However, I disagree with Shubhalaxmi that the bill should be opposed because it allows for savings – in fact it is ignoring the field reality. A lot of women’s groups are infact federating (one lakh according to APMAS)- and savings is an important component of building ownership and participation of the women members – to ensure that the micro finance institution is governed by them – and not by agencies which are only interested in pumping credit and making profits from high rates of interest. In fact the two issues of interest rate and savings are closely related – if savings are allowed (to women owned institutions only) it ensures that there is no dependence on external sources for loans and the decision remains in the hands of women. By promoting credit only model the agency is transferred from women’s control to control of for profit institutions – I HAVE NO PROBLEM WITH FOR PROFIT AS LONG AS THEY ARE ALSO THINKING OF CHANGE AS WELL

I agree there are risks involved – of federations being promoted by NGOs who may use it for their own purpose or women’s savings at risk because of unethical practices. But the point is – by not regulating what is already happening in the field are we not exposing them to bigger risks? I think the focus should be on building capcaities of women to take informed decisions. By advocating stopping avenues of savings for women – which could revolutionise the micro finance sector and reduce rates of interest and give a legal recognition to thousands of SHG federations, I think we are indirectly promoting them for profit NBFC model – which has only the advantage of being efficient – they can neither show impact nor ethics (I am talking of the NBFC in general – there are some exceptions to it – the ethics part may hurt a few but if someone documented the views of SHG leaders in the ACCESS conference last to last year – they will know I am quoting women from AP. Karnataka, and some other states!)

I agree that some fund should be earmarked for capaity building – and I think instead of parking it with NABARD – it is better to make all the banks accountable to it by giving a certain percentage of loan amount as capacity building grant. I know SIDBI, FWWB used to give 10% or certain amount for cpcaity building. It has stopped now – because micro -finance has arrived – and we do not need capacity building funds – because the poor are ready to pay for it! What a logic! It has resulted in poor being left out of micro finance – and then we talk of social performance management for which international donors are ready to pump in crores to find out what went wrong with micro finance.

Also every one think of cpacaity building differently – for some it is only to let clients know the rules of the micro finance programme. So that too needs to be defined and consensus build upon it.

I think we need to strengthen the hands of sadhan – and arrive at common understanding to push for the bill which will be most important for community based organisations.

Kalpana Pant

Thanks for updating us. The reality of the SHGs is still the same that these are women’s forum driven mostly by micro finance interest groups. MF bill in this context is very important and as we worked intensively earlier to raise our concerns around it, lets again look at it and think together how can be make our voices heard. Is MF bill the same or it will now come up with some changes. I think it is important to grab a copy of its latest version and understand (analyse) it in present context.

I can give sometime to it and it would be nice if some more people join so that there can be a collective understanding (including various perspectives)

in solidarity
archana

Women’s groups also provided an alternative draft of the bill to the Standing Committee in September 2007 – http://www.nirantar.net/rat/mf%20bill.pdf. The key recommendations we had made were:
Inclusion of banks, both public sector and private banks, as well as micro finance institutions (MFIs) registered as non-banking finance corporations (NBFCs) and section 25 companies in the financial institutions to be covered by the bill
A cap on interest rates
Punitive measures for coercive means of recovery
Disallowing collection of thrift
Reviving and monitoring implementation of existing schemes to ensure reach of subsidised credit to the poor through public sector banks
Standard setting towards a greater focus on empowerment and equity
Contribution of substantial resources by Government of India (GOI) and banks to a National Fund which will be used for capacity building and emergency needs
Replacing the National Bank for Agriculture and Rural Development (NABARD) with a representative Microfinance Development and Regulation Council, at the national, state and district levels
At that point the Bill seemed to gone into cold storage.

If the MF Bill is indeed making its way back, we need to again come together, respond and point out the anti-poor, anti-equity and anti-women aspects of that Bill. Furthermore, we really need to hold back and do some stocktaking of the microfinance/microcredit movement in the country. The XI Five Year Plan itself recommends that we need to re-look at ‘microcredit/microfinance’ as the sole framework for poverty alleviation and empowerment programmes. Half the Plan period is gone – but the High Level Committee to review microcredit/microfinance policy and programme has not been constituted yet.

We, as activists, practitioners, researchers, etc, can hardly ignore a phenomenon that is so widespread and touching the lives of so many rural poor women belonging to marginalised communities that we all work with. I urge you all to please forward this information and disseminate it as widely as you can.

In solidarity,
Subhalakshmi