Saving Holds Key to Women’s Empowerment
Friday, February 26, 2010
Once upon a time, Sumitra used to roam the streets of the Indian city of Ahmedabad, collecting discarded caps which could be recycled and sold back to manufacturers such as Coca-Cola.
She would spend the whole day sifting through the rubbish collecting the caps in return for a few hundred rupees – about $2.
Then in 2006, Sumitra was introduced to a microfinance initiative which provided her with a small loan to start her own business.
Four years on, she employs five women, and is the proud owner of six bottle-cap straightening machines which process 50kg of caps a day.
After paying the salaries of her employees, her business makes a small profit that Sumitra saves every month – a move that she says has transformed her life and that of her family.
Sumitra got the small loan from the Vikas Centre for Microfinance Development, one of the oldest clients of the non-profit organisation Women’s World Banking (WWB) which helps lift women out of poverty.
They work closely with microfinance institutions, or MFIs, which provide a credit lifeline to millions of deprived people in some of the poorest countries of the world.
Now, after a few decades of providing small loans, they want more people to do the same as Sumitra and start saving.
“As the microfinance industry matures, we are seeing the beginning of a major shift from a focus on credit to an emphasis on savings,” says Mary Ellen Iskenderian, the president of WWB.
“Loans or credit were the model for the first 30 years of microfinance. Savings is the future.
“We will continue to look for new and innovative ways to increase global access to savings products and services for the poor,” she adds.
WWB is holding a series of leadership workshops across South Asia in conjunction with the MFIs that have been working hard to empower people in poorer societies, especially women.
WWB is planning to create innovative savings products and services, apart from small loans, for nearly seven million low-income people in Asia, Latin America and Africa during the next 10 years.
The initiative has just received the backing of the Bill and Melinda Gates foundation, which has pledged $8.5m (£5.5m) to the project.