Alternative livelihoods for 500 ragpicker families

Nek lives in a shelter on a narrow strip of land running through one of Kolkata’s “canals” – they are in fact open sewers. She is 35 years old, a mother of five and lives with her husband and four of the children.
She and her husband have a small tailoring business but they have struggled to support their large family on the Rs200 (£2.13, $2.80, Eur2.38) they managed to earn each day. Nek says “Sometimes we used to go to sleep hungry”.

Last December, Nek applied for a loan under Tiljala SHED’s Alternative Livelihood programme. With the Rs20,000 (£213, $2.80, Eur238) she bought a new sewing machine and an overlocker machine. She and her husband have been able to improve their efficiency with these new machines and now earn Rs500 per day. This has made a huge impact on family life and prospects for the whole family.
• They can eat regular nutritious meals. “We eat fish or chicken 4 days a week” says Nek. This is considered a ”privileged meal” within the community
• They can purchase new clothes occasionally, especially for festivals (an important tradition in which the ultra-poor are unable to enjoy)
• Nek has started saving a little money each month
• She has purchased her own electricity meter
• She is keeping the youngest children in education and spending what is necessary on books and uniforms.
Moreover, Nek has already repaid the original loan (with interest) and is keen to take out a further loan. Nek’s experience shows how access to cheap credit, through responsible microfinance loans, empowers a family to change their own lives. Nek has not received any free handouts, just a helping hand so that she can grow her business and improve the lives of the whole family.

This project began in early 2016. The loans were entirely funded by GlobalGiving donors like you. Since then your generosity has changed the lives of 330 destitute families in central Kolkata.

• Total beneficiaries 330
• Total of loans disbursed Rs 5,265,004 (£56,000 $73,500 Eur 62,700)
• Total of new loans from the revolving fund Rs2,829,000 (£330,200 $39,500 Eur 33,680)
• Total Number of *CIGs 44
• Loan Recovery rate 98%

*Credit Interest Group. Lending/borrowing is organised around these community-based organisations. Each of the 5 women in the group is responsible for all the others in the group. They support one another and recommend others for loans. It is a system which works very well indeed.

When everything went wrong for Ishrat, she was very lucky that donors like you had supported her through Tiljala SHED’s livelihood programme.  Ishrat was born into a large rag picking family, had no education and was married off at 14. Ishrat and her husband Nasir have 3 children. They run a sack-selling business: they buy old sacks, sort them and then sell them on.  They used to make a profit of about Rs7000 (£78 or USD100) per month which was just enough to feed the family – but they had no way of improving their income without an injection of capital.  So Ishrat approached Tiljala SHED for a loan of Rs15000 to enable them to expand the business.  They rented a godown (warehouse) increased their stock and improved their monthly income by a further Rs3000

Access to financial services and to credit is one of the most effective ways the ultra-poor can help themselves out of the cycle of poverty.  Kolkata’s rag pickers are so poor, though, that normal banks won’t lend them money.  Money lenders charge extortionate interest rates and families can find themselves deep in debt when they cannot repay a loan.  Tiljala SHED’s livelihood programme exists to help the poorest of the poor – not to exploit them.  We understand that things go wrong, people fall sick and need to cover medical costs, businesses don’t always grow as fast as people want.  In Ishrat’s case the godown and all her stock were burned to the ground in December last year.  They need to start all over again.

Ishrat will be given a further loan to help her build up her business again and she is on very relaxed repayment terms.  She wants to pay back what she owes but she does not need the added stress of growing debt.  Mita, Mijanoor and the rest of the team at Tiljala SHED who run this programme with such care and humanity are there to help Ishrat and her family improve their lives.

Thanks to you and other donors Tiljala SHED can give families like Ishrat’s a second chance.  Please consider a further donation today so that we can help more families like Ishrat’s.  There are currently 90 families waiting for small loans.

Since April 2016 £48,000 (USD63,000) has been disbursed to 166 families.  £28,600 has been repaid so far and loaned out again to a further 116 families.  Total 282 families have been helped.  The present recovery rate is 97%.