Nepal

Going into a bank was unheard of for women farmers in Nepal. Now some 3,000 are members of a scheme where loans are readily available to help them increase their income.

'When we were asked to borrow money from the bank to buy chickens and goats,' says Sri Laxmi, a woman on a small farm in Nepal, 'we said this was a business for men. They are the people with time to go to the bank. Women have too much work to do. And we do not know about writing or filling in forms.'

Persuading Nepal's poorest women to form active self-help groups and take out loans was not always easy. The idea began in 1973 with the Small Farmer Development Programme (SFDP) which aims to make it easier for people doing farming on a small scale to get loans, previously only available to more wealthy farmers. Before this, people had to depend on the moneylenders for the advances of cash they needed to buy fertiliser, seeds and other things for their production. But they often paid dearly — sometimes with annual interest rates as high as 60 per cent.

The SFDP not only offers lower rates, but — quite different from conventional loan agencies — the women farmers do not have to own land in their own name, or put up their property or goods as collateral. Instead they form groups of about eight to twenty members who borrow on a group guarantee basis: if one person defaults, the group have to take the responsibility for repayment. And in a close-knit community, the pressure is on to keep to your obligations. So by and large the debts are promptly paid off.

Sri Laxmi's group had worked side by side for years in the paddy fields. They'd gathered fuel and collected water together, and seen their children grow up. The SFDP organiser, Bhisma Ojha, helped them with the paperwork needed to set up their first loan of $200. This was used, collectively and individually, to buy goats and chickens, beehives and fertiliser. The debt was cleared in two years and the animals still provide income which goes into the group's savings account.

Sometimes things don't turn out as planned. Ganga Devi Dhungana has been a member of a small farmer group for several years. She swiftly repaid her initial $500 loan out of profits from the weaving business she had set up. Her group willingly agreed to a further advanced of $1,500 which she needed to expand the business. She was a good risk, for her products sold well. But then her husband died and a fierce wind blew the roof off her workshop.

What could she do? The group members met urgently and decided to help Ganga Dhungana. Some offered free labour to help repair the damaged workshop, and the bank temporarily suspended the loan payments. Ganga Dhungana gradually picked up the pieces and got to work again.

The scheme's benefits are not just financial: as members of a group the women's confidence grows. There are people to call on in times of trouble. They recognise their abilities and learn useful skills in dealing with the outside world. Some of them say they used to be like 'frightened mice, always running away from the big cats of the village.'

'When I came to this area, Budhanilkantha, four years ago to introduce the scheme,' says organiser Bhisma Ojha, 'I couldn't find a single woman who wanted to join. Today there are 11 groups here with over 100 members.' These days, the women are coming to her.

Adapted from 'Give Us More Credit' by S. Cameron and M. Giri, in UNICEF News. No. 122, 1985.