Teaching them to fish

Teaching them to fish

By John Silveira

October 24, 2006

In 1978, when Nanuben and her husband left their small village, in the Mehsana district of Gujarat, India, where she was an agricultural laborer, they were both earning 3 rupees a day. (Today, one rupee is worth a little over two cents in American currency.) They moved to the city of Ahmedabad with just 7 rupees between them. There, for 5 rupees a month, they rented a hut where they slept on the dirt floor and ate only once a day.

Today, almost 30 years later, Nanuben owns her own business and hires people to work for her.

Fifteen years ago, Dayavantiben Mulayam singh Yaadav had no home, few possessions, and very little money. She and her husband rented a shack that had neither electricity nor plumbing. The floors were made of mud, the walls of raw wood, and their beds were little more than straw mats. For work they made a snack called pani puris and sold them from a cart. But their business was slow because living conditions made it nearly impossible to maintain the quality of their product.

Now, she not only runs her thriving snack business, she also has what would amount to—in the West—a catering business. She and her husband also own their own home with electricity and plumbing, have been able to provide employment to others, have a savings account which by the standards of her neighbors is substantial, and they have sent their children to school so the next generation can live better.

At 18, Jatuben Shankarbhai left a small farm with her husband and moved to Ahmedabad where they rented a room without electricity or water. There, they began raising a family. He got a job in a mill while she began selling vegetables from a cart. Despite two incomes, they barely got by.

Now, they have bought and outfitted a house, provided for their children—including being able to afford “proper marriages” for them, and perhaps most importantly, she has expanded the vegetable vending business which increases the family’s income and has made them self-sufficient.

What makes these stories unusual is that these women all live in India where, despite efforts to change their lot, women are still second-class citizens. Yet, there are tens of thousands—no, hundreds of thousands of stories like theirs. So, what is it that, against all odds, has lifted these woman and thousands of other women out of the clutches of poverty along with their families and the neighbors they often wind up employing?


The Self-Employed Women’s Association, SEWA, was formed in 1972 by a group of some 4,000 women. These women were self-employed, though not necessarily “self-employed” in the way we use it. They were women who earned a living through their own small businesses such as:

  • vending fruits and vegetables from street carts
  • piecework—such as rolling cigarettes or rolling incense—as contract labor
  • weaving
  • embroidery
  • mending and repairing clothes for others from their homes
  • they even picked through waste

Then, as now, they were workers with no fixed employee-employer relationship and had to depend on their own labor and wits for their survival. Often they were then, as many are now, poor, illiterate, and vulnerable, with almost no assets or working capital. However, they were economically active, and contributed significantly to the economy and their society with their labor.

Among India’s poor women, one of their top priorities is work; work that will support their families. But, as has been pointed out, in poor societies it is not uncommon that part of a man’s income goes to supporting his family. But in the same societies, typically, all of a woman’s income goes into maintaining the family. In fact, often, a woman’s income is considered to be a part of her husband’s.

In 1974, the women in SEWA formed the Mahila SEWA Co-Operative Bank. The bank is owned by the self-employed women and its policies are made by their own elected board. The bank’s main business is offering loans.

SEWA only loans to low-income women and microentrepreneurs. All self-employed women, age 15 or older, can become members of SEWA, can qualify to join their “union” and can qualify for loans. But, before granting a loan, the bank’s loan committee, made up of self-employed women, consider an applicant’s income-generating ability, financial status, soundness of working conditions, and ability to repay. The committee then makes recommendations to the bank’s board. Most of the loans granted are unsecured. But the borrower is required to set aside five per cent of the loan amount to purchase bank shares and to open a savings account if she does not yet have one. The women are also encouraged to register their both their savings accounts and their assets—such as working tools, house, or land—in their own name and not their husbands’.

The bank then lends to the women for three major things: working capital, work tools, and housing. SEWA has not only helped women to build their own businesses, it has helped many women to move out of huts and slums without electricity or water, and to build their own houses complete with the utilities we take for granted. In India the number of women now belonging to SEWA now numbers almost three quarters of a million.

But SEWA goes beyond loaning money. When Jatuben Shankarbhai was hassled by the police, as “unlicensed” vendors frequently are, SEWA also provided her with an identity card which has led to fewer problems. The police are much less apt to hassle someone with a SEWA identity card since the bank now has economic clout and reasons to fight for its members’ rights. So, with economic freedoms they are now gaining, the women in SEWA also have more of the personal freedoms we take for granted.

Jatuben and other depositors also now have a scheduled savings plan, something not before practiced by these women or their families. And, as with saving accounts in this country, the money in the accounts is loaned out to raise even more money. And the people to whom it is loaned are other women like Nanuben, Dayavantiben, and Jatuben who, by bettering their own lots, are bettering the lives of those around them.

Other groups have taken training at the SEWA Bank and have started saving and loaning cooperatives in other parts of India.

Bureaucrats don’t run this. Nor is it supported by taxes. This isn’t welfare. This isn’t money once spent it’s gone. The money is loaned by women who have a stake in the success of the loan, and it’s paid back—with interest—so as to be loaned out again to other women. Money misloaned is simply lost. But the program has a phenomenal success rate and there are very few defaults. And, unlike charitable work that seems to require the endless input of money to sustain it, this is a self-sustaining program.

This is not a philanthropic or charitable program, either. One of the problems of most philanthropy is that the poor are always the beneficiaries, but they are almost never participants. This bank is run by the poor or those who were once poor. Another problem with conventional philanthropy is that it rarely encourages the beneficiaries to become productive for either themselves or their families. In fact, it rarely even addresses those issues.

Warren Buffet recently announced he is giving away a great deal of his money. Imagine if, while pursuing their philanthropic endeavors, Buffett or Bill Gates—another billionaire relatively new to philanthropy—were to seed a bank run for poor women, or just poor people, and their goal was to make those people productive and self-sufficient; to let the poor taste a piece of the capitalistic lifestyle that made them and others wealthy. Neither they, nor any other philanthropists, should forget where their money came from. They should realize that by “giving it away,” they’re not teaching self-reliance and independence, they’re teaching socialism and dependence. Poverty is not “cured” by socialism and poverty is only temporarily relieved by charity. The cure for poverty is putting people to work and by the creation of wealth. The symptoms of poverty can be temporarily assuaged with charity, but it can’t be cured. In fact, it can be argued that in its long run, charity perpetuates poverty—and dependency.

The future of Third World countries, particularly in Africa and Asia, is not in more and better giveaway programs, it’s in building wealth—autochthonous wealth, i.e., wealth that’s created at home. SEWA-like programs actually do that and the world needs more of them.

Are you asking why don’t you hear of the SEWA model? It’s not in the interest of bureaucrats or politicians to be creating programs that free people of bureaucracies and politicians. But the SEWA model is a program that would fit well in both rich and poor countries. It would fit perfectly in the United States. There would be obstacles here. The federal government has put a very tight lid on banks and there would be money interests in Washington and within the states that would oppose it. Also, starting small businesses in this country can be expensive, as the larders of the bureaucracies have to be greased to start even an ice cream stand. But if you want to alleviate and even cure poverty here or abroad, remember, don’t give them a fish, teach them to fish.

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