Women in Business: Strengthening Women's Economic (1997)

This document has been made available in electronic format
by the International Co-operative Alliance (ICA)
May, 1997
(Source: Coop Dialogue, Vol., No. 1, Jan-April, 1997, pp.8-19)

Women in Business : Strengthening Women's Economic Activities
by Usha Jumani
This paper addresses the reality of women in small business. it is
organised in two parts. Part I describes the main features of poor women's
economic activities in the overall context of women in the economy as well
as of small business. The common elements which emerge from successful
grassroots initiatives to improve poor women's  socio-economic reality
and the constraints faced by them are described next, to define a larger
strategy for strengthening these economic activities. The steps which
governments can take to strengthen women's small businesses are listed at
the end of Part I.

Part II focuses on the role of credit as one input in strengthening women's
economic activities. The experiences of grassroots initiatives have been
analysed to highlight the principles for providing credit to poor women.

Definition of Small Business
The term 'small business' has been used as an umbrella term for explaining
a wide range of activities through which poor people earn their livelihood.
Micro-enterprise, small entrepreneur, cottage industry, household sector,
informal business, unregistered business, tiny sector, are the various
qualifications applied to refer to specific segments of small business.

There are two aspects which have to be understood in the term 'small
business'. One is the meaning of 'small', and the other is the meaning
of the word 'business'.

The word 'small' is defined in a context - it is a relative word. There are
legal limits set to define 'small' - by number of people working, by amount
of investment, by income earned. Basically, it is a reference to scale of
operations and the limits of 'small' are set a priori. For instance, in India,
the small business sector is defined as units which have an investment in
plant and machinery up to Rs.6.0 million*. Similarly, units operating with
power and having less than 10 workers, as well as units operating without
power and having less than 20 workers are not covered by the Factories
Act. The Household sector is defined as units having less than 5 workers.
People earning annual income less than Rs.22,000 are exempted from
paying tax. These are various indicators of 'small' but they are still fairly
big in relation to the reality of the majority of the population in India. An
annual family income (5 members) of Rs.6,400 is the cut-off for the
poverty line in India. Almost a third to half** the population in India lives
below the poverty line.

'Business' refers to any activity which is done for getting a commercial
return - it includes production, trade, and service activities.

Men, women, and children are engaged in a variety of ways in small
business. The reality of women in the economy and in small business is
described in the following sections.

Women in the Economy
Taking the economy of India as a case in point, a graphic representation
(see opposite page) of the heterogenity of working women in the
economies of developing countries by income groups and work
relationship with the economy would be as follows:

If all the working women in the economy are designated by a circle, then
the approximate proportion of women in low income, middle income, and
high income groups are segmented by the 3 horizontal lines in the circle.
The majority of the population is low income group.

A very small proportion of women in developing countries have a regular
job with an employer-employee relationship recognised by the law and
with all the protective legislations accorded to employees. There are 
other employed. India is the tenth most industrialised country in the 
world, yet only 6-7 per cent of working women are other-employed. 
This minority is shown in the schematic diagram above by chord ab. 
Other-employed women (recognised employees) are spread over all the
three income groups.

There is another category of women who are engaged only in household
work for their own family - this is mainly middle income women as
marked by the line code in the circle. The low income women have to do
their own household work in addition to working for a livelihood. The 
high income women rarely do their own household work themselves - 
they get it done by others.

The rest of the working women are all fending for themselves  to earn a
livelihood - they are self-employed are also spread over the three income
groups. The low income, self-employed women by far constitute the
largest segment of all working women in developing countries. All the self
employed women are engaged in some economic activity for a return - cash
and/or kind return - with or without requisite public policy support. The
percentage of women having an established employer-employee
relationship recognised by the law is even lower than that in India in most
of the developing countries of the world.

Low income and middle income group women are those mainly engaged in
'small business'. When we try to understand the small business sector
where women are concentrated, we have to add the dimension of poverty
to it. As the majority of women in India and other developing countries 
are low income women, the economic activities they are engaged in become
the focus of 'small business' definition. Five types of work/production
relationships mark the economic activities of low income, self-employed
women. These are:
-	Wage work
-	Piece rate work
-	Unpaid family work
-	Own account work
-	Small entrepreneur

The 'small business' focus has so far been primarily on the economic
activities initiated by women entrepreneurs.Their problems and issues
and the support they need are fairly well understood. Increasingly these
small entrepreneur activities belong to the middle income and high income
group women in the economy. The remaining four work relationships
where low income women are concentrated are not well understood. If we
want to address the question of women's poverty and strengthening
women's economic activities through development as a planned effort,
then we have to understand these various work relationships and the kinds
of occupations these women are engaged in.

Main Features of Poor Women's Economic Activities
Poor women are all working women. They are engaged in a variety of
occupations including small farm agriculture; livestock tending; processing
livestock produce; gathering and processing forest produce; tree growing;
small trading and vending; producing manufactured items such as garments,
bidies (leaf cigarettes), shoes, footstuffs, handicrafts, etc. at home;
providing unskilled manual labour on fields, construction sites, in factories
and worksheds; providing services such as cleaning, washing, cooking,
transportation, childcare, etc.

They are involved in fending for themselves to somehow generate cash
and/or kind return from their work to sustain themselves and their families.
They work on their own in a self-created niche in the economy, they
maximise on various work opportunities.

The natural seasonality of work in the economy relating to agriculture,
livestock, forestry as well as the religious and ceremonial seasonality of
work lead to a situation where poor women are engaged in multiple
occupations at different times of the year to ensure even a minimum level
of survival. The occupations are a combination of subsistence and
commercial work. (Activities generating return in cash are being referred to
as commercial work). The production relations they are engaged in are a
combination of own account work, piece rate work, wage labour, and
unpaid family work at different times of the year. The consumption and
production needs of poor women for earning income are intermingled
because day-to-day survival is the most critical aspect of their lives.

Essentially poor women work in the informal system of the economy -
the activities they are engaged in are small in size, using traditional labour
intensive skills, generate small incomes, are highly decentralised, depend on
verbal transactions with few people and are based on mutual trust. They
own very meagre capital and assets to sustain their economic activities -
they can generate very low cash and/or kind return from these activities.

Women engaged in these economic activities are dispersed over so many
homesteads and workplaces, they work individually. They are illiterate
and do not have security of work and income. Their economic activities
have low yields and low productivity. They are caught in a web of
exploitative relationships with buyers and suppliers of their goods and
services because of their own poverty. Thus they end up getting paid very
low wages or piece rates, very low prices for their finished goods, they are
forced to buy raw material at very high retail prices because they buy in
small quantities, they are forced to pay high rates of interest on funds they
borrow, they have to make distress sales because they do not have staying
capacity and have to accept unfavourable trade terms. They are
handicapped in dealing with formal institutional avenues of the economy
and have very little policy support for their work.

Coupled with this work situation is the fact of multiple roles for women
created by the social and biological reality. the roles of wife, mother,
homemaker are in addition to the worker role for women - hence all the
household chores, plus childcare, plus looking after the husband and
menfolk and other family members, have to be done hand-in-hand with the
income earning and livelihood sustaining work. Their work is not called
work and they are invisible as workers in official statistics.

The multiple roles, multiple occupations, multiple production
relationships, cash/kind income base all contribute to the complex 
reality of the livelihoods of poor women. These are the main features
of the small business sector where women are concentrated.

Successful Initiatives for Strengthening Women's Economic Activities
Several grassroots organisations in many developing countries have been
actively involved in the task of influencing poor women's income by
strengthening their economic activities. Some governmental programmes
also have attempted to do the same work. However, when grassroots
organisations have designed their own programmes or worked in
conjunction with the government to implement government programmes,
the results have been better compared to government programme
implementation through government's own officials.

Essentially, these initiatives have tried a variety of interventions in
Land based, livestock based, manufacturing based, trade based, service 
Based economic activities of poor women to enable them to increase their
incomes (returns). There have been varied degrees of sustained income
increase (e.g. from Rs.50 - Rs.1000 per month in India). The numbers of
women involved in these efforts also vary from groups of 5 to 5000
women. The length of this paper does not permit detailed discussion of
these initiatives. However, the common elements in these efforts have been
described below.

Common Elements in Successful Grassroots Initiatives
The efforts which have been able to achieve the objective of strengthening
poor women's economic activities have several common aspects. These
can be listed out as separate elements which really represent a cluster of
positive forces coming together in specific efforts. More the number of
these elements are built into the design of planned development
interventions, the more likely is the effectiveness of these interventions to
strengthen women's socio-economic situation.

1.	Conscious Efforts of Organising Women:
Poor women are scattered and dispersed over many worksites,
homesteads, occupations and activities. They are too weak and helpless
economically to be able to deal with the forces of poverty alone. They are
not organised as workers, to pressure for economic improvement in their
lives. To bring about change, conscious efforts have to be made to bring
these poor women together for collective action - they have to understand
their common reality and common goals of desired change and be ready to
act in unison. Organising people is a slow continuous process of enabling a
group of people to perceive common goals and act collectively.

2.	Interventions to Strengthen Existing Economic Activities
The organising process is sustained by concrete improvements in the lives
of people. Economic improvement for poor women is possible by
strengthening their existing economic activities and/or introducing new
activities. Specific interventions are needed for both these options, to
change the equilibrium of economic forces which result in such low
incomes/returns for poor women. The experience of most grassroots
organisations has been that it is easier to strengthen women's existing
economic activities by skill upgradation, improved productivity, better
selling prices, lower costs of production, easier terms of credit, and
providing support services like space, equipment, health care, child care,
bringing about economic improvement for poor women.

These interventions have been effective because of the sensitive
understanding of women's multiple occupational base and multiple life
roles reality on the one hand, and of establishing policy linkages for
positive improvements in their economic activities on the other. These
aspects are discussed in the next two points.

3.	Women's Multiple Occupations and Multiple Life Roles Reality:
Poor women are engaged in different activities at various times of the year
for survival. Usually it is a combination of land based, live stock based,
manufacturing base, trade based, service based activities, it is not possible
for any one of these activities, to provide sustained income to poor
women. The production relations of natural seasonality and cyclical work
opportunities, round the year because of natural seasonality and cyclical
work opportunities. 

The production relations in this multiple occupation base are also varied.
Some activity is pursued as own account work, another as piece rate work,
a third as wage labour - for instance a woman may be engaged in
agricultural labour on daily wages -for part of the year, may have a few
goats of her own which give milk for part of the year, and be involved in
weaving silk on piece rate for part of the year.

Interventions for strengthening women's economic activities are effective
when they take into account this complex work reality. The most marked
improvements have come around when efforts are made to increase income
from all the activities women are engaged in. Those who have income from
more bases of livelihood are better-off than those who have income from
one base only.

Efforts which have tried to increase the number of income bases for those
women who have only one base of income presently are also effective.

Similarly interventions which are sensitive to women's multiple life roles
are more effective. The role of wife, mother, homemaker, all make demands
of time on women's worker roles. The interventions to improve women's
economic position mainly focus on their worker roles. But the present
societal structures do not permit women's maximum energy to be spent in
the worker role - hence interventions which permit flexibility of working
time, which allow unexpected and unforeseen events, which provide
support during pregnancy, childbirth and afterwards, provide childcare
facilities, are more effective than those which do not.

4.	Good Internal Management and Positive Public Policy Linkage
Income in any economic activity is earned through good inherent
management of the work and through adequate public policy support from
the economy where it is conducted. Poor women usually run their own
individual economic activities very efficiently because of sheer survival
pressure on them. But public policy support from the economy is usually
absent or loaded against them. So it is very difficult for poor women to
improve their economic situation individually, and alone. 

When interventions are made to strengthen women's economic activities; 
It is very important to create the positive policy linkages for access 
to raw materials, markets, skills, space, credit, equipment, etc.
Without this policy support , the most efficiently managed economic 
activities find it difficult to generate ore income for poor women. 
Wherever such policy linkage has been established the incomes of women 
have increased. On the other hand, when interventions do not pay 
enough attention to good internal management of the economic activities
for women, then in spite of good public policy support, increased 
income is not generated for women. So it is important to integrate 
good internal management and positive public policy support in 
interventions designed for strengthening women's economic activities.

5.	Focus on Groups of Women
The efforts to organise poor women lead to interventions which can
involve large numbers of women. It is very difficult to help large numbers
of poor women individually, but when some group activities are initiated,
then success is better. The nature of the group can vary from doing
something in common such as procurement of raw materials or marketing,
whereas all other aspects are managed individually; to doing all aspects of
the work as a group, including procurement, production, sales, accounts,
etc. The choice depends on the nature of the economic activity the women
are engaged in and how amenable it is to be done jointly/separately. The
more critical point in this process is the creation of a group to enable
women to learn the dynamics of their economic activity, and to develop a
stake in the activity initiated.

Individual entrepreneurship does not help to create a stake in a group/joint
economic activity. The whole process of getting positive public policy
support involves group pressure and collective action for change. Unless
there is a stake for members in a group, it is very difficult to make them
retain their interest in the group. A stake is created by involving the
women in sharing the profits of the economic activity, by involving them
in decision making to run the economic activity, by developing their own

This process leads to group entrepreneurship and collective self
employment. It eventually takes the organisational form of a co-operative
to function in a co-operative way, either as a registered or unregistered co-
operative. The efforts which have remained confined to dealing with
individual women only, have not been so successful in creating change and
impact in the lives of large numbers of women.

6.	Integrated Set of Support Services
Interventions for women's economic activities which have focused on
providing an integrated set of support services for women such as credit,
healthcare, childcare, communications, training, housing, insurance, in
addition to the various aspects of the economic activity itself such as
procurement, markets, space, technology, etc. have been more successful
as compared to those which provide only isolated services.

7.	Teams of Literate and Illiterate, Middle Class and Working Class, Professional and Amateur Women
Interventions which have been able to build teams of literate and illiterate
people to deal with the handicap of illiteracy which faces poor women,
have been more effective than those which have left poor women to deal
with illiteracy on their own. Building such teams has also led to middle
class and working class women coming together because, by and large, the
middle class women are the literate ones in developing countries. It also
leads to professional and amateur women working together to enable
transfer of skills and create new knowledge from this combination. 

It is very difficult for poor, illiterate women to influence and deal with
middle class bureaucrats and policy makers to change their situation, on
their own. When such teams get formed, then each set of women bring
their own strength to the situation - poor women know the dynamics of
their economic activity, middle class women know how to deal with policy
makers; amateurs have the strength of life experience and knowledge of
survival, professionals have the knowledge of systematic training and
existing theory about a subject. 

New and unique strength is created when such combinations are allowed to
develop. Interventions which build such teams in their development design
have been more effective in strengthening women socially and

8.	Attempt to Change the Structure of the Economy
All these elements described above, have the combined effect of trying to
change the structure of the economy in favour of poor women to make it
more responsive to their socio-economic reality, and to create enough
representative strength for them to protect their interests. When the
interventions designed are very clear about this overall larger change being
sought in the structure of the economy, then all the concomitant efforts
and links are made to bring about this change. All the elements described
above are interwoven links in this process of change. When the larger goal
is not clear and articulate then some change does happen, but the existing
system gets reinforced more often that not and women's representatives in
the economy is not necessarily ensured.

Constraints Faced by Women's Economic Activities
Nevertheless, success is very limited in strengthening women's economic
activities because of several inherent forces in the economy which are very
deep-rooted. These are mainly:

1.	Vested Interest to Exploit Women's Work Cheaply
The vested interest in favour of the status quo is very powerful - big
business and those who are presently deriving substantial incomes from
the economic activities where women in large numbers are able to do so
because women's work is underpaid and unpaid. The present economics of
the concerned occupations cannot be sustained if women start getting all
the facilities and income due to them for the amount of work they put in.
To struggle against such powerful vested interests is very difficult for poor
women, but it is possible. It is very slow and long process requiring great
perseverance. That is why results are very fragmentary and small, and
success is limited.

2.	Women's Limited Skills & Exposure
To earn good and sustained income directly from the economy through
self-employment today requires institutional/organisational dealings and
linkages. As the institutional infrastructure of the economy becomes more
and more central in controlling the flow of money it becomes necessary to
acquire the competence for institutional transactions - whether it be with
banks, financial institutions, insurance companies, government
departments, public sector corporations, development corporations, other
companies, trading and marketing corporations. All the planned
development interventions are increasingly channelled through these

The majority of the women do not have the skills, experience, exposure for
institutional transactions as individuals or as groups. They need
representative organisations of their own to help them develop their
competence in the organisation-to-organisation interface of business
transactions. Very few such representative organisations of poor, self
employed women exist. Hence the limited success of women's economic

3.	Women's Incompetence in Formal Dealings
The transformation of the economy to an institutional base has also mad
formal dealings central. Formal dealings depend on written transactions and
poor women are largely illiterate. Poor women are not able to understand
this transformation on their own and create a niche for themselves in the
changing economic scenario. Hence the limited success of their efforts.

4.	Insensitivity of Policy Makers
The policy makers responsible for the transformation of the economy to
an institutional base do not address the needs and reality of poor women
directly. Institutional finance, for instance, is a good indicator of the
sensitivity of the policy makers to women's economic activities, the flow
of public funds to women's economic activities through institutional
finance is very low. An analysis carried out by the author in 1987
correlating institutional funds flow with women's economic activities
showed that less than 2 per cent funds were allocated to 17 out of 28 three
digit census classification categories in India where women's economic
activities are concentrated. Hence the transformation of the economy is
strengthening those sectors of the economy where women are not engaged
in large numbers. Such contradictions make it very difficult for poor
women's economic activities to survive against the flow of the economic

5.	Erosion of Women's Economic Activities
The activities per se, in which poor women are engaged are being
destroyed, and replaced by other goods/services produced mechanically.
Agriculture, handlooms, handicrafts, fisheries, sericulture, dairying,
vending, are some of the sectors of the economy where women are in large
numbers. The way work is transformed here affects women , most
critically. Hence it is very difficult for women to earn sustained income
from such work.

6.	Insufficient Collective Strength
Women do not have sufficient collective strength as yet to lobby for
protecting their interests and be able to divert the emerging economic
opportunities in their favour. Hence the limited success of strengthening
women's economic activities.

Strategy for Strengthening Women's Economic Activities
The strategy for strengthening women's  economic activities has to address
the twin objectives of increasing income and increasing solidarity of
women. The assumption for strengthening their businesses is that in due
course of time they must become big in size and develop on the lines of the
large business corporations. This path of economic growth eventually
leads to the creation of an employer-employee work relationship for the
majority of the population, as has been evidenced by the economies of the
industrialised countries. 

However, in the developing countries, this path of growth is a reality for
very few economic activities and the existing corporation are not able to
generate further growth in employment easily.

Most of the present day national and multi-national business corporations
have started their businesses many decades ago in a small shed and have
followed the path of economic growth up to infinity to reach their present
size. This strategy of growth is based on individual entrepreneurship and
wealth creation. This strategy has led to the present day division of labour
and capital, has led to unequal distribution of wealth and resources, and
also to mass scale poverty in the world today. It has not been able to deal
with poverty, and it does not have the capacity to create enough work for
all, to generate enough income for all in an employer-employee
relationship. It does not lead workers to develop a stake in the business as
equal partners when it becomes large. It has also created concentration of
resources, and of economic power, and the institutional infrastructure to
reinforce this concentration.

This strategy of growth has left the economic activities of poor women out
of the mainstream of the economy and made it very difficult for them to
flourish. It has not lead to empowerment of women, nor to changing the
structure of the economy to a more egalitarian and democratic basis.

As the previous Director General of the ILO, Mr. Francis Blanchard has
	"It would be unrealistic to insist that a solution lies in integrating all
	workers into the formal sector. The formal sector in many developing
	countries is simply too small to absorb more than a fraction of labour
	force entrants even in the most favourable economic conditions. Indeed
	work in the informal sector undoubtedly relieves poverty and its
	valuable contribution in meeting basic needs should not be under
	estimated. We must take care not to smother it with regulations. It
	would be more pertinent to look for other ways to protect its workers,
	most of whom are self-employed or apprentices, against exploitation, to
	help them set up additional small enterprises and co-operatives, to
	provide them with training, credit and other support required to
	diversify production and to improve their productivity and income.

	Informal sector workers, whether they are in rural or in urban areas,
	self-employed or employees, must to a large extent help themselves in
	overcoming difficulties. This will not be feasible unless they get
	together to defend their interests. Existing workers' and employers'
	organisations should strive to meet the needs of their workers in the
	informal sector more effectively, by appropriate adjustment of their
	objectives and structures. In addition, or as an alternative, new forms of	
	organisation and participation should be explored.

	In short, I believe that it is of vital importance for the ILO to extend its concern to the entire world of labour, including the hundreds of millions
	of men and women in the fringe of or outside, the organised, industrial,
	formal sector."

The strategy for strengthening the business of poor women, which is
emerging from the experiences of grassroots organisations is to enable small
businesses to grow into co-operatives with the ownership and decision
making control in the hands of poor women themselves. The interventions
necessary to make this a reality have been described earlier.  These
interventions are the basis of this development strategy to influence the
reality of poor women favourably, to enable them to become true partners
in the economy. The strategy is to juxtapose the labour movement, the co-
operative movement, the women's movement, to create the necessary
momentum for self-employment for the majority of the population.

The way of strengthening self employment for the majority through
workers co-operatives involves creating collective ownership of resources
through group entrepreneurship. A co-operative allows economic growth
and group solidarity for the members. It also creates a stake in the business
for all the members because of shared ownership. The wealth generated
through economic growth of a business through co-operatives is a source
of strength for all the members, who are also the workers in that business.
So wealth does not get concentrated in the hands of a few owners, but is
dispersed in the hands of many workers.

This strategy has to operate from the existing economic activities of poor
women and their various work relationships in the economy. The economy
is basically divided into production, trade, and service sectors and women
are active in all three sectors. A schematic representation of the work
relationships of women in all these areas of the economy would be like in
the following chart.

			Sector of Economy		Production	Trade	Services
Small Entrepreneur

Own Account Work

Unpaid Work in Family Unit

Piece Rate Work

Wage Work

All these work relationships are part of the world of small business.
Instead of looking at the small entrepreneur alone as the focal point of
growth, it is necessary to look at all the work relationships as the focal
points of growth to create increased income and increased solidarity
through co-operatives. Whatever support is to be provided to make this a
reality is the basis of development interventions. The present day
situation of the economy has been created by following a strategy where
the small entrepreneur becomes the focal point of growth to develop into
large corporations and absorb all the remaining type of work relationships
into an employer-employee relationship. The limits of this strategy to
strengthen the poor are self-evident from the present extent of poverty in
the world.

Grassroots experience is suggesting a strategy where all the five types of
work relationships of poor women are nurtured to develop into
production, trade, and service co-operatives of workers to create true self
employment for the majority of the population. Whatever support and
help is needed to nurture these workers co-operatives becomes part of the
planned development efforts.

The mainstream of the economy is where the majority of the population is
working. The strategy must enable the majority to be in the centre of the
economy and to protect its interests. Women have to be in charge of their
own lives and be able to influence decisions which affect their lives - be it
at grassroots, national or international levels.

Steps Governments can take to Strengthen Women's Small Business
1.	Facilitate the process of organising women workers and create
	people's organisations.

2.	Make a commitment to strengthen self-employment for the majority.

3.	Channelise institutional finance in sectors of economy where women
	are engaged in large numbers, in proportion to their numbers.

4.	Create a basis for power sharing with people's organisations by
	involving them in policy formulation and programme implementation.

5.	Create a favourable policy support for women's economic activities.

6.	Commission fact finding studies, of the reality of women's economic 	activities and their problems in the overall economy.

7.	Create visibility for women's reality through research, reports, media,
	policies, programmes.

8.	Develop programmes specially targeted at women but linked into all
	sectors of the economy. Create a separate department or ministry for
	women, but integrate its functioning through all the concerned

9.	Invest in capacity building process for women through training,
	exposure programmes, and orientation programmes.

10.	Simplify procedures and formalities, as well as the legalities of
	programmes, and institutional support to help poor women. Illiteracy
	should not become a handicap for women to get the help of
	development programmes.

11.	Recognise the existing experiential knowledge of women and delink the
	creation of work opportunities to academic qualifications. Enable
	vocational training to strengthen women's existing skills and thereby
	their work.

12.	Create a cadre of functionaries who will be a link between the
	governing function and development programmes implementing
	function of the government. This link will have the responsibility to
	increasingly hand over the development programmes implementation	
	function to people's organisations.

13.	Facilitate the process of ownership of assets for women - land,
	livestock, house, capital, licenses, equipment, tools, bank account,

14.	Create an integrated set of support services which includes credit,
	healthcare, childcare, communication, training, insurance, housing, legal
	facilities, for women along with the support they need for their
	economic activities.

15.	Redefine the mainstream of business to refer to the work of the
	majority of the population.

16.	Reserve markets and raw materials for poor women's economic
	activities so that they can continue to generate income from their work.

17.	Create institutional markets and institutional facilities for women's
	economic activities.

18.	Re-educate present government officials through exposure
	programmes, field experience, and conceptual frameworks to
	understand the nature of women's economic activities and respond to
	their reality. 

	Reorient the selection procedures of new recruits into the government
	machinery to create cadres of functionaries capable of responding to
	the development tasks related to poverty.

19.	Link performance evaluation and career opportunities of government
	officials to the improvement of the lives of poor women through
	government programmes and schemes - not just to achieving funds
	utilisation targets.

20.	Reorient official government implementing machinery which have been
	established from public funds to cater to the needs of the whole
	population - both self-employed and employees - and not just to
	employees who constitute a minority of the working population.

Women's Access to Credit
There has been considerable interest in development agenda over the past
15-20 years to provide credit to women in developing countries as a way
of strengthening their economic activities. Governmental schemes,
international organisations, voluntary grassroots initiatives have all
attempted to develop effective mechanisms to provide credit facilities to

India has several governmental schemes in the form of anti-poverty
programmes, subsidies, incentives for women's activities. Bangladesh has a
special bank called Grameen Bank, constituted under an Act of Parliament.
Pakistan has recently set up a special Women's Bank.

There are some international organisations which are also active in the field
of credit to women - UNIFEM, World Council of Credit Unions,
Women's World Banking, the Trickle-up Program, among others.

The voluntary grassroots initiatives within individual countries have been
the most numerous and varied in approach in providing credit to women.
They include informal savings groups, non-governmental organisations,
registered credit co-operative societies, federations of savings and credit
groups, women's co-operative banks. Some of these voluntary initiatives
are Sewa Bank, Myrada, Assefa, Thrift Co-op's Association, Working
Women's Forum, Community Services Guild, Bhagvatula Charitable
Trust, Bhuva-neshwari Ashram, Astha, Annapurna Mahila Mandal, BAIF
Development Research Foundation, Gram Vikas, Tagore Society for Rural
Development in India, BRAC, Proshika, Saptagram in Bangladesh; Aga
Khan Rural Support Programme, Sind Rural Workers Co-operative
Organisation in Pakistan; Wok Meri in Papua New Guinea, Rural
Development Programme in Western Samoa; the Goroko Women's
investment Co-operative, The Masimba Women's Group, the Mraru Bus
Project in Kenya; Women in Development Inc. in Barbados; The Women's
Construction Collective in Jamaica; Women's World banking affiliates in
several countries.

Funds are available as credit from various sources in the economy such as:
-	from a person's own funds
-	from family funds
-	from friends and relatives
-	from charitable institutions
-	from money lenders
-	from savings groups
-	from credit societies and revolving loan funds
-	from banks
-	from other financial institutions
-	from national and international donor agencies
-	from government programmes.

In most countries, communities, and parts of the world in general, women
have had access to funds from the first six sources in the above list.
Traditionally, women have not had access to funds from the remaining five
sources, and it is these financial sources that are becoming more and more
important in determining the future of economies all over the world. To
facilitate women's access to credit, it is essential to understand how they
are located in this financial structure because an increasing amount of
money of the global economy is being channelled through credit societies,
banks, and other financial institutions.

We will discuss here the lessons learnt from the experiences of voluntary
grassroots initiatives in developing countries in strengthening poor
women's economic activities by providing credit from the last five sources
of funds in the above mentioned list. Voluntary grassroots initiatives have
had a better performance and have been more successful in providing credit
to poor women compared to other efforts (governmental and international

Poor women's needs for credit are closely intertwined with the nature of
their economic activities. A detailed analysis has been presented in Part I
of this paper, about the complex nature of poor women's work and
economic activities. The efforts of governmental schemes, international
organisations, and voluntary initiatives have been to create an institutional
framework for women's access to credit. They have either created
completely new institutional mechanisms or they have built on the
traditional mechanisms available to women and integrated them into the
institutional operations.

Wherever the finer nuances of poor women's work have been understood,
it has been possible to develop a strong and effective mechanism for
providing them credit.

These finer nuances are essentially related to the informal system of work
in which poor women are involved. The informal system of work basically
depends on verbal transactions based on mutual trust. Poor women's
economic activities in the informal system of work are small in size, use
traditional labour intensive skills, generate small incomes, are highly
decentralised. In this system the subsistence and commercial activities of
poor women's work form one continuum. The consumption and
production credit needs of poor women form another continuum. It is very
difficult to separate these four aspects of poor women's work into clear
cut compartments. Their precarious life situation demands a holistic
approach to their total life as a person and credit becomes one aspect of
this holistic approach.

The work of voluntary initiatives in providing credit for poor women can
be referred to as banking with the informal system of work. We can
analyse the successful experiences of voluntary initiatives through a
comparison with the functioning of the conventional banks which can be
called banking with the formal system of work. The role of the voluntary
organisation (initiative) itself can be seen as that of a banker in a very
broad sense, in this comparison. 

Banking with the Formal System
The basic lesson to be understood in providing banking services to poor
women is in the role of the banker in banking with the formal system
compared to banking with the informal system of work.

Today, conventional banks function from an office where the borrower has
to come and present his/her creditworthiness credentials. This is mainly in
the form of security or collateral. If you are able to prove through
documentary evidence that you have sufficient security/collateral
acceptable to the bank, then you are creditworthy and the banker is ready
to do business with you. If you are not able to present such documentary
evidence, then you are not creditworthy and the banker is not willing to do
business with you. Those people who have been able to involve
themselves in formal systems of work are able to provide documentary
evidence such as a salary certificate, fixed deposit certificates, inventory
certificates, bills due; or those who own property - both moveable and
immovable - are able to provide property ownership certificates.

Poor women are not able to provide such documents because they have
not involved themselves in the formal system of work. They are in the
informal system of work by design or by default, and find it difficult to
borrow from banks. In the present system, therefore, the onus of
establishing creditworthiness falls on the borrower (poor women). The
borrower also has to be familiar with and knowledgeable about bank
procedures and formalities and has to be literate, to be able to deal with
banks. The poor are, by and large, not knowledgeable about these
procedures and most of them are illiterate.

Those borrowers who can provide these various certificates, are able to get
assistance from banks. However, the work of giving certificates is done by
a third agency - the respective ones for property, employment, taxes, etc.

This agency - whether the registrar of properties, or the revenue
department or the municipality or the office where the person is
employed, or the income tax department, or the sales tax department, or
the octroi department - does the necessary field work and scrutiny and
checking of the bonafides of the person and then issues certificates to
show that a particular individual is worth a certain amount. The bank then
uses these certificates, the ground work for which has been done by a third
agency, and determines the creditworthiness of the borrower.  The bank
uses this security/collateral base to recover its dues by selling off or
disposing off the property, etc., if the need arises.

When banking with people in the informal system, it is very difficult to get
such documentary evidence because they keep written transactions to a
minimum. Hence the role of the banker changes. The banker has to do the
field work himself/herself to know the exact worth of the borrower and to
determine his/her creditworthiness.

This process is even more true when banking with the poor, because they
rarely have any written transactions. Their dealings are mainly of small
size and are verbal in nature. For poor women, this process is the most
true, because they do not even have any assets in their name.

Individual knowledge of the social and work system of the borrower is the
basis on which the bank can take risks when dealing with the informal
system. Constant contact with the borrowers, knowledge of the various
trades which these people engage in, the kinds of goods and services they
provide, their sources of procuring goods, the places where their goods are
sold, the customers and the suppliers of the borrowers; the place of work,
the place of residence, social peers, relatives and associates of the
borrowers; size of business, margins in each trade, other income sources;
family size and expenditure, habits and attitudes of the borrowers are the
kind of detailed information which the banker has to know and
continuously monitor. This information alone can substitute for security
and collateral. The poor cannot provide documentary evidence on their
own, so the banker must find a substitute for documentary evidence.

The onus now falls on the banker to get all this information and decide
how much risk to take on a particular borrower. The procedures and forms
have to be filled by the banker. Constant follow-up and extensive field
work are absolutely necessary. This alone can ensure repayment and only
then can banking be viable. The documentary evidence sought presently by
the banks as security/collateral is only for ensuring repayment.

In the informal system of work the knowledge of the borrower and follow
up is the substitute for security. The banker and the borrower thus have to
have a direct relationship of trust with each other in this system as
compared to the system where a third agency providing documentary
evidence becomes the locus of trust between the banker and the borrower.
In the informal system of work the banker must know when the borrower
is going to have money and go to recover dues at that time.

Principles of Providing Credit to Poor Women
The following principles can be highlighted from the experiences of
voluntary organisations in providing credit to poor women.

1.	Organising the Women First of All before initiating any banking
activities is most important. The situation of poor women in the informal
system is exploitative because they are not organised as workers.
Organising the women around common issues which they face enables
them to come together, to gain strength from each other, to learn the ways
of the formal institutions and to deal with the exploitation they face in
several forms. When credit and banking facilities have been initiated with
an organised group of women, they have been effective.

2.	Build a Relationship of Mutual Trust and acceptance with the women.
Constant ongoing work with the women and a genuine effort to strengthen
their situation, is the basis for building a relationship of trust. Constant
contact with the women, their problems, their struggles, their lives, helps
to understand the reality of the women and helps the women to
understand each other as well as the organisers. It releases their own
creative energy and contributes to designing developmental activities which
are acceptable to them.

3.	Develop Systems which Do Not Make Illiteracy of the Women a
Handicap whether it is photographs for identification or field visits to
substitute for documentation or verbal information to be transferred to
written formats by literate people. The onus of meeting the demands of
the formal system (written transactions) is taken over by the organisers
and the functionaries of the voluntary organisation.

4.	Understand the Multiple Occupations and Multiple Roles of Poor
Women. It is very important to know the various economic activities
which the women are engaged in, the kind of problems they face in these
activities, the nature of exploitation, the incomes they can earn and the
way they combine their various roles to maximise on income. An
involvement with the overall life of the women and their needs, helps to
coordinate different developmental activities with them. A realistic
assessment of their credit needs and capacity to repay is possible only
from this knowledge.

5.	Understand the Informal System of Work in which these women are
engaged. The subsistence - commercial continuum of livelihood systems,
the combined need for consumption - productive loans, and the changing
priorities of the women as their day-to-day life situation changes have to
be understood. Also understand the various work and social relationships
of the women.

6.	Understand the Handling of Small Amounts of Money. The credit
needs of poor women are small in size. But the number of women needing
such credit facilities is very large. Hence, detailed systems are important
for recording all banking transactions and ensuring safety of the money.
Considerable paper work is involved. Each woman's  trust is sustained
when all her money transactions with the organisation are meticulously
updated and are accurately maintained.

7.	Encourage Savings of the Women as a Source of Funds for the Credit
Programme. Women have a strong need to save and they need a safe place
to keep their savings. Their individual savings are small so it is important
to again develop detailed systems of ensuring safety of their individual
small amounts of money, accuracy of transactions, and updating of
records. Collectively their small savings can add up to a considerable
amount of money. Their savings help them to develop a stake in the
smooth running of the credit programme, because their own money is

8.	A Holistic Approach to the Problems of Women, Not Merely Credit.
Credit alone has little impact on the economic status of poor women. A
holistic approach incorporating struggle for the fair implementation of
various legislation in their support, vocational skills training, access to
raw materials, markets, space to work, legal aid, health and childcare,
maternity protection and social security, communications skills, insurance,
housing, are some of the elements that go hand-in-had with the availability
of credit. 

The situation and problems of poor women determine the immediate
priority as well as the mix of support systems that are needed. This kind
of holistic approach facilitates the effective utilisation of credit and also of
high recovery rates. The economic status of women as well as the
collective strength of the women improves.

9.	Flexibility and Timeliness of Responses to the needs for the women,
services provided at the doorstep of the members, quick decisions to
sanction loans, close personal follow-up are all reflected in the flexibility of
systems to adapt to the needs of poor women.

10.	 A Participatory Structure which provides women with effective
access to decision-making in the functioning of the credit mechanism

A Board of Directors from the members is important and a structure which
allows illiterate and literate women to help each other is encouraged.
Involve the women themselves in deciding rates of interest for loans, terms
of repayment, systems for maintaining records, decisions to share the
surplus generated from the activity, other facilities to be created for the
women, and the ongoing work of the organisation.

11.	Build a Cadre of Dedicated Organisers and Workers who are able to
involve themselves in the lives of poor women as partners in progress.
This is a crucial link, without which it is difficult to make all the above
mentioned aspects a reality.

Credit as One Input in the Process of Change
Credit can only be effective when it is understood as one aspect of an
integrated set of support services to strengthen poor women's economic
activities. When money is being given as a loan, the prime concern is that it
be repaid.

To ensure a high rate of repayment of loans extended to poor women,
demands an overall involvement with their lives. If the money available as
loans leads to increased sustained income, then the person can repay the
loan. Otherwise it is very difficult to repay loans. Even the rich people
cannot repay loans if sustained incomes are not possible. 

Credit to poor women has to be seen as a process of enabling them to
stabilise their livelihood system - be it income in cash and/or kind through
one or more activities. The interventions needed to strengthen poor
women's economic activities have been described in Part I of this paper.

All these interventions are also an integral part of ensuring an effective
credit mechanism for poor women.

Money alone is not enough to enable poor women to influence their
incomes favourably in an economic environment which is loaded against
them. Money as part of an integrated process of building collective
strength is very very critical in strengthening poor women's economic