‘When we have money they call us by our names, not our disabilities’


A cooperative bank in Madhya Pradesh catering to the disabled and their families is evidence of what microfinancing can scale up to.

Representational image; Source- Shutterstock

Iqbal Qazi was at the ripe age of 28 when his upper spine buckled under the heavy weight he used to lift working as a coolie at the local bus stand in Athner, Madhya Pradesh. With two small kids and a wife to take care of, he had big responsibility but little support.

After recovering from the initial shock, Iqbal started assisting an egg cart owner who would give him Rs 25 a day. His brothers offered food and a place to stay. However, in his own words, it was not a life of dignity. “I never wanted to be dependent on others to make a living. After a year, I had my own cart with four egg trays to start with. But due to the physical deformity, it was not an easy task to set up the shop every day,” he recalls. It was in 2008 that Qazi realised the importance of joining forces with others going through similar situations. Qazi joined a disabled persons’ organisation (DPO), and his wife joined a group of neighbourhood women who pooled in money and started small businesses.

She ran an informal bangle shop and bought a sewing machine to stitch ladies’ garments. Last year, they also grew soya bean on the 2.5-acre family farm. “We were not poor because we did not work hard enough. We were poor because we lacked the initial capital to make the best use of the resources available. Being part of the DPO and self-help group (SHG) threw open new horizons,” says Iqbal.

While DPO ensured that Iqbal got disability pension and other benefits offered by the government, SHG turned his wife into an entrepreneur. Today, Iqbal’s daughter is studying in college and his son goes to a private school. Iqbal earns around Rs 200 per day from his egg cart.

Such stories abound in India, where more than 2.5 million SHGs cover over three crore poor families. Besides financial security, these groups also lead to positive participation in governance. But many a time, they are not able to scale up as banks don’t trust them on loan repayment. An experiment in Betul district of Madhya Pradesh shows how SHGs can lead to an attitudinal change in financial institutes.

What makes it work?

Naman Sawayat Sakh Sahkari Samiti is a savings and credit cooperative with a total saving of over Rs 94 lakh. It has also disbursed loans of around Rs 86 lakh for various activities including farming and dairy, small-scale food processing, grocery shops, restaurants, and vegetable carts, etc.

People with disability and their families are at core of this microfinance initiative.

From modest people who saved Rs 20 every month, the members are now the stakeholders in this bank. The movement has added another dimension to microfinance by including persons with disability or their family members, mostly the female caregivers. “Conversely, persons with a disability are the entry point for us to gain access to unprivileged neighbourhoods because they tend to be the poorest of the poor. These families have the greatest need for economic support, for which they turn to informal lenders who charge exorbitant interest rates, thus prolonging the poverty status,” says Poona Kapse of Naman Sewa Samiti, the group which initiated people into SHGs.

Of the 4,411 members in the cooperative, 32 percent are persons with disabilities.

Zahid Khan knows his name. He also understands when his mother tells him to take his meal or fetch something from the market. The 18-year-old was born deaf and mute and till five years ago he used to communicate through hand gestures. There was no special school where he could go for studies. Neglected by the society and confined to his home, Zahid had nothing to look forward to.

His father, Suleman Qazi, is orthopaedically handicapped and pedals his way to the surrounding villages of Athner town, selling cosmetic knickknacks. The Qazi family’s life started changing as Zahid’s mother Shakila joined a neighbourhood SHG supported by Naman Sewa Samiti. The members started collecting Rs 20 and took loans for children’s education, medicine, or to support a ration shop.

However, it was not easy for Shakila as Suleman would always doubt what benefit a women’s group could bring. “Ours is a conventional neighbourhood believing that women should restrict themselves to household chores and leave outside work for men. However, with time, people started realising the importance of working in groups and the role of women in budgeting,” Suleman explains. But SHGs were just an entry point for Naman. As it gained acceptance, the organisation, through its network, reached out to people with disabilities.

“The neighbourhood has a high number of people with disabilities, especially children. SHGs were the best way to reach them since their mothers were involved there,” informs Poona Kapse, manager of Naman’s savings and credit cooperative. Soon, Suleman and Zahid became members of the neighbourhood disabled people’s organisations which connected them to government schemes and pensions for the disabled.

Suleman got loans of Rs 2,000 and Rs 1,500 over a period of time for his cosmetics shop while Naman tried to give as much assistance for Zahid’s education as possible. Today he studies in Class VI, knows sign language, has got an ear machine, and is also trained in making chairs.

Shakila, meanwhile, continues to break new ground through the SHG. The group got a loan of Rs 1 lakh from the Central Bank of India and used it to trade in mahua, making profit of Rs 10,000 each.

The scaling up

As the SHG network swelled, in 2006, the Samiti decided to form a federation which could give bigger loans and hence amplify the economic potential. Naman Sewa Samiti gave the federation seed money of Rs 1 lakh. A woman representative from every SHG became a member of the federation to ensure equal representation and participation.

However, it was soon realised that even the federation was unable to meet the aspirations of the SHG members, who had tasted the much-desired economic emancipation and were now willing to break the ceiling. To their frustration, the formal financial institutions remained as inaccessible as ever. This desire to reach further heights gave birth to the cooperative bank.

The most important outcome of a cooperative has been the inclusion of the neglected and ignored rural poor into the formal financial network. “They have understood loans, utilisation of money to further their personal goals, and the importance of the returning policy. The SHGs so trained get easily assimilated into the formal network as financial institutions are always keen on adopting the groups which value repayment of loans and recordkeeping,” says Kapse.

Naman Sewa Samiti has collaborated with the Central Bank of India to achieve this objective since it ensures that SHGs receive an additional source of credit besides other benefits of a banking system like government subsidies. The SHGs are free to choose between the banks and the cooperative and many have taken loans from both.

Collaborations with nationalised banks and government departments have further amplified the benefits that cooperative members are able to avail, whether it is formal credit, subsidies, or training programmes on skill enhancement. The cooperative also acts as an information centre on government policies even for non-members. Thus, instead of being an exclusive asset of the members, it has emerged as a public service provider.

Maybe the self-help and microfinance sector can learn a lesson or two.

Disclaimer: This article, authored by Manu Moudgil, was first published in GOI Monitor.