Background

In rural Wardha, the major source of employment for women is agriculture-related activities. Traditionally several commercial fruits such as bananas and oranges and crops like groundnuts, flaxseed, corn, and sorghum abundantly grew in this region and provided livelihood to many women. On one hand changes in climate, especially the sudden rise in temperatures, resulted in farmers losing their banana and orange cultivation while on the other hand, the invasion of wild animals into farmers’ fields destroyed crops like groundnut, corn and sorghum with many farmers turning away from growing these crops. Most of the farmers shifted to sowing commercial cotton, soya bean and pigeon pea. With this shift, women were the worst sufferers. For the commercial crops the farmers found it more economical to use low-cost chemicals (roundups) to control weeds than paying wages to women for weeding. Consequently, women lost work as well as the feed and fodder they collected while weeding the agriculture farms.

Apart from this, with the advent of heavy mechanization in farming, and extensive use of chemicals and roundup-type herbicides, the number of working days for women in the agriculture sector got drastically reduced.  The labor engaged in agriculture, majority being women, lost their major source of livelihood and were relegated to the fringes.

 Without any secondary source of employment, lack of skills, and a prolonged economic downturn, particularly post-demonetization in India and the Covid-19 pandemic, the women labor force slipped into deep crises.

In such a situation Magan Sangrahalaya Samiti decided that even within our limited resources, we should provide subsidiary employment to women by setting up small rural-based enterprises. But to set up small enterprises we needed to organize the women labor force in the region and required infrastructure facilities, working capital and skilled manpower.

1.  Formation of Rural Women Self-Help Groups

 Our first step was to mobilize rural women and generate awareness amongst them about their exploitation by middlemen from whom they borrowed small amounts of money for agriculture, health, education or household emergencies and mortgaged their assets at exorbitant interest rates. This borrowing was leading to an unending circle of vicious exploitation. 

 To economically and socially empower the rural women of 150 villages, we formed 1500 Women Self-Help Groups (SHG), each SHG consisting of 11 to 15 women members totaling a number of 18,000 rural women. Initially, opening of every SHG account was an ordeal as no bank was willing to open small accounts. The beginning was torturous. For opening one savings account we and the women visited the bank at least 5 to 10 times. Women were forced to tread 10 to 15 kilometers every day from their village to the rural bank (in some places there was one bank serving 25 villages), lost daily wages and suffered the wrath of male folk in the family who were not cooperative about their journey towards becoming financially independent. The delays and slow process led to rising mistrust and anger amongst rural women resulting in increasing dropouts. Every day we were losing ground and at times felt that all our efforts would be in vain. Suddenly we were struck with the brilliant idea of renting a house near the lead bank and making it our office. We made our SHG members stay overnight in our rented office so that we were the first customers to reach the bank the next morning and thus cut the waiting period and long sojourns of women from the village. After three long years, our indefatigable efforts paid off and we were successful in bringing about an attitudinal change in the bank authorities.  We could credit link the 1500 women SHGs with 24 rural banks. These SHGs have monetary transactions of around Rupees 40 crores with the lending banks.

2. Skill Upgradation of SHG Members

The economic empowerment encouraged women to be independent of the shackles of bonded labor at home and farm. It gave them the freedom to invest in their own necessities and dreams.  To work in an organized manner with the newly formed SHGs we selected women leaders in each village and made them village coordinators. These village coordinators in turn selected Area Coordinators who were in charge of a cluster of 10 villages. With the team of village coordinators and area coordinators, we organized meetings through the night (after home and farm work) in every village on issues of concern to the villages.

We used the night meetings as a platform to establish the concept of women’s entrepreneurship, strengthening rural economy through local marketing, federations, skill up-gradation, assisting mothers to become primary earners, and raising the standard of living by investing in basic facilities like water and sanitation, raising women health issues, teaching young girls and women to understand their body, reproductive system, health and hygiene, collective investment on economic ventures and rural enterprises etc.

Through these interactions, we encouraged women to become entrepreneurs by investing the SHG loan from the bank in petty businesses. Around 500 women started small enterprises investing their own resources and subsidized loan amounts. These enterprises included tailoring, food processing, grocery shop, utensil shop, readymade garment shop, tea and snacks stall, rental shops of utensils (for marriage and festivals), rental shops for farm tools and equipment, rental shops for lights and tents (for marriage and festivals), milk dairy, vegetable vendor, beautician shop, sale of plastic buckets, trough and mats, wild palm broom, goat rearing, auto – repair, smokeless wood stove maker, school bag and purse makers, Papad and local noodle makers, repair of household items (Stove, mixer, pressure cooker, pots, pans etc.), auto-rickshaw driver, etc.

3. Assisted Trained Women to become Entrepreneurs

The next step was to skill the rural women in new enterprises based on local farm and forest resources. We imparted skill training to more than 2000 rural women in 40 technical institutes. By the end of the training, these rural women were skilled in making 200 products.

4. Parameter before setting up the rural women’s enterprises
5. Rural enterprises should be selected based on local manpower, local skill, local resources and local market. As such enterprises sustain, strengthen and nurture the local economy.
6. For rural women with low risk-taking capacity, it is pertinent to limit the scale of the enterprises so that the new entrepreneur can handle, run and expand it without fear of failure. Even if the enterprise fails the loss can be handled and recovered.
7. Established only those enterprises that depend on readily available, low-cost, local raw materials like locally available agriculture crops, forest produce and weeds. Because for generations these women were associated with agriculture, farm and forest they had command over their local produce. They could easily relate to the new technologies of processing and value addition of these products.
8. Make quality products by training women at centers of excellence as it is the quality that sells. Standardized quality products instill trust in the customers and in time the quality product becomes the trade mark and this is the foundation of a sustainable future. Making quality products is a slow, long-drawn, continuous process but once women are trained in making quality products they continue to do so and given proper opportunity and funds, they excel.
9. Initially, it is important for the enterprise to develop a strong foundation, regularize raw material supply, improve product quality, and generate confidence in the producer and faith in the customers. For this, a particular quantum of financial reserve is a must. A well-established source of raw material and assured market (a minimum quantum) are the basic requirements. 
10. Keep the profit low till the market is well established. Cut the frills i.e. do not invest on costly packaging, advertisement, branding, scaling up till the product has passed all the tests of customer preferences and demand. Generate local demand to make the product popular at local level. In Small townships, no commercial advertisement works as effectively as word of mouth.
11. Generate a market for conscious customers who appreciate and support quality homemade products. Once the market is established it will help in slow and steady growth.  If the internal/ local market is well established and the products become renowned locally the word rapidly spreads to the outside the market. Though marketing is fundamental to the growth of the enterprise, the eagerness or obsession to expand the market, and branding the product in a short time often kills small businesses. It is important that the production as well as the market grow organically.  In the local as well outside market, there are aware customers whose mission is to help the poor and deprived and save the environment. These conscious customers should be brought into our fold and be treated as active partners. It is these customers who set the ball rolling and help us to link with a bigger network. The support of conscious customers / ethical buyers raises marketing to a different level– from monetary transactions to a dream-sharing experience. The common dream is that we all will collectively make efforts so that no one sleeps hungry in my village.
12. The location of the enterprise should be within walking distance i.e. not more than one or two kilometers from the residence. It should be located at a safe place equipped with basic amenities like water, electricity and sanitation. Rural women are accustomed to the safety of their houses. Even while working on a farm or factory they mostly work along with their family members or group of friends. If they do not feel secure at the workplace they tend to leave the work without notice.

 Loan free Enterprise

In Wardha, more than 95 percent SHGs that started the enterprises by taking loans from the bank survived only for one or two years. We found that most of the banks tend to overbudget the project forcing women to take more loans than required. First-time enterprises are not well versed in accounting, pricing, market, business interrelationships, overhead charges, taxes, licenses, etc. In quite a few incidents when the enterprise started giving profits, the men took over its ownership. Within SHGs that collectively started the enterprise, a large number closed down due to ownership issues, differences over profit distribution, lack of leadership, mismanagement and most crucial was the inability to pay back the bank loan. 

For the newly setup enterprise, in the initial phase, paying back the bank loan becomes difficult as most of the new enterprises have to bear the high infrastructure cost that eats away at their working capital. Most of the SHG-run enterprises closed down as they were forced to invest a major share of their loan on infrastructure. With their working capital locked in infrastructure, the production comes to a grinding halt. In such cases, the bank declares them bankrupt and takes away their property along with all machines and equipment.

The mortality of most loan-based rural enterprises made us reflect on loan-free small enterprises. In other words, we decided to set up small enterprises where the initial loan-free investment is sourced from outside (Individual, corporate, grant from the funding agency, donation, crowdfunding, pooling of resources by SHG, etc.) Once the enterprise starts running and the market is established SHGs can start investing a small amount of subsidized loan as working capital in the enterprise to keep the engine running.  

6. Common Facility Centre

For urban based enterprises the government provides subsidized land, subsidized year round supply of water and electricity supply, connecting road networks, tax holidays, etc.

Whereas no such efforts are made for rural enterprises and the enterprises are faced with the lack of basic infrastructure facilities; exorbitant rate of land; irregular electricity supply; water shortage; lack of good roads and transport facilities; lack of trained professionals and service sector; exploitative market; etc. All these discourage setting up new rural enterprises.

To overcome the lacuna of infrastructure facilities each new individual enterprise has to invest a considerable amount in infrastructure facilities taken out of their meager working capital (Loan). Later this financial crunch of working capital sets the downfall of the enterprise. We have witnessed the closure of one enterprise after the other.

Therefore when we planned to assist the rural women SHGs in setting up enterprises it was pertinent to support them with infrastructure facilities. So we came up with the idea of the Common Facility Centre i.e. a centrally located production cum distribution centre equipped with basic amenities and sufficient space to accommodate and serve five to seven enterprises. Though the property will belong to the Magan Sangrahalaya Samiti (MSS), Wardha, the SHGs will use the infrastructure and will collectively bear all the expenses related to repair, maintenance, taxes, bills etc. They are not allowed to sub-let the infrastructure to other organizations but can add as many SHG enterprises as they can accommodate. If the SHG wants to take up any major construction work or modification or addition to the existing infrastructure they can do it with prior permission of MSS.  

7. Setting up Rural Enterprises

MSS took financial assistance from various sources including Government, non-government, individual, foreign friends, and invested in purchasing small machines and tools for the enterprises. This assistance was merged with the small loans the SHG received from the banks. Initially, we started with enterprises where the investment did not go beyond Rs. 2 lakhs. A few enterprises started with an investment of a mere Rs.25,000/-. In this manner we were able to launch 32 small enterprises that produced over 220 products, using locally available resources. These products are necessary items and utility products that have assured the local market. Every year we add two to three new enterprises with assistance from local SHGs. The common facility center simultaneously accommodated 5 to 7 enterprises.

8. Coordination, Pricing and Quality Control

The sustenance of the enterprise depends on the timely procurement of raw materials, regular supply of finished goods, quality control, price regularization, and well-established market network.

But for the rural women SHGs the whole concept of entrepreneurship, large-scale production and market culture was new and any mistake in the initial phase could be fatal. Therefore for the initial phase, MSS took up the responsibility of hand-holding the SHGs enterprises. For this, one trained personnel was deputed at each Common Facility Centre with five to seven enterprises. Here they were assigned to monitor the enterprises right from procurement of raw material to marketing of finished goods. It took us three to five years to develop a sustainable enterprise. The hand-holding of the enterprise continued till a new enterprising leader emerged who was genuine, dedicated, accepted by all the SHG members, and showed the ability to take the enterprise further.

9. New Approaches to Expand Market

Apart from setting up shops at popular sites or places where there was a countable footfall, we successfully experimented with three marketing plans.

• The first Experiment was a weeklong exposition named ‘Wardha Wardhan’, where all the SHG enterprises showcased their products along with colorful artisanal products, organic products, innovative rural crafts, organic food etc. The exposition was held in the lush green campus of MSS amid vibrant cultural programs from different parts of India. ‘Wardha Wardhan’ became a super hit with visitors from Wardha and neighboring villages and started drawing huge crowds. This platform gave wide recognition to the SHGs and their products.

• The second experiment was a specially designed Mobile Shop that carried all the products made by the enterprises and sold them in Wardha city.  The mobile shop operated during busy hours of the day. It stopped at every busy street corner and sold the product by interacting with individuals or groups of customers. It also held street corner workshops on issues like organic farming, organic products, adulteration, food that heals, Swadeshi, decentralization, ethical consumerism etc.

• The third experiment was setting up an Organic Cafeteria named ‘ Rasoi ’. In time Rasoi has become a popular food joint in Wardha and has the benefit of high turnover. Presently Rasoi buys most of its groceries from SHG enterprises thereby giving an assured market to these enterprises.  Due to expanding sales of Rasoi quite a few new enterprises are born.

• The fourth Experiment was to lead a constructive movement related to the products manufactured by the enterprises. Like the ‘Tel Swaraj’ movement led by MSS to create awareness about the ill effects of imported oils like Soybean oil, Palm oil and the benefits of indigenous flaxseed oil. (Two decades back the majority of households in this region were consuming Flaxseed oil but the subsidized low-cost Soybean and Palm oil made them shift from healthy oil to non-healthy oils). This movement boosted the production and sale of Flaxseed oil. The rise in demand for Flaxseed oil resulted in an increase in the area under flaxseed cultivation. Many such awareness-generating movements are organized by MSS that positively impact the stability and sustainability of the enterprise.

All these experimental sales have now become a major source of earnings for the SHG enterprises and are instrumental in making them sustainable.

10. Impact

1.  The annual monetary bank transaction of the 1500 SHGs formed by MSS is more than        Rs. 60,00,00,000/- (Rupees sixty crores). This economic empowerment has brought about considerable change in the rural economy in the region where women are taking the lead in running the household and investing in agriculture as well as other commercial ventures.

2. The 32 rural enterprises manufacturing 220 products are providing livelihood to around 1000 rural women, artisans, farmers and their households.

3. With MSS intervention, apart from these enterprises, there are 200 self-run small enterprises started by individual SHG members that are providing livelihood to 500 poor women and households. 

4. The economic empowerment of SHG members has led to their social and political empowerment which is a significant achievement. Our SHG women have taken leadership positions in various spheres of life in the community. Many of them have taken prime positions as Gram Sarpanch, Up-sarpanch, members of village council, and active membership on different advisory boards set up by the Government.

5. The Department of Rural Development of the Government of Maharashtra selected all MSS-trained and experienced village coordinators and area coordinators and appointed them as project coordinators for Wardha district benefitting lakhs of rural women.

6. The empowered SHGs are now collectively taking up welfare activities to gainfully benefit rural households. Their initiatives are helping thousands of rural households to avail benefits of various Government welfare schemes, subsidies and programs.  With their efforts, 4000 rural households have been covered under the government’s yearly health insurance scheme.

7. These enterprises are instrumental in changing the agriculture pattern of the region.  Rosella, a weed, has been turned into a commercial crop for small dry land farmers. Likewise, flaxseed cultivation that went extinct has been revived and around 1000 farmers have started cultivating flaxseed as a third-interval crop. Flaxseed is a zero-input crop, therefore its resurgence is bringing more money to the farmers.

8. Vidarbha is a region where the largest number of cotton farmers have committed suicide for lack of profitable returns. MSS’s support to organic cotton farmers and associated enterprises has led to hundreds of farmers shifting back from growing BT cotton to indigenous, organic cotton. These farmers are now showing the way to other farmers to shift from highly chemical and capital-intensive genetically modified cotton cultivation to chemical-free, low-cost, indigenous, organic cotton and are thereby rescuing farmers from the vicious circle of disease, debt and suicide. The demand for organic cotton is steadily increasing, bringing more money to organic cotton farmers.

9. The MSS concept of ‘Farm to Fabric’ is the development of a cluster of 10 inter-linked, low-energy, environment friendly enterprises that manufacture hand-spun, hand-woven, hand printed and dyed organic cotton fabric and garments. These enterprises are providing skills and livelihood to 300 organic cotton farmers and Khadi artisans. The high-quality organic Khadi and organic Khadi products manufactured by these enterprises are drawing a large number of designers from the fashion world and environmentalists.  

10. The SHG women enterprises have led to creation of a dedicated team of local farming suppliers. These farmers regularly grow and supply organic agricultural produce such as fruits, vegetables, herbs and spices to the women’s enterprises. As these farmers get assured markets they totally survive on earnings from the women-led enterprises.

11. Apart from their gainful activities, these enterprises regularly generate awareness about chemical-free, healthy, fresh, low energy use products in the community. A slow but steady movement about chemical-free products and organic farming is taking shape in the region.

12. In time, women running the enterprises have turned into master trainers and are now successfully training women and men from tribal-dominated states of India like Jharkhand, Chhattisgarh etc. in manufacturing new products from locally available farm and forest produce.

13. Over the years, with MSS intervention and guidance, these enterprises not only provide livelihood to women members but also sustained their households, and became shining examples in the community, whereas other similar efforts in the vicinity failed to take off.

14. These sustainable enterprises are well grounded, up-scalable, sustainable and capable of beating competition.