'Cotton widows' turn entrepreneurs thanks to Mumbai NGO
Vandana Foundation drives the entrepreneurial spirit among women in Vidarbha and imparts employment training to urban slum youth
It took just Rs 5,000 to turn Jaya Petkar’s life around. A young widow from Yavatmal district in Maharashtra, Jaya was desperate when a failed crop and mounting debt drove her husband to suicide. The Rs 50 a day she was earning as farm labour was simply not enough to sustain her children and herself.
Her prayers were answered when Vandana Foundation, a non-profit organisation, provided her a loan of Rs 5,000 to set up a small kirana store, which she operates out of her home. Today, Jaya earns a minimum Rs 200 a day and is a proud woman.
To Hell And Back
Set up in 2011, Vandana Foundation is a Mumbai-based NGO founded by A N Roy, former Director General of Police, Maharashtra and his daughter former journalist Saumya Roy. Like Petkar, the foundation has helped as many as 2,500 rural families, largely women, in Yavatmal and Wardha districts of Maharashtra, where a wave of suicides among cotton farmers is leaving thousands of debt-ridden families on the brink of starvation. The foundation also works in the slums of Mumbai, where it imparts skills training to youngsters to make them employment-ready.
“Our livelihood support activities focus on helping our beneficiaries start their own small businesses and become entrepreneurs. We do this by providing them financial support as well as entrepreneurial training and job skills,” reveals A N Roy. “In Vidarbha, which is reeling under farmer suicides, we are helping widows start businesses such as general stores, selling fish, personal accessories and bangles and tailoring. These women, who never once thought they would become entrepreneurs one day, are now self-sufficient and even saving for their children’s education.”
The foundation offers different types of low-interest micro-credit, depending on the type of beneficiary and whether they are located in an urban or rural setting. While in urban areas, it provides only loans, widows in Vidarbha receive grants or a combination of loans and grants, as the foundation does not wish to push them into a vicious debt cycle.
Loan products are carefully structured and some deserving entrepreneurs receive even multiple loan cycles at 12 per cent on a reducing balance basis. “Slowly, we plan to make it a complete loan model,” reveals Roy.
To fund its social impact schemes, Vandana Foundation receives grants from the Bajaj Foundation for rural widows, while it recently tied up with Union Bank of India for the loans it extends to urban beneficiaries. “A part of the loan amount comes from the small funds we have in our kitty,” adds Roy.
According to the MoU with Union Bank of India, beneficiaries who have a multiple loan cycle with the foundation are eligible for higher loans of up to Rs 50,000, explains Roy. “The criterion for seeking a loan is that the person must be credible and the business must be scalable. The additional infusion of capital must lead to a higher business activity and profit. The foundation helps the bank complete their KYC and due diligence.”
More Than Money
Vandana Foundation does much more than lend money to potential entrepreneurs among the urban and rural poor. Its USP is driving the entrepreneurial spirit among people who would have continued to subsist below the employment radar. But it wasn’t easy. “Encouraging widows to start businesses was difficult,” remembers Roy. “We took two years to do our research before we launched the programme and we therefore knew what kind of businesses would do well in these areas. Next, we had to build confidence in the widows to become independent. Today, many of these women are not only self-sustaining but they also encourage other women to start up on their own,” says a delighted Roy. The foundation also provides spinning wheels and cotton, and trains the villagers to spin khadi. The women give the khadi cloth to the foundation, which then sells it for them.
A Promise For The Youth
In Mumbai, Vandana Foundation tied up with Skills Academy, an entrepreneurial venture in the education and training sector. It has trained youth from the slum areas of Dharavi, Chembur, Vashi, Mankhurd, Govandi and Dongri for jobs in industries such as hospitality, construction, retail and IT-BPO.
Roy has initiated a novel initiative in Mumbai’s slums – a slum police panchayat or participatory policing. Apart from crime prevention, the panchayat helps identify beneficiaries for the foundation’s schemes, makes sure funds are invested where they should be and EMIs are paid on time.
And it’s not only Mumbai’s youth that can look forward to a better future. Vandana Foundation has two computer training centres in Vidarbha, one in Wardha and the other in Pandharkavda, the epicentre of the farmer suicides. Thanks to a tie up with NIIT, the foundation is helping young men and women here aspire for jobs once they had never dreamt of.
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