Mini-Banks and the Women Development Fund

RDT’s facilitation of SHGs to set up savings and loan opportunities is characterised by a concerted effort to provide greater access to finance for women, by decreasing dependence on their families and often exploitative traditional money-lending sources; which in most cases were lenders that charged heavy interest rates on even meagre amounts like Rs. 20.

In the first phase, SHGs used counselling to promote a savings habit, so that women could have their own financial footprint through individual savings accounts and could carry out financial transactions independently. At first these were as little as Rupees 0.25, 0.50, 1 and 2, which morphed into collective savings called ‘Mini-Banks’ in 1983, where women pool their monthly savings and give out loans on a rotating basis as credit among themselves. The CO maintained a register of savings by women members, tracked borrowings and also took the minutes of meeting whenever the SHGs met. Today women members contribute as much as Rs. 50, even 100 monthly and are confident handling borrowings and managing their repayments.

To take this approach further, each group has a savings account in a bank or post office in the name of the SHG with two members as signing authority. RDT has now given the complete responsibility of these mini-banks to the SHGs and stopped monitoring it.

“Programmes like WDF and 'Women to Women' provide credit access for viable subsidiary occupations for a supplementary household income.”
Mr. Bharatharaj
Bank Manager, Ananthapuram

Credit sources for additional income are predicated on providing loans for and facilitating agriculture allied activities for poor farm labourers in drought-prone areas, especially women, which include cattle rearing and dairy business, poultry farming, and other small business like tuck shops’ refreshments, etc. The dependency on money lenders has remarkably reduced with women now saving funds in the form of fixed deposits etc. for future purposes like old age care and weddings of their children.

In 1994, RDT helped establish a Women’s Bank at village level called Women Development Fund (WDF) which is a credit facility for higher borrowing by women, implemented and controlled by women themselves. Every village was initially given Rs. 20,000 as principal amount to be deposited in a fixed deposit. Each area has 4-5 clusters and each cluster has 10 villages. 2 women from the cluster manage the bank account with the CO maintaining the bank statements and ledgers. Loans are interest-free and are approved by ATL, STL and women network leaders. RDT is in the process to handover the fund management to women leaders and book keeping training is also provided to young boys and girls. RDT adds contribution to the principal amount if it gets reduced due to no repayments, dying of cattle or a natural calamity etc.

By the end of March 2015, 17,291 rural women had availed a total of Rs. 19,43,53,453 crores in recycled loans from the WDF corpus.

These loans have been used through the years for various enterprises such as:

  • Rearing of milch cattle for selling milk
  • Rearing and selling of rams/sheep
  • Buying and selling of groundnut, black slabs, vegetables, fruits, provisions etc.
  • Leased-land cultivation including taking tamarind and coconut trees on lease
  • Making of incense sticks, rope and basket making
  • Hiring out of utensils during marriages and social functions etc.

Buying Milch Cattle under WDF has been a particularly successful initiative. A cumulative total of 18,569 dairy initiatives have been financed for 8298 rural women owning 10,250 milch cattle across 984 villages, each providing a monthly net income of Rs.2500 as of March 2015. Only a few women borrowed a third time for milch cattle purchase indicating that after raising loans for two times, they become self-reliant and capable of managing income generation activities on their own without borrowing again.

The Women to Women Programme was started in 2002-2003 with a special focus on developing entrepreneurial capacities in rural women. It is a group sponsorship programme which connects Spanish women and the women from the project villages. The objectives were to create financial assets in their name, promote higher education for girls and to create a common health fund for women and girls. It is a companion project to WDF by RDT-FVF which extends the possibilities of accessing credit and mobilising resources through external sponsorship for setting up small ventures, so as to utilise for any need of family. A group photo of the women beneficiaries along with a letter highlighting their achievements are sent to the Spanish donors sponsoring them. As of 2010, the focus of the project has shifted purely to building business opportunities for rural women and funding other social and economic processes. 60% programme funds are converted into fixed deposits, which the women can withdraw after 7.5 years to start a new business. And the rest 40% is put into a general corpus that can be utilised for health, education and training needs etc. Today, approximately 35,746 women are covered under this programme.

RDT’s Livelihood Programme for Chenchu Women makes inroads into a particularly insular rural community. Deep-forest dwellers, Chenchu homes are far from each other, drinking is prevalent among women, and there was a general lack of solidarity and sharing among them.

Till now, grants totalling Rs.19,90,000 covering 3012 women from 280 groups have been provided for various income generation schemes such as running petty shops, rearing sheep/goats, tailoring, incense stick making, milch cattle etc.

The Chenchu women revolve the grant corpus as rolling-loans among themselves. The percentage of repayment was over 80%. Collection of forest products is one of the main occupations of Chenchus but given the lack of a proper transport facility to collect as well as to sell such products, RDT provided 97 bicycles in 4 villages. RDT has also been helping them market the goods created from forest produce and these initiatives have been specifically beneficial for Chenchu women.


“There was a great dependence on money-lenders when we rst started working in the project villages as women knew little about nances or Government schemes. Starting Group savings and ‘Mini-Banks’ was a turning-point as it broadened their nancial possibilities and inculcated small business sense. Instead of borrowing from exploitative sources, now they depended on a Group that supported them. Sanghams not only saved them from perpetual debt, but the approach has been towards training women to mobilise government resources for their benet.”

Mr. Srinivasulu, STL Women Programme


“My husband Marenna and I have always worked as agricultural labourers but work was difficult to come by. Although we have 2 acres of land, they don’t yield any crops due to lack of rains. We have two daughters and a son, and we needed more money to support the family. I had previously taken loans for children’s education and did not want to be in debt of money-lenders. RDT came into my life when I joined the Durga Women Group and realised I had the power to change my economic circumstances. Women to Women programme gave me a loan for goat rearing, but it was a loan I did not fear. Marenna and I would take the goats along to work and look after them. I thought it would be a good idea if one of us should work as a labourer and the other should take care of goat rearing. I initially took Rs. 6000 for four goats, then Rs. 12000 for another four, and now I have a total of 68 goats. I did not sell even one goat while populating our herd and goat rearing has helped us to pay for our daughter Gangamma’s GSM education who is now working in a private hospital. Our daughter Chenamma has completed B.Com and is preparing for her PG entrance exam, while our son Mahesh is studying Intermediate. I am meeting all their financial needs through rearing goats and selling them and our family has gained a lot of respect in the village”. Ms. Sakamma, Tenagallu Village, Kundurpi Area, Kalyanadurgam Region

RDT came into my life when I joined the Durga Women Group and realised I had the power to change my economic circumstances”.


The village level savings’ initiatives have improved the overall status of women in their families. Because of financial independence and their contribution in household expenditure, women are now more actively involved in making decisions related to family matters.