Housing Finance Schemes from SEWA Bank

As housing is a productive asset for the millions of women who are poor and who work out of their homes, access to housing finance at long-term, affordable rates is a prime necessity. Moreover, among the poor, those with assets are less vulnerable to the vagaries of life than those without assets. Thus, asset-creation is important in the battle against poverty, and financing housing a powerful weapon in the fight. Further, providing women credit for housing helps empower them, and gives them greater control over their lives, homes and productivity.

But financial institutions have been reluctant to give women housing loans, for women are still perceived as mere housewives who are high credit risks and a housing loan is not seen as a productive loan which will lead to an increase in income.

The bidi workers provide an example of the problem faced in obtaining shelter, by women who are poor.

SEWA began organizing the bidi workers in 1979 when some of them approached SEWA because they felt that, despite working very hard, they earned very little; their piece rates were too low. When SEWA approached the Labour Commissioner, they were told that these women, being home-based, could not be counted as workers, and so could not be covered by the labour laws. Thus began SEWA’s campaign for recognition of home-based workers, and bidi workers in particular, to be protected by laws. In the course of this campaign SEWA discovered that there was a law called the Beedi and Cigar Workers’ Welfare Fund Act (1977) which provided bidi workers with facilities such as health care, maternity benefits and housing subsidies. Also during the campaign, SEWA found that proper houses were a great need for the women. For bidi workers, their home is their workplace, and yet because of poverty, the women could not repair their dwellings or maintain them well. Most of them did not own their homes and their houses were repeatedly destroyed in communal riots, in Municipal Corporation demolitions, and by natural disasters.

SEWA therefore decided to help provide shelter to the bidi workers. As a first step, in 1987, SEWA conducted a household survey of 500 bidi workers earning less than Rs.700 a month. With the results of this survey, SEWA approached the Beedi Workers’ Welfare Fund, and were told that although the Fund had grants for a subsidy of Rs.15,000 per house, funds could only be released if SEWA worked out a group housing scheme. This meant having a plot of land, getting a loan to supplement the subsidies, and building houses for the workers. All this was beyond the capacity of SEWA if it had to proceed single handedly. But fortunately, 1987 was the Year of Shelter for the Homeless and the Housing and Urban Development Corporation (HUDCO) was keen to give loans to the weaker sections of the society. HUDCO called a meeting with SEWA, the Ahmedabad Urban Development Authority (AUDA), the Beedi Welfare Fund and the Gujarat Government’s Ministry of labour, and each of them agreed to contribute: HUDCO to provide loans, AUDA to identify a piece of land under the scheme allocating land for the economically weaker sections and to build the houses, the Beedi Welfare Fund to provide subsidies and the Gujarat Government to sponsor the scheme. SEWA said it would mobilize the women bidi workers, and SEWA Bank undertook the responsibility of collecting repayment of the loans.

Of the 500 women who were eligible for the plots, 110 were selected by lucky draw. SEWA discussed the cost and every aspect of the design of the houses with them and it was decided that the houses would have an area of 22 sq.m and be a single storeyed. The women were also trained in quality control and quantity estimates of the raw materials to be used, so that they could monitor the building of their homes. AUDA put up the houses with the active participation of the bidi and in 1990 all the houses were completed and ready for allotment.

It was at this stage that the National Airport Authority upgraded the Ahmedabad Airport from ‘National’ to ‘International’ and refused to give permission to allocate the houses, for now the houses fell within the ‘landing zone’ of the international air carriers.

As they had been refused the houses specially built for them, the women protested in front of the AUDA office, demanding that they be given new houses. But the authorities did not respond. After many a sit-in outside AUDA, bidi workers went to meet the Chief Minister and it was finally decided that they be provided new houses. HUCO agreed to give the loans, AUDA began construction, SEWA again completed the formalities.

Several years had elapsed since the first cost estimate of Rs.15,000 per unit, thanks to long-drawn-out government procedures and the ill-planned way in which government agencies tried developing a housing scheme in a prohibited area. Because of these long delays, the women were now asked to pay a staggering of Rs.45,000 per house, which the building contractors estimated as the new costs. The women began an agitation against the building contractors who retaliated with harassment and intimidation. It took many meetings with officials of AUDA, and the Labour and Roads and Building Departments before it was agreed that Rs.23,000 would be paid by the women and the rest by the government.

The houses were completed in November 1993 after a seven-year struggle for shelter, and handed over to 110 bidiworkers of SEWA. They named the housing colony Anasuya Nagar, which in Gujarati means ‘a township with malice towards none’. Women of all communities who once lived in dark, small, crowded homes, now have the space to live in dignity and work at home. They also have water, sewerage and toilet facilities. Among those who built houses here are Vidhyaben Ambalal Ipkayal and Mahananda Narayan. Vidhyaben says that during the seven years it took, she lost and regained hope many times, but now she finally has her home. She adds, ‘I only wish my daughter was with me in this house’. And Mahananda says, ‘During the dark period when I could not earn because I was looking after my injured daughter, I heard of SEWA helping its members to build houses. This gave a ray of hope to my life. I started attending SEWA Housing Committee meetings, joined agitations against the authorities and requesting the Chief Minister and other government officials to have our houses built as early as possible. Our dreams came true when SEWA finally helped us build our own house in Anasuya Nagar.’

Seeing the difficulties that women who were poor, were facing in getting finance for housing. SEWA Bank has been providing SEWA members with housing finance; and its sister organization, Mahila Housing SEWA Trust, provides technical services related to housing including advice on improving and extending existing houses, building new houses and about infrastructural services.

SEWA Bank has found that, as the economic security of SEWA members increases, the demand for housing loans and housing-related services also increases. By 2000 SEWA Bank had given loans worth over Rs.180 million for housing purposes to over 14,000 women (see Table below). These included loans to repair or replace a roof, wall, floor or door, for monsoon proofing, adding a room or kitchen, upgradation, loans that could be used as deposits for rent and to buy or build a new house. Loans were also taken for infrastructural facilities such as water or electricity connections or building a toilet or paved approach roads to the houses.

As a rule, loans for a new house require that the house is bought in the name of the woman borrower, thereby creating an asset for the woman.

The number of women availing of housing loans and the purpose of loan, 1995-99

Purpose	Year
	1995	1996	1997	1998	1999
New building	504	404	526	766	444
Building Repair	838	793	983	1,154	1,124
Monsoon Proofing	241	206	187	351	400
Slum Networking Project	0	46	17	0	7

In 1990, 50 per cent of the total loans of Rs.6.6 crores disbursed by SEWA Bank, or Rs.3.3 crores, were for shelter related purposes, including house repairs or additions, adding services or buying a new house. But what is really significant is the repayment rate of loans – a high 96 per cent, which imply demonstrates the credit worthiness of poor women working in the informal sector.

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