Born in 1933 to a middle class, well-educated family, Ela Bhatt has spent her life fighting for the rights and welfare of India’s “invisible” workers. Her grandparents worked with Mahatma Gandhi in the non-violent struggle for Indian independence from the British. Deeply influenced by Gandhi, Ela has followed his ideals all her life. She has pioneered the idea that people themselves, no matter how poor or uneducated, are able to solve their own problems if they organize together to do so. To help provide this, she founded SEWA, the Self-Employed Women’s Association. Called “one of the best—if not the best—grassroots programs for women on the planet,” SEWA proved so successful that it has become a model for microfinance programs in other parts of the world.
Ela started as a lawyer with the Textile Labour Association (TLA) in Ahmedabad, Gujarat, a union founded by Gandhi, who had deep respect for India’s textile producers. Working in the womens division, Ela soon found that women were doing many of the labor-intensive tasks needed in textile production, as well as in other fields of work.However, as workers, they were invisible. Outraged, Ela said, “Personally, I don’t think there can be any greater injustice to anybody in the world than to have one’s work contribution negated. … Who is the backbone of any economy in the country? It’s the poor! Yet they are not recorded as workers in the national census. They are described as nonworkers!”
Home-based workers are the least visible of all. In the textile industry, contractors give the women cloth pieces, which are already cut out to form parts of a garment. The women sew the garments together at home and return them to the contractor. The women have to work fast and for long hours, because they are paid by the piece. Often, young daughters help with the sewing after school. The contractor would pay whatever he wished, often an extremely low rate of 4–5 rupees per day. The women, because they were unorganized, had no way to demand higher rates.
Other women workers in the informal sector also had very difficult working conditions and were often exploited. These women included vegetable sellers, rag pickers, bidi rollers (a hand-rolled cigarette), incense makers, cleaners, laborers, cart pullers and silk and cotton workers.
“I realized that although eighty percent of women in India are economically active, they are outside the purview of legislation.” Ela recognized that these women needed the help that they could get only through organizing together as a large group. To meet that need, she founded SEWA in 1972 to organize for better pay and working conditions. SEWA, which today has 250,000 members, helped workers at the lowest level of society become empowered to take control of their lives.
It soon became apparent that women workers had a serious problem with money and banking. Even though many of the women worked 12 hours a day or more, they made little money, had no savings, and never had enough capital to improve their conditions. For example, a home- based textile assembler might have to pay high rent on the sewing machine she used. She never had enough money at one time to buy the machine. Even if a woman was able to get a little money together, the money often was not safe at home, where men felt entitled to whatever was in the house.
If a woman wanted to borrow money to further her business (for example, to buy extra vegetables to sell in the market), she would have to borrow from moneylenders at outlandish rates, sometimes 50 percent per day. Since womens wealth was often in the form of jewelry, they also got funds through pawning. Because they were largely illiterate, these women were unable to sign their names at a bank and were unfamiliar with banking routines. A male relative would have to sign for them, gaining access to the money. In addition, bankers, who had never dealt with illiterate low-income women, treated them badly.
SEWA had a meeting to which 2,000 women came and told of their difficulties with the banks. Finally, someone said, “Lets start our own bank!” Others agreed, and the idea was underway. SEWA Bank was registered in 1974 with 4,000 members. When money had to be raised to register the bank, the women, saying, “We are poor, but we are so many!” raised the needed RS. 100,000 within six months. Ela says that the idea that illiterate women cannot be decision-makers in finance is an untrue middle-class notion.
A major problem was that the women could not sign their names. How could they be identified at SEWA Bank? SEWA found a way that was so successful it is now used in banks throughout India. Each woman was photographed holding a slate with her bank account number on it. One copy of the photo was in her bank passbook, while another copy was kept at the bank. This definite identification meant that women could now have money in their own names: Men were no longer part of the process.
When a woman joins SEWA Bank, the first step is saving. The woman must save an amount every week, no matter how small. Even if she makes only RS. 4, she is encouraged to save half a rupee. SEWA even provides a locked piggy bank for the purpose, and representatives from SEWA come to the womans home to take the savings to the bank.
After acquiring the habit of saving, a woman will be allowed to take out a loan. Designed to meet the needs of low-income women, the loans are small with a long payback period, up to 36 months. Ela pioneered the concept of microlending, the idea that very small amounts, as small as $5, may be all that is needed to make a difference.
Women used the loans for practical purposes: buying equipment they had formerly rented, expanding a business, installing indoor plumbing and paying for childrens education. Over 95 percent of the loans are repaid on time, a much higher repayment rate than for other banks. SEWA Bank also educates and assists the women through other services, such as day care, maternity protection and job training.
SEWA Bank, which now has over the U.S. equivalent of $3 million in assets, has been so successful that there are now branches in other parts of India, and men have even asked to participate. It is important to realize that all of this was accomplished without any outside financial help. The women did it all themselves.
The SEWA Bank model, through its concepts of microfinance, has been used to empower poor women throughout the world. Towards this end, Ela joined with nine other women at the first U.N. World Conference on Women in Mexico City in 1975; these women shared the belief that the world’s financial institutions must become accessible to low-income women. Incorporated in 1979, Women’s World Banking now has 43 affiliates in 35 countries. Ela Bhatt has served as its chair since 1985.
The far-reaching effects of Ela Bhatt’s work have been recognized internationally through many awards, including the Right Livelihood Award (the alternate Nobel Prize) for “Changing the Human Environment” in Stockholm in 1984.
In India today, only about 11% of workers hold regular jobs with formal employer- employee relationships. These jobs are documented and the workers are protected by whatever laws are available.
Nearly 89% of India’s workers are undocumented. Their work in the informal sector is usually not covered by legal protection that may be available to workers in formal sector jobs. They work either on their own, or as piece workers with a contractor or middleman, in relationships that depend on verbal agreement.
Part of the informal economy, this work is done at home, usually by women. She gets raw materials from a contractor or middleman, assembles the finished product and brings it to the middleman for payment. Often at the mercy of the contractor, she must accept whatever pay he is willing to give. This type of worker is the most invisible in the economy.
Works with the large amounts of money used by banks, governments, stock markets, corporations and other large institutions.
Microfinance works with the very small amounts of money actually used by low-income people. It is often the most appropriate way to implement social programs at the grassroots level.