MicroFinance – Transforming Employees into Employers
“I was an employee only 3.5 years ago but now I am an employer – there are two staff working in my shop” says proud Shibani Gop (age 36), a resident of Ghatshila, East Singhbhum in Jharkhand. Shibani got married to Shrinivas Gop, a labor, at the age of 17 only and became a mother in the next year. The entire family of 4 adults and one child was entirely dependent on earnings from labor work by her husband, father-in-law and hence was passing through serious uncertainty.
Ghatshila is a very small town located on the bank of Subarnarekha River and the town is bounded by hills and forests with very less opportunities for earning by doing labor work only. Hence they were facing real problems to earn the bare minimum. With her father-in-law (Lalmohon Gop, age 68 now) getting older and son (Shital Gop, age 18 now) growing, their income sources stared becoming stringent and expenditures increasing. To solve the problem, Shibani had to start working as a labor first. Then she started working in a local tailoring shop. But, the current inflation rate and increased educational expenses for her son were adding to her worries.
In such a helpless situation, in the beginning of 2010, she came to know about Ujjivan which was providing business loans to economically active poor women from one of her neighbors. Ujjivan had just started its operation in that area a few months ago. After discussing with Ujjivan staff, she along with some of her neighbors formed a group of women and applied for loans from Ujjivan.
Just after few days, she got her first loan of Rs. 8,000 from Ujjivan and purchased her own tailoring (picco) machine to start her journey as an entrepreneur from her house. Gradually her business started improving and she expanded her business from home to a rented shop at Kashida Road, one of the main business areas of Ghatshila during her second loan cycle along with purchasing a new tailoring machine. Her 3rd loan from Ujjivan was also invested into tailoring machine and other equipments purchase. Currently she is into her 4th loan cycle and accessing Rs. 25,000 loan from Ujjivan. She has used this loan for purchasing the 4th tailoring machine, equipments and raw materials for her shop. Currently there are 2 workers working at her shop. She also trains some of the local women, who are trying to start their own tailoring business.
Shibani is the main income earning member of the family now. Her father-in-law is not working any more. Her husband still is a labor but helps her at the shop whenever he is not having any other work. Her income has increased almost 4 times in last 4 years (Rate of increase is 100% per year) causing almost 3 times increase in their household income even though the income of her husband has increased only slightly. She is now employing two workers at her shop.
Not only in financial terms, Ujjivan’s microfinance has improved her life in various other aspects as well. Financial stability has not only improved her status within the household, but also improved their social status among neighbours. Relationships with her spouse, in-laws and neignbours have also improved. Participation in social and religious festivals has improved as well. As she has now become the main income earning member of the household, her participation in decisions on business related issues, household related issues and issues related to their son have improved a lot. Her son passed 10th standard and is currently studying in 12th standard in a private school. She is now spending almost Rs. 1000 per month on her son’s education. She is also thinking of sending her son to a bigger city for higher education. The increased income has given her the luxury of spending Rs. 800 for household durables per month and Rs. 500 for leisure as well. She has recently purchased one Scooty bike for her taking a loan from a bank and spending Rs. 18,000 as down payment from her savings. In terms of health and hygiene there is a huge improvement. As a labor and later as an employee she was unable to take much care of her health and hygiene but currently she is having time to maintain the basic required hygienic ways.
She is now visualizing a planned business growth in coming years by not only increasing her stock but also by diversifying her products to meet larger requirements of her customers. For that she will be required to have access to higher loan amounts.
Shibani thanks Ujjivan for whatever she has now and for all the help that she got. In her own words, “By getting loans from Ujjivan, I am improving day by day in my personal and professional life. I see Ujjivan like a mother who is feeding her child and helping her to grow up.”