Microloans for women with positive results

Kudumbam NGO has three principal working areas in Tamil Nadu (India). The main office is in Trichy, and the organization also runs an ecological farm called Kolunji south of the city in the Pudukottai District, and has a regional office by the coast in the Nagapattinam District.

Some time ago I had the pleasure to visit the coast office together with Mr Oswald and Mr Ramadass from Kudumbam. It was a three-hour drive to get there from Trichy, and on the way Oswald told me that Kudumbam started to work on the coast in 2005 after the tsunami. Many farmers had gotten their land destroyed by the salt and the mud coming from the seawater of the tsunami, and Kudumbam started working together with communities for the recovery of farmlands. This work is now completed, but Kudumbam has continued working in the area, now with the main focus on empowerment of rural women.

We went to Kudumbam´s office on the coast for a meeting with representatives of farmers (mainly women) that have organized themselves into federations, in order to receive loans from a national bank called NABARD (National Bank for Agriculture and Rural Development). With the help from Kudumbam´s field staff in the area, women in many villages have started “Neighbourhood Support Teams” (NST), each with 5-7 members. Several NSTs then go together and form federations; so far 112 NSTs have been formed into 4 federations in the area. Individual members can then apply for small loans, where the rest of the members in the team stand as a guarantee. Therefore it is important that the teams consist of neighbours that know and trust each other. Last year the federations received loans from NABARD for the first time, and a total of 250 people were granted small loans.

The meeting started with the beautifully dressed women sharing their own stories, which Oswald translated from Tamil to me. Several of them had borrowed money to buy goats, which had given kids, and so they had earned money. Others had borrowed to pay for the education of their children, or to start small shops in their villages. So far the repayment of the loans have been 100 percent. At the end of the day there came four representatives from the bank (four men), and the leaders of the federations gave short presentations of their budgets and the new loans they want to apply for. The bank men seemed quite impressed by the organization of these rural women, and they encouraged them to send in their new loan applications as soon as possible. Even though the meeting was going on in Tamil and I couldn’t understand much, I was impressed by the women and their eager to improve their economic situation.

But no story can be completely happy. On the following day during a staff meeting at the office, a young woman showed up with her husband. She had taken a small loan last year, which she had already paid back, and she also had some savings in the NST’s account. Now her husband immediately wanted her savings, and the staff explained that this is not possible without the approval of the federation. The discussion was going on fast and I could understand that the man was being rude, at the end he left and his young wife started to cry. I asked Oswald and he explained to me that the man had earlier beaten his wife, and the members of her NST didn’t like that, hence he now wanted her to leave the group. When he had left the woman said that if she couldn’t get her savings back he would beat her again. Because of this the staff made an exception and gave her a cheque for the money. I was feeling both angry and sad and asked Oswald if the woman could not contact the police when her husband was beating her, Oswald then smiled and said “the policemen would just tell her to be more patient with her husband”. This is the reality faced by many women in Tamil Nadu, especially in the rural areas.