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Originally produced for UNICEF

“Cheating” the moneylenders

Meera Devi, Trainer and member of the Damodar Mahila Mandal, Hazaribagh, Jharkhand
It is possible for even very poor people to save. Some money comes into every house and some money is always wasted on unnecessary items. It is spent on trinkets or sweets or hair decorations or cosmetics or on alcohol and cigarettes. I tell the women, save Rs.10 per week and you will have Rs.40 per month. This is not much but if you do this every month, by the end of the year you will have Rs.500 which is an impressive amount.

If ten women save for a year they will have Rs.5,000 and that is the kind of money that we usually borrow from moneylenders. When I explain this they realize that they do not need to go crawling and begging to moneylenders anymore. They can break free by helping each other.

A few years ago there was nothing to see at Bara Junction. It was just a place where two dirt roads crossed each other, but it was a good location because people from ten or twelve villages are always passing through.

If you go to Bara Junction today, you will find a small laundry, a small shoe shop, a small utensil shop and a tea shop. All of these shops have been started by women who belong to the mahila mandal, using loans they obtained through their groups from the bank. These women have been transformed from agricultural labourers into shopkeepers.

When the moneylender came around and saw all these shops at Bara Junction he was shocked. "What are you all doing!" he said, "have you committed theft?" He could not believe his eyes!

Pramila Devi, Group Member, Jhapa Village, Hazaribagh, Jharkhand
My husband and I both worked in the fields. We had no property. Life was very hard for us: I spoke to him about the mahila mandal that was being formed in the village by some of the women. I wanted to join but he said that it was a waste of time. But then we saw that women who joined the group were beginning to make progress. Some of them had even opened small shops. I spoke about this with my husband and when a second group was being formed, he gave me permission to join.

He still didn't believe that the group could make much difference to us and honestly I felt the same way. I was saving a handful of rice every day, and selling it, and putting the very few rupees I got into the group savings. It seemed so little that I didn't believe it could make much difference to us. But my husband also gave me money to put into the savings account that he earned from working in the fields or on construction projects.

We tried to be careful with every rupee.

After two years we had managed to save about Rs.1,500 (about $30). I told my husband that I could get a loan from the bank. He didn't believe me but I applied and was successful in getting a loan of Rs.5,000. My husband was amazed. He took the loan money and went to Kolkatta. He bought some clothes which he sold at local markets. We also set up a small shop in our house in the village which I ran so that I was close to the children. We have three daughters.

We were able to pay back the entire loan of Rs.5,000 and than took another loan of Rs.10,000. My husband went back to Kolkatta, bought some more clothes which we are selling through the markets around here. These days we save about Rs.25 to Rs.50 and we have personal savings of Rs. 17,070 (about $350).

Our lives have been completely changed. My husband and I talk about the business and he asks my advice on matters that he would never have bothered to discuss with me before. Even though he does all the marketing I take care of the accounting. When we sit together, I will sometimes correct him or he will correct me. Before, when we worked in the fields, we hardly ever talked, but then there was nothing much to talk about.

Life is very different for our daughters as well. Before, we had to depend on my in-laws for everything. Now, if I want to give the girls milk I can buy it myself. Our six-year old daughter is going to school. The four year old goes to the midday kindergarten in the village. The baby stays with me.

Gayatri Devi, Treasurer, Chauhatta Village Group, West Champaran, Bihar
I had to marry my eldest daughter and had no money to provide food for the barat, the procession from the groom's family. They were coming the very next day. I was very upset because failing to feed the barat is a big disgrace. I borrowed 80 kilos of rice (worth about Rs.800) and spices and vegetables from several people and said I would repay them with my labour. After the wedding I had to send my 8 year old son to work for the shopkeeper to pay him back and I worked for an entire harvest for the people who gave me the rice.

Then I had to marry my second daughter and again I had no money. I took a loan of Rs.2000 (about$43) from a moneylender. He charged interest at 120% per year and it seemed impossible for me to ever repay it.

But then the Mahila samiti was formed. I joined and was able to save Rs.600 (about $13) in about a year. I was able to use this to get a loan of Rs.2000 from the bank, but instead of paying the moneylender right away, I bought a he-buffalo. I kept him for a year then sold him for RS.6000. By this time I owed the moneylender Rs.4400. I paid him Rs.4000 –I begged to be let off the other RS.400- and with the RS.2000 I had left over I bought another he-buffalo. That was in October 2000.

I'll keep him for a year and then sell him and pay back all my debts from the bank.