Anarcho-environmentalism allegorised

The name Anaarkali in the present context has many meanings - Anaar symbolises the anarchism of the Bhils and kali which means flower bud in Hindi stands for their traditional environmentalism. Anaar in Hindi can also mean the fruit pomegranate which is said to be a panacea for many ills as in the Hindi idiom - "Ek anar sou bimar - One pomegranate for a hundred ill people"! - which describes a situation in which there is only one remedy available for giving to a hundred ill people and so the problem is who to give it to. Thus this name indicates that anarcho-environmentalism is the only cure for the many diseases of modern development! Similarly kali can also imply a budding anarcho-environmentalist movement. Finally according to a legend that is considered to be apocryphal by historians Anarkali was the lover of Prince Salim who was later to become the Mughal emperor Jehangir. Emperor Akbar did not approve of this romance of his son and ordered Anarkali to be bricked in alive into a wall in Lahore in Pakistan but she escaped. Allegorically this means that anarcho-environmentalists can succeed in bringing about the escape of humankind from the self-destructive love of modern development that it is enamoured of at the moment and they will do this by simultaneously supporting women's struggles for their rights.

Monday, May 19, 2008

Microfinance Revisited

A micro-finance expert who had successfully launched and nursed to profit a leading micro-finance firm in the country and then chucked it all to start an NGO in Rewa district of Madhya Pradesh came to discuss rural development with me the other day. This led to a debate on the efficacy of corporate micro-finance as opposed to micro-credit and savings through self-help groups in bringing about an improvement in the livelihood situation of the poor. Micro-finance is profit driven and so cannot charge anything less that 25 to 30% annual interest on the loans they advance to the poor. Now this is the interest rate that moneylenders too charge when they are reasonably sure of the possibility of repayment. This is too high an interest rate for the poor and so even though they do manage to pay it and repay the principal it effectively leaves them with no capital or savings of their own for future financial security and so they are perpetually bound to go to the moneylenders or the corporate micro-finance institutions. Any sudden shock due to drought or death or crop failure leads to such families sinking into the vicious cycle of increasing debt.
Self-help groups on the other hand are typically supported by NGOs of one kind or another and so the interest rates are lower and the administrative costs are borne by the NGO which has funding support. Moreover the self-help groups also serve as community institutions that build up communitarian feelings among the people and help them to collaborate on various other activities like watershed development, marketing of agricultural produce, purchase of agricultural inputs and the like. The most important thing from the financial point of view is that lending in the SHGs begins only after a corpus is established through regular savings. The interest paid on the lendings when they do begin goes towards increasing the corpus and so over time capital is built up and there are examples of SHGs that have successfully freed their members from the clutches of moneylenders and built up substantial capital.
Microfinance institutions, however, do not insist on the savings aspect and are only interested in advancing loans and recovering them. Since recovery is a difficult proposition all kinds of stratagems are used to ensure that this does take place. In the picture below the women members of a group linked to a micro-finance institution in Vishakhapatnam in Andhra Pradesh are being made to take a collective vow to return the money that has been loaned to them.

Many NGOs in western Madhya Pradesh have instituted good micro-credit and savings operations among the Bhils. They have modified the working of the SHGs to suit the situation of the members and serve them in the best way. One NGO Bharatiya Gramin Mahila Sangh formed SHGs among the Malwi Bhil women of Indore district. The SHG members save regularly and then leverage the corpus to get loans from banks at a low interest rate. However, once the corpus reaches a level of about Rs thirty thousand for a ten woman group they distribute the corpus among themselves because they feel that they cannot deal with more money. After this they begin again from scratch. These groups too have freed themselves from moneylenders even though they have not been able to build up capital due to their diffidence about dealing with large sums of money. A diffidence that arises because their basic resource endowments are very low and so they are liable to economic shocks. They fear that if the corpus gets too large and the leveraged loans larger then in case of default due to a big economic shock the whole group will collapse leading to great difficulties. All these groups have got together and contributed some money and a lot of labour to build a community centre in one of the villages for themselves where they regularly meet to discuss various issues relating to their livelihoods as in the picture below.

An important aspect of this mobilisation is that the contribution of these women's groups in the social and political spheres has been even more than in the economic sphere and the activities that have been undertaken are as follows -
• The women were at the forefront of the struggle to increase agricultural wages and they succeeded by doubling them from a lowly Rs 25 a day to a much more justified Rs 50 per day.
• The Below Poverty Line surveys had been done in an improper manner earlier. The SHGs ran a campaign for the correct identification of poor people and got many genuine families listed and non-genuine families delisted.
• Similarly many eligible women were registered for widow pension.
• Concerted action including social ostracism and registration of police cases was instituted against alcoholic men who used to cause a nuisance for their wives who were members of the SHGs.
• Action was taken against corruption in the Panchayats and Sarpanches were forced to return funds they had defalcated.
• When a woman was beaten up by upper castes then the women of all the SHGs together went and sat in front of the police station demanding action against the culprits and were successful in getting a case registered against them.
Thus the SHGs can become potent institutions of the people while micro-finance institutions will always remain profit churners for their owners and keep the poor perpetually in debt bondage.


anish said...

Thank you for this post.

It cleared up a lot of things for me. There has been so much buzz in the media about micro-finance - like how these corporations are helping people etc. But it was always surrounded by typical corporate jargon. I start having doubts about their real intentions whenever I run into such jargon.

The stories of Self-Help Group women taking more control over their lives collectively are really very inspiring. Especially in today's general negative atmosphere. Thank you.

Rahul Banerjee said...

in the same way as corporate retail houses are chipping in to the unorganised retail business with the aim of skimming off profits similarly corporate micro-finance companies are entering the rural credit markets and chipping into the traditional area of operation of the moneylenders. there is no reliable estimate of the moneylender dominated rural credit markets but it can easily be imagined that it runs into thousands of crores at the all india level. that is why the micro-finance companies have muscled their way in and at the same time they try to camouflage this profit seeking with slick talk of financially empowering the poor.

Payal said...

Reading your blog further reinforces my beleif in community based micro Finance. Being surrounded by MFIs, and constantly bombarded by all the hype and publicity of 'empowerment', one at times feel that the 'SHGs model' is too time consuming and input intensive. But as mentioned in your blog the true financial inclusion is through people's organization and not corporate led models.

A blog on community based MF is like an oasis in the desert.

Rahul Banerjee said...

usury in fact has been the major drag on rural development from time immemorial. it resurfaces in various forms. and corporate micro-finance is the newest form of usury. self help groups when supervised by a good NGO with grant support do provide relief but they too have their limits operating as they do in a larger context of capitalist exploitation through the market. rarely if ever do shgs succeed in income generating activities beyond a point and so are left stagnating in a low value situation. thus the moment NGO support is withdrawn the SHGs tend to collapse.

Anonymous said...

SHG as a model for women's empowerment has failed. It not only stereotypes women as 'savers' for the family for 'family purpose', but unwantedly puts additional burden on the women members expecting loyalty, working for the benefit for the group in the larger aim of repayment than anything of greater importance.

SHGs are exclusionary - not only of women from different communities, but excludes the poorest of the poor as well - largely because poor women do not have the time to do hisab-kitab, plus of course they do not have money to save to the extent that SHG 'elite' members quote. One rarely comes across an SHG saving a rupee a month.

One could get better insight through Nirantar's report on SHG.

Rahul Banerjee said...

not only shg model but any NGO model for rural development is in the long run a failure because within the overall capitalist setup of immiserisation of the marginalised poor there cannot be any sustainable development model for them. the much touted rights based approach too is totally flawed because it assumes that the liberal democratic state will if pressurised by the organised might of the poor implement the rights that are guaranteed to them by the constitution. in reality the state uses illegal means to suppress any rights movement that becomes powerful enough to challenge it. moreover these rights movements these days are also supported with grants from funding agencies. the moment this grant support is withdrawn these movements will collapse like a pack of cards. i mentioned clearly that the shg model is not self reliant but has to be grant supported. it is a stop gap arrangement. without the overthrow of capitalism and the global market economy as it operates at present there cannot be any justice or development for the poor. so to criticise shgs without criticising capitalism or the market economy is hypocritical and dishonest.

Punkhuri said...

hi....i am a student and i have to make a project on the Bhils. i would be really grateful if you could please help me with it. just a little information about their origin, culture, lifestyle, challenges that they face....i would really be obliged if u could reply. Thanking you...
(reply at my blog plz..

Anonymous said...

there are many ways of development approach and my contention is that the shg model does not answer an empowerment model of development. And rights approach rejects shg as a model for empowerment of women. Primarily because the model rests on savings and credit or thrift and credit. Any SGH that does not do savings, will not be called an SHG, would it ? Similarly any women's group that does not do savings and credit will not be called an SHG.

You are right, rights approach takes its reference from what is enshrined in the Constitution but it could go well beyond by intepreting international human rights regime to drive home the point. Whether donor driven rights approach is able to deliver or not, is a worthwhile question open to criticism. But currently we are discussing what model delivers empowerment that is required in a development process that challenges statusquo. And I reiterate - SHG model does not challenge statusquo, it may, as you rightly point out - 'build communitarian feeling' to maintain statusquo, but certainly not to challenge.

Rahul Banerjee said...

anonymous seems to have missed the whole point of this post which was not to eulogise shgs but to demonise corporate micro-finance which is a slick form of modern usury. i just mentioned that in comparison to the latter shgs or micro savings and credit organisations are much more people oriented. in my later comments i made it clear that shgs have a very limited scope in an overall capitalistic setup and at no point of time did i say that they are capable of challenging the state. the rights based approach whether in the context of the indian constitution or in the context of international human rights too i am afraid cannot challenge the state because it functions within the capitalist framework which is basically illegal whatever may be its rhetoric. whenever a rights based intervention on behalf of the poor challenges the profit making logic of capitalism as it must do to ensure empowerment the state cracks down on it with illegal repression. that is why i said that rights based approach is flawed.

punkhuri the bhils reside in a vast stretch beginning from sind in pakistan to nashik in maharashtra. they have a varied culture and history. i am familiar with the bhils of madhya pradesh and i have written about them here -

Anonymous said...

i am afraid i did not get your finer aspects of shgs being people oriented - my question was exactly even that - what people orientation is one talking of if the model is exclusionary....perhaps i do not have sufficient intelligence and leave this topic here.

I cannot but comment on your claim that rights based approach is flawed because it challenges State and any challenge of the State is met with repression. So ?? are you suggesting we do not challenge the State ? Any challenge of the State is bound to end in repression, perhaps that's the measure of being effective. Yes, one may ask what then after repression, do we have mechanisms ready to counter these State initiated repression, that perhaps is the test of our democracy and our Constitution.

Rahul Banerjee said...

the shg model need not be exclusionary. whether it is inclusive or not depends on the NGO that is supervising the SHGs. i had given one rare example of an inclusive SHG that had taken up rights issues also. trashing all shgs is like throwing the baby out with the bath water. taking up rights issues will bring the people in conflict with the local power holders initially and if the mobilisation increases then the state. the rights based model assumes that the state will respond positively to this mobilisation in accordance with the constitution of india and the international human rights conventions that it is a signatory to. however, this does not happen in reality and repression results that imposes tremendous costs on the people in terms of going to jail, attending court cases and even getting killed. thus the model is not flawed in its bid to challenge the state or local power structures but it is flawed in expecting the state to act according to the constitution or international rights covenants. the model is also flawed in not questioning the capitalist mode of development.
finally the history of the twentieth century teaches us that it is futile to talk in terms of models. no model of development can succeed regardless of the ideology on which it is based. the diversity of individual situations necessarily means that centralised models cannot address the problems that arise.
this blog celbrates anarchism and communitarianism but does not posit them as models. instead individual successes and failures are described very much with the realisation that they are taking place within a heavily centralised capitalist global framework.
challenging this framework is the basic task of people's mobilisation. any mobilisation that does so in a small way is welcome even if it is through the formation of an SHG. while you cleverly misconstrue my arguments to mean that i am advocating against putting up such a challenge you remain silent about whether capitalism is good or bad. this silence leads me to assume that you favour capitalism and the skewed, high finance dominated market economy that it has spawned and that is why you are biased against micro savings and credit activities of the poor!

Anonymous said...

Came across an interesting note on shgs circulated by Indian Cooperative Union. Am cut pasting. You may want to have other ways of sharing this info to your blog fans! Feel free with the use.

Here it goes:
Indian Cooperative Union
Hyderabad, Andhra Pradesh
1 June 2008

With the objective of having an informed and healthy dialogue on self reliant cooperatives (SRCs), self help groups (SHGs) and microfinance institutions (MFIs), the Indian Cooperative Union (ICU) has been circulating notes containing its observations to an involuntary egroup that has the email addresses of several institutions and individuals who, in the opinion of the ICU, have an interest in these entities. The note of May 27th was titled "Politicisation of SHG Movement". Produced below are some select comments received from the recipients of the ICU Note.

1. From Kerala: Many of those involved in the new Janashree do not have a clue of what they are doing. This may turn out to be a real tragedy for the SHG Movement in Kerala - the most literate, with great degree of awareness. Added to this is the issue of caste-based organisations forming SHGs and acting like microfinance institutions (MFIs) - the Nair Service Society (NSS), the SNDP ( an organisation of Ezhavas- a dominant backward caste here). Added to these are the church-promoted SHGs. All this has added to the malady. Members of SHGs seem to be happy for the present with multiple memberships. Their happiness may not continue for long; when defaults start, the real tragedy begins. So, it is not merely politicisation and communalisation; it is, in fact, criminalisation of self help and microfinance programmes.

2. From West Bengal: Let me first make it abundantly clear that, as a long time student and practitioner of microfinance, I do not have any hidden agenda for the Indian political parties nor am I overenthusiastic on the capabilities of these parties, which for a variety of reasons - right or wrong - are the main driving force of the Indian democracy for the last six decades.We have seen the other models of democracy in the world and everywhere their performance is subjected to some criticism or the other. With all their failures which all of us in the civil society, at times enjoy and yet try very little to reform the political system, our record as a democracy is not all that bad and we have reasons to be proud of its achievements in contemporary world, especially in the third world.

In development, there is basically no long term conflict of interest unless different social groups get carried away by some differences in their often self-designed stakes in development and claims of their respective shares of the social pay-off in terms of people's goodwill and popularity. Let us not forget that these parties ultimately remain accountable to the people - the source of all political power in a mature democracy. Thus, let us not surrender to the temptation of the political leaders of the day and start crying that the microfinance and self help initiatives so persistently pursued by the leaders of the civil society, for so many decades (when all the populist programmes of the government failed to deliver results and make any worthwhile impact on the lives of the poor) will suffer immeasurable and irreparable damage, if left at the hands of the political parties and the bureaucracy. For a robust democracy, there is perhaps little scope for us to think on such purely sectoral lines by only criticising the parties and remain on the warpath all the times thereby nullifying much of the aggregate national level energy and resources.

The efforts taken by two national level parties in Kerala, the most politicalised state in the country, need to be looked into by us in a non-partisan manner, examine their results as far as these help in reducing the poverty levels and increasing employment opportunities in a place where people are known for their high literacy and a generally higher-than-national level standard in basic health care, etc.What we, in the civil society, can do is to set up alternative microfinance initiatives in the state and prove to the society, the people and also the parties that such alternatives are equally beneficial in terms of the development parameters accepted universally. We all know that all so-called development initiatives driven by purely localised leader-based interests (the vote-bank interest!), are bound to peter out in the medium and long term, whereas initiatives, born out of people's aspirations, their genuine needs and potentials for future have been duly recognised and rewarded by society and posterity. History of economic development bears ample testimony to this .

Leaders of the political parties, like leaders of civil society organisations (CSOs) or of non-government organisations (NGOs), are not free from the commonest human tendency for increasing their domain of influence.- it may be the size of party membership or the number of clients or the portfolio size. In social dynamics, individual leaders play very critical and decisive roles. What is really called for in our democratic society, is to look for continuous dialogues with all the development agencies and the connected machineries, including the parties and the bureaucracy, and settle for the path of minimum conflict and maximum consensus to realise the socio-economic goals fixed by the process. Calls for getting prepared for imaginary battles ahead with great risks of loss of precious economic and human resources in the battles, may serve some unknown objective of the SHGs and MFIs in Kerala led by the NGOs, but will definitely take the state backward in its onward journey to the goals of poverty reduction through generation of income and employment, based on a cooperative approach between the government, the political parties and the civil society working in Kerala. In development there is no apartheid, from either side and development is not the sacred territory of any group - political, apolitical or non-political.

This is all for the present. I have some more observations on this imaginary battle for gaining more social, economic and political space. But that is left for some future occasion.

3. From Delhi: On reading the contents of the email, a genuine development person will believe that what a pity that politics ultimately does not leave anything and party politics in competition eventually contaminates all the noble concepts and efforts. The creativity and the art is eventually reshaped to something else.

We have witnessed that Panchayati Raj which was a noble idea to bring the local administration to a village development has not been spared of the petty politics. Yes, there have been some efforts to reshape the panchayati raj institutions (PRIs) by bringing in women's participation, by advocacy of NGOs for people's participation in identifying and implementing the village infrastructure development programmes.

On the subject of different political parties promoting SHGs, we in the NGO fraternity may not be able to stop the politicizing aspects, but through advocacy on the larger forums, we certainly can ensure that the "bigger picture" in self help and microfinance efforts is to strengthen the livelihoods and promote the entrepreneurship which are indeed tied to the GDP (current mantra in India). So, let us keep pursuing the noble agenda of livelihoods and entrepreneurship in which self help and microfinance bring in valuable inputs which address the socio-economic aspects of poverty. This is the "bigger picture"

4. From Mumbai: In a democracy, the politicians are bound to hijack any pro-poor programme like SHG Movement and then spoil it by their ideology, ambitious targets for mass loan disbursements and coverage, with no quality control. Even otherwise, of late, the SHG progamme is being seen more as a business proposition by most of the MFIs and equity companies, as is evident from the exorbitant rates of interest being charged by most of the MFIs, than as a socio-economic engineering to improve access of credit to the under-served and the un-served poor

5. From Gujarat: The design of the SHG Movement is also an issue. In Gujarat, too, there have been such instances, with even NABARD being party to them. Here, it has to do with saffron groups

6. From Andhra Pradesh: Though what the ICU has pointed out is very significant, I am afraid it comes too late. The entire corruption of SHG Movement was started by Chandrababu Naidu of Telugu Desam Party who, under the direction of the World Bank, turned rural women into consumers from being producers and entrepreneurs. That is why under pompous headings such as "Stree Shakti" he made rural women as vendors of Unilever products and converted SHGs from vibrant fora for women's sisterhood-building into a chitfund unit or a retailing unit.

This was hailed as the greatest empowerment of women. There was hardly anyone who unmasked this unprecedented betrayal of women's grassroots movement by a puppet of the World Bank. Now, if the CPM and the Congress take a leaf out of this sordid story, why do we need to oppose it? The chattering segment of our civil society has already sanctioned this trend and now it does not retain the moral right to point fingers at the CPM and the Congress in Kerala. This is our sad reality.


* This note is circulated in public interest.

* If any recipient of this email is not interested in receiving such stuff, she or he has to simply click "Reply", type "Unsubscribe" in the subject box, and finally click "Send". The relevant email address will automatically get deleted from the egroup.

Rama Reddy, President
Indian Cooperative Union
Ranga Reddy Women's College Campus
Santosh Nagar Crossroads, Saidabad
Hyderabad - 500 059, Andhra Pradesh

Telephone: +91 40 2433 1167
Cellphone: +91 94412 00568
Email: President@IndianCooperativeUnion.Net

Rahul Banerjee said...

all that has been said in criticism of the shg movement in the above note can also be said about the cooperative movement of which the author is an activist. the cooperative movement in this country has been taken over by politicians, bureaucrats and technocrats and the individual member is just a pawn in their games. any movement in fact can get taken over in this way. i was pointing out the deleterious way in which corporate micro-finance has distorted the shg concept. but just because a movement can be distorted does it mean that the movement should be discarded. then not only shgs but cooperatives and rights based organisations too should be discarded because these have all been distorted in the Indian context.

Anonymous said...

i appreciate your desire in this blog to promote anarchism and communitarianism. You are obviously not suggesting shgs are any close to celebrating this concept! You will have me believe you are idolising the WB!

well, on to your query on rights approach within the capitalist form of govt....its true rights based approach operates in a socialist framework seeking intervention from the State in the assumption that the State is a lesser evil that the Market. Such an approach inherently believes in the super power of collectivism that has the ability to rip the government of its power.

Community, we are all familiear, is not a monolithic structure or body, it is formed of differences in terms of belief system, class, caste, gender and that is what makes it all the more difficult (not impossible) to bring in that collectivism under a single banner or platform. Therefore I fail to understand how the notion of saving and crediting could give rise to feelings of 'communitarianism'. You surely must be familiar of instances where women must have withdrawn memberships when 'higher' caste women refuse to (rather not allowed to) come to meetings in dalit bastis. But by then the pressures for the promoter towards recovery and building more such groups are so high, that one would rather not 'waste' their time over such matters. Of course, i do not disagree with you that some organizations might have done justice to the notion of a selfhelp group. But then my question is why get into shg model - get on with the more familiar traditional mahila sangathan minus the savings and credit, which in any case promotes formation of 'capital' under the pretext of a vague notion of 'communitarianism'.

Rahul Banerjee said...

you are still obsessed with models. while i am saying that any model is deficient whether it is an shg model or a rights based model. you are living in a fool's paradise if you think that cooperative action can rip any government of its power. i would like you to show me one instance in which cooperative action has ripped a government of its power and then we can dissect it to see how far it has been cooperative.

the problem of divisions on the basis of caste, class, gender etc are there at all levels of society right from the community level to the highly centralised state. however, at the community level it is easier to resolve this problem if there is no intervention from the state in support of the powerful sections. i had mentioned just one example of a process in which a group of women began with savings and credit and then took up issues of rights violation. i did not mention any model.
as for building capital through SHGs that has become a necessity because of the integration of even the remotest people into the global market economy.

Vidya said...

Am I missing something here in the comments? As far as I am aware the shgs seem to be the only 'workable option' almost across NGOs, or for any group working with rural women.
May be other theoritical models and options may exist but this one really works and has shown results whether it is in the South, the North East or anywhere else in India

And many congratulations on the new book!(catching up with the blog via Bhupinder's latest post).

Rahul Banerjee said...

shgs are indeed a pretty good model but they have their limitations given the fact that the larger economic forces tends to impoverish the members. for instance the high inflation and the higher bank linkage interest rates obtaining at present will almost certainly put pressure on the shgs which are almost always in a difficult situation when it comes to repaying the loans. the successes are given a lot of publicity but actually their number is very small compared to those that have failed. as i said earlier there has to be grant support and able monitoring of the performance of the shgs by a good NGO.