WOMEN IN INDIA: SOCIAL AND POLITICAL EMPOWERMENT THROUGH

UNCLAS SECTION 01 OF 03 CHENNAI 000083 SENSITIVE SIPDIS E.O. 12958: N/A TAGS: PGOV PHUM KWMN KDEM IN SUBJECT: WOMEN IN INDIA: SOCIAL AND POLITICAL EMPOWERMENT THROUGH MICROFINANCE ¶1. Summary: Self-help groups are at the vanguard of women's empowerment in South India. Small groups of women organized by government and non-governmental organizations encourage poor women to pool funds and allow them to access loans from the formal banking sector. In so doing, the groups afford members financial independence that yields dividends well beyond the pocketbook. Membership empowers women in their domestic lives, as well as in their communities and on the political front. End summary. Government and private sector encourage saving and microcredit -------------- ¶2. Self-help groups (SHGs) facilitate microfinance in South India. A typical group is comprised of ten to fifteen women from economically backward areas, such as urban slums and rural villages. They pool together savings from their members, which are used for small loans to members or as collateral for loans. Tamil Nadu pioneered the use of SHGs in the late 1980s and early 1990s. By 2008, there were 370,312 government supported SHGs in Tamil Nadu with almost six million members. The Tamil Nadu government made USD 742 million available to these groups in the form of government or bank loans. Private sector efforts to encourage SHGs are equally important. The Managing Director of Tamil Nadu's Commission for Women Development told post NGO-supported SHGs cover another six million people, meaning that a total of 12 million of Tamil Nadu's 65 million people work with a SHG. In neighboring Andhra Pradesh, the state's Rural Development Department reported 850,000 SHGs benefitting close to ten million women in the state. Andhra Pradesh's SHGs had USD 392 million in savings as of January 2009. SHG safety net reduces reliance on usurious money lenders -------------- ¶3. SHGs first provide a crucial financial safety net to poor families. The ability to take small loans from the group or a formal sector bank reduces reliance on informal money lenders, who charge exorbitant interest rates and may resort to physical violence to collect payments. "Any time a child became sick, or there was a marriage, these women would have to go to the moneylenders, but now with the group they do not have to anymore," explained a fieldworker for the NGO World Vision. SHG organizers commented that the groups help vulnerable families break free from the cycle of extreme poverty caused by their reliance on money lenders. SHG micro-credit improves incomes -------------- ¶4. We met with women working in SHGs organized by two NGOs, about 100 women associated with the Madras Christian Council for Social Services (MCCSS) and another 20 with World Vision. MCCSS and World Vision staffers explained that the women all live in Chennai's slums. Their husbands are typically manual laborers or drive auto-rickshaws (three wheeled motor vehicles used as taxis in Chennai),earning approximately USD 60 to USD 80 per month on average. The women told us that small loans (either directly from the SHG or from a formal bank facilitated by the SHG) allowed them to almost double their families' incomes -- many women reported earning approximately USD 50 per month by setting up small businesses. The women mostly establish small retail shops in their neighborhoods which sell basic provisions or sarees. But some women use the money for other enterprises, such as selling phone cards or tailoring. ¶5. The Managing Director of Andhra Pradesh's SHARE Microfinance Limited agreed that SHGs improve poor families' incomes. "Access to financial services improved economic conditions of the households, improving their asset base, and diversifying them into higher return occupations," he said. He added that members experienced a significant increase in income, ownership of livestock, and levels of savings, which reduced their reliance on moneylenders. He said the groups move the women away from daily wage labor and increase their engagement in more profitable forms of self-employment like the ones the World Vision and MCCSS SHG members described to us. More than microcredit: empowering women -------------- CHENNAI 00000083 002 OF 003 ¶6. Through our conversations with SHG members we learned that the groups are more than microcredit institutions; they are powerful tools for empowering women in virtually all aspects of their lives. At post's International Women's Day celebration, several women's rights advocates commented that SHGs started as a microcredit phenomenon, but have evolved into a mechanism for solving a broad range of social problems facing women. One said "finance is the key that opens the first door, but there is so much more" that the SHGs can accomplish. ¶7. Membership in an SHG increases women's power within their families. SHG members told us that they experience less domestic violence than women outside of the groups. MCCSS-organized women told post that the reduction in domestic violence coincided with length of membership in the group. They said that the decrease in violence was a direct result of the women's access to funds to assist in supporting their families. An MCCSS organizer explained husbands were unwilling to run the risk of losing the income their wives generate by engaging in domestic violence. ¶8. The groups directly intervene in family disputes on behalf of their members. Members of both World Vision and MCCSS's groups stated that they had intervened in domestic abuse cases by speaking with husbands or going to the police if necessary. When asked if the offending husbands paid them any heed, the answer was a resounding "yes, they have to listen or we go to the police." The SHGs become a social support network for the members, "our unity allows us to solve the problems we face," said a World Vision SHG member. She cited the example of a member who was having trouble with her mother-in-law. The group intervened on her behalf with the mother-in-law and husband to resolve the dispute. In the Indian context, where the mother-in-law traditionally dominates, outside intervention on the daughter-in-law's behalf is extraordinary. ¶9. The SHGs allow women to take control of decisions relating to birth control and education. A United Nations Development Program (UNDP) case study on SHARE Microfinance, Ltd. stated that "[b]irth control is almost universally practiced" and that women "are discussing contraception issues with their husbands." In addition, while the preference for a male child is still prevalent, "there is an increase in valuing girls." The report further states that,"daughters are more likely to remain in school for longer periods and married later. Increased value for daughters is related to [SHG] membership." During our meetings with World Vision and MCCSS, every one of the approximately 120 women reported that their daughters are in school. From personal empowerment to political power -------------- ¶10. SHGs have also become a source of political power for disadvantaged women. MCCSS organizers said that local politicians respect and listen to the demands of SHG women because they see them as a valuable, well-organized voting bloc. SHG members told post that ground-level district administrators are responsive to their needs, and will receive their petitions for redress and generally respond without serious delay. The MCCSS SHG women related an anecdote demonstrating their political empowerment. Many of the women's homes flooded during the recent monsoons. When the local government was slow in handing out promised disaster relief funds to the families of SHG members whose homes had been damaged, leaders from several of the SHGs went directly to the Minister for Local Administration, MK Stalin. Stalin is no ordinary minister; he is the son of the state's Chief Minister and the heir apparent in the ruling party. After the meeting, 256 families who had originally been denied assistance received the funds. (Note: Securing a meeting with Stalin is exceptionally difficult; Consulate officers have not met with him in several years. End note.) ¶11. Comment: The SHG members we met come from some of Chennai's worst slums, where they face the violence, filth, disease and poverty common in the ugly corners of all of India's mega-cities. Nonetheless, they exhibited remarkable confidence in themselves and hope for their children's futures. The self-help groups appear to have had a transformative impact on their lives. This transformation begins with the confidence derived from knowing that CHENNAI 00000083 003 OF 003 there is a loan available to help with an emergency and from earning one's own income, however modest. But the dramatic change appears to be the result of groups of women coming together, enhancing their collective power through mutual support. End comment. SIMKIN