How Microlending Has Changed Women’s Lives in India

Read about how this example of microloans for women in India changed their lives and allowed them to pursue their entrepreneurial dreams.
When I visited Salem, India, for a class trip in college, I thought I knew what to expect: a textbook microlending and women’s development group.

I knew going into it that the place we’d be visiting, the Holy Cross Rural Development Center, most of the women came from poor villages. (And by “villages,” I mean communities often including thousands of households! Much larger than the country village I was raised near in Michigan.)

I knew that local women, often raised in multi-generational households, have the expectation that they will be married, sometimes through arrangement, and live their lives as wives and homemakers, probably struggling to provide for their families amid limited resources and occasionally without access to the income to care for their families.

And I knew that the Holy Cross Rural Development Center provides these women another option. Here, women are taught a trade. While I visited, women were working on dying fabric that they would later sew into clothes. These would then be sold at market.

The women at the center are also taught best practices for having a small business: how to manage assets and income, how to judge when expenses are responsible and needed, and how to address challenges such as having enough income to grow but not the resources to do so.

And with this, women are provided with one of the most important tools for economic growth: a microloan.

What is microlending exactly? Microlending, also called microfinance, involves small peer-to-peer loans given by an individual or group of individuals to someone who may not be eligible for a traditional loan.

Often, money for these loans is community-generated. Or occasionally, an organization will provide the necessary funds to start the pot of funds, and it is up to the community to repay loans and aid in its growth.

(There is also a microfinance sector that is closer to a traditional bank, funded by investors who seek capital gain through small loans. This has caused its own set of problems, such as overleveraging of clients and forcing them to take loans from one company to pay back another, but this structure of lending is a bit different than what we’re talking about here.)

There are a plethora of organizations (like Catholic Relief Services) that seek to empower women in developing countries by creating a financial resource that would otherwise prevent them from providing for their families. These services vary from place to place, but it often involves some sort of training in a trade, as well as providing microlending to finance the start-up of that trade.

The funds are stewarded by groups of women, with a number of women meeting on a regular basis to administer or collect loans and provide support to each other. And because community is an inherent aspect to this style of lending, it is especially challenging not to repay the loans: after all, you’re repaying the loans to a group of friends who are also supporting and cheering you along the way.

I was familiar with all of this, and I thought I knew what to expect when I walked into the Holy Cross Rural Development Center.

But this is exactly what surprised me at the Holy Cross Rural Development Center: the community support. It’s so easy to think of ourselves as “lucky” to be in a “developed” country. Yet, the level of encouragement, support, and commitment to one’s trade is something hard to find in my culture.

For these women, learning a trade and starting a business was about more than just providing for their families. It was about walking alongside each other as they journey deeper into their calling as mothers, nurturing and caring for their families while using the gifts God has given them.

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