Earlier this week, the United Nations marked the International Day for the Eradication of Poverty, highlighting Sustainable Development Goal #1: “End poverty in all its forms everywhere.”
In Madurai, where WomenStrong International Consortium member DHAN Foundation has been working with poor communities for 30 years, one woman recently stood up before a crowd of 500 people and showed what it means to achieve this goal.
Muthulakshmi was 38 years old when she joined one of DHAN’s Self-Help Groups they call Kalanjiam. These groups begin as vehicles for microfinance – as small self-help groups do throughout the world – but DHAN’s groups are platforms for much more. They’re vehicles for broad development activities, such as health screenings, skill building, insurance and innovation. They have enabled hundreds of thousands of women, men and families to move from struggling to survive toward a more stable, secure life and future.
It is a tradition at DHAN each October 2, the birthday of Mahatma Gandhi, for people who have transformed their lives to stand up and declare themselves out of poverty. This year, it was Muthulakshmi turn.
Looking back, Muthulakshmi remembers when her father earned enough to support the family. But by the time she was in the 5th grade, he started drinking and the family slid into poverty so severe that she and her younger sister were forced to leave school to work in a textile mill. The two little girls earned a combined daily wage of 2 rupees (3 cents U.S.), essential to the family being able to eat. Alcoholism that leads to or keeps Indian families in poverty is a depressingly common story.
By the time she was in her 20s, when middle-class Indian girls are finishing college or getting married, Muthulakshmi was working the nightshift as a coolie carrying heavy loads in a rice grinding mill for 6 rupees a day (about 10 cents U.S.). From this, she paid a 1-rupee commission to the agent handling her labor contract and with the remaining 150 rupees per month (USD 2.25), she supported two sisters, a brother, her mother and father. Then, believe it or not, everything got worse.
Her brother had an accident that cost him an eye, her father died of cancer, her older sister moved to another city to become a maid, and her younger sister, who had always helped generate income for the family, went blind.
But Muthulakshmi also met the man who was to be her husband and when she was 27, they married. He earned less than she did, but the bit of additional income helped. Not long after, DHAN helped form a Kalanjiam on her street and its members approached her to join. She refused, believing she didn’t have enough money to save or enough time to attend meetings. Kalanjiam members persisted until she finally joined and learned how to save 50 rupees (75 cents U.S.) per month. It was a beginning.
She was encouraged to take a small loan that she could repay. With the first 300-rupee loan, she bought a water jug and a cooking pot. After repaying the loan, she borrowed 1,000 rupees and repaid that. Interest on the loans of about 24 percent was much less than the usurious rates charged by unscrupulous money lenders. As the only source of short-term loans to the poor, such lenders are common throughout the Madurai slums, charging up to 200-percent interest on small loans.
When Muthulakshmi was unable to repay one such lender, he literally stripped the sari off her back for the 100 rupees (USD 1.50) owed. It was an unforgettable humiliation, and when her Kalanjiam heard what happened, they stepped forward to repay the loan on the condition that she never borrow from such a source again. Muthulakshmi calls this a turning point in her life.
“I took it as a challenge,” she says. “I was determined to become a dignified person. I was going to earn more, work harder” and she began working as many as three or four jobs a day.
She helped her husband sell broomsticks. She started working construction, carrying bricks and sand on her head in the searing heat. Her daily earnings increased to 50 rupees (75 cents U.S.), and at each step, the Kalanjiam supported her. Meanwhile, her Kalanjiam expanded from its initial six to 20 members so the the combined savings of the group grew, too. More savings means more money to loan.
They opened individual bank accounts and leveraged their savings to take bank loans at reasonable interest rates. They offered members health and life insurance by connecting Kalanjiam members with available government programs that the poor often don’t know how to access.
Her financial literacy improved through Kalanjiam trainings, and she came to understand that rent took one-quarter of her monthly wages. Since other members were in the same boat, the group decided to participate in DHAN’s innovative home leasing program. The program allows members to take a loan equal to three years of housing costs, pay the landlord in one lump sum and repay the loan from the group monthly so that in the end members wind up with three years of rent as savings. The home lease gave Muthulakshmi both peace of mind knowing she would not be evicted and 20,000 rupees (USD 300) in savings. She then took out a 30,000-rupee loan (USD 450) toward an even better house, and did it all again.
Meanwhile, her hard work on the construction site paid off. Although most crew leaders were men, Muthulakshmi became a group head and hired 10 women and 2 men to form her own crew. She now earned 1,000 rupees (USD 15) a day, after paying her workers and all expenses. Just as things seemed to be going well, her husband was diagnosed with throat cancer and died. It was a personal tragedy, but not a financial one. The health insurance the Kalanjiam arranged paid for his care and the life insurance the Kalanjiam offered provided Muthulakshmi with a death benefit of 35,000 rupees (USD 525).
Muthulakshmi’s mother and brother now have their own home. She has savings of 35,000 rupees and owns two parcels of land where she plans to build her own house. She contributes to the livelihoods of 10 family members and has taken 2.75 lakhs (USD4,120) in cumulative loans, all repaid.
And, she says, she’s just getting started.
“I have no plan to stop, because I now have the self-confidence and courage to do more,” she says. “I lost my husband, my sister is blind and I grew up in a difficult environment, but over 15 years in the Kalanjiam, I have been transformed from a clumsy woman to a respected community member.”
She says she likes telling her story. “I like encouraging other women. I say to them, ‘never give up’ Hard work leads to success. Keep going, because if I can do it, so can you.”
Kalanjiam provide the space and support needed to accelerate each woman’s transition out of poverty. The transformations aren’t just about more money, but also about more dignity and community connection. Kalanjiam members are like family, sharing in each other’s joys and tragedies and the sense of connection extends well beyond the group.
During the annual Hindu festival of Diwali, Muthulakshmi gives new saris and extra money to her workers. Out of every 500 rupees she earns, she routinely donates 50 to the very poorest. During temple festivals, she feeds poor neighbors and donates 5,000 rupees worth of rice. She is a respected member of Madurai society.
As you consider global progress toward achieving the first Sustainable Development Goal and if you have any doubt, look for inspiration at Muthulakshmi. She’s the face of success in achieving the goal.