Where Collective Strength Lies

by | Jul 8, 2019

Who’d ever want to pay an interest of Rs. 1200 on a loan of merely Rs. 500? A woman from the jungle village of Tirpania in Kharagpur, Bihar did so willingly, at least for a while.

Until the concept of Self-Help Groups (SHGs) found its way to rural women in Bihar, borrowing from local moneylenders at exorbitant interest rates was the norm. That’s not all though. While some women could not afford to pay back an amount that would reduce the interest cost, many did not understand monetary transactions well. They say it gave a false impression of holding credit for a longer period while making ‘seemingly’ meagre interest payments periodically. Even when they made their way into self-help groups and could finally avail credit at significantly lower rates, it took them 2-3 years to break the habit of interest repayments.

Mahajan Mukti’ or freedom from moneylenders is still a reality in remote pockets of Bihar but women are willing to have faith and create opportunities for development of their communities.

Manganiya Toli, a village of mainly animal rearing women whose husbands work as migrant labourers far from home, faces acute water shortage and has a single crop bearing season which generates minimal income. Until a few years back, their only means of receiving remittances from their husbands was in the account of a single Rajput man from Milky village about 2 km away. “Hazaar rupaye me sau rupaya kaat leta tha”, says Rubi Devi, and sometimes even denied receipts.


When outsiders visited to form the first self-help group in their village, despite huge mistrust, they gave their time to understand the concept, took a leap of faith and eventually formed one. Trusting another individual with her money was the biggest challenge for Sakuntala Devi but it allowed access to a bank account for her savings, availing credit at lower interest rate while also earning a 2% interest on money lent to others. Today, 90 out of about 150 households of Manganiya Toli are connected to a savings and credit cooperative through women in their families who are regularly availing financial services to keep up with their needs.

Rubi Devi was the first to build her family a pucca house. She received about 1.4 lakhs under the Pradhan Mantri Indira Awaas Yojna after the required bribe payments but it fell short. So, she took a loan from the cooperative to complete the roof construction. 5 years on, since the women could avail bigger loans from the cooperative, more than 90% houses in the village are more or less pucca. Onlookers confirm this development. Rubi Devi also took the lead to solve the problem of water scarcity on her side of the village. The single hand-pump that served over 50 households had run dry, forcing women and children to walk for an hour to the neighbouring village well to fetch water because caste-based conflicts didn’t allow them to avail services of the Government installed water ATM in their village. Any complaint fell on deaf ears. She thus, decided to take matters into her own hands. After timely repayment of her first loan, she availed another for INR 50,000 and used the money to get a 200 ft chapanal (hand-pump) installed.

It is interesting to note the ways in which different women used their newly acquired understanding of finance to achieve some level of economic empowerment in this village.


Government installed water ATM compound being used by a family who limited the water supply to only specific village households.

Parvati Devi’s mother-in-law finds relief in the fact that their savings have moved from the ‘gullak’ to a bank account and instead of using up the saved money in times of need, they can now avail credit. Sakuntala Devi progressed from keeping cash at the bottom of rice containers to using her matured savings for purchasing a vessel to store 10 mann rice (1 mann = 0.4 Quintal). It allows her to buy rice in bulk during the harvest season and reduce that expense by almost INR 2000.


Sakuntala Devi with her purchase.

Mala Devi has struggled to pay back her loan due to extensive medical expenses but she ensures payment of her annual LIC premium. She wants to build a house after the policy matures in 15 years.

Almost every woman now has a PAN card and bank account in her own name. Their conversations have changed. Earlier they’d only talk about issues at home but now they discuss solutions in the form of monetary gains through savings and credit options to avail. Pehle doosre ka loan chukaane ke liye paisa lete the, ab apna kaam badhaane ke liye lete hain.

Villages have seen development through financial inclusion after one or more women decided to step out of their comfort zone and take the risk of saving money in ways new to them. In Tulsipur, Deepa Devi pawned 7 katthas of land with Sheesham (Rosewood) trees to cover the loan she had taken from a local Mahajan. She joined a self-help group and also began saving with a women’s cooperative that allowed her to avail credit, pay back the Mahajan and release her land after 25 long years. Her success led over 100 women in her village to follow into her footsteps and see benefits of formal savings.

While some women choose to follow the set system with few deviations, others with a greater risk-taking appetite opt to change it as per their preference. Mamta Devi from Munuktan village joined an SHG in 2006 but decided to quit after she got to know about the financial mismanagement by the then SHG leaders. In 2009, she formed a new group with 15 members, who operated without a bank account. An SHG bank account requires a tripartite leadership that Mamta Devi could no longer get herself to trust. 10 years on, the group continues to operate without a bank account and has 70+ members who save Rs. 100 every month and avail credit regularly.

Strict rules have been laid down for collections and loans get booked in advance so that no money has to be kept at home for long periods. The members work as a strong collective ensuring default is kept to a minimum. Although Mamta Devi has a bank account in her name, she finds this better than any formal system of saving because interest earned on loan repayments stays within the group and is distributed among the members. Everyone in the village trusts her with money. Her only dependence, however, is settling the group’s accounts every 3 years for which she has to find someone who knows how to do the job and that is a bit of a problem.

Multiple SHGs across these villages in Munger district have collapsed due to lack of guidance on how to conduct their affairs in the long run.

Conflicts and mistrust among members seem to be the main reasons. They admit that an intervention by a third party helps them understand better rather than from a fellow member, who is often dismissed. Unfortunately, the larger institutions that initially started these SHGs have moved on to newer things and there aren’t enough people with time on their hands to facilitate SHG ongoings anymore. Some groups are able to find people on payment, while others that are unwilling or cannot afford to pay, face delay in finalizing accounts, which could potentially lead to mismanaged funds and in turn, affect the livelihoods of women. The Adivasi Tola from Kulhariya village is an example.

Situated 7 kms away from the National Highway with no mode of public transport going into the village, it has had little exposure to the outside world and apart from the single institution that introduced this concept, none other have ever ventured into the area. Women from 35 out of 50 households became a part of elf-help groups that supported them with their seasonal businesses. However, the treasurer of one of the groups used the money in her own household activities instead of depositing it with the bank. This led to severe mistrust with only 7-10 members continuing with one SHG.

The women here lead strenuous lives collecting firewood and other produce from the forest for a living. Cane ka patta or leaves used in Bidi production grow only once a year for about a month and are sold for INR160 per 5000 leaves. Kaili Devi says, “Pehle mela me jalebi, jhaal-muri, sab pattal me bikta tha, ab nahin.” Thermocol has replaced the leaves. A few women produce Masuha (local liquor) and sell it to men within the village at meagre rates due to restricted market demand since the liquor ban in Bihar.


Flower buds procured from the forest to prepare Mahua.

Declining sources of livelihood together with limited sources of finance have put women and families under the pressure of survival. These are women who had never heard of the concept of credit before they were introduced to SHGs, yet who, albeit unknowingly, collectively contributed to the growth of their village.

These instances speak volumes about the investment that’s still needed in building women led solutions for rural communities. They have shown the willingness and strength to lead and bring about lasting changes especially when they’re organized. Responsible interventions that ensure sustainability and survival are something that social institutions need to seriously deliberate upon so that women are not left halfway in the journey of empowerment.

SHGs are still popular among poor women who find them as important spaces to begin their journeys of financial inclusion and self-reliance. Their failure seems to have been a huge hit to aspirations that found their way out through years of oppression, leading to resignation and acceptance of an unfair future. This is not where women’s resilience should find home.

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