About Us - Sewa Bank's Approach to Banking

Based on its ideology and long experience of working to mainstream poor women workers in the informal sector, SEWA Bank’s approach to banking has been to consider the life cycle needs of women and to then try to meet those needs.

In studying the lifetime needs of poor women workers, SEWA Banks experience has been that they are mostly trapped in the vicious cycle of poverty and the main objective is to help women get out of this spiraling poverty syndrome.

1) The Vicious Circle of Poverty

2) Process of Capitalisation

3) Women Workers Need to Provide for Planned, Unplanned and Productive Expenditures during their Lifetime

1) The Vicious Circle of Poverty

Self- employed women workers are caught in the vicious circle of poverty; of indebtedness, assetlessness, and low-income levels. A possible solution to free these women from this vicious circle was by directly linking them with the nationalised banks. But the formal sector institutions were unable to meet the financial needs of women workers adequately for a number of reasons. These included complicated forms, which were largely inaccessible to illiterate women, need for high levels of collateral to get credit etc. Since the formal Financial Institutions failed to meet the needs of women workers, SEWA Bank came forward with informal delivery mechanisms for loans, savings and insurance which help these women in coming out of this cycle.

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2) Process of Capitalisation

When a woman joins SEWA Bank, she also begins the process of capitalisation in her life. At SEWA Bank, capitalization is understood as the process of formation of capital towards sustainability and growth, at the level of the individual as well as at the level of the household.

Usually when she joins SEWA Bank, it is her first exposure to (formal) banking. She is usually already in a debt trap and hence has to first redeem her debts before building up her capital base through savings and then loans. The moment she starts saving, she builds up an asset over a period of time, which ultimately helps her in either starting up a new enterprise or upgrading her existing one, or to meet future consumption expenditures. The case history of Nanuben, an old-clothes trader describes this process.

Nanuben, is an old clothes vendor. She and her husband grew papayas on their family’s land. But they couldn’t make a living, and so with Rs. 7 (US $ 0.06) they arrived in Ahmedabad city twenty-five years ago. Nanuben was a keen business woman. She borrowed some money from her parents and started an old clothes business and began to save. Then her aunt told her about the Self-Employed Women’s Association (SEWA) and its Co-operative Bank, SEWA Bank. She opened her own bank account and deposited her savings in it. Soon she took her first loan of Rs 500 (U$ 11) and never looked back. Nanuben has now taken twenty loans – the last eight have been for Rs 25,000 apiece. Her net worth is now Rs 5,00,000.

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3) Women Workers Need to Provide for Planned, Unplanned and Productive Expenditures during their Lifetime

Women workers, especially those in the informal sector-have been largely bypassed by the formal banking institutions. However, they are economically active, and have distinct expenditure patterns, depending upon their trade or work, their family situation and their socio -economic conditions.

SEWA Bank relies on an intimate knowledge of its client’s expenditure patterns, in order to develop appropriate products and services. Accordingly, the experience of SEWA Bank over the last 30 years has resulted in 3 main products as pictured above.

Three types of financial services have been developed by SEWA Bank till date, through various schemes, to broadly meet these different financial needs.

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