Women and Money June 1997 Microcredit Section ©"> Sewa microfinance - Finances and Credits Assistant

Sewa microfinance

sewa microfinance

Self-Employed Women's Association (SEWA) of India

Paving the Way for Women's Economic Progress

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Women and Money

June 1997 Microcredit Section

© 1997, Smita Srinivas History and Objectives of SEWA

SEWA was founded in 1971 and registered in 1972 as a trade union movement for women in the informal sector, an unrecognized, neglected part of the economy. (In India this informal, largely self-employed sector constitutes approximately 90% of the total economy). A few thousand women subsequently established the SEWA bank as a co-operative to empower poor self-employed women by providing them with access to credit and financial services and to reduce their dependence on exploitative money-lenders.

There are many SEWA groups in different parts of Gujarat, but the common theme is women’s empowerment in the truest sense of the phrase. The path to women’s empowerment and bargaining power is tied to income levels, literacy rates, and status in the society. This status is further affected by poor health, fear of land-owners and factory bosses, lack of knowledge of the judicial process, and experience of repeated exploitation at the hands of those in power.

SEWA’s Role in Empowering Low Income Women

When SEWA was founded by Ela Bhatt, she created a means by which self-employed, poor women had access to justice and could combat police and other violence and exploitation. Due to an ancient British law still in existence, these women were committing an offence by sitting in public areas to sell their wares. This led to endless harassment from people in authority. The women often lost their produce, were subjected to physical violence, and evicted from the premises. SEWA was formed, the women sought judicial recourse. In a landmark ruling, the Indian Supreme Court ruled that it was women merchants’ right and a city’s duty to provide a separate place for workers in the informal sector to ply their trades.

SEWA’s first victory had been won.

SEWA is not just a trade union or a bank, although these have been its strengths. Its goal of allowing women to reach their fullest potential through using all resources effectively, has made it grow rapidly. SEWA has strategically used the traditional tools of struggle and bargaining, which have characterized many trade union movements as well as other techniques. In areas where there are few prospects for self-employment or any employment, traditional unionizing techniques do not work. In such cases, SEWA has worked at the grass-roots levels with various women’s village organizations, often helping form these groups. SEWA makes the women run their own organizations, forming co-operatives and helping them bargain collectively in the market-place. Since Gujarat is a dairy-farming state and one where non-unionized work and smaller co-operatives have little chance of survival, one of SEWA’s biggest successes has been in the dairy co-operative sector.

Sub-sectors of the economy that SEWA’s members have identified and developed are dairy farming, gum-collection, embroidery, salt-farming and plant nurseries. The benefits in these sectors have been economic and social. Activities like embroidery, normally considered women’s work and non-wage earning, have been successfully converted into wage labor. Due to resulting increased income and greater status in their communities, these women have a much stronger voice in village-level decisions normally made by male leaders. SEWA has also succeeded in minimizing seasonal migration due to lack of employment by encouraging women to form self-employed producer groups and then finding new markets for their products.

Financial and Support Services of SEWA and the Role of Microfinance

SEWA began its own bank to give women access to micro-loans. SEWA has been successfully giving small loans to resource-poor women over two decades. Women are encouraged to hold accounts in their own names (revolutionary for traditional Indian society, where financial accounts are almost always managed by or passed down along patriarchal lines). Since many women clients are very poor, illiterate, and cannot sign their names, photo IDs are provided and transactions made using this means instead. Bank clients are largely hawkers, vendors and those working in the tobacco and dairy producing areas of Gujarat state in Northwest India. They are share-holders of the SEWA Bank. Decisions regarding policy and sanctioning of loans are made by a Board of Directors, where positions are filled by regular elections.

The Bank is run by qualified financial managers who are hired by this Board. The Reserve Bank of India (India’s Central Bank) supervises its functioning as it does any other bank. The repayment rate is astonishingly high by the yardstick of commercial banks, and SEWA loans at viable commercial rates of interest. Its attraction is that it provides services tuned to the poor (especially poor women) and its interest rates are much lower than those of usurious money-lenders. There are no government subsidies. Thanks to its commercial interest

rates and members’ high repayment record, SEWA successfully stays self-sustainable, something many financial experts believe is difficult to achieve when the loans are given to the poorer strata of society.

The Success of SEWA’s Microfinance Loan Programs

A fundamental process of upward economic mobility is capital accumulation where clients are able to save and invest some significant part of their earnings to further augment their future output and income. Even more growth could be achieved by investment in technological factors. These would either be by labor-saving capital accumulation (or time-saving/capital intensive) like investment in machines or by capital-saving technology. In many less developed countries, more labor-intensive (and capital saving) technology is needed.

SEWA lends to its members for working capital, investment in working tools, and for capital investments like work areas, houses or storage space for their produce. SEWA has given priority to capital accumulation so that loans are not taken primarily for consumption and survival. Furthermore, SEWA ensures that loan sizes are not too small, or no significant amount can be invested in capital. This can especially be a problem for women, who have greater obligations socially to the family before themselves. SEWA also has savings mobilizers. Women can open savings accounts and deposit their money when SEWA makes house or workplace visits.

Institution-building and Supporting Social Infrastructure

Perhaps more important than just access to credit, which many incorrectly believe is the panacea for all hardship, SEWA has concentrated on empowering women to use their resources most effectively. In the villages of Gujarat, and in the city markets of Ahmedabad (where SEWA has its headquarters), women are speaking out more, taking leadership roles, and realizing how far they can go when they have collective bargaining power for wages, better working conditions, combating domestic violence, or improving education and family health. Women’s groups that received loans also received training in financial management, their legal rights, business management, as well as other support-services. Principles of collective organization have made women able to meet their need for higher incomes (or any income at all), better health services, child-care, and common forms of insurance to protect their lives and livelihoods. Many SEWA groups have begun health co-operatives and child-care facilities. They try to make these financially self-sustainable by generating income through fees for services and training fees for other groups.


From 1972, the women of SEWA have come a very long way. Today SEWA has over 220,000 members and has 362 producer groups and 72 co-operatives. The name SEWA (meaning assistance or duty in Gujarati and Hindi) now brings to mind women with increased leverage in the economic market place, women who are more aware of their rights under the law, and women who have growing societal visibility. Low-income women have organized to claim a much stronger bargaining position in the economic arena. Women and their families now have hope of appropriate health and child-care services. Women are increasing their financial and managerial training while also providing better opportunities for education and health to their families, especially their daughters. By providing resource-poor women access to financial credit and developing support services that allow women best use of their resources, SEWA has shown that microfinance is a powerful tool in developing institutional strengths and a strong economy. Women who already constitute a huge part of the labor force in most countries, have been given the opportunity to claim their rightful place in the economic and social arena. These successes have to be understood in the context of not just traditional Indian society, but in a world at large that treats women’s labor as second-class because it is often not wage-earning. SEWA’s pioneering achievements stand the test of any society, modern or traditional, developing or industrialized. Some excellent sources of information about SEWA and case studies of various other microfinance programs that this article has drawn upon are:

  • Speaking Out, Women’s Economic Empowerment in South Asia. Eds. Marilyn Carr, Martha Chen and Renana Jhabvala published by the Aga Khan Foundation Canada and UNIFEM.
  • Chen, Marta (1996), Beyond Credit: A Subsector Approach to Promoting Women's Enterprises. (book + video), published by the Aga Khan Foundation Canada and the Harvard Institute for International Development (HIID).
  • USAID Microenterprise development briefs 1995.

  • CGAP briefs and focus notes 1-5, Consultative Group to Assist the Poorest, World Bank

    The Hidden Beast: delinquency in Microenterprise Credit Programs ,

  • Katherine Stearns, Accion Discussion Paper no.5, 1991 Assessing the Impacts of Microenterprise Interventions: A Framework for Analysis. USAID AIMS Project, 1995

  • Contact Addresses for SEWA: Self Employed Women’s Association (SEWA)

    Sewa Reception Centre, Opp. Victoria Garden, Bhadra



    Tel: (91) 79 5506477/5506444 (SEWA main office)

    Source: www.gdrc.org

    Category: Payday loans

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