Economic Growth India Project #21941

Alternative livelihoods for 500 ragpicker families

by Tiljala Society for Human and Educational Development

Project Report | Jul 5, 2019
How access to microcredit changes lives

By Jane Manson | Fundraising

Rehana

Rehana’s Story

Rehana is 26 years old. She is married with a son and a daughter. They live near Topsia canal side settlements in central Kolkata. Her daughter studies in class IV and son studies in class I. Up until June 2018 Rehana earned a meagre Rs 50 (57 pence) per day by chappal-cutting (trimming the rubber straps of sandals). Her husband is a rickshaw puller and earned Rs 180 (£2.00) per day after paying Rs 70 rent to the owner for the rickshaw. This income was not enough for running the household expenses and sometimes the family went to sleep without food.

In June 2018 Tiljala SHED had received a loan of Rs 20,000 (£230) for supporting her business through Tiljala SHED’s Alternative Livelihood Program. Rehana purchased a rickshaw. This meant that they no longer had to pay rent for the rickshaw. Her husband earned a good amount for 6 months and, no longer trapped by poverty, he was able to find good work in Odisha. So Rehana now rents out the rickshaw and receives Rs.70 per day in rent.

Having repaid the initial loan in full, she took another loan for Rs.30,000 in June 2019 and opened a new warehouse for waste recycling work. She is also repaying the second loan in time. Her husband continues to work hard in Odisha to help repay the loans.

Whatever she is earning from the warehouse is reinvested in the business to expand. The condition of the house and their living standard has increased. They have a lot of expansion plans and she plans to take another loan in the coming months after the repayment of the loan.

Life has changed in just 12 months and with their hard work this family is making progress and is on the way to end poverty in a few years.

Rehana wants to live an independent life and does not want to depend on her husband’s income. She has dreams to make her son a police officer and daughter a nurse to serve the society. She is a leader in the community and an entrepreneur.

How are these loans organised?
Applicants for loans under the Livelihood programme all come from the very poorest section of society. They live in the desperately poor areas of central Kolkata which Tiljala SHED has supported for many years. All the beneficiaries are women, although many, like Rehana, may take the loan to enhance or support their husband’s business. Each beneficiary is screened to ensure they are truly in need and living below the poverty line. Applicants form small groups of 4 or 5 women, CIGs (Credit Interest Groups) which then work together to support and encourage one another and also to take responsibility collectively forone another’s repayments. A condition of taking a loan under this scheme is that the children must remain in education and that the beneficiary must have a bank account and develop a habit of saving. This way they are protecting their future.

Why is this scheme so successful?

It is run by and for women.
The CIG structure means that potential beneficiaries are selected by friends and neighbours who know them well.
Tiljala SHED provides business training and support
Because T Shed is a charitable organisation and not a bank, this scheme is run entirely on humanitarian grounds. If a crisis occurs – and amongst the very poor an illness in the family can cause a severe financial crisis – the loan repayments are rescheduled and sometimes even forgiven altogether. Even so the overall repayment rate is always very high.

What are the main positive outcomes/impact?

The women are empowered to build a business and become financially secure
Across the scheme women report much reduced levels of domestic abuse
The children remain in education and thus increase their own chances of a better future
Families who have lived for generations in illegal shelters beside the railways and open sewers are now planning to move into proper housing and to put their children through a good education

This scheme is 3 years old. It started with a fundraising Quiz Night in December 2015. That evening raised the seed funding which led to the first 80 beneficiaries receiving loans in June 2016. Since then a total of £96,500* has been disbursed to 472 beneficiaries. Of those, 142 are former rag pickers (the lowest of the low – women who fed their children by collecting other people’s waste and selling it on to dealers). The rest were classed as ultra-poor (not rag pickers, but from extremely vulnerable families and living in the same illegal makeshift shelters). None of the beneficiaries are in any useful way literate – and yet 74% have increased their family income through becoming entrepreneurs.

We are desperate for another £10,000. With this we can expand the project and bring in the long waiting list of CIGs (more women like Rehana) who are desperate to change their family’s fortunes with a small loan. With a further £10,000 circulating through the system, enough interest will be generated to cover the entire cost of the project and to make it fully self-sustaining.

A single donation from you will be accessed again and again as these desperate communities lift themselves out of poverty, educate their children and walk into a brighter future…

*£18,000 raised through Global Giving (about £3000 at that first quiz night) and the rest is funds returned in repayments and funds raised locally in Kolkata.

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Apr 8, 2019
How Noorbanu built a business on a microloan

By Jane Manson | Fundraising

Noorbanu and Rajah in their shoe factory

One of the most uplifting experiences when I visit Kolkata is a trip to visit the women who have set up small businesses.

Uplifting because the impact of these loans is seen so quickly.

Thanks to your generosity, we can distribute microloans to vulnerable women who live in the squatter camps beside the railways and sewers. Almost all are former rag pickers, who have scraped by and fed their families by collecting other peoples waste and selling it on to dealers. With no access to financial services (other than loan sharks) these women have little hope of changing their lives

Take Noorbanu. She took a small loan of Rs 15,000 (£166/USD219) in June 2017. She set up a small shoe making business. Her husband Rajah got involved and they grew the business together, taking the finished goods to sell to merchants at one of Kolkata’s biggest markets. By March 2018 the family income had risen from Rs7000 a month to Rs13000 (this is a very good income, and much more than many of Tiljala SHED’s staff earn). The original loan was paid off in full by March 2018, but Noorbanu applied for a further loan. This time they took Rs20,000 and started to expand the business and to take on staff. The pictures you see were taken in January when I visited this industrious little factory built on a bank beside the railway. The Rs20,000 was also returned very quickly and Noorbanu now employs 8 staff. They make 100 pairs of shoes a day and clear Rs15 – 20 profit per pair.

Rajah is clearly in charge of the factory, but Noorbanu is responsible for the finances and they seem to be a great team. They are planning a future away from the chaos of the railway squatters where they can set up a formal factory and a comfortable home.

By all accounts, like so many of the men in these communities, Rajah had been a bit of a troublemaker, drinking hooch and becoming violent. But he is a changed man, they say, having put all of that behind him.

In fact, the reduction in domestic violence is, for me, one of the most significant outcomes of this excellent project. With access to credit these women are truly empowered to change their own and their families’ lives.

And, of course, the Rs35,000 lent to Noorbanu, was returned to the Revolving Fund and is now busy helping other families to lift themselves out of poverty and despair.

Please consider a generous donation today – even better a regular contribution – so that you can transform the lives of extremely vulnerable women in this forgotten part of Kolkata.

This week the first $50 (£38) of every donation attracts an additional 60% in matched funding. So, if you are a UK taxpayer a donation of £38 is worth over £70 to us until Friday 12^th April 2019

The numbers:

Number of beneficiaries/loans since June 2016 428

Beneficiaries with 2^nd loans 50

Beneficiaries with 3^rd loans 4

Total amount disbursed £81,344 (about half is from returned loans)

Loan recovery rate 96.6% (Yes, really)

Noornbanu's factory. Eight employees and growing..

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Mar 11, 2019
Usha - The "Sareewalli"

By Jane Manson and Shafkat Alam | Fundraising

Usha receives her cheque

Each time I visit Kolkata I make a point of visiting as many of the beneficiaries of this project as I can. Mainly because these women’s stories are so uplifting. Read here how a small micro loan of just £200 empowers a woman to lift herself out of poverty.

"Usha’s husband died just few years after her marriage. She has 2 sons. They were very small when her husband passed away.
After her husband passed away she faced struggle and hardship and ultimately, she became a maidservant and it was just contributing Rs.1500-2000 per month to her family. This small income was not enough. Usha always wanted to do something big which she had in her mind. But time was not with her and she faced many hurdles. She became a part of the CIG and eventually she got a loan of Rs.20,000/ to start her saree business. She is selling sarees door to door and also gets her customer at her doorstep. She lives in a small hut at Topsia canal side and the condition of the house is ramshackle. With her sincere effort, the saree business was booming, and her sales were touching skies. She repaid the loan in 6 months which had a time period of 10 months. She has bigger plans for her expansion. She applied for loan again and after discussion with the CIGs she again got a loan but this time Rs.30, 000/. She is the first beneficiary to get a Rs.30, 000/ loan and she is repaying fast without any delay.
After her husband passed away she faced struggle and hardship and ultimately, she became a maidservant and it was just contributing Rs.1500-2000 per month to her family. This small income was not enough. Usha always wanted to do something big which she had in her mind. But time was not with her and she faced many hurdles. She became a part of the CIG and eventually she got a loan of Rs.20,000/ to start her saree business. She is selling sarees door to door and also gets her customer at her doorstep. She lives in a small hut at Topsia canal side and the condition of the house is ramshackle. With her sincere effort, the saree business was booming, and her sales were touching skies. She repaid the loan in 6 months which had a time period of 10 months. She has bigger plans for her expansion. She applied for loan again and after discussion with the CIGs she again got a loan but this time Rs.30, 000/. She is the first beneficiary to get a Rs.30, 000/ loan and she is repaying fast without any delay.

With her income she is planning to shift from her kacha kouse (temporary makeshift) to pucca (permanent structure) house in the slum which is an indication of her stable income. She is famous in the area and people call her "sareewali" - the sari seller. Usha is trying her best to transform her life. She is one of many who inspire us in our daily life.”

Almost 400 women have now benefited from this fantastic project. We desperately need new funds so we can continue to provide loans and ultimately make this project entirely self sustaining.

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