Setting up a women’s bank in rural Maharashtra was a daunting task in the 90s, and Chetna Vijay Sinha , Founder and Chairperson, Mann Deshi Mahila Sahakari Bank and Mann Deshi Foundation in Maharahstra’s Satara district, had to battle many stereotypes. Finally, in 1997, the Reserve Bank of India issued the first licence for a rural women’s co-operative bank. With 1,85,000 clients now, the Mhaswad-headquartered bank plans to reach one million rural women entrepreneurs by 2020. Sinha, who recently won the Social Entrepreneur of the Year 2013 award by The Schwab Foundation for Social Entrepreneurship, a sister organisation of the World Economic Forum, and Jubilant Bhartia Foundation, spoke to Business Line about her journey. Edited excerpts:

When did you get the idea to set up a co-operative bank in Satara?

I was born, brought up and educated in Mumbai and was involved in the Gandhian movement. I taught economics in Mumbai for a year and then got married to a farmer from Satara (a drought-prone area with a primarily Scheduled and backward caste population). I continued to work with women in the area, helping them on issues, such as getting electricity connections. One day a woman told me that she wanted to open a bank account but the banks were not at all helpful. I went with her to a bank, and was told that her account was not viable for them. That is when we thought of starting a bank.

Did you face any glitches in setting up the bank?

I made enquiries with RBI on how to go about it and was told that we could start a co-operative bank, as the capital requirement was not much in a village (Rs 6 lakh). We mobilised women, who contributed Rs 25 each. While applying for the licence, we need to submit a list of promoting members. In our application, a member had a thumb impression, so the RBI denied us a licence, saying that it could not be issued to a co-operative bank whose members were illiterate. I was dejected. But when I related this to the women, they said “Why are you disappointed, we will learn to read and write.” I felt they had so much energy…. so I started the process of literacy through our foundation, After five months, we re-applied for the licence.

How was your experience this time?

I decided that this time I will not go alone. So, 17 women went with me to RBI’s office in Mumbai after seeking an appointment. Initially, we were not allowed to enter because of the way rural women dress (most of them belong to the shepherd community), but in RBI if you have an appointment, they are sure to meet you. The women told the RBI officer, “We may not be literate, but you ask us to calculate interest on any amount, if we fail, don’t give us the licence”. The entire debate engaged the officer and after a two-hour meeting we got the licence. This was in 1997.

How difficult was it to get women involved in banking?

We have eight branches now, but yes there were challenges. The first was that women said they wanted to save money daily but cannot come to the bank every day. So, we thought of doorstep banking. But women were saving only Rs 3 or 4 a day. The transactions were very tiny. So we thought of using technology. Now, we have agents who go door-to-door with a wireless hand-held device to accept payments, repayments etc.

When did entrepreneurship come into the picture?

In 2006, a woman took a bigger loan for buying a buffalo. That is when our foundation thought of starting a business school for rural women. We started a doorstep B-school with a mobile bus with tailoring machines, laptops etc. The courses are conducted at their doorstep. The strategy was that the school would train women entrepreneurs, who would then get a loan from the bank to start her enterprise.

Soon we started a community radio, where women could advertise their products, give interviews and network. Also, a 24x7 toll free helpline in three languages — Marathi, Kannada and Hindi — was set up, and a chamber of commerce for rural women to provide them a supporting network, market connection and make them aware about licences, loans etc.

Given the patriarchal mindset, didn’t the men in the family oppose women handling money?

Yes, that was a problem, but we wanted women to control their own finances, so we designed the products in a different way. Interestingly, the women themselves suggested that we should not give them funds, instead we should buy them a goat or buffalo. Later, we convinced them that they need to handle their own finances. Then they started keeping their passbooks in the bank so that their husbands don’t know how much money they have. After some time, we told them that we would not keep their passbooks. That’s when we designed a GPS-enabled electronic card. It can have multiple accounts, loan, savings, pensions etc. and only the woman can operate it.

But, we realised that men had to be included in the process. So, in 2006, we made it mandatory that women who share property with their husbands can get larger loans and the husbands will have to undergo entrepreneurial training along with the wife. That made all the difference. In India, one has to address the whole household. A woman spends one hour in the bank and 23 hours with her husband, so we try and include men at every step. But, we do not give loans to men.

What are the key challenges that you faced?

Handling depositors’ money is itself a big challenge, as it has to be safe. The other challenge is keeping the bank’s mission in mind, especially the staff. Instead of giving a Rs 50,000 loan, we should not lose sight of someone needing a Rs 500 loan. Our aim is to reach every woman, not commercial gain. So, margins are a challenge, because these get squeezed as we are not regular microfinance lenders who charge high interest rates.

Also, collaterals for women for bigger loans is a big challenge. Earlier, we were making husbands co-members, but now we tell women that they should own property. So, we started offering interest subsidy to women who own property. Now, for a bigger loan, we have the husband coming forward and saying that he will make his wife a property co-owner. Also, we make it a point to felicitate such men. So far, over 6,000 women have become property co-owners.

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