The Indian Co-operative Network for Women - Amodel fit for the future

byDr. Jaya Arunachalam

President

Indian Cooperative Network for Women/Working Women’s Forum (India)

atInternational Raiffeisen Conference

Bonn, Germany

onMay 3, 2012

Being the UN Year of Cooperatives it is imperative to emphasize the role of cooperatives in some of our countries and their impact on vulnerable business groups of men/women. Experiments like that of ours i.e., the Indian Cooperative Network for Women (ICNW) is a classic example to highlight the role of cooperatives that has facilitated millions of women in their entrepreneurship through the micro loaning process.

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Background

The microfinance operations of the ICNW has facilitated low income entrepreneurs to meet their working capital as many of them do not have access to credit from nationalized banks (though the main objective of nationalization in 1969 being to help the poor borrowers i.e., 1% of their profits). However, it took a different shape by not benefiting the poor and the vulnerable. The concept of microfinance on the other hand grew in a big way to serve the low income groups.

The experience of the ICNW demonstrates that its programmes are tailor made to suit the needs of the poor women not only to facilitate improve their living/working conditions but also help them to escape from persistent poverty.

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The Indian Cooperative Network for Women

Attending the International Conference organized by International Raiffeisen Union (IRU) we understand that particularly in Germany the long experience of cooperatives emerged as the panacea for not only reducing the hardship among poor workers but also to facilitate carrying out varied business. Similarly the European visionary Mr. Friedrich Wilhelm Raiffeisen facilitated Aworkers to form cooperatives in rural areas in the middle of 19th century particularly to facilitate farmers and other small craft enterprises relieving them out of their financial struggle (as they could not meet the expenses of the working capital for their business and compensate their share to the landlords).

The great visionary took the initiative during this period and founded the first collective mechanism to support the suffering rural population of Germany and founded the credit union which today has become the first conceptual initiative of the cooperatives in the spirit of Raiffeisen.

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The Raiffeisen Union

Similar to the Raiffeisen’s cooperative, the Indian Cooperative Movement too was organized against the deterioration of rural situation where moneylenders exploited farmers; and the landlords had given land rights of large acres of land known as the permanent settlement in favour of the colonizers.

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The Raiffeisen Union

The freedom fighters of India therefore had to fight against such mechanisms to save the exploited masses that India suffered then. Therefore it is significant to discuss the experiment of the unique women’s cooperative known as Indian Cooperative Network for Women (ICNW) promoted by the Working Women’s forum (India) (WWF), its progress and emerging challenges in the competitive business environment.

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Working Women’s Forum (India) (WWF) a social organization has its major objective as poverty reduction through microcredit/allied products. It motivates the poor/helpless towards collective vision/action for their own progress through the cooperative ideology. Within 3 years of its initiation in 1978, it established a cooperative for women known as the Working Women’s Cooperative Society in the year 1981 with headquarters in Tamil Nadu.

This was the first co-operative credit society for poor women by poor women and initiated its operation with 2500 members in the year 1981. Later when the women entrepreneurs took the lead and expressed their desire to spread the message to other states transcending barriers of linguistic cultural context, it spread its operation to the 3 Southern States of India with 14 branches to meet the needs of poor women thereby registering the Working Women’s Cooperative Society as multi-state cooperative.

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ICNW reaches these poor women who live/work in remote areas excluded from financial services and or even basic services and helps them to move out of poverty. The credit programme of the ICNW has reached so far 544872 poor entrepreneurs effecting nearly Rs.2343 million accomplishing about 99.13% recovery rate in the urban slums/rural areas.

It is known today as the Indian Co-operative Network for Women (ICNW) addressing the critical and financial needs of poor womenentrepreneurs.

The members of the ICNW are involved in trades as vendors, home-based workers, weavers, garment makers, food processors, handloom/craft workers, service providers, etc. ICNW was established to strengthen not only their economic roles but also to orient the poor in strengthening their existing skills. If necessary train them in new skills enabling most women in the neighbourhoods to join this effort. Women came out of isolation/seclusion through the efforts of ICNW and have come a long way to emerge as successful community leaders/ entrepreneurs. 7

The clientele are acquainted through orientation in financial literacy, custody of income, entrepreneurial ventures, alternate skill training, and general empowerment to equip themselves to face future struggles. The concept of participatory training process has made them rich human resource not only to transform themselves but also grow as a fully developed entrepreneur.

This was the first experiment of poor women in the Indian co-operative effort to test their strength and weakness to have better livelihood options utilizing their own banking options.

National Cooperative Union of India lauds ICNW: Time-to-time ICNW organizes skill training/leadership development training programmes with a motive to impart necessary knowledge/skill and competencies to the staff of 14 branches in Tamil Nadu, Andhra Pradesh and Karnataka enabling them to utilize its nuances in their day-to-day work. In this perspective, the skill training programme was organized by ICNW on 30 December 2011 where the National cooperative union of India (NCUI) CEO along with the President was invited as the chief guests. Complimenting the effort taken by ICNW to tap the latent talent of the women members, they appreciated that this cooperative enables women from lower socio-economic groups to raise themselves into confidence, empowerment and blossom into entrepreneurs.

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The height of their economic role not only raised their standard of living also demonstrated the promise of gender equality. Further appreciation from the union was that the ICNW/WWF provided women with the skill and ability to earn a livelihood and earn between Rs.2000 and Rs.5000 a month by training them in various trades.

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Often, workshops are arranged to equip the women with the latesttechniques of business. This year it was in association with Goldsman Sachs and the Indian School of Business, Hyderabad on 17 February 2012. The outcome arrived at during this two day training workshop was that the participants became aware of new techniques of business, costing, pricing, marketing, etc. Exchange of knowledge and skills amongst the participants has been a visible positive outcome of the training. Besides, what was learned during the two day workshop was imparted to other entrepreneurs in Tamil Nadu, Karnataka and Andhra Pradesh.

The crisis of microfinance in India

It is not that microfinance operations in India was carried on smoothly as in other parts of South Asia. It did have its own difficult times particularly in the southern parts of India. For a short period there was a setback in the programmes due to the fact that few borrowers borrowed from multiple sources beyond their need and capacity to repay. Instead of being messiahs of poor the microfinance institutions have become moneylenders charging high rate of interest, making these loans available at the door steps of the poor. Further, these MFIs also engaged in coercive recovery practices. This happened in the recent 3-4 years. Infact the microfinance practices were on the verge of collapse. However, the Reserve Bank of India (Central Bank of India) took prompt action and set a ceiling for the amount to be borrowed not more than Rs.50,000/- per borrower and lending rate not to exceed 26%, limiting that these poor borrowers to one institution and not to borrow from multiple sources. This is the system that is practiced in ICNW since inception where the limit is Rs.50,000/- lending it at not more than 18% interest. Further identifying multiple borrowers in the year 2010-11 enabled ICNW to function as a successful cooperative bank in the year 2011-12. 10

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ICNW – Cooperative of poor women

As an innovative approach ICNW has evolved a comprehensive social security programme for its members such as life insurance, health insurance, disability insurance, accident insurance and has covered over 9,39,463 women. Further it shares its expertise from its experience of working for over three decades facilitating the women in poverty to other non-governmental organizations (NGOs) universities and those that require such facilitation. Infact this successful strategy has attracted several NGOs both within and outside the country to visit ICNW/WWF both for an exposure visit and orientation to setup a similar outfit in their respective region.

Several scholars visited the cooperative for internship and for short orientation programme and one such intern is Anganeta Dyck, Post Graduate student from University of Duisburg-Essen, Germany who visited ICNW/WWF from 1 March 2010 to 28th May 2010.

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Infact ICNW/WWF combined evolved special modules of the training programme to the visiting NGOs from Uttranchal, Madhya Pradesh, Maharastra, Bihar, Orissa, Rajastan, Chattisgarh, UttarPradesh, Jammu and Kashmir, Nepal, Sri Lanka, Afghanistan, Laos,Ghana, South Africa and Universities from U.S., Germany, France,etc. The orientation in ICNW is an intensive exposure-cum-learning experience to replicate the grassroot leadership experiment in their respective region. The exemplary work of ICNW/WWF among poorest women in the three southern states of India was appreciated across the country and towards this gesture an ‘Honorary Doctorate’to the President from the University of Lunenburg (Germany) was bestowed in the year 1999. Besides this, to commemorate the Silver Jubilee Year of ICNW/WWF Prof. Brunhild Landwehr from Lunenburg University covered the entire operations/programmes ofICNW/WWF in the form of a book titled “Structuring the Movement and Spreading it on….”.

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International Acclaim

As the work of ICNW spread across the country, several prominent dignitaries like Queen Mother Juliana from Netherlands, late Prime Minister Shri. Rajiv Gandhi, Dr. Klemens van de Sand, Germany, Rural Adivisor from Dutch Government Mr. Paul-ter Weel and recently the US Secretary of State Madam Hillary Clinton showed special interest to visit ICNW/WWF headquarters in Chennai to meet the poor entrepreneurs in solidarity and observe its functioning. Madam Hillary Clinton not only observed the products of the women entrepreneurs but also showed great concern patiently listening to their stories who have progressed to the status of fast food sellers from pavement seller/hawkers.

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To remind ourselves of our vision today I would like to putforthbefore this august body that there are several examples of ICNW that remind Raiffeisen’s experiment particularly the ideology of self-help and self-management process among the workers.

The poor women can be successful co-operators

To sum up ICNW experiment demonstrates that even the poorest andsemi-literate women can manage and run a cooperative following the principles of co-operative management if they have the right kind of training/orientation and field exposure. This system has not only worked but also infused confidence among the members, raised thestandard of their living, upholding human dignity, helped redistribution of resources towards ensuring social justice and positive social change.

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A new type of world leadership: From below

From the experiment of ICNW it could be observed that the world is experiencing a new kind of leadership experiment emerging from the grassroots, capable of expressing their collective wisdom for collective survival. It is only the beginning for change in our times. The new leadership recognises the extraordinary force that is drawn from different kinds of people and different kinds of leadership the strength of women, the wisdom of the youth and the old. It is a great realization in the present times that the true leadership does not come from the individuals but from the collectives of people working together through the richness of their diversity and disagreement. Such a leadership has a specific commitment to break the traditional barriers of sex, race, class and age, and help the emergence of the much needed leadership in other communities to struggle together in a spirit on non-violent, universal comradeship, fight the situation of hunger and poverty, assuring the most deprived and the neglected populous, to reach a stage of self-reliance and self- respect. A leadership that will awaken communities to their true potential towards their commitment for a better world and a better economic order.

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Details of Working Women's Forum (India)And The Indian Co-operative Network for Women Ltd.,

Portfolio Report as on 31st March 2006

Area covered under the Working Women's Forum (India)

No of Members (Cumulative) 1317902No of Branches 14Villages 3780Slums 2405Social Security Coverage of Women (cumulative) 939463Reproductive Health Coverage 16,18,842

As a legally registered Micro Finance Institution ICNW has on

Out reach in Credit 544872Loan Portfolio (Rs.) 2343 MillionNo of Loans 15,69,398Share Capital 102 MillionSavings:Member’s Savings 161 Million Total Used CapitalFixed Deposit of Members 86 Million Working Capital:Borrowed Capital 360 millionReturned Capital 308.17 millionBalance Capital 52.45 MillionOutstanding Portfolio 140 MillionFinancial Self-sufficiency 108%Operational Self sufficiency 103%% of women clients 100%% of Rural Clients 68.00%% of Urban Clients 32.00%On Lending Interest Rate 18% on declining balance Avg. Repayment Period 12 MonthsCumulative Repayment Rate 99.13%Default Rate 0.87%

247 million