrust doesn’t limit its work to credit and lending, but it ‘integrates[s] supplementary programs of education, adult literacy, and healthcare’.
By using the self-help groups as starting blocks for collaboration, women are enabling each other to make their own decisions and empower themselves and their communities.
International agencies recognise the accomplishments of micro-credit. UNICEF's State of the World's Children 2007 report states: ‘By challenging and defying discriminatory attitudes in their communities, women's groups can advance the rights of girls and women for generations to come.’
Through creation of an idea, discussion, action and successful implementation, self-help groups are ensuring the women within them are becoming more valuably recognised in their societies. And this is a huge step towards gender equality.
The success of self-help groups has proved that micro-credit is no longer just limited to the developing world. The first Grameen bank in New York was opened on 25th April this year.
From a concept that only came into existence in the 1970s aimed at the rural corners of Bangladesh, to the first American-style Grameen bank in 2008, micro-credit’s presence is ever more evident throughout the world.
It has yet to be seen how micro-credit will change the face of banking in the developed world. Will the indicator of female empowerment be measured to the same degree? Will the greater empowerment of low-income people be achieved?
Or perhaps, as bank loans become less accessible to those on low incomes, and personal debts increase, self-help groups will provide another option to those in need, in our world of savings, investment, loans, mortgages, ISAs, bonds….
Katie Hill
posted by Development in Action at 22:59
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