A micro-enterprise dynamic for under privileged women that needs chronicling
THE NOBEL AWARD TO BANGLADESH‟S PIONEERING MICRO-CREDIT PROVIDER IS A RECOGNITION OF THE MOVEMENT‟S MERIT. DO INDIA‟S EFFORTS MATCH IN MOMENTUM? FE UPDATES
M SARITA VARMA
The Financial Express, Oct. 23, 2006
It‟s the call of the boardroom that's keeping Kerala women SHGs—Asia's biggest of its kind—on their toes.
To rev up their credit-absorption, the Kudumbasree Mission (the state government outfit that manages SHGs) has no option but to shed its unwieldy „society‟ mantle and perhaps even don a company ensemble.
Covering 36 lakh families under microcredit, Kudumbasree now walks far beyond just small hamlets. Compare this with the Bangladesh Grameen Bank‟s coverage of 64 lakh clients. Clearly, here‟s a poverty-
alleviation task that otherwise credit-shy bankers in Kerala vie with one another to undertake. Last year, Kudumbasree had gone for a housing byproduct, Bhavanasree, in collaboration with nine banks. Commercial banks—mainly SBT, Canara Bank and SBI—have together financed the Kudumbasree SHGs
to the tune of Rs 564 crore till March 2006, according to statistics culled by the State-Level Bankers' Committee.
"Loan recovery rates in Kerala‟s SHGs are even higher than the 95-98% seen in other states and pushing
SHG credit is meaningful banking," SBI chairman Om Bhatt had consistently argued during his tenure as SBT chief.
Kudumbasree has emerged such a bankers' darling that when the government outfit proposed to float a special purpose vehicle as a microfinance NBFC, SBI and ICICI bank were in the race to pick up the stakes left after the Kerala government and its Kudumbasree arm took up 51% and 24% respectively. While last year, SHGs had to turn away sorely needed Rs 10 crore worth of government guarantees because of Kudumbasree's society status.
After it recently burned its fingers over the legal validity of the ICICI • Covering 36 lakh families, Lombard health insurance cover, the Kudumbasree Mission is sceptical Kudumbasree walks far beyond about a hurried leap to the NBFC format. "We have two goals," says the small hamlets. Compare this
executive director Sarada Muralidharan, "one, to migrate the 1.74 lakh with Bangladesh‟s Grameen
SHGs from the community development mode to a microfinancing Bank‟s coverage of 64 lakh
mode. Two, to facilitate their access to lower-cost credit, especially clients
from international bodies." While eyeing the NBFC transformation as a
gradual process, the immediate priority is to “come out with a framework for a credit-flow tie-up with Sidbi,”
Kerala has been protective of its SHGs, even from boardroom tremors, especially after the recent political storms in Andhra Pradesh. The state has left no scope for interest siphoning through arbitrage. An SHG has 20-40 members. Thrift, savings and internal lending skills of participating women have been fine-tuned to international standards. From 0.98 in 2002-3 to 2.45 in 2005-6, the momentum of internal lending in Kudumbasree groups has not missed researchers‟ eye.
As a women studies journal of the University of Brazil (Etudes Feministes, Jan-June 2006) puts it, an Amartya Sen model agent of sustainable development is actively at play in Kerala. Beyond the high recovery rate, the blossoming of finance to micro-enterprise among under-privileged women also marks a dynamic
that needs chronicling, says Annette Busque, finance expert, Bank of America, who undertook a study of Kerala‟s SHGs.
"While Kerala has not been generally considered an entrepreneur-friendly state, the bottom segment of the socio-economic pyramid now fiercely contradicts this notion," CR Soman, who runs a health NGO says. Kudumbasree women have been dabbling successfully in over 70,000 assorted micro-enterprises, from jasmine farming and rabbit-rearing to hollow-bricks manufacture and medical diagnostic services. About 50,000 acres are under Kudumbasree SHGs' contract farming efforts.