Maharashtra’s Microfinance Self-Help Groups Fail to Support Dalit Women at Time of Greatest Need

Satara (Maharashtra): Many self-help groups (SHGs) in Maharashtra, in which marginalised women save small amounts of money on a cooperative basis so as to be able to start small enterprises, had to shut due to lack of funds during the COVID-19 lockdown last year.

As lakhs of urban workers returned to their villages and rural employment took a hit in western Maharastra’s Satara district, these community savings groups largely failed to support their members. Even now, a year since the start of the pandemic in India, they are not yet back to functioning.

The impact of the lockdown has been the most severe on marginalised women, especially those belonging to Dalit castes. “During the lockdown, I struggled to take care of my family financially and even the last option – the bachat gat (self-help group organised around small savings) failed,” said Sangita Nandkumar Mane, a 45-year-old farm worker who is the president of the Ramabai Magasvargiy Mahila Bachat Gat Vaduth, a self-help group in Vaduth village, Satara district.

Satara has 1,719 villages in 11 blocks, with 15.5% of its rural population living below the poverty line and 8.8% belonging to the Dalit castes. Satara block, where Satara city is located, has 1,227 self-help groups with savings accounts in banks such as State Bank of India and Bank of Baroda. Every village has at least a small branch of the district cooperative central bank, which is meant to provide loans and basic facilities to account holders at the village level or to credit societies such as those run collectively by self-help groups. But in the lockdown period, as the poorest rural women struggled to survive, these services and economic resources were closed to them.

Interviews with members of 15 self-help groups in Satara block, where the majority of the members are landless Mahar Dalits, showed that five groups have not held regular meetings for a year and were not able to add any group or individual savings. The members said their groups had either lost members or stopped adding new members or subscriptions and had stopped all activities during the lockdown because they felt they had no other option.

Even after the lockdown period ended in June, they faced such extreme financial strain that they were not able to contribute the Rs 100 per month that each member had managed earlier. In most families, the men lost their city jobs as construction workers or security staff in offices and the women were unable to earn sufficiently as farm labourers in their villages.

Sangita Mane from Vadhuth village. Photo: Mayur Jeevan Kamble

In Vaduth village, Sangita Mane’s self-help group has existed for 12 years since 2009. But a few members dropped out last year due to economic stress.

“In earlier years, we had been able to support one another in managing family expenses through the bachat gat,” said Sangita. “We could pay the children’s school fees, deal with health emergencies and so on. But the lockdown was an excessively big shock on everyone all at once.”

Sangita’s husband had worked as a driver but lost his job during the lockdown. “During the lockdown we felt that even our last option, the credit society, was not useful,” Sangita said. The group earlier had 20 members, but now has 16.

After restrictions on movement and meetings were lifted, Sangita and other self-help group members started trying to meet and save again, but the savings now are in exceptionally low amounts.

“We earlier collected and pooled together small amounts such as Rs 100 a month, but now the members are not able to save money,” she said.

Vaishali Kamble, the president of Ramabai Mahila Swayamsahayata bachat gat in Shivthar village in Satara block said that several SHGs which have been running for 10 to 15 years and have members from the historically and financially marginalised Dalit communities especially faced a lot of difficulties.

“Our SHGs with Mahar (Navbuddha) caste and Magasvargiy women members faced a lot of distress,” said Kamble, who works with her husband as a vegetable vendor in Satara. “Most members of our community are landless and work on ‘upper’ caste people’s farms for Rs 200-300 daily. But because of the fear of the coronavirus, they told us to not come to work anymore and relied on their families for farm work.”

In the lockdown period, Kamble and her husband lost their sources of regular income and struggled to support their children. “Even as the president of a bachat gat, I faced so many problems. I was not able to turn to the bachat gat for support either because our savings were wiped out and there is no certainty about regular paid work even now,” Kamble said.

Having started with little or no land or any other form of capital, the members of the bachat gat were only able to use small amounts for routine expenses, even though they had been contributing and pooling savings for 10 to 15 years. Most members of the SHGs have been unable to become financially independent or become the entrepreneurs that the government scheme envisioned. According to experts, this raises a question about the self-help group economic model as a system to overcome poverty or even support those with low incomes through financial emergencies.

“Governments have powers to change structural inequalities by redistributing resources, but they do not take measures to do so. Since 1990, ‘social empowerment’ through SHGs has been a mechanism that the state started to rely on,” said Professor Deepa Tak, a professor at the Department of for Women’s Studies Centre at the Savitribai Phule University in Pune. “But SHGs for Dalit women is like poverty management for a family. It is not adequate by itself. Ultimately, Dalit women need fundamental changes in social and economic structures to be able to attain stable livelihoods.”

Government interventions

According to a NABARD (National Bank for Agriculture and Rural Development) report, Maharashtra initiated self-help groups in 1999. In the decades since then, thousands of rural women have been informally associated with this type of economic activity, meant to create economic independence, enable self employed and informally employed women with cash flow, and further economic and social independence.

The state government runs two programmes to support SHGs – the Mahila Arthik Vikas Mahamandal, a scheme run by the women and child development department, and the Umed Abhiyan under the Maharashtra Department of Rural Development’s State Rural Livelihood Mission.

Women on their way to work on farms. Photo: Mayur Jeevan Kamble

Both work for the empowerment of women. The Mahila Arthik Vikas Mahamandal aims to connect SHGs with capacity building, providing training in financial transactions and enterprise development, while Umed Abhiyan works on poverty elimination through social mobilisation, institution building, financial inclusion and a portfolio of sustainable livelihoods.

Umed Abhiyan started in 2013 under the Maharashtra State Rural Livelihoods Mission (MSRLM) and is meant to specifically focus and work on poverty reduction using self-help group channels.

According to an advertisement published by the Maharashtra government, Umed Abhiyan covers 34 districts with 38,931 villages, and since its inception, it has reached 54.8 lakh families. Under this project, banks have loaned Rs 8,788 crore to SHGs through Umed Abhiyan and the government has granted Rs 786.81 crores in funds.

Lack of capital and training

Despite the numbers on record, rural Dalit women members of 15 SHGs in Satara’s villages of Shivthar, Vaduth, Arphal, Arale and Bhimnagar said that over the years, they have been unable to find any stable livelihood options or set up even small enterprises as they lacked capital and land to begin with.

During the lockdown, they found it difficult to rely on this mechanism even for small expenses. Government authorities also did not facilitate the revival of these groups during or after the lockdown measures.

Of the 15 SHG groups in Shivthar, Vaduth, Arphal, Arale and Bhimnagar, five stopped working because of economic difficulties. In the 15 years since they had been operational, eight of the 15 groups had not taken a loan above Rs 50,000, as they faced difficulties in starting new business enterprises.

In Arphal village, Megha Mane, the secretary of Ramabai Ambedkar Mahila Bachat Gat, an SHG for women living below the poverty line that started in 2004 said there were 14 women in her group, all of whom are farm labourers.

“When we first started, we took a Rs 50,000 loan, but nobody could use it properly for new economic activity,” she said. “We lacked the proper skills to make a product. We needed more guidance, but we have not received it from the government.”

In October 2004, the group began its first monthly saving of Rs 25 by each member. By 2019, the group members were contributing  Rs 100 to the pool every month.  “We used the group savings for family expenses, such as the children’s education, health emergencies and family functions,” said Megha.

Many women said that due to their lack of business skills, they could not start business activities or small enterprises.

“Even if we make village-level products, how will we sell them when we have no access to any proper sites or markets?” asked Pushpa Mane, the 45-year old president of the Ramabai Mahila Bachat Gat, Arphal. Pushpa said that over the years, the groups could meet only a few of each other’s immediate consumption needs and were not able to save beyond that for emergencies such as they faced in the lockdown last year.

The SHGs in the nearby villages of Vadhuth, Arale, Bhimnagar and Patkhal faced a similar situation.

Shivthar village’s four SHGs have women from the Mahar Dalit community as members and have been operational for up to 15 years.

Vaishali Kamble’s SHG started in 2010 with a monthly saving of Rs 50 from each member of the group, which they deposited in Bank of India. By 2016 their monthly savings had gone up to Rs 100 each.  But there has been no increase in savings since then because they were not able to raise their incomes.

“Twelve women in my SHG belong to extremely poor families and we hoped to help each of them in an emergency, but we were not able to during the lockdown as all of us were badly affected and we received no support from the government,” said Kamble.

Lack of capital is not the only obstacle these women face. There is also a lack of family support for new achievements or economic activities.

An SHG meeting in Arphal. Photo: Mayur Jeevan Kamble

Rupali Kamble, the 41-year-old president of the Ramai Mahila Bachat Gat group, which started in 2008 with 10 members, said, “Our members frequently lack family support, as well as the skills for any kind of business management.”

She added: “In the lockdown, it became hard to contribute our usual Rs 100 each and the amount was too small to help us through months of distress.”

Economist Abhay Tilak, director of Indian School of Political Economy, Pune, said: “For business activities in rural areas, SHGs are affected by several factors, specifically non-financial inputs like the purchase of raw material, access to market selection, purchase of machinery, market intelligence, decision making power, production cycle, marketing and recovery. All these non-credit factors matter and without understanding this, we cannot make this economic model a success.”

Professor Samapti Guha, professor of social entrepreneurship, microfinance and development studies at the Tata Institute of Social Sciences, Mumbai, said: “When we talk about the economic side of SHGs, we ignore many affecting factors. Low income households have a low capacity or propensity to save so it is very difficult to manage the regular work of the SHGs. All SHGs basically engage in a primary activity, so in rural areas they have very limited scope to scale up in a competitive market.”

Lack of adequate support

In Mumbai, Dr Heman Vasekar, chief executive officer of Maharashtra State Rural Livelihoods Mission, said: “Because of the lockdown, we faced certain limitations in providing help to the SHGs, but now we are trying to connect more effectively. We help rural women create stable resources and we will give more specific attention to Dalit women’s communities.”

Other experts said the lockdown showed that the government must revisit and restructure the self-help groups for marginalised women, focusing deeper on social and economic inclusion.

“SHGs have played a very important role in collective mobilisation and collectives can effectively channel a community’s needs and expectations from the government for new policies for development,” said Rakshita Swamy, who specialises in rural livelihoods and has worked with the rural development ministry on improving the implementation of its programmes in villages. Swamy pointed out that if SHGs focus only on microfinance, their scope of work and development may automatically be limited.

“Instead, SHG channels could do surveys about particular regions with specific questions regarding livelihood problems, including nutrition, employment and health related issues,” said Swamy.

An email sent by this reporter to the project director of Umed Abhiyan on February 25 did not elicit a response.

Mayur Jeevan Kamble is an independent journalist from Satara, Maharashtra and is currently pursuing an MPhil in Development Studies at the Tata Institute of Social Sciences, Mumbai. This story was reported under the NFI Fellowships for Independent Journalists programme.


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