Recently micro-finance has caught the attention of the public specially after Prof. Yunus was awarded the Nobel Prize in 2006. Worldwide there are thousands of these institutions providing micro-credit to hundreds of thousands of people, mostly women.
One of the challenges that micro-finance faces is that beyond providing its borrowers with credit, it needs to make sure that they also have marketable skills and training that will increase their income generating capacity and the required business skills to help them manage their enterprises. One of the innovative organizations that has attempted to tackle this issue is the Mann Deshi Mahila Bank, a women owned cooperative foudned by Chetna Gala Sinha. They not only put a business skills program together, they also provided a mobile mechanism to bring the training out to the rural villages where it would have maximum impact.
I had written an article about my visit to the Mann Deshi office and their unique Business School on Wheels for Women in a column for Lokvani that is reproduced below. You can see some of the photos I took here.
Mann Deshi Mahila Bank and Its Business School on Wheels for Rural Women Raj Melville, Lokvani.com, 05/15/2008
Over two dozen expectant faces turned in our direction as we walked into the small crowded room on the second floor of a storefront office in downtown Hubli. These women had come from surrounding villages, some a half a day’s journey by bus, to attend the final graduation ceremony of their rural business course. I was introduced to the group by our guide, Sheela Munro, Program Officer with the Mann Deshi Mahila Bank. Over the course of the past month, these graduates had learnt basic computer skills or sewing skills from a mobile training center in a converted school bus.
The Mann Deshi Mahila Bank, a women owned co-operative bank, was started by Chetna Gala Sinha, an economist, farmer and activist in the drought-prone Mann Desh region of Maharashtra. Its goal was to help empower the women in the area and to enable them to achieve financial independence and self sufficiency. Due to the poor agricultural conditions, many local men wound up leaving the area to look for employment in urban centers. The burden of responsibility at home fell on the women who were left behind. With a high illiteracy rate and low level of basic skills, most women worked at meager jobs on farms or as street vendors. By providing women with both basic vocational training and the ability to save and borrow money, Mann Deshi has created thousands of budding rural women entrepreneurs.
Mann Deshi customers begin by saving a small amount of money every week with the bank. Once they have built a track record of saving, they can apply for a loan. Loans are usually small, around Rs. 5000 ($125) at a 20 percent annual interest rate. The alternative in many cases is borrowing from merchants or money lenders at typical rates around 7% per month. To facilitate collection, Mann Deshi agents visit a village once a week. By reducing the need for a borrower to take time out from work for a trip to the bank, it saves them a days worth of lost income. Having ready access to funds also gives the borrower a bargaining advantage when buying from merchants. In some cases they can use the money to increase their margins by leasing an orchard, gaining access to the fruits at the source. Over the years, Mann Deshi Mahila Bank has grown to cover 17,000 women entrepreneurs, with assets of 90,000,000 rupees ($2.25 million) and an enviable repayment rate of 97.5%.
Along the way, Chetna and Mann Deshi has been recognized internationally including being named an Ashoka Fellow, winning the International Ashoka Changemakers Innovation Award in 2005, honored with the Jankidevi Bajaj Puraskar Award for Rural Entrepreneurship in 2005 and the 2006 Microfinance Process Excellence Award, sponsored by ABN AMRO Bank and PlaNet Finance India
However even as Mann Deshi grew, the organization realized that in addition to capital, women needed marketable skills and training to increase their income generating capacity and business skills to help them manage their enterprises. The Mann Deshi Business School for Rural Women was setup in 2006 offering a range of vocational courses such as screen printing, sewing, and basic computer skills as well as courses in financial literacy and career guidance. These classes provide technical, financial and marketing skills to women with no formal education and to girls who have dropped out of high school, allowing them to start and improve their own small enterprises.
Mann Deshi is one of the leading organizations that provide both skill building programs and access to affordable credit. Most other organizations focus on either providing microloans or training. Looking to provide financial empowerment for rural communities in the Hubli/Dharwad area of North Karnataka, the Deshpande Foundation, together with the Ashoka Foundation, began a five year project with Mann Deshi in September 2007. As part of the outreach and education program for this region, Mann Deshi implemented a unique Business School on Wheels for Rural Women. By taking their courses out to villages, it provided access to the same training to groups of women who otherwise would not have been able to make the trek into the city. The classes are held in a converted school bus that is partitioned into two rooms. Each room has two rows of benches and tables for the students and a blackboard on the dividing wall. One section has three table mounted sewing machines where the tailoring and sewing classes are taught. The other has several laptops that are used to teach introductory computer skills.
Back in Hubli, as we hand out their completion certificates, there is obvious excitement in the eyes of the women gathered. Several stand up and speak about how they believe the training will help them and their desire for more education. One particular speaker catches our attention. She is a young girl, perhaps high school age, dressed in traditional Muslim attire. She earnestly explains to us that were it not for the bus coming to her village, she would not have had the opportunity to learn since her strict upbringing would not allow her to come into the city unaccompanied. Now that she has been exposed to the computer, she wants to learn more. She wants to learn accounting.