During my recent trip to India, I spent four days in Karnataka with an Indian NGO, Myrada. This organisation started here in 1983 around the town of Kolar which had suffered large-scale job losses as the result of the demise of the gold mining industry there – an unexpected connection right from the start with Purple Shoots since we are starting in an area in a very similar situation in South Wales. Myrada’s work spread to the rural areas and a lot of the work I saw whilst I was with them was in small rural communities or small towns.
Through its years of experience, Myrada has learnt a lot about what works and what has failed in their efforts to help the poorest communities out of poverty and they were keen to pass this information on to us so that we can get to where they are without wasting any time on things that don’t succeed.
The core of what they seek to do is to build institutions for the poor. This has come from a recognition that a lot of the barriers which prevent the poor accessing finance for businesses, finding training, making changes in their communities etc is because they were excluded from the mainstream institutions which existed. The “institutions for the poor” were not imposed but were developed by the people themselves in response to their needs – and then once established, Myrada was able to get official systems to recognise them – i.e. banks will lend to them, companies will contract with them etc. Myrada has demonstrated that this has effectively empowered the people who have been a part of these institutions which has enabled them not only to improve their economic position but to make changes in their communities – some have become members of their local government, others have effectively lobbyed to make changes, and some have trained for new roles or in new skills.
There are a range of institutions which Myrada has fostered – the key ones we looked at were what they called Self-help Affinity Groups, and the Federations of these groups. These SHGs are small groups of individuals linked together in some way or with a shared background or shared position or problems– in the rural areas these were often groups of people from the same village. They came together voluntarily, initially just with the aim of mutual support and the socio-economic development of their family and community, trying to solve collective problems. This led to saving together – very small but regular amounts – and this built up a fund from which they could offer loans to each other, thus avoiding the expensive and exploitative money lenders, who were their only other option. Myrada together with another organisation NABARD successfully demonstrated that these groups could be bankable propositions – and banks started to lend directly to the groups who then lent the money on to individual members. The Indian banks are now statutorily obliged to offer a certain percentage of their lending to these groups which have proliferated throughout India, with 7.9 million people involved in groups facilitated by Myrada and many other organisations following Myrada’s lead. The banks report an almost 100% payback rate of loans made to these groups.
The first group we visited, in a small farming village, had been together for many years. In its early stages it had worked to solve some common problems, a key achievement being to get a proper tarmacked road to the village to enable them to get produce out easily. As the group developed they began looking for ways to improve their income and eventually planned and financed a silk worm business which now employs many in the village and has enabled the group members to improve their lives significantly. In the photos below, one lady is standing outside the new house she was able to build and in the background of the group picture is the school which all of the children are now able to attend.
The groups are all linked to a local federation – two members from each group are represented on this which meets regularly and acts as a further support network, helping groups to solve problems and issues, forming a strong body to lobby government or other institutions, and collecting and disseminating useful information. They also appoint members to oversee the running of the third institution – Community Managed Resource Centres. These employ staff and offer services to the SHGs such as training, accountancy etc – and these centres are entirely self-sustaining. This structure is very successful and the transformation in the lives of everyone involved is very evident – and many of them were happy to talk to us about that.
Although this is a well developed Indian model, it can be adapted to work in the UK context – as the charity I have been working with, A Passage from India (soon to be rebranded Wevolution) has demonstrated in Scotland. A lot of the barriers to UK unemployed and disadvantaged people are similar in that mainstream institutions are not able to support them, particularly to raise funding and their only options are our own UK equivalents of the Indian exploitative money lenders. Unemployment and disadvantage have the same effects on people in the UK as in India – damaging confidence, engendering feelings of hopelessness and being worthless, and disempowering. Wales has a lot of the strengths needed (more about his in another blog) to ensure that community groups similar to the self-help groups set up by Myrada would work well and could be effective. Purple Shoots is therefore working to establish some groups to prove this – the first one or two will hopefully inspire others.