Chaitanya, the organization I’m working with, is one of the pioneer organizations in the country to have successfully worked on the SHG (Self-help group) model with women. Since 1993, Chaitanya has been promoting community-based institutions for facilitating economic empowerment in rural India. Today, we work with over 1 Lakh women in Maharashtra and continue to expand into other states including Madhya Pradesh and Chhattisgarh. It’s been almost 6 months here, and knowing that one single women’s collective holds a loan outstanding of over 2 crores, never fails to amaze me. It means that, within themselves, they are capable of moving such huge amounts of money. That is the power of collectives, of women, of facilitation.

How does this model really function and what makes it work?

Level 1 – SHG

This level collectivises women residing in the same locality or village, into groups of 10-20. The reasons for them coming together could range from finance, know-how on government schemes, or even just political motives. However, the main purpose for Chaitanya, is to facilitate a space for women to be with each other and socially empower themselves. The women in SHGs, realize a need to create a forum – a forum that becomes theirs to voice their opinions on local and personal issues.

The means of achieving this cohesion is by firstly providing means of financial empowerment. We inculcate in them a habit to make regular monthly savings and further proceed to lending it internally, at a pre-decided rate of interest. The amount of savings, the loan beneficiaries, the penalty, external lending, and even the internal lending rates are all financial decisions that women in the SHG together make. Also, the date of meetings, location, and the agenda of each meeting is decided by them.

Every SHG must also elect a President and a Secretary who go on to represent them in the next level, the village cluster. Thus, we try to establish a sense of informed and collaborative decision-making right from the beginning. The culture of the group is reflected in its working, punctuality, regularity, accountability, and redressal. These are all a cumulative function of what the women in an SHG derive as their golden rules, and a way of functioning, over time.

Level 2 – Cluster

After the formation of an SHG, we proceed on to building a cluster or a village organization (VO). In a locality/village, once there is a strong presence of at least 3 SHGs, the signatories from each one of them, along with a member (revolving) are invited to form a cluster. It can hold a minimum of 3 SHGs to a maximum of 20 SHGs. It helps maintain order and supervises the working of each SHG under it.

The cluster represents the needs of the women in a village and serves as a village-level body. It gives them a platform to raise their concerns pertaining to their particular village, sometimes even in tandem with the Gram Panchayat.

Belonging to a cluster gives the SHG and its women an overview of their group’s status. It also serves as a medium for conducting various social activities. It is required to function as an intermediary between the SHG and the federation. In rare cases, SHGs directly begin working with the federation. The cluster came into being organically after the women residing in a geographical region felt the need for increased social capital and a system closer to them to address issues both within the SHGs and in the village.

Level 3 – Federation

The Federation is the topmost body consisting of clusters. It is a culmination of representatives from villages falling within it. Apart from being the apex body that acts like a bank to sanction the higher denomination lending and borrowing for its members, the federation also serves as a common ground that brings together women from multiple villages, religions, occupations, and economic strata. It aims to reduce the social differences that are hard-wired in all the corners of the country by bringing them together for a higher good – empowerment of women.

The promoting agency, Chaitanya, comes into play till this body of women is self-sustained and continues to offer guidance to ensure that new and better avenues of opportunities are explored by its women, a value add that is far beyond just monetary transactions.

The federation that takes shape as a culmination of a few village clusters then metamorphoses into a sustainable body that is able to hire its own staff, run its own office, offer loans, and function independently as an organization.

The creation of their identity comes after years of experience in day-to-day meetings, sharing by cluster representatives, transparency of handling and maintaining the accounts. Trust plays a major role in the creation of this identity. Across all three levels, there is open book-keeping and financial handling. The minutes of each meeting are written and discussed, and all decisions are taken in a participatory manner. Thus, transparency in transacting and decision-making is what goes into holding these collectives intact.

When we compare this model to that of micro-finance institutions, especially in rural India, there is an increased, equal, and revolving opportunity for members to lead here. Apart from that, the decision-making lies solely with the women and not with an external body or a facilitating agency. Whether a delay in loan installment requires a penalty or a further allowance is decided to take into account the financial predicament of the defaulting member and that of the group. There are no hard and fast rules, just a code of conduct that is drawn up by the women themselves.

Today I see over 40 such federations being run independently by our women, in addition to which some women run their own businesses, some run homes, some fight legal battles, some appear for local elections. But more importantly, they all have a story to tell and they aren’t afraid to share it, even if this means they have to stand alone. I wonder what could be a more tangible way of witnessing empowerment.