New Delhi: Inclusive financial networks such as credit cooperatives are more effective than traditional financial institutions in relieving the financial distress of women whose lives and livelihoods are hit by catastrophic events such as the COVID-19 pandemic, shows a yet-to-be-published survey by SEWA Bharat, a federation of women-led bodies that provide economic and social support to women in the informal sector.
Here are some anecdotes from SEWA’s research in eastern Bihar’s Munger district that illustrate this finding: Gangadevi, 35, an agricultural worker, and her family of four were hit by the pandemic in ways that she cannot even fully describe but she managed to avoid a crushing loan. Lailadevi, 42, is engaged in animal husbandry and manages to save Rs 125 a month and it is these small savings that saved her from getting entangled in a debt spiral over the last two years. Both these instances were reported in the summer of 2021.
The pandemic led to all-round job loss and ensuing financial distress, especially among the poor. However, those who were affiliated to credit cooperatives supported by SEWA had an easier time accessing money to buy food, run households and pay rents, the study found.
In May-June 2021, SEWA Bharat conducted relief efforts, primarily the distribution of ration kits, in five states including Delhi, Bihar, and Uttarakhand. To understand the impact of the crisis on the lives of women, the organisation also conducted a survey featuring 319 women working in the informal economy across these three states.
About 50% of respondents described themselves as homemakers. Others were occupied in different trades including agricultural, home-based work and domestic work. Upto 80% of them were SEWA members. Some of the questions featured in the survey were: How prepared were they to deal with the pandemic? What was the kind of stress they were facing? What kind of support from civil society and the government could help them to tide over these anxieties?
A significant finding of the survey was that many women reported that their affiliation with SEWA’s credit cooperatives helped them access loans and credit opportunities that other, more formal final institutions do not offer them. Mostly women rely on moneylenders known to the community and they charge exorbitant interest that sends debtors into a debt trap and impoverishes them. Banks too, require multiple documents for identity verification that many migrants may not have access to, creating barriers to loans, credit, pension and insurance facilities. One of the reasons for this is the lack of institutional recognition for informal workers and thus, the lack of policies and programs that protect their interest.