A major cause of poverty among the poor subsistence-farming communities is the lack of access to and control over credit. When they need money to buy farming equipment, for example, they have to rely on money lenders who charge unmanageably high rates of interests. In addition, in the absence of central organisation in the village, the community does not work together to improve central resources.
The development of (largely) womens self-help groups has provided access to cash and resources on reasonable terms and in the familiar subsistence way of working. There are over 60,000 members of self help groups affiliated to Community Aid Alliance but the program needs to expand further in order to provide the funds to maintain the central computerized database systems and enable linkages with financial institutions for better rates of interest on their savings
The self help groups have also created grain banks, a central store of grain of which a percentage is donated by each family in the village. This supports low harvests times and families who run out of grain in the lead up to harvesting. The self help groups have also focused on maximising utilisation of land and water resources within the village for example converting rocky land into farmable land and creating community gardens. Another means is through value adding to their crops before selling them for example deseeding and packaging spices.
The self help groups have given women a previously unavailable opportunity to come together and discuss social issues within their community such as domestic violence and lengthy distances they have to walk to water supplies. The self help groups have empowered the women to tackle these kinds of social issues which have also changed the perception of their families and the community and given them more respect. This is called the Credit PLUS effect of self-help groups.
I started my shop with a R2000 loan from the self help group six years ago and now my business is worth R30,000. Dongamma, owner of village shop, Pandigunta village, Andhra Pradesh.
I facilitated the formation of a number of other self help groups in different villages and a federation was formed, thus creating a cooperative society which has allowed us to market our products properly and use the collective savings of all the self help groups so we dont lose lots of money through money lenders who charge up to 35% interest per month. Aruna Gokurumoina , Project Coordinator of Manyaseema, Federation of Self Help Groups