Women take action to relieve loan burdens

Since her training, Lakshmi has started 19 groups and regularly organizes loans from the bank in order for people to fund projects in water and sanitation. Lakshmi helped members to get 69 WaterCredit loans for water connections and toilets.


As a longstanding member of her self-help group (SHG),* Lakshmi has seen many things change in the Indian village of Sittilrai where she lives with her husband, Theangavel.

Before she ever heard of Water.org and their local partner organization Gramalaya, Lakshmi was witness to the dubious ways in which private moneylenders in the community tend to operate. They provide loans at rates of interest most people can’t afford and then visit their house to demand for repayment. They use threats and harsh words at first; later, they take people’s property. The loans are usually borrowed in the first place to pay for food, marriages and other important ceremonies. But the loans quickly become a burden as borrowers realize that the longer they fail to repay their loan, the higher the interest rates become, and the more these private moneylenders harass them.

Lakshmi recalls a woman in her village named Chellamal who unable to repay her loan of 3000 Rupees ($66 USD). One day, the moneylender turned up at her house and took Chellamal’s cow for payment, even though it was worth over three times as much as the loan. Chellamal didn’t dispute the matter because the lender, who was also from the village, was a wealthy man. Being poor, she lacked the confidence to take him on. Furthermore, she knew it was not uncommon for moneylenders to use physical violence if a borrower complained about the treatment they were receiving.

Lakshmi could not tolerate what she was seeing. She organized a meeting with all the houses in the village, collecting 10 Rupees ($0.22 USD) from each household to be repaid at a low rate of interest. It was during this time that a non-governmental organization (NGO) visited and suggested that the people in the village form a SHG. Sixty men and women came together to form a SHG. But it quickly became clear that the SHG was not functioning as it should because the men were always pressing to increase the two Rupee ($0.04 USD) membership fee. Also, when one man in the group received a loan, it was common for all the other men to then also demand that they receive the same.

As a result, Lakshmi wanted to make the SHG exclusively for women. At this time, in August of 2003, Water.org’s local partner organization, Gramalaya, appeared on the scene to help improve the functioning of SHG Lakshmi had started. First, the group of 60 was divided into three groups of 20 and the men were separated from women. Next, Gramalaya restricted the member’s access to internal loans that were only required to be paid back in small installments, at a low interest rate. Gramalaya also trained the SHG member on how to manage their finances.

Lakshmi herself attended Gramalaya’s SHG leadership training and is now a member of the SHG Federation, who represents all the SHG members. Since her training, Lakshmi has started 19 groups and regularly organizes loans from the bank in order for people to fund projects in water and sanitation. Lakshmi helped members to get 69 WaterCredit loans for water connections and toilets through Guardian, a sister microfinance institution of Gramalaya who handles all the financing.

Jayanthi and Usha Jayanthi

Both Jayanthi and Usha come from a town in Tamil Nadu, India, and are the mothers of young children. Some years ago, Jayanthi needed finances for her stationary shop and went to a private money lender who gave her a loan of 1000 Rupees ($22 USD) at an interest of 100 Rupees per week, which she was struggled to afford. Usha also took out a loan from a private lender, to put her child through school. Like Jayanthi, she soon found out it was difficult to repay the money at the 60% interest rate she was being charged.

Jayanthi and Usha heard of Water.org and Gramalaya’s self-help group (SHG) that had started in their village, so they joined. Here they learned how they were able to clear their earlier debts by taking out a loan that was manageable and that would not force them into further debt. Initially, Jayanthi borrowed 5000 Rupees ($110 USD) and in turn, had to pay back only 1.5 Rupees ($0.03 USD) in interest on top of the monthly installment of 500 Rupees ($11 USD). In this way, she was able to clear her debts and invest in projects for the future.

Later, the 12 members of the SHG took out a larger loan of 120,000 Rupees ($2,644 USD) from the bank, giving 10,000 Rupees ($220 USD) each to fund their own income-generating activities. Now, all members of the group are involved in activities such as shop keeping or metal working. They also took out loans for toilet construction and are now proudly using a safe latrine.

- Documented by Luke Whaley & Pictures by Darcey Williamson, UK

This project made possible by support from PepsiCo Foundation.

*Self-Help Group: a group of 8-10 women whose purpose is to come together to address development issues and issues in their community. The women must meet certain criteria to be a member of the group (i.e. responsible, saving money, leader in the community, etc.). Women are trained on health and hygiene issues, take out loans as a group, and educate others in their community. Often, they become leaders in their community for these development initiatives. Micro-lending activities are common within these groups because of the social collateral and shared group responsibility for a loan.

Capital: New Delhi
Population of 1.2 billion
77 million lack access to safe water
769 million lack access to improved sanitation
59% of the total population lives on less than US$2 per day