Women Federations Emerge
as a Boon for
Rural Communities during COVID Lockdown
SHG
federations have a huge potential to address poverty by serving
as a platform for providing financial and livelihood promotion services.
The dictionary says a federation is ‘an association o f
autonomous bodies uniting for common perceived benefits’. According to
an APMAS (2005) study, “SHG federation is a democratic body formed with certain number
of SHGs functioning in a specific geographical area, with the objective
of uniting such SHGs for a common cause and for achieving these causes,
which an individual SHG would not be able to do.”
There are 5
women led federations in Bundelkhand, one of India’s poorest regions.
Out of these, 3 have been actively providing micro credit services to
the rural community for their livelihood purposes even during the
lockdown situation. These federations have become the first choice to fulfil the financial need of the communities during this COVID-19
pandemic due to their reliability and low interest rates.
These
federations have taken measures to support community members in the
following ways:
-
3 months of
concession in repayment of instalments allowed to help members to avoid
getting into the burden of loan repayment.
-
There were
more than 30 entrepreneurs who survived the lock down effect by
utilising loan amounts taken from these federations.
-
Even after
2 months of lock down, there are many who are ready to trust the micro
credit services from these federations and apply for loans to give wings
to their business ideas.
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Yashoda
from Ambabai village in Jhansi district took a loan of INR 20,000 just
before the lock down. She did not suffer much of a loss in her business
of beauty parlour and cosmetic store. Unlike others, she did not go to
any money lenders for her financial needs and was able to manage her
business from home.
Narendra
Kushwaha, a young entrepreneur from Ladpura village of Orchha block
took the loan amount of INR 50000 just before the lock down. He used the
loan amount to expand his tailoring unit into multiple business units
including mobile recharge and ready-made clothes store which he runs
with the support from his wife.
Manish
Sen from Orchha block who runs a saloon took a micro credit of INR
20,000. He used it for improving his first shop and also started a new
outlet at the prime location in Orchha market area facing all the
effects of lock down. He is recognised as one of the top 10 saloon
service providers and this helped him to keep running his business even
during the lockdown.
Lessons
Learnt – There is a distinct possibility of these federations
promoting their own microfinance institutions in the future to serve the
supplementary financial needs of the community members as they have the
capacity to survive situations like lock down when financial support to
the rural community becomes really tough. To meet the ever growing
financial needs of the rural community irrespective of any situation,
several innovations are needed, including using smart card and mobile
phone technologies.
A national
level association to support community based microfinance is needed to
advocate for the sustainability of the federation system and support
rural entrepreneurship to ultimately overcome the economic crunch due to
any disastrous situations in future.
■
Diksha Singh
dsingh2@devalt.org
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