In April 10 this year, SEWA, the Self-Employed Women’s Association, which prefers to describe itself as a cooperative or trade union rather than a microfinance institution (MFI) (though it straddles both spheres), with a membership of 1.3 million women, completed 40 years of its existence. This gives us an ideal opportunity to review its historic contribution to enterprise but to also ask some fundamental questions about its future.
The organisation was founded by Ramon Magsaysay awardee Ela Bhatt in 1972 and, indeed, SEWA has become synonymous with Bhatt. In a country like India, labourers working in a corporate entity form trade unions to protect their rights, but the case here is the reverse, where a trade union formed by women workers from unorganised sectors have managed to set up companies.
One of Sewa’s triumphs is the formation of the Mahila SEWA Sahakari Bank Ltd, an urban cooperative bank, which was the first organisation set up by SEWA in 1974, to cater to the needs of all its members. It now plans to become the largest inter-state cooperative bank in the next decade. SEWA Bank will be applying to Reserve Bank of India for a licence to operate in the rural areas.
||Area of operation
||Turnover (Rs cr)
|(*includes combined turnover of past two years) Source: SEWA
For the year ended March 2012, the bank had deposits worth Rs 111 crore from 3.71 lakh customers. The bank's advances stood at Rs 56 crore, with net NPAs of 1.63 per cent of the total loan amount. The bank's net profit for the year stood at Rs 94.43 lakh, showing a 11 per cent growth over previous year.
SEWA has its own company for artisans, known as Trade Facilitation Centre, while it also operates rural agri-business under 'Rudi'. It has set up 'Nirman' for creating rural infrastructure, while a company named 'Hariyali' was created as a rural energy initiative. It has tied up with insurance majors to provide health and life insurance to its members.
Hailing SEWA's activities on grassroot levels, Anil Gupta, an IIM-A professor and executive vice-chairman at National Innovation Foundation (NIF) stated that its model of operations provides learning for many. "They are the pioneers of insurance in the unorganised social sector, also for the urban cooperative banking in rural areas. They have emerged as a strong brand in themselves," he says.
What began as a movement, with around 1,000 members initially to organise women workers in the unorganised sector for employment and self reliance has now evolved into a umbrella of 140 cooperatives, federations and companies catering to different needs of its 1.35 million members spread across 14 district of Gujarat and 11 other states of the country. "What is satisfactory is that women have become far more organised in sense of empowerment and self reliance, though not fully, but to a large extent. They now hold assets and have become more productive and are generating surplus income collectively," says SEWA founder Ela Bhatt as she reminisces on her 40-year journey of social action.
Initiatives taken up by SEWA have become a landmark for the policy formulations. In 2002, the second amendment to Companies Act, which allowed cooperative societies to form producers' companies is perceived as a major development towards strengthening unorganised sectors like farmers and women's cooperatives. "The amendment to Companies Act came as a major boon to cooperatives like SEWA, which created companies from unions. This model provides a link for unorganised sectors to get access to large markets. This brings them an opportunity and market infrastructure to sell their goods at right price," says Y K Alagh, economist and former member, Planning Commission.
Yet, SEWA faces significant challenges going ahead. "The SEWA members will have to work harder than before in the coming days to withstand the market forces and the liberalised policies of the government," Bhatt explains. "The income of our members is increasing, but the pace at which it is increasing, is far slower than the rate at which the inflation is rising. As a result, the standard of living for that member does not improve much, it remains more or less the same."
Bhatt also feels that SEWA needs to understand the younger generation better in order to keep the cooperative movement alive. According to Gupta, in order to expand its reach and effectiveness among rural masses, SEWA needs to link itself more with youth in the rural areas. "They (SEWA) need to bring more innovation and creativity in operations. They also need to strengthen their link with the student community," adds Gupta. It may be noted here that Ela Bhatt is also on the board of NIF.
The question is whether SEWA can continue to do all the things that it has done so effectively without the charismatic Bhatt at its helm.
Reema Nanavati director, SEWA says, "We have a well made out strategy. Elaben stepped down in 1996. Since, 2003 we have been working towards having a strong leadership emerge within the organisation itself."
Nanavati says that the organisation has 80 per cent of their leadership coming from members, while 20 per cent are professionals from various trades. “Like for a bank, we need a banker, and for a company we do need a professional CEO," she adds.
How SEWA manages to build this leadership cadre and reach out to the youth while successfully disengaging the Bhatt mystique from itself will determine SEWA’S success in coming years.