WHILE the recent announcement of a women’s bank in the Union Budget has been touted as a progressive measure for the financial inclusion of women, no concrete measures have been forthcoming to make all existing public sector banks sensitive to the needs of marginalised women. In the heart of the national capital itself, women’s self-help groups (SHGs) consisting of domestic workers and other women working in the unorganised sector continue to face a wide range of problems in getting access to credit, opening accounts and transacting with public sector banks. In fact, in creating a separate women’s bank, the gender insensitivity of existing public sector banks, which has led to the gradual disintegration of several small women’s SHGs in the National Capital Region (NCR), is being glossed over.
In the last five years, women’s self-help groups in the NCR have faced considerable obstacles in getting even meagre amounts of credit (ranging from Rs.25,000 to Rs.50,000) sanctioned by the banks because of the large number of conditions that are required to be fulfilled. For some organised groups, even the initial step of opening a bank account proves cumbersome. This alone has turned away a number of women from forming small groups to empower themselves.
Speaking to Frontline , Sudha Sundararaman, general secretary of the All India Democratic Women’s Association (AIDWA), said, “While any step in increasing women’s access to financial services is welcome, one cannot overlook the larger issue of gender sensitivity of public sector banks as a whole. Women from marginalised groups often find it very difficult to open accounts as the attitude of public sector banks is often patronising and unhelpful. Women’s self-help groups are often refused credit by banks, and sometimes they even have difficulty in opening accounts. Why should existing banks not respond to women’s needs?”
Kavitha Krishnan, secretary of the All India Progressive Women’s Association (AIPWA), highlighted the structural problems for poor women in accessing credit: “Public sector banks must look at women’s empowerment by providing cheap, accessible credit to poor women, especially in areas where women are affected by distress situations such as drought and other natural disasters. Also, the trend of looking at microfinance institutions [MFIs] charging exorbitant rates of interest as vehicles of women’s empowerment needs to be reversed. The MFIs make profits from disempowerment. A women’s bank should not absolve the existing public sector banks of their responsibility towards women’s empowerment.”
There is a broad pattern in the problems faced by women’s SHGs in the NCR. Anju Jha, Delhi State secretary of the Home Based Mahila Mazdoor Association, a group of SHGs started in 2000, spoke about the gradual disintegration of SHGs after 2007: “The banks are sceptical about granting even small loans in the range of Rs.25,000-Rs.50,000 to slum-dwellers and domestic workers. They ask for a guarantor. Banks refuse to open a separate account for a subgroup under the SHG unless the subgroup is also separately registered. They ask for the PAN card of the woman who is the office-bearer/treasurer of the SHG. Very often, the group head of a group of domestic workers does not have a PAN card. As a result of difficulties in accessing credit from banks, SHG members can only help each other out with small loans which are not able to sustain businesses long term.” The association, which started out with 34 SHGs in 2000, at present has only 12 under its umbrella.
SHGs facing problems In the Delhi-NCR region, the SHG movement has been deprived of institutional support from the state. The SHGs here cater to women living in slums situated in the vicinity of the most affluent localities. The denial of small amounts of credit by the banks has larger social implications for women entrepreneurs starting small businesses with help from SHGs. They are dependent on these activities for supplementing their meagre family incomes.
The tales emerging out of Kusumpur Pahari, a colony of migrant workers in Vasant Vihar, bear out the larger implications of banks being insensitive to the needs of the marginalised. Take the case of Dhanalakshmi, who runs a small grocery store in the colony and manages to make about Rs.3,000 a month after paying the bills. Dhanalakshmi, along with 19 other women, has been a member of an SHG called “Nai Kiran”. Each member contributes Rs.100 a month and the money is pooled to give out loans to women for starting small businesses and for contingencies. The SHG is primarily run with contributions from its members and has not been able to obtain credit from banks whenever the need arose. The members of Nai Kiran had tried to get a loan from the Oriental Bank of Commerce in Mahipalpur six years ago, but to no avail.
Dhanalakshmi lamented that the meagre income generated from the shop was not enough to support a family of four. “I could have expanded the shop if the bank sanctioned a small loan of about Rs.50,000. My husband also helps me out in running the shop. As of now we can only manage to procure the bare essentials for running a grocery shop, including milk, eggs, toffee, bidis, cigarettes. My younger son still goes to school. The elder son works as a gym trainer. It is difficult to sustain the family with such a meagre income.”
For Shaila, also a member of the SHG, the dream of starting a small business in ready-made garments never quite took off because she could not find the money for it. She had to borrow Rs.10,000 for a chest operation from the SHG. With her meagre family income, Shaila has to depend on loans from the SHG to be able to continue sending her 12-year-old son to an English medium school in Green Park which charges a monthly fee of Rs.4,000.
The SHG depends mainly on contributions from members and from other sources for its activities in the colony. Sumati, a member who runs a pre-nursery school-cum-creche for children of the working women in the colony, said, “We charge a minimum fee of Rs.20 a month from the women whose kids come to the creche. There are 25 kids in all. I look after the creche from 8 in the morning until 12 noon on all weekdays and alternate Saturdays. We depend on contributions from members. We occasionally receive voluntary help from the Rotary Club of India.” The creche has been around for 12 years now.
Sulochana Rajendran, who has been running a beauty parlour in the locality for the past eight years, got her loan of Rs.30,000 sanctioned from Canara Bank only after she procured a recommendation from a sub-divisional magistrate.
The lack of access to credit at affordable interest rates has forced some of these women to borrow from local microfinance institutions which charge exorbitant rates but have less elaborate procedures.
About six months ago, Shaila, along with 10 other women, took a loan of Rs.15,000 from a local MFI that charges an annual interest of 25.96 per cent. The group as a whole has to repay the loan in 30 instalments, two instalments in a month.
Most of the women said that the proposed bank would hardly make a difference if it had the same mode of functioning as the existing public sector banks.
Several of these women’s SHGs began their operations in NCR areas where there are sizeable populations of migrant women.
Another case in point is the history of a group of five SHGs, which started work in 2001 in the Alaknanda camp in South Delhi to cater to poor women who had migrated from Bangladesh. It initially managed to get around 400 women involved. Anju Jha, who was intimately involved with the working of this group, said: “One of the SHGs had started a small catering business named ‘Ananya’, which was doing quite well in the neighbourhood.” However, the SHGs were disbanded following the large-scale displacement of women living in the slums in 2005 to the Khader area in the NCR.
Following this relocation, the SHGs disintegrated and were again reconstituted under the leadership of Meera Biswas, one of the members of the SHG movement in Alaknanda, in 2007. About 11 SHGs, consisting of 400 women, were formed in 2007. Subsequently, one of these groups applied to the Allahabad Bank branch in Chittaranjan Park, an affluent South Delhi locality, for a loan of Rs.50,000 to start a business of selling spices. The bank allegedly refused to sanction the loan, and after this the groups gradually disintegrated. Anju Jha explained, “Efforts are still on in the Khader area to reunite these women and revive the SHGs, but on account of the lack of support from public sector banks it is difficult to convince women to form SHGs.”
Another SHG catering to 19 domestic workers in Molarband was disbanded in 2010 following lack of cooperation from a public sector bank. Sonia Varma, who was involved in the running of the SHG, said, “The SHG had been started to provide credit to women to start a tailoring and sewing shop. The women, most of whom were domestic workers, always faced problems in withdrawing money from the account of the SHG in the Sarita Vihar branch of Bank of Baroda.” Anju Jha recalled that once she had to visit the bank to plead with the manager on behalf of the women. “I tried to explain to the manager that the members could withdraw money on behalf of the SHG. It appeared that the manager was not even aware of the concept of SHGs,” she said.
The banks have been reluctant to open accounts of subgroups of SHGs on the grounds that they are not registered with the government or that the office-bearers did not have PANs. In 2011, the Vasant Vihar branch of Punjab National Bank allegedly refused to open an account for an SHG of 17 women in the Bhawar Singh camp as it was not a registered organisation. In 2010, another SHG, of 15 women living in Rangpuri, most of them rendered homeless as a result of the destruction of slums in Mahipalpur, were reportedly not able to open an account with a public sector bank.
The United Progressive Alliance government’s token step of starting public sector banks for women comes against the backdrop of major challenges faced, in the absence of state support, by small entrepreneurs and women’s groups trying to empower poor and marginalised women. While the lack of such support is clearly showing in the severe hardships faced by these groups, it is doubtful if the opening of a women’s bank will address the social ramifications of this problem in any substantial way. The mandate of the public sector in large-scale social transformation, which cannot be achieved without serving the poor, needs to be addressed through more concrete measures.