HAND UP: Saving-Credi to Improve Livelihood
Since 2007, CORE has worked with its Nepali partner, Society for the Urban Poor (SOUP), to implement the ‘Hand Up’ saving-loans program for extremely poor urban people in vegetable market and municipal trash collection areas. The urban groups have 300 members. This year, 65 members have taken loans. One of the challenges of working with the urban group is that they are not a cohesive community because most of them migrated to urban areas when they lost their homes, fields, or husbands.
Most of these people left their villages, usually due to dire circumstances, to seek a living in the city. Life is tougher than they expected and they find that if they do not work that day, they do not eat. Hence, they need to make smaller savings each day, otherwise there are too many demands on each rupee. With SOUP, we have improvised how the saving is done to meet the needs of these poor women by having flexible saving that allows for daily deposits of any amount that enables them to save. We have facilitators visit the group members each day to collect their few rupees of daily saving whether 10, 30, or 100 rupees. With just five or ten rupees per day, most members have gradually increased the amount that they can save each day and built up a saving account that they had never dreamed possible.
The flexibility of saving any amount daily has allowed women who thought that they would never be able to save to have a saving account of several thousand rupees. The saving amount of each member then serves as collateral for small loans to meet emergency needs and for capital to purchase more stock or equipment to improve their small enterprises. The loans come from both the saving fund of the group and a revolving fund provided by CORE. Our stipulation is that the loans are small so that they can be readily repaid and so that the funds are available to more of the members. Some women have taken up to seven rounds of loans, which they repay and then borrow a somewhat larger amount if they need it. Gradually, some of these members join a larger group or cooperative to have access to larger loans.
How we work: The facilitators are the key to the successful project. The Nepali partner, SOUP, hires and trains facilitators to work in the program. Often these facilitators are experienced social workers who have served as volunteers with SOUP activities for many years. (One facilitator served for 18 years as a volunteer before CORE began the project where we could offer her a salary.)
The facilitators visit every day – going out in the blazing sun, pouring rain, or winter fog every day to collect the members’ daily savings. They also serve as counsellors and financial advisors, listening to the problems of the women and offering advice and moral support.
“After a few weeks we got used to working in the garbage dump. Mostly, we enjoy working with the people. We learn so much from these women and when we have a holiday for more than three days, we miss them,” says Ratna Shoba, one of the long-term facilitators and staff.
The power of five rupees: savings are more important than loans for self-reliance
The women now use their savings and loans to improve their livelihoods and support their families. Several women have gone from working sorting garbage to having tea shops or canteens. One woman was earning paltry day wages breaking stones for gravel when she started with the group. She took a loan to buy a gravel machine and then another (for which she now employs others) and now runs a tea shop as well. Another has gone from saving Rs 10 per day to Rs 100 per day each for herself and her two kids. A few women have joined microcredit cooperatives to be able to get larger loans. They often remain members of the group for the solidarity and in appreciation of the start that it gave them.
When requested, SOUP has accepted requests to expand the work to include women in other nearby lanes.
In July of each year, the groups hold their Annual General Meeting. The groups sell shares to members for a fund that would sustain the groups in the future. SOUP is investigating how to start a cooperative for the long-term sustainability of the program.
“We have some money that is our own!”
Most members (mostly women but a few men) report that they feel a much greater sense of satisfaction and empowerment from saving than from taking loans. Several studies and much larger programs have verified this finding. Each of them knows that their families survived on loan after loan in the villages. But, saving a hundred dollars’ worth of rupees is a real accomplishment to them. “In the villages, we all took loans from the money lenders to survive. We know that we can take loans. What is special to us is when we can SAVE money,” say our members.
STREET-SIDE LITERACY FOR CONFIDENCE AND CHANGES
When requested, the facilitators taught women’s literacy classes to microcredit members. In 2012, the women in a group near the city dump, asked for classes and chose to have the classes held in an alley, near their workplace and living quarters. Although SOUP offered space in its nearby office, the women chose the alley so that they would have little excuse to skip classes. We also introduce information about health and nutrition in these classes. CORE has supported training in special literacy teaching techniques for the SOUP facilitators.
Sita is a member participating in the literacy class in July 2012. The inset is a photo of her from 2009, holding her saving passbook.
Tara came to Kathmandu with her baby after her husband was killed in the insurgency. She joined the group in 2009 when she worked in a cow shed. She now owns three cows to sell the milk and has opened a small shop.
“This saving group is like my parental home. At the start I would struggle to save Rs 10, now with their support and what I have learned, I save Rs 300-500 per day. I have learned so much like how to buy wholesale, so that I save and earn more money.
As well I realize that I am capable of doing all this to support my daughter and me. At first, I struggled to repay a loan for Rs 2,500. Now, I’ve taken loans and repaid them; now I have a shop and three cows and a calf. On the extra land I lease for the cows, I made rooms to rent to people who are in a bad situation like I used to be. Now, three of those women have joined the saving group.”
Pramila has an outside tea stand at the wholesale fruit market. She joined the group three years ago.
“I learned to save money and teach other women that if we save a few rupees, we can take small loans to start a business and save money. From small amounts each day, we can have income and save a thousand or more rupees each month.
“From the income we pay rent, school fees, and buy what we need. I took loans to pay for my husband’s treatment before he died. I am paying off these loans and taking care of my family. I cannot get to many group meetings but I appreciate its work and their decisions for us. I advise all my friends to join the group.”
Saraswoti joined the group seven years ago. She is afraid to take a loan but saves every day from her earnings sorting garbage in the dump. When she needs money, she takes it from her savings. As well, her children have scholarships from CORE, which helps despite their difficult home situation.