Microfinance – Access to Capital
Getting a loan can be extremely tough for the poor, especially in the rural parts of our country. To solve this problem, Self Help Groups (SHGs) are formed. These are informal, village-based saving and loan groups composed of 10-20 women or men. They follow the common method of pooling personal income to develop a revolving loan fund for members.
As of 2018, there are 5838 SHGs in Sheohar under the umbrella of JEEViKA. Unfortunately, only 7% of the households (2.4% women) in Sheohar were reached by these SHGs (2012). Reluctantly, people turn to local money lenders – mahajans – who charge a very high interest rate of 3-5 percent per month. Although Axis Bank and Share Microfinance are also working in Sheohar district as a microfinance organisation, they provide loans for livelihood purposes only.
As a result, it is virtually impossible to obtain investments for upgrading sanitation. According to the 2011 Census, 78% of households in Sheohar did not have a latrine and practiced open defecation. Although the central government has allocated considerable funds to incentivize the construction of Individual Household Latrines (IHHLs), it is ultimately the responsibility of the individuals to take the initiative for their households.
The inadequate water and sanitation coverage in Sheohar had caused the poor-quality WASH facilities to have a far-reaching impact on the overall well-being of the people. Through Water For People India’s intervention, microfinance institutions were initiated to increase community access to credit for sanitation products and services. This strengthened the financial capacity of households and allowed them to build sanitation facilities. The intervention is contributing towards the Swachh Bharat Mission’s ODF++ goal of having 95% of the population accessing and using an IHHL.