Micro Finance Case Study

Association for Sustainable Community Development

Tamil Nadu, India

Like many women from the Vandavasi area of Thiruvannamalai District, Mrs. R. Deiwanayagi’s family are all involved in agriculture. She is forty-two years old and her husband is fifty-two and they have two teenage children, a boy named Sathishkumar (now 17) and a girl named Nathiya (now aged 20).

She and her husband have spent much of their life working in agriculture. The work usually involves field work, such as ploughing or sowing, or work involving animals, such as herding or milking. The work is mainly seasonal, and it is not always guaranteed. Typically, an agricultural worker could expect to find employment only half of the time. The average monthly income for such work is approximately 900 rupees ($22). With both herself and her husband working, the income for the family was approximately 2000 rupees ($50). From this money, she was just about able to feed and clothe the family, and to pay for her two children to go to the local government school. However, she was unable to pay for additional unexpected expenses such as medical costs and general repairs.

In 2003, ASSCOD facilitated the formation of Women’s Self-Help Groups (SHG) in Vanadavasi and the surrounding rural villages. There are a total of fourteen such SHGs in the town alone. Mrs R. Deiwanayagi joined one such SHG when it was first formed. The name of their SHG is “Mettioli” which is the name of a popular Indian television soap opera which they like to watch. There are a total of twelve women in her SHG.

In 2005, Mrs R. Deiwanayagi decided she needed to increase her income. Both her teenage children wanted to continue their education after they left school and she wanted to make improvements to the family’s simple brick house. After attending an Entrepreneurial Development Workshop run by ASSCOD, she decided that she wanted to buy and sell saris. The sari is a traditional dress worn by virtually all women in India. They are usually brightly coloured and highly decorated sometimes with sophisticated embroidery. It is a single piece of material usually made from high-quality cotton or silk. She did some initial research and discovered that the best place to buy them wholesale was in Pondicherry, which is a large town approximately 60 kilometres away. If she bought enough items, she could get a good wholesale price. She could then take them back to Vandavasi and sell them to friends, family and local shops.

She approached her ASSCOD SHG and borrowed 5000 rupees ($120), and by contributing her own savings of 2000 rupees, the initial total capital investment was 7000 rupees ($166). With this money, she went to Pondicherry and bought a total of thirty saris at wholesale price. When she returned home, she started selling the saris. The wholesale price of a sari is typically between 200 and 250 rupees. The profit on an individual sari is on average, about 35 rupees. With her first purchase, she was able to sell all the saris within a month. This meant a profit of around 1050 rupees. With the proceeds from the sale, she went back to Pondicherry and bought another 30 saris, and began the process again. Now she has built up a regular customer base of individuals both private and commercial.

Now with the extra income, she was able to pay for her two children to attend further education. Sathishkumar is studying Computer Science at the local government ITI College. Nathiya is studying for a BSC in Education at a nearby University. The family has also benefitted from some much needed home improvements.