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
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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
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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
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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
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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
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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

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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