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Women Together: Incentivising Savings for Economic Development

Much attention gets paid to micro-lending – but here's an example of an awesome micro-savings initiative run in Indian low-income contexts by all women-teams. "Only some poor people will benefit from the chance to borrow – but almost all will benefit from the chance to save.”

Photo of Meena Kadri
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A few years back, while researching savings mechanisms in Indian slums for Niti Bhan (then of the Helsinki School of Economics) I covered the Mahila Milan micro-savings initiative at Dharavi, Mumbai.

Mahila Milan means 'women together' and this is the name of an initiative which began in Mumbai in the 80's and now has a networked federation of nationwide woman’s collectives encompassing 60, 000 women. It provides a vehicle for the empowerment of women via leadership roles and advocacy alongside its pivotal daily savings collection.

Prema Salgaonkar (above) has been working with Mahila Milan for over 20 years and now heads a group of local facilitators of a daily savings scheme for Dharavi residents. Prema visits around 450 households each day, of which a third will deposit anything between Rs 5 to 200, with almost all households banking something each week. Such an initiative is ideally suited to the irregular nature of earnings in low income contexts.

Initially Mahila Milan had many more illiterate members and developed a system whereby coloured squares of paper would be exchanged for deposits and kept by the saving member in a plastic bag: red for one rupee, yellow for two, green for five and so on. This way members could always check how much money they had access to and plan accordingly. Now, with growing household literacy, this system has been largely disbanded and replaced with passbooks which members were proud to show us and explain the context of various peaks in savings and withdrawal. 

The system is not just about collecting money but also about daily contact which deepens the understanding of various issues facing Dharavi residents. Contributing to a consensus of community priorities, this information is often passed on to other support groups in the area such as the local community council (panchayat) plus used to inform a number of Mahila Milan initiatives. One user who participated in the scheme conveyed that even on the days when she has nothing to deposit that its was reassuring to be visited by a trusted outsider with sound financial knowledge and that she sometimes used the opportunity to discuss issues such as how rising food prices were affecting those beyond her own neighbourhood. She notes that watching her savings grow has allowed her to start imagining and planning a better future for her family – with her mother and sister also active members in the scheme. 

We were told of numerous success stories like the woman who saved towards buying a second-hand sewing machine which allowed her daughter to leave a gruelling job at a local garment factory to start her own now-flourishing dressmaking business. Another woman, with six children and an alcoholic husband, saved Rs 5-10 a day till she had Rs 5000 with which she bought a machine to process heavy duty plastic for recycling and now boasts a much higher standard of living for herself and her family. Others access their savings on a short term basis to counter income fluctuations – still signalling a heightened life standard.

How might we further support micro-saving as a way of empowering women in low-income communities without putting them into debt? How might we share stories of success of micro-savings to motivate more women to participate? How might we leverage community roles like micro-savings collectors, to inform women about safety issues and report abuses?

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