Jayshree Vyas, MD, talks about the business model and technology initiatives of the cooperative bank of unorganized sector women workers:
The Self-Employed Women’s Association (SEWA) was registered as a trade union in Gujarat in 1972 when a group of self-employed women, residing in Ahmedabad, first formed their own organization. In May 1974, SEWA Bank was registered as a cooperative bank under the dual control of Reserve Bank of India and the state government. Jayshree Vyas, a qualified chartered accountant has been working as managing director of Shri Mahila SEWA Sahakari Bank since 1986 for economic empowerment of underserved women. During her tenure, she has taken various initiatives to uplift economic status of these women, such as introduction of integrated micro insurance and micro pension for social benefit and introduction of financial and entrepreneurship literacy program to provide in depth financial and business knowledge.
Self-Employed, Unorganized
SEWA Bank was the first informal sector women’s bank in India. Its main objective was to strengthen its members’ bargaining power to improve income, employment and access to social security. Empowering women was the prime objective with which the Self-Employed Women’s Association movement called SEWA began its journey in 1972, as envisaged by founder Elaben Bhatt. SEWA, a trade union of unorganized sector women workers realized a need for promoting their own financial institution, based on 3 major reasons. Jayshree Vyas, managing director, lists: “They need capital for running their day-to-day business as well as for buying equipment for the business. Such borrowings were on exploitative terms and they desperately wanted to come out of the clutches of these money-lender. They wanted some safe place to put their savings. Their experience in dealing with formal banks through SEWA union had made them realize that it will be extremely difficult for them to avail banking services from these formal institutions. 96% of all women workers in India are in the unorganized sector. SEWA sees itself not merely as a workers’ organization, but as a movement.”
Viable Financial Venture
Self-employed workers are those who earn a living through their own small business or through selling their own labour. This sector of the economy is called the unorganized (informal) sector. They are mostly caught in vicious cycle of vulnerability. Jayshreeben indicates: “They said that, ‘We may be poor, but we are so many’, and indeed 4000 self-employed women contributed share capital of Rs10 each to establish the Shri Mahila SEWA Sahakari Bank. Since then, it has been providing banking services to poor, illiterate self-employed women and has become a viable financial venture. They barely have any assets or working capital. But they are extremely economically active, contributing very significantly to the economy and society with their labor.”
Majority of our members are affected by the pandemic. All of our members are working in the informal sector. Lockdown – for 100 days – up to June end, was a very difficult time, especially because many areas were in the red zone and so members were quarantined, thus not even able to come out of their homes at all and not able to do business.
However, banks being an essential service, SEWA Bank had for all 100 days opened its all branches specially to ensure that our members can get financial services, specially withdraw their savings and can get emergency credit. It was a very challenging time, especially because we had to take precautions for both our members and our staff. But we could take all precautions and our members too were very disciplined.
From the beginning, we had motivated and facilitated women to save their money – even small amounts. This was very helpful to women. They were coming to the bank to withdraw their saving, even from quarantine places. Their bank passbook became their license to come to the bank, even from the curfew area. Another advantage they had was digital services; many of them used ATMs for withdrawing their money.
Even during these difficult days, few women could continue with their businesses or changed their business like the business of making masks. Other women who were home based workers started preparing food-snacks and sold in nearby area. Vegetable vendors could get permission to sell vegetables.
In many houses maids were not going for work and housewives had to clean their homes. They could not bend and needed standing ‘mops’ so SEWA women immediately realized that need and started selling the same. Balloon man business stopped so that he used sticks for display masks and hand gloves, shifted business from selling balloons to selling masks and hand gloves.
Largest Membership Base
The members are engaged in the 3 predominant activities as vendors, as laborers or small service providers and as home-based workers. Jayshreeben updates: “Membership increased by approximately 400,000 increased in the last 3 years but it was also adversely affected due to pandemic. We are expecting to reach approx 1 million members in the next 3 years.”
Savings-Led Microfinance
SEWA Bank exists to reach to maximum number of poor women workers engaged in the unorganized sector. Main objective of SEWA Bank is to help poor self-employed women to come out of the vicious cycle of poverty. Jayshreeben explains: “Our bank helps them to build their businesses, capital, assets and help them to improve their living conditions. Thus, SEWA Bank essentially follows the savings-led model of microfinance. We provide them suitable financial services for socio-economic empowerment and self-development, through their own management and ownership.”
Product Design, Biz Growth
The bank offers financial services such as saving schemes, fixed deposits schemes, recurring deposit schemes, pension product, group loans, business loans, and bank also offers insurance for life, health, natural calamity, accident, death and many more schemes for the informal sector women. Jayshreeben points out: “SEWA Bank has taken lifecycle need approach to design and develop loan products catering to a range of financial needs of its poor women members. Thinking of tomorrow and even beyond is the motto we follow so as to design a financial product, keeping in mind the behavioural patterns, attitudinal changes and such other traits of poor self-employed women. These women are counted as high risk in insurance, which is why we have linked savings, credit and insurance together to make it simpler for them.”
Majority all of our members have been affected by the pandemic. All of our members are working in the informal sectors like small vendors, home-based workers, garment makers, incense stick makers and service providers like paper pickers, scavengers and construction workers. Majority of them are earning on a day-to-day basis, and do not have regular salary income. So, what is suitable for our members is micro insurance. Approximately 35,000 members are linked with the insurance products. Most common insurance products are accident insurance and stock insurance. Earlier, we linked our members with Pradhan Mantri Jandhan Yojana – in that we also provided life insurance policy and accidental policy to our members.
The bank today has a share capital and reserves of around Rs800 million, working capital of Rs4.50 billion. Jayshreeben proudly cites business growth: “Our bank has advances of Rs2 bn and deposit of Rs3.25 bn as on 31st December 2021.”
Housing loan portfolio is Rs183.4 million and business loan portfolio is Rs1.33 billion as on 31st December 2021.
Financial Counselling, Discipline
Along with empowering women, information is crucial to the empowerment if, long term benefits are to accrue. Jayshreeben believes: “Towards this end, the financial counselling becomes a necessity for it leads to wiser and sustainable decision-making process. Financial discipline is arrived at through financial counselling, which helps take care of exigencies in future, gives a feeling of security, inculcates a feeling of economic independence and encourages them to plan for the future.”
Training To Expand
Along with financial counselling, SEWA Bank also has expertise in providing business counselling training. Jayshreeben says: “This training mainly aims to impart basic knowledge and information to women members to not only start their own business but also how to expand their existing business and be successful.” Sewa Bank had provided financial literacy and digital literacy training to approximately 20,000 informal economy women in Gujarat. During the pandemic our training was also affected. We are dealing with semi-literate members but during the pandemic we started to provide digital financial literacy to our members virtually.
With the increasing pace of digital financial market, SEWA Bank added digital financial literacy to its financial literacy trainings. Jayshreeben informs: “We have provided this so that women can fetch benefits of digital banking like time and cost saving, cashless transactions, security of their financial transactions etc. Bank is having its own, well experienced trainers for imparting these trainings, who impart this with use of various modules like basic accounting, selling, marketing and making a business plan etc.”
Conclusively, SEWA Bank has rich experience of providing financial management and business counselling trainings to thousands of women. Jayshreeben adds: “They have provided skills training along with access to loans to ensure increase in income for all informal economy women workers.”
Rupay Card, UPI Usage Up
SEWA Bank has launched PoS and e-commerce services on its Rupay debit cards, enabling the bank customers to purchase goods and services online. Now, SEWA Bank customers can enjoy shopping on the internet websites, payments in shopping malls, pay utility bills, swipe card for petrol/ fuel, etc, at their convenience 24x7x365. This service is free of cost and all customers can start utilizing it today by using their existing Rupay debit card and pin. It is possible to withdraw money from ATMs all over India with the help of this Rupay card. Jayshreeben updates: “We have distributed 58,000 Rupay cards to our members. We are offering a number of digital banking services to our members, which include core banking service, ATM / debit card service, IMPS, NEFT & RTGS, UPI/BHIM, QR code, PoS & e-commerce, SMS service, missed call service, passbook printing machine and cash deposit machine. Within time span of just 3 years of launching UPI services, we have reached to an average 25,000 UPI transactions per month.”
Cyber Security Awareness
SEWA Bank conducts awareness programs for the employees. Jayshreeben elaborates: “Security Operations Centre (SOC) organizes cyber security programs on regular basis. Awareness mails are sent to employees, explaining how unknown URL, links, unknown mail ids should not to be opened. We give examples on how the hackings have happened in different banks, we read out to them different circulars issued by RBI and explain how precautions to be taken on the same.”
The bank is following all the norms and regulations given by Reserve bank of India from time to time. Jayshreeben adds: “Our bank also provides awareness to the customers related to frauds as well as security and informs them about precautions to be taken while using the digital platform, during financial literacy programs in the field.”
