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Financial Inclusion of Elderly Women - A case study of SEWA Bank, Gujarat

As per the census of India 2011, while the sex ratio is in favor of male population in ratio 940:1000, for elderly at (60+) population it is in favor of elderly women by 1022:1000.1 Statistics reveal that by 2050, women over 60 years would exceed the number of elderly men by 18.4 million,2 clearly showing the feminization of ageing. However, the biggest challenge for older women at the moment is isolation, poverty and lack of social security services. Financial independance for elderly women is almost negligible in India. The crisis is even more pronounced among women in the unorganized sector and women from lower income families. Thus, the situation of older women requires immediate attention.
Various efforts and initiatives have been undertaken by different stakeholders to enable elderly women to spend the last years of their lives with dignity. One such effort has been initiated by Self-Employed Women’s Association (SEWA) Bank3 to provide financial support to elderly women from the economically weaker sections of society. This is a collaborative effort with the Government of India, where SEWA Bank works as the frontline organisation disbursing pensions under the National Pension Scheme (NPS) of the Government of India.
While this is a generic pension scheme for the benefit and support of people and families from the economically weaker sections of society, SEWA is also directing its efforts to secure the future of the women associated with the Bank and has integrated this with the Life Cycle Approach to financial inclusion of women.
The unprotected or unorganized sector in India accounts for 93 per cent of the labour force.4 Over the years, SEWA has realized that women from this sector, being the sole supporters of their families, need access to credit throughout their lives to cope with various family needs and emergencies. Savings in the form of fixed deposits, savings or loans would help them accumulate the money needed to weather unexpected emergencies, pay for their children’s education, improve their housing, prepare for old age, or finance other major purchases that would benefit their families. Full financial inclusion for the poor includes not only access to services, but the knowledge and power to choose the right product and use it effectively.

Implementation strategy
The Shri Mahila Sewa Sahakari Bank came into being in the year 1974 and was established on the initiative of 4000 self-employed women who contributed Rs.10 each as their share. The SEWA Bank is a pioneer in the microfinance sector in that it not only steadfastly commits itself to empowering poor women, it is also governed by the beneficiaries.
SEWA Bank is also the only licensed microfinance bank in Gujarat State authorized to accept deposits as well as lend funds. Customers with savings accounts outnumber borrowers by almost three to one. The Bank realizes that its members – women from lower income groups– need loans for a variety of reasons such as the purchase of income earning assets, raw materials, improvement of housing or repayment of old debts. At SEWA Bank, in the absence of traditional collateral, a regular savings record over a period of one year is taken as a form of security.

Chief Objectives and Activities of the Bank:

  • To provide facilities for savings and fixed deposits, thus encouraging thrift in women
  • To provide credit to further the productive, economic and income generating activities of the poor and self-employed women
  • To extend technical and management assistance in production, storage, procuring, designing and sale of goods and services
  • To provide facilities to rescue their jewellery from pawn brokers and private moneylenders and giving loans against jewellery
  • To adopt procedures and design schemes suitable to poor self-employed women like collecting daily savings from their place of business or houses, or providing saving boxes and giving training and assistance in understanding banking procedures

The total savings and credit status of SEWA Bank over three years is given in the table below:

  2010 – 2011 2011-2012 2012-2013

No. of members 82,327 88,167 96,921
Share capital 5,29,70,650 6,04,89,950 7,55,72,490
Accounts 3,61,639 3,71,108 4,48,434
Total deposits 1,19,47,68,390 1,11,26,43,000 1,14,11,63,000
Credit accounts 1,48,146 1,65,175 1,85,179
Total Credit 51,69,06,439 56,22,27,199 70,42,38,552

Innovative Life Cycle Approach to Financial Inclusion

Financial inclusion is fundamental to economic and social development which means access to all the facilities of savings, credit, remittances, insurance and pension. Given the size of the population and the diverse nature of the financially excluded segment in India, the onus of promoting inclusion lies equally on each stakeholder of the financial ecosystem – government, banks, private and social sector.
In serving its women members, SEWA Bank adopts a life cycle approach, wherein women’s financial requirements are mapped from birth to death and products are designed to meet their short, medium and long-term needs. SEWA Bank’s objective is to act as a woman’s lifetime friend and not as a shortterm provider of funds and hence it tries to design its services, products and mechanisms as per the needs of the woman at all stages of her life.
Each product is designed to help members meet a particular need: a housing account helps the beneficiaries to build or repair their houses, while an emergency preparedness account helps them weather the economic shocks that are common among the poor and those working in the informal sector. There are also accounts that help women save for education costs, marriages, and the purchase of gold.
Beneficiaries are strongly encouraged to prepare for old age by making deposits in the National Pension Scheme (NPS) through SEWA Bank. Credit products complement savings in order to help beneficiaries expand a business or ensure smooth cash flow, while access to insurance offers additional support for emergencies.

“Over the years, we studied the financial needs of women and their lives. Now, we first try and get them not to borrow from moneylenders and loan sharks at high interest rates. Then we educate them on saving small amounts from their daily wages. We get them to chart out their life goals and then customize their loans according to these goals. These women are nearly always saving for a rainy day, and the rainy day keeps coming in the form of a natural calamity, a festival, an illness, a fraud or even bad business.”- Ms. Jayshree Vyas, Managing Director, SEWA

Empowering the Economically Disadvantaged

Maniben Haribhai Patni, 55, is resident of Girdharnagar. She is a fruit vendor and has been the director of the SEWA bank of her area for 28 years. Since the beginning, Maniben has been aggressively persuading women to become part of SEWA and she became the agewan (leader) of her group very soon.
Maniben says it was difficult to convince other banks to give loans to workers like her. She says, “Limitations of women workers from the informal sector and the reluctance of the existing banking setup to help us forced us to establish our own bank”. Her first loan of Rs. 5000 was for the expansion of her business. She took other loans too – Rs.10,000 to repair her house, Rs.50,000 to buy a house for her family, Rs.55,000 loan against gold for the marriage of her son. SEWA Bank has a beneficiary friendly system and she had no difficulty getting any of the loans. She also has an insurance policy in her name. A small fruit vendor, with little awareness and access to resources, she started to save Rs.10 per day in SEWA Bank which has grown to Rs.1.5 lakh now!! She has built her own house, got back her mortgaged gold, paid the debts of moneylenders and has now opened four pension accounts in her own name as well as for her daughters and daughters-in-law.

Pension Scheme for the elderly

Earlier, only government employees were eligible to get pension but after the introduction of NPS all citizens of India are eligible. NPS is mandatory for all central and state government employees whereas NPS-Lite is optional for the unorganized sector. National Pension Scheme Lite (NPS-Lite) – Swavalamban and Unit Trust of India (UTI) Retirement Benefit Pension Fund assure constant financial help during old age.
SEWA Bank had started its own efforts to provide security to women during their old age by launching a scheme called “Bhavi Suraksha Yojana” (Future Security Scheme) in 1995. However, they had to withdraw the scheme due to Reserve Bank of India guidelines. The experience of SEWA Bank in providing financial security to the elderly came in handy when the Central Government was planning for NPS-Lite. With the help of SEWA Bank the Government could reach out to a large beneficiary group whose trust had been won over the years so the scheme was easy to implement. Since February 2012, SEWA Bank has been linked with NPSLite Swavalamban. Though SEWA bank focuses on women, NPS-Lite – Swavalamban is the only scheme where men also have a pension account with the bank.
Women feel that financial support in old age is important so that they are not dependent on their children. During the focus group discussions, many women expressed their view that health becomes the most important concern during old age so regular income in the form of pension can at least help them to obtain better medication. It was evident from the number of women enrolling for the pension scheme that they are now making up their mind for a better life in general and better old age in particular.

Micro-Pension Initiative: UTI-Retirement Benefit Pension Fund

The Micro-Pension scheme offered by SEWA in partnership with UTI is a pioneering initiative in India. The scheme helps all women below 55 years of age to save as little as Rs 50 a month in a pension account. At the age of 58, the account holders receive their savings along with interest to finance their retirement. Till date, more than 26,500 SEWA members have opened UTI-Retirement Benefit Pension Accounts in SEWA Bank.

Financial Literacy

As a result of years of close field-level interaction with SEWA Bank members, the Bank has recognized the need for education to help these members make better financial decisions. SEWA Bank was the pioneer of financial literacy training to members and was instrumental in establishing the Indian School of Microfinance for Women (ISMW) and setting up the National Alliance for Financial Inclusion and Literacy (NAFIL) to continue this work.
SEWA had already designed modules on financial literacy and shared this expertise and the materials with ISMW. The main objective of SEWA’s financial literacy program is to make poor women understand the basic concepts of financial planning and motivate them to plan for their future. For this reason, in June 2002, SEWA Bank introduced ‘Project Tomorrow’, a project for members to gain skills in personal financial planning. The program was intended to help these women to escape the cycle of poverty, make informed decisions about their finances, build their own future and live a secure life.
Financial literacy is increasingly being recognized as a key element to ensure that members are active and knowledgeable participants in their financial decisions and that households are able to fully utilize and leverage the financial services available to them.


The SEWA Bank has broken the vicious circle of indebtedness and dependence on middlemen and traders, and this has increased the bargaining power of the women. SEWA Bank has nearly 1 lakh members availing one financial service or another. As per the latest data, SEWA has 44,354 female and 8923 male pension accounts. Making use of its reach and resources, the bank is trying to reach as many women as possible.
SEWA Bank has set an institutional goal of serving one million beneficiaries by 2015. Today it serves more than 350,000 women, providing savings, loans and access to insurance and pension products, from seven branches in the Ahmedabad area.
SEWA Bank claims to be one of its kind and till date there is no bank like it in India or abroad. It is worth noting here that the Ministry of Corporate Affairs data reveals that there are more than 4500 Non-Banking Financial Companies (NBFCs) in Gujarat and nearly 50,000 NBFC in India.
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