Intervention Methodologies of SEWA

SEWA

  1. Providing facilities for savings and fixed deposit accounts, thus inculcating thrift in women; managing their savings and ensuring safe custody of the cash that the women receive as loans.
  2. Providing credit to further the productive, economic, and income generating activities of poor self-employed women and help in creating assets of their own.
  3. Adopting procedures and designing schemes suitable to poor self-employed women, like collecting daily savings from their places of business or houses or providing saving boxes and giving training and assistance in understanding banking procedures.
The bank adopts the following mechanism to achieve its objectives:
  1. Recognize/understand in detail financial problems of self-employed women.
  2. Adopt methods of operation through which they can come out of these financial problems.
  3. Design procedures and adopt mechanisms which are suitable to them.

Problem-I: Indebtedness (paying high rate of interest)

SEWA Bank's Intervention:
Providing loan for replying old debts, at a comparatively lower rate of interest
Results
  • Relieved from debts
  • Increase in real income because of difference in rate of interest
  • A portion of increased real income being saved in SEWA Bank's personal saving account.

Problem-II: Borrowed working capital (paying high rate of interest)

SEWA Bank's Intervention:
Providing loan for working capital at lower rate of interest
Results
  • Increase in real income because of difference in rate of interest
  • Expansion in business and thereby increase in actual income
  • A portion of increased real and actual income being saved in SEWA Bank's personal savings account.

Problem-III: Hired equipment (paying rent on equipment)

SEWA Bank's Intervention:
Providing loans for buying equipment
Results
  • Increase in real income because of saving in rent.
  • Asset is created in the name of women
  • A portion of increased real income being saved in SEWA Bank's personal saving account.

Problem-IV: Low income level

SEWA Bank's Intervention:
Providing loans, facilitating savings and financial counselling
Results
  • Increase in real income:
    - by borrowing at a lower rate of interest
    - by repaying old debts
    - by borrowing to buy equipment
  • Increased volume of business
  • Interest earned on SEWA Bank's savings account.

Problem-V: Assetlessness

SEWA Bank's Intervention:
Mortgaged properties relieved and providing loans for buying other assets.
Results
  • Equipment and tools of trade and other productive assets are in women's name.
  • Bank balance in women's personal bank account.
  • Buying other real property like house or land from SEWA Bank's loans.

Problem-VI: Lack of financial planning

SEWA Bank's Intervention:
Providing financial counselling
Results
  • Using own funds rather than borrowed funds
  • Being able to convert savings into investment
  • Being able to survive financial crisis, emergencies etc. through insurance and other financial planning.
Abstracted from:
"Banking with Poor Self-employed Women" by Jayashree Vyas in Savings and Credit: The NGO Factor. Bangalore: ActionAid (India), 1992.
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Hari Srinivas - hsrinivas@gdrc.org
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