India, Tamil Nadu.

Responsible Organisation

International Fund for Agricultural Development (IFAD), co financed by the Government of India and the State Government of Tamil Nadu.

Description

Women make an essential contribution to their families’ survival (they are the sole income providers for 20-25% of the households), despite their virtual lack of access to means of improving their incomes. IFAD’s Tamil Nadu Women’s Development Project (1990-1998) recruited 27 NGOs to work with women self-help groups, building on the experience of non-governmental organizations (NGOs) that had been working with poor rural villagers. They spent the first 6-12 months building group cohesion and familiarizing the members with saving and borrowing procedures. Once women overcame the fear of borrowing money and found they were able to repay their group-based loans, they were assisted in requesting formal loans from the Indian Bank’s own resources.

The savings generated by the women themselves had important implications on building confidence among and empowerment of women, which in turn has an impact on the sustainability of the initiative.

The women’s newly gained confidence has led many groups to broaden their field of activities. Branching out beyond savings and credit, they took the initiative in community-oriented projects and held negotiations with authorities. By adopting a method of group organization, IFAD’s project assisted rural women in improving their skills and economic activities until they acquired sufficient self-confidence to become regular bank clients and entrepreneurs, thereby building their self-reliance and raising their status in the family and the community.

In the words of Parameshwari, a woman from the village of Oodaipatti, "Before joining the group, I had a lot of money problems. I always had to borrow money at very high rates. I no longer have these problems and it's good experience for me to have contact with others. There are no caste feelings in my group; we all work together. I am hopeful about the future, because I have my own income and I know that if I have a problem I can solve it with the group. What I want most is to provide better conditions for my family, build a simple house and buy some land so I can earn more."

Issues Addressed

Trade, economic growth, finance, investment, poverty, capacity building, empowerment of women.

Results Achieved

Half of all the loans granted went towards livestock activities that provided landless and smallholder women with the opportunity to have some sort of daily income, and one fourth went towards handicrafts and small-scale trading.

• 4,602 self-help groups were formed, bringing together 108,300 women in eight districts;

• Over 68,800 loans were granted on market terms (12.5% interest) by the 108 branches of the Indian Bank;

• The State Government of Tamil Nadu decided to expand the project using its own resources to all the districts of the state, while the World Bank and IFAD are replicating this experiment in six other states of India.

• The women’s groups also managed to save money and set up a system for small emergency loans among members.

Lessons Learned

The project was not only effective in mobilizing women into self-help groups and granting them access to microfinance, but was also responsible for important changes in social patterns and norms, which have led to the empowerment of women. Those involved in the project have become more independent economically and their overall decision-making role in the family has also been enhanced.

Contacts

Ms. Rarhana Haque-Rahman,
IFAD Coordinator Communications and Public Affairs,
Via del Serafico 107
00142 Rome, Italy
Tel. (+39) 06 54591; Fax (+39) 06 54592143; Email ifad@ifad.org