One month of Swabhimaan

May 12, 2017
By Rang De Team
Women attending the financial literacy training program under Swabhimaan

It has been nearly a month since Rang De’s latest initiative Swabhimaan went live. Swabhimaan — which aims to promote financial inclusion in rural India — was launched on 8 March in Yeshwantpura village in Kolar district, Karnataka.

Through Swabhimaan, we aim to provide people in rural India with access to low-cost loans at their doorsteps. To do this, we aim to introduce processes that spur behavioural change along with a financial literacy program.

Ever since Swabhimaan was launched and the first loan was disbursed to Almas Taj, the program has gone from strength to strength. 114 women in the village have been imparted with a beginner’s level financial literacy course that covers the basics of banking, financial planning, loan, insurance and saving options.

Our co-founder Smita Ram with Almas Taj, first borrower to avail a small loan under Swabhimaan

Potential borrowers are asked to take a short, digital test in financial literacy. Of the 81 women from the village who took part in the test, 65% cleared it on the first attempt. The financial literacy sessions, which began in the village of Yeshwantpura, have spread out to nearby villages, with sessions being now being conducted in Lekkenahalli, Hanumanayakanahalli and Gangapura, all of which fall under the same postal code as Yeshwantpura.

So far, 34 women have already received loans at single-digit interest rates under Swabhimaan. Rs 7,57,503 has been disbursed, with the funds being utilised for a variety of purposes.

The loan amount was directly transferred into the bank accounts of the borrowers, many of which were opened under the Pradhan Mantri Jan Dhan Yojana (PMJDY). Many women have repaid the loans, kindling activity in these bank accounts that they had little inclination or incentive to use earlier.

Statistics for Swabhimaan as of May 2017, one month after the program went live.

What we have learned so far

At Rang De, we believe that financial empowerment starts with possessing financial awareness that is both relevant and actionable. In order to equip the borrowers to take independent financial decisions, we conducted financial literacy training on the ground. Our efforts were vindicated when some women in the village, who qualified for a loan, refrained from taking it because they did not have any pressing needs for money.

The more time we spend in the village, the more we learn — we saw first-hand the great efforts taken by the women to sustain their homes. The cashless, discretionary and flexible nature of loan under Swabhimaan, where a woman borrowing money has the liberty to choose the amount and tenure of the loan as well as the frequency of repayment, is a great help. The signs from the borrowers in the village have been positive, though there is a long way to go.

The funding by TATA TRUSTS allowed us to conduct research on the various aspects of rural credit and the technical requirements needed to build a robust platform for Swabhimaan.

Their financial support has also allowed us the leeway to make mistakes and incorporate the learning into the final product. Bringing about a change in rural credit in the country is a monumental challenge.

For a rural population that has transacted on paper for the longest time, it is a huge leap to move to cashless, digital financial services.

Providing hassle-free, last mile connectivity remains a challenge as well. We have begun to realise that technology cannot replace all human intervention. There are instances small problems cropping up — requests for passbook updation being rejected, the bank’s printer being dysfunctional for long stretches of time — that require troubleshooting by a person present on the ground. As Swabhimaan grows in the months to come, we are constantly tweaking our processes and technology to adapt to this learning.

You can provide low-cost funds directly to women in rural India by investing in Swabhimaan here