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  International Fund for Agricultural Development

Women braid coconut leaves to make panelling for homes and to be used as carpeting at a production unit near Naickenkottai.

IFAD photo by Anwar Hossain

Name of the project

Tamil Nadu Women’s Development Project

Location of the project

India, Tamil Nadu

Responsible organisation

International Fund for Agricultural Development (IFAD)

Cofinanced by the Government of India and the State Government of Tamil Nadu


With the progress made in the past two decades, India’s acute and severe food shortages have become a thing of the past and the Government can turn its efforts towards long-term structural problems, such as the low social status of women. Despite their virtual lack of access to means of improving their incomes, women make an essential contribution to their families survival, especially among the poorer strata. In fact, rural women are estimated to be the sole family providers in 20-25% of homes, clearly a work force with economic potential.

Concerned about providing effective economic support to these women and making them aware of their rights, the Indian Government approached IFAD for assistance in 1987. Building on the experience of some non-governmental organizations (NGOs) that had been working with poor rural villagers, IFAD’s Tamil Nadu Women’s Development Project (1990-1998) recruited 27 NGOs to work with women self-help groups. They spent the first six-twelve months building group cohesion and familiarizing the members with savings and borrowing procedures.

Once women overcame the fear of borrowing money and found they were able to repay their group-based loans, they were assisted in requesting formal loans from the Indian Bank’s own resources. The women’s groups also managed to save money and set up a system for small emergency loans among members. The savings generated by the women themselves had important implications on confidence building among and empowerment of women, which in turn has an impact on the sustainability of the initiative.

Half of all the loans granted went towards livestock activities that provided landless and smallholder women with the opportunity to have some sort of daily income, and one fourth went towards handicrafts and small-scale trading.

The women’s newly gained confidence has led many groups to broaden their field of activities. Branching out beyond savings and credit, they have taken the initiative in community-oriented projects and have held negotiations with authorities. By adopting a method of group organization, IFAD’s project assisted rural women in improving their skills and economic activities until they acquired sufficient self-confidence to become regular bank clients and entrepreneurs, thereby building their self-reliance and raising their status in the family and the community.

In the words of Parameshwari, a woman from the village of Oodaipatti, ''Before joining the group, I had a lot of money problems. I always had to borrow money at very high rates. I no longer have these problems and it's good experience for me to have contact with others. There are no caste feelings in my group; we all work together. I am hopeful about the future, because I have my own income and I know that if I have a problem I can solve it with the group. What I want most is to provide better conditions for my family, build a simple house and buy some land so I can earn more.''

Results achieved

  • 4 602 self-help groups were formed, bringing together 108 300 women in eight districts

  • over 68 800 loans were granted on market terms (12.5% interest) by the 108 branches of the Indian Bank

  • the State Government of Tamil Nadu decided to expand the project by using its own resources, to all the districts of the state, while the World Bank and IFAD are replicating this experiment in six other states of India.

Lessons learned

The project was not only effective in mobilizing women into self-help groups and granting them access to microfinance, but was also responsible for important changes in social patterns and norms, which have led to the empowerment of women. For instance, women involved in the project have become more independent economically and their overall decision-making role in the family has also been enhanced.


The interviews were conducted in June 2000

Kuppamma, comes from a small village in Tamil Nadu; she is a destitute agricultural labourer with minimal wages and who has suffered from dowry, female infanticide and domestic violence. Her husband had left her when she was 20 years old leaving her with three children to take care of. When she heard about a group of women pooling their earnings together in a common fund to provide loans for emergencies, she decided to join the group. Saving regularly to build up her credit worthiness, she eventually became elegible for a loan that enabled her to buy land and livestock and also to send her children to the local village school. Now her husband wants to come back to her!

Kusum is a 22-year old woman who lived in the village Oodapatai situated in the Madurai district of Tamil Nadu. She was faced with similar problems: she had a drunken husband, three daughters to feed and clothe and debts to pay to usurious money-lenders. Six years later, she too achieved her dreams with the help of micro-credits of the Tamil Nadu Women’s Development Project; women formed similar self-help groups and NGOs then trained them in basic account management skills. The members were required to contribute a part of their earnings to a common fund. In return they could borrow money from the fund. This practice of small loans and savings provided them with the discipline and confidence. Today, Kusum, but similarly also the other participating women, has her own farm, her daughters attend the village school and her husband no longer drinks.

Lakshmi Venkatachalam is 45 years old and comes from the village Kalyanvalas in Tamil Nadu. Prior to availing of the IFAD loan, she depended on moneylenders who charged her an exorbitant interest rate. She and her husband worked as seasonal agricultural labourers for only six months per year. Each of them earned the meagre sum of Rs 15-20 per day. In 1994, a self-help group was established in Lakshmi’s village. Lakshmi joined the group and took a loan of Rs 11000 in 1995. With that sum she bought four cows which now have four calves and earns a net income of Rs 2000 per month from the milk animals. Her husband supplements this income by continuing to work as an agricultural labourer. The couple have two handicapped sons aged 22 and 20. So Lakshmi also used the loan to pay for the medical expenses of her sons and to engage them in active work, she rented a shop where the older son now works. The younger son, who suffers from heart problems, delivers milk to the Mallur milk society which is about three km away from their village. Lakshmi is the breadwinner of the family and plans to expand her operations. She wants to acquire 15 cows.

Bhagyam makes pots by moulding clay. She lives with her father-in-law and her son. Before they availed of the IFAD loan, they were dependent on moneylenders who charged them an exhorbitant interest rate. The IFAD loan improved their situation considerably. Now they are earning a net income of Rs 1000 per month as compared to Rs 500 per month that they had before. With that, she could buy additional clay, firewood to fire the pots and a bullock cart to transport the pots to the market. Today, her house is equipped with a TV and radio.

Laxmi is the animator of a self-help group. Her husband Ravi works as a construction supervisor and earns Rs 1000 per month. Together they have two sons, Ramesh and Karthik. Before she availed of an IFAD loan, she was a housewife. With the loan, she has bought three sewing machines and she now teaches 15 members. Apart from holding tailoring classes, she also makes children’s clothes and blouse pieces. Now she earns an income of Rs 800 per month. In her words, ''…before the IFAD project, I was a housewife. Now that I am earning well, I have also gained a position of respect in society. I sell blouse pieces for Rs 15 per piece and make clothes for children…With my additional income I want to finance my son’s studies at an English boarding school. I am very happy that I can help these women who will in turn set up their own businesses.''

Rani and Senthil run a soda factory. Prior to availing the IFAD loan, Senthil worked as a coolie (porter) and Rani was a housewife. Senthil earned Rs 30-40 per day. In 1992, they took an IFAD loan of Rs 11,500 which they have fully paid back with interest. They used the IFAD loan to start a soda factory which now gives them a daily income of Rs 100 per day. They sell soda to the local shops and nearby villages. Today, they have managed to purchase the house they live in and for which they had formerly been paying rent for.

An area in Nilavarapatti has been leased to Seltru for a year. He uses the area for the crushing of stones and has employed local village men to cut the stone. The women’s self help group from the village of Panamarathupatti headed by Selvi buy the residual stone at Rs 250 and crush it further. They sell the crushed stones at Rs 750 to the contractor who uses it to make roofs and line roads. Before, the women of this self help group used to work as agricultural labourers earning Rs 30 per day. Now, as stone crushers, they earn between Rs 75 and Rs 100 per day. Although their salaries have improved, working conditions are still hard. They start working early in the morning and continue in the scorching heat; they welcome monsoon showers. Selvi comments ''the formation of self-help groups benefitted me immensely. I took a loan from the group…now my sons study in a convent school and I am able to save Rs 125 per month. This would never have been possible without the help of the group. Before I only earned Rs 40-50 per day but now I earn Rs 100 a

The ration shop in Mallagoundanor village sells essential commodities at government subsidized prices. Before 1995, the people of the village had to walk 2 to 3 km to buy ration goods. In 1995, the government set up a ration shop in the village and put the women's self help group in charge. This was done on a trial basis. Seeing how efficiently these women managed the shop, the government handed over the running of other ration shops in the state to women’s self help groups.

In the same village, Gandhimati and Dhanalaxmi are running these shops. For every kilogram of rice they sell they get a 10 paise commission. In total, they both receive Rs 850-900 per month. (Rs 450-550 as commission and Rs 400 as resale value of gunny bags). ''The shop was opened in 1995. After having seen how successful our self help group was, the government decided to hand over the management of the ration shop to us. Before that we had to walk 3 km to buy ration goods. Now we get Rs 450 as commission and another Rs 400 for resale of gunny bags'', says Gandhimati.

Vadivazhagi works as project coordinator for a NGO called the Community Service Guild. She narrates how the men were initially reluctant to let the women join the self help groups. Now that these women have started earning, the men have changed their minds. They now appreciate the fact that their wives contribute to the family income and that, as a consequence, their children are able to go to school. The men even celebrate March 8, International Women’s Day. The women in turn have gained confidence. Initially they were nervous about dealing with officials. Vadivazhagi strongly believes that this IFAD project should be replicated everywhere.

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