Microcredit: a short term solution to misery


Ramrati is an old woman living in Holambi Kalan, a slum in North Delhi. In a cramped room, she owns two machines to grind wheat into flour. Deepa is a 17 year old petulant young woman. She displays and sells cosmetics on a roadside shop in Bawana slum, few miles away. they don’t know each other, they are on the opposite poles of human life, they have nothing in common. Except that they have taken a microcredit to start their business.

Ramrati pouring cereals in the machine

Ramrati pouring cereals in the machine

Ramrati used to live in a slum in central Delhi with her husband and 4 children. the whole family had to move to Holambi Kalan 5 years ago  because of the State plan urbanisation in the capital.  She thus, had to find a new way of earning money. The first year, she borrowed 8000 Rupees from Aajeevika, a microfinance non-profit organisation.  She bought a machine, then a motor, with a second loan the next year. With one rupee per kilo grinded, she earns 150 rupees a day. At the age of 60, she is now able to provide a decent living to 13 of her family members.

Ramrati's husband

Ramrati's husband

Microfinance has also been of huge help to Deepa. The determined and proud young woman has been married for a year now. At that time, her husband had just a little mobile shop. Last year, Deepa borrowed 8 000 roupies.  Jewels, hair accessories, make up….She managed to set up a stall of cosmetics along the road. With a weekly market on tuesday, she earns enough money to live modestly with her husband and her baby.

Deepa and her baby

Deepa and her baby

Like Deepa and Ramrati, many women in the slums in North Delhi have recourse to microfinance to cope up with poverty. When they arrived in this area, five years ago, they had nothing but a small plot of land given by the government with no drinking water and no electricity. The families had to build their houses. But with the lost of their livelihood, they had no money. Rapidly, they were plunged into heavy debts to money lenders.

Non-profit organisations like Aajeevika, who works in this particular area, lend small amounts of money with low interest rates to women. They use it to pay off their previous debts, to build a house, or to start a business. Twice a week, they meet up in tiny rooms to exchange money. And due to peer pressure, all loans are paid back to the non profit organisation.

women in a bank meeting

women in a bank meeting

But according to a member of Aajeevika, there should not be any misunderstanding about what microfinance really is. “It is just an attempt to fight against poverty, not a consistent alternative.” Deepa and Ramrati are the successful ones. With no skills of entrepreneurship, most of the women use their money to marry off their daughters or for daily consumption.

Holambi Kalan

Holambi Kalan

Coline Garré

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~ by delhidecidela on August 13, 2009.

One Response to “Microcredit: a short term solution to misery”

  1. Hi – cams across ur blog on google – aajeevika is doing some great stuff – thanks for bringing their efforts to light!

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