Feature story

Savings grace

Paving the path to financial independence is the objective of a cooperative society in Bihar that counts 4,500 women among its members

Beena Devi’s big dream is to put her daughter through medical school. Presuming she makes the admission cut — and there’s every possibility she will — that means having the money ready to fund her future. Unlike so many in similar situations and from similarly stressed backgrounds, Beena has a friend to count on.

A native of Kumarpur village in Bihar’s Munger district, Ms Devi’s chosen benefactor is Sewa Bihar, a credit cooperative society with a complicated name and a simple mission. The Bihar Mahila Sewa Bachat Evam Sakh Swavalambi Sahkari Samiti is a credit cooperative promoted by Sewa Bharat. It is an associate organisation of the well-known Self Employed Women’s Association (SEWA), the Ahmedabad-based trade union that provides a voice to more than two million women working in the informal economy.

Established in 2012, the Sewa Bihar cooperative has an asset base of 80 million, representing the saving power of some 4,500 women engaged in farm labour, rural construction and small businesses such as vegetable vending. Spread across seven districts of Bihar, the cooperative is an informal savings and loan bank for women members from about 300 self-help groups (SHGs) in 90 villages.

Each SHG deposits the savings of its members, earns interest on these and has the option of borrowing a loan of up to four times the value of their deposits. The cooperative runs like a microfinance scheme and it highlights powerful development themes: financial independence, inclusion and empowerment. Most importantly, it gives underprivileged women the chance to build monetary assets they can call their own.

In 2018, the cooperative approached the Tata Trusts to support much-needed training for their office-bearers and field workers so they could improve its work processes and productivity. The Trusts did not need much prompting to back the cause. “We have a long history of supporting SEWA and the Bihar cooperative initiative was aligned with our work in improving financial inclusion,” says programme officer Karthik Doraiswamy.

Training and skilling

The Trusts funded a year of training and this involved around 30 sessions for about 100 executives, supervisors and field workers of the Sewa Bihar cooperative. The skilling was all about ways and means of managing money better. The training, planned around the information and knowledge that the staff needed, covered data, documentation and cash-handling in order for them to better understand financial systems and bookkeeping.

Vitta saathis (field workers for finance) are the bedrock of the cooperative. This all-women brigade is responsible for getting more members into the cooperative, maintaining loan ledgers and managing credit recoveries. The last is critical. As Ms Devi puts it, “The cooperative will profit only if our loan recovery rate is good.”

The training has helped turn around the functioning of the cooperative. Perhaps more crucially, it has empowered women like Ms Devi to rise through the ranks and make a better life for themselves. Starting as a vitta saathi in Kumarpur, Ms Devi now heads the cooperative’s Bariarpur office. Her fear of computers is gone and that’s a big deal for her and others like her.

The capacity building sessions for Ms Devi and her vitta saathi peers focused on documentation processes such as maintaining loan ledgers and defaulter reports, and why it is essential to keep the loan registers up-to-date. The official records of member dues are now reliable, supervisors have learned to check each vitta saathi’s entry, and there has been a reduction in errors of over 60% in documenting daily collections.

Making the system robust

The team has also learnt cash and loan management. The cash collected gets recorded and deposited in the bank the same day, data entry and data management have become routine and reliable, and loan defaulters are tracked rigorously. As a result, the defaulter percentage has come down from over 10% in 2018 to about 4% in June 2019.

Gayatri devi
Gayatri Devi has started a small business with monetary support provided by the Sewa Bihar cooperative

It’s finer with finance

B aby Kumari has come a long way — from being looked down upon for not being able to ‘produce a son’ to becoming financially independent and gaining a weighty measure of self-worth.

A vitta saathi (field worker for finance) posted at the Sewa Bihar cooperative’s Kharagpur branch in Munger district, Ms Kumari lives in Kathautiya village with her four daughters. As far as her family and community were concerned, that was four too many of one and none of the other, that much-sought-after son.

Ms Kumari was not ready to take it all lying down, and she realised soon enough that the road to redemption was paved with financial independence. She got going with a teaching job that paid 200 a month. The amount was paltry but it was the beginning of a journey that led Baby to join a self-help group (SHG) and, in due course, become its treasurer.

When the Sewa Bihar cooperative was formed in 2012, it started with just 150 women members. Ms Kumari played a big role in expanding the cooperative in the Kharagpur area, going all out to convince women to join the effort to get more financial leverage for their savings.

Today, from one SHG, the Kharagpur branch covers more than 50 clusters spanning a 30-km radius and including in excess of 3,000 members. Ms Kumari, meanwhile, has gone on to manage the accounts of some 700 members even as she has turned into an icon for women’s empowerment in the area.

The overall effort has led to a significant increase in the Sewa Bihar cooperative’s operational efficiency. There have been other positives too, as Sangita Devi can attest. In charge of the cooperative’s head office in Munger, Sangita had never worked on a computer previously. That has changed and she is now a more capable organiser as well, thanks to the soft-skills training she has received in leadership, conflict resolution, etc.

The training project had to navigate a host of road blocks. For one, it had to be held in different districts to allow more field workers to participate. That raised safety and security issues as some of these districts are in the grip of what are known as Maoist insurgencies (in one tense encounter, training team members had a tough time convincing a police party they were not Maoists).

The Sewa Bihar cooperative has, in no small part due to the training initiative, been transformed from a loosely managed NGO to a smoothly functioning enterprise that gives poor rural women a stronger foothold in the financial system. That translates into improved prospects for Beena, Sangita and their thousands of fellow travellers.

The Tata Trusts-funded training has helped make Sewa Bihar members more process-oriented and better managers