Ahead of International Women’s Day, the UN’s International Fund for Agricultural Development (IFAD) and the Government of Maharashtra in India agreed to invest an additional US $12 million, to socially and economically empower 1 million rural women in the state through the Nav Tejaswini project.
The project will support rural women across Maharashtra’s 34 rural districts to break the chains of poverty – helping them to start and expand competitive businesses. Nav Tejaswini builds on the successful Tejaswini Rural Women’s Empowerment Programme, an initiative of IFAD and the Govt. of Maharashtra’s Mahila Arthik Vikas Mahamandal (MAVIM) that closed in 2018.
“We’ve seen 80 per cent of poor women graduate from subsistence farming to becoming small agricultural business owners thanks to this programme,” said Ulac Demirag, IFAD’s Country Director for India.
“This work has huge potential, across India and globally in places where women can’t get credit and don’t know how to set up a business. Plans to set up a Centre of Excellence to teach people in India and people from all over the world how to replicate the programme are underway,” he added.
The programme helps women in Maharashtra break into a banking system that has been reluctant to lend to women individually by organising them into associations and training them in basic financial literacy and banking fundamentals. It harnesses the power of community organisations such as self-help groups (SHGs) and village clusters that receive training and business hand-holding from community managed resource centres (CMRCs). CMRCs are self-managed federations of SHGs. Women cover the operating costs of their organizations themselves, ensuring they are the owners of their own development.
Tejaswini established strong institutions, financial discipline and well-functioning micro-entrepreneurial activities for poor rural women. Nearly all of the 90,000 SHGs established during Tejaswini and Nav Tejaswini were able to access formal credit from banks with an excellent 99.5 per cent repayment rate. Tejaswini introduced the successful model of CMRCs, which each federate about 200-300 SHGs and provide a range of social and economic services to its members on a cost-recovery basis. Nav Tejaswini leverages these gains to promote women’s enterprise in rural Maharashtra.
Community-level transformation in Nav Tejaswini is led by the CMRCs. The programme builds on a successful partnership with commercial banks (initiated as part of the Tejaswini programme) to start micro-enterprise loans for women entrepreneurs. Women use these loans to set up small businesses, like pig and goat farming, or handicraft-making, and understand balance sheets, cash flow and the financial technicalities that have helped them become small businesswomen and leave subsistence farming behind.
Of the total project size of $421.87 million, IFAD is providing a $50 million loan and a $1.4 million grant for the new project. In addition, the Government of Maharashtra is providing $104.78 million, with a further $4.9 million contributed by project participants themselves. The project is expected to leverage at least $9.9 million in private investment, while an estimated $250.8 million is expected from domestic financial institutions contributing to a bank linkage component.
India is a founding member of IFAD, and IFAD has worked in India for more than 40 years. The current country strategic opportunities programme is fully aligned with the government’s policy framework and efforts to ensure that smallholder food and agricultural production systems are remunerative, sustainable and resilient to climate change and price shocks. To date, IFAD has supported 32 rural development projects in India worth $1,211.94 million. These interventions have directly benefitted 6,341,436 families.
