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Learning from the poorest: Experiences of CEO of a small rural women’s bank

By Rekha Kulkarni*
I run a small bank for rural women in a drought-prone area of Maharashtra. It’s called the Mann Deshi Mahila Sahakari Bank. It’s the first bank set up in the country by and for rural women. Most of our customers are micro business owners – women who work at weekly markets or run their enterprises from home. They are vegetable traders and small and marginal farmers; they run tea and snack stalls, small tailoring units, grocery stores, food canteens;they raise goats, chickens and sheep–the list is endless. Everyone’s business has been impacted by COVID – almost all have seen their incomes fall.
People ask me – as the bank that lends to these micro business owners, aren’t you worried? Only 30% of our clients are currently repaying their loans. So yes, of course, COVID has posed a huge challenge for a bank like ours. But what has kept me going is what I have learned from our customers. Their resilience and ability to overcome numerous challenges – cultural, familial and financial – as they set up and run their businesses are remarkable. Their true capital is their courage. And that is ours as well.
Our founder, Chetna Sinha, set up the Mann Deshi Bank in 1997 because poor rural women had no place to keep their savings safe. No bank accepted their money. Today we have 8 branches, 100,000 account holders, 30,000 shareholders and we’ve given over 400 crores in loans. Our balance sheet may be very modest, but our model of financial inclusion has been studied and appreciated by organisations as diverse as the Reserve Bank of India and the Harvard Business School. But when we first set up the bank, women who placed their trust in us were taunted. We were called the Kacchra (Garbage) Bank. Women would put in their money, take it out a little later, then put it back again. Their neighbours warned them that we would steal their money or go bust. We were tested again and again. This went on for years.
Our mission has always been to economically empower rural women. All our products have been designed after discussion with our customers to ensure that they have control over their assets and their income. For instance, when we first started, we thought we would offer loans of Rs. 20,000 to Rs. 30,000 to women to buy several female goats and a buck. (Goat farming is very popular in our region.) But the women didn’t think it was a good idea. Give us a loan for just one or two goats, they said, so that we can decide how and what to do with the goats. If we have too many goats, our husbands will take over. Moreover, come with us to the animal market and give us a loan for the exact price of a goat that day. That was among our first products – Rs. 3000 or Rs 3200. Whatever the goat cost that day.
A few years later, we created the first pension scheme for informal workers after we noticed that many elderly women used the interest from their fixed deposits to buy medicine for themselves. ‘We don’t want to burden our families,’ they said. The pension scheme we designed subsequently became the basis for our country’s more recent National Pension Scheme. Today, we have many tailored products. For example, we offera one-year recurring deposit product that runs from June to April and matures just before the academic year begins. Women use the money to buy necessary school supplies.
At present, many women have come to us for loans against gold. Most of these women have been buying gold with the savings they accumulated every year from the businesses they run. I met a woman the other day who had taken a loan from us some fifteen years ago to start her business. With her savings, she bought a one-gram gold ring for Rs. 640! Today it costs almost ten times that. And it’s at times like COVID that this asset comes to great use.
I am very proud of working at Mann Deshi. I am the first female graduate from my village of Shirgaon in Belgaum district in Karnataka. My father was estate manager on a large farm and my mother was a housewife. We lived in a comfortable life in our village and I am the youngest of three siblings. In September 2000, my husband, who had retired in 1993 as a radar fitter from the Indian Air force, was still struggling to find a well paying job. Money was tight and we had two young children. I applied for the position of bank clerk at the Mann Deshi Bank as it had a branch close to our home.
When the founder, Chetna Sinha interviewed me and realised that I had been a state-level badminton player, she decided to hire me. She felt that the discipline of badminton would help me quickly grasp the discipline of banking. As always, she was right. Within six months, I was the branch manager and six years later, in 2006, I became the CEO of the Bank. Today I am a regular lecturer on financial inclusion at the RBI’s College of Agricultural Banking (CAB) in Pune. I’ve even given talks at Harvard and Yale. I am also the only female CEO among the 27 Cooperative Banks in our district.
Chetna has two very important mantras. The first: never provide poor solutions to poor people.
That’s something we take very seriously. For instance, when we first set up, we gave all our customers very attractive looking piggy banks. It was a disaster. Husbands broke the piggy banksand took away their wives’ hard-earned savings. So we became the first bank to provide doorstep services to our clients. We went to their homes and workplaces and collected small amounts of savings from them on a daily or weekly basis. We gave them electronic passbooks so their husbands wouldn’t know how much they had saved. The importance of privacy is something that I learned very early on. I had just become branch manager, and one of our customers, a widow who went door-to-door selling steel utensils, came to meet me with her son. She had been a regular saver. But she wanted to open another savings account. I asked her why. She didn’t say anything. But the next day, she came back. This time without her son. ‘How could you say that in front of my son?’ she asked angrily. ‘He didn’t know I had an account and I wanted to keep it that way?’ It was a lesson I never forgot.
To date, compared to other banks our size, we have invested an enormous amount in technology because we want to provide the best services to our clients. For example, we hired the well-known firm Deloitte to do our cyber security audit.
That’s why our customers continue to bank with us. As they flourish, so do we. One of the very first loans I sanctioned when I joined Mann Deshi was for Rs. 5000 to Nandini Lohar. She ran a tiny stall where she sold photo frames. Over the years, she has taken a dozen loans. She now has two stores. Her children are well educated. She was nominated for a national award. Sangeeta Bhosale is another example. As branch manager, I gave her a small loan for a tiny grocery shop. Today she has two mini malls with a turnover of several crores, a three-storey home, a large godown and a car.

Chetna’s second mantra: invest in women. Our Board, everyone in our senior management team and over 90% of our staff are local women.They manage everything independently. This is also because we hire excellent consultants to train and guide them and to keep costs down. Whether it is handling stringent RBI audits, offering excellent customer service, managing our treasury, ensuring data security, or using the latest technology, our staff handles it all. All this helps our clients, and as women’s businesses grow, they give their children the best education, they build their assets, they invest in their homes, and they become important, admired members in their communities. Thatour bank plays such an important role in the lives of the women around us gives us a great deal of confidence and pride.
As the CEO of Mann Deshi Mahila Bank, I have to constantly keep an eye on our profits as well as on our mission. For instance, some financial products are more expensive to service. Take the example of the Joint Liability Group loan. It is a standard credit product with fixed weeklyrepayments that works very well and is offered by most banks. Compare this to a cash credit facility for weekly market vendors that we also offer. Here, clients can take a loan in the morning and repay any amount they want that same evening. This makes it much more expensive for a bank to service.
However, since our customers specifically requested more flexible loans, we committed ourselves to offering this product and figured out a way to make it profitable. In fact, we were the first bank to do so. Another example: after demonitisation, our customers were worried their sales would come to a standstill because of the lack of cash. So we made sure that they could exchange Rs. 500 and Rs. 1000 notes for the same value in coins, and this kept their businesses going. On the other hand, I had to ensure that we would not be overrun with fixed deposits, which would mean a huge interest burden for us and eat into its profits. So we immediately dropped our Fixed Deposit rates. As a result, our women’s businesses continue to grow, our NPAs remain low, our share capital is increasing and shareholders – now rural women from across Maharashtra – enjoy better dividends.
During COVID, we supported both our customers and our staff. It was invigorating to see our staff fearlessly coming to work every day, riding their two wheelers with their ‘essential services’ sign displayed. We organized transport for those who didn’t have their own vehicles, offered advances to our Field Service Agents who typically depend on commissions, and provided relief food packages for fifteen thousand of our most vulnerable customers and their families. Our staff was in constant touch with our customers, relaying important information on the latest government regulations, safety protocols, bank timings, providing top up business and emergency loans, making sure we always had enough money in our ATM machines and teaching customers how to make digital payments.
Chetna has been a very powerful role model for me, and for all of us. She is both globally and locally renowned, but her attention and focus remain on the poorest rural women. Typically, western Maharashtra is very hierarchical. This is especially so among Cooperative Banks, which are controlled by powerful political groups run by men. You have to jump up and salute if you see your senior! And many banks do not give their members any dividends. So a successful women’s bank is a huge achievement, and especially one where the Chairperson’s door is always open to customers and staff. Chetna has inspired us to develop a culture of service and hard work.
It’s not been easy. Because we compete with local private banks, we always need to think ahead. We were the first cooperative bank to become a member of the Unique Identification Authority of India (UIDAI). We are also very ambitious. Within five years, I want to be all over Maharashtra. I’d like Mann Deshi Mahila Sahakari Bank be the first choice for any woman–whether she is a street vendor, a vegetable vendor or a micro entrepreneur. I’d also like to set up a service in which a van carrying an ATM goes to remote rural locations so women to access their money.
Yes, being a banker during COVID is very worrying. But we’ve seen worse. Our spirit, like that of our customers, remains strong. I will end with a story of our Annual General Meeting. For our women, it is a huge celebration and for many of them, the bank’s annual report and the notice of the AGM is the only time they ever get anything in the mail addressed to them. Once, when some members didn’t get their report, they complained to us, and we had to take it up with the local post offices to ensure that every shareholder got her mail.
At Annual General Meetings (AGMs), our shareholders show up in large numbers, resplendent in their saris and with flowers in their hair. Once, when we organized some music, I was amazed at how many women, including some very old ladies, jumped up and danced. It was a wonderful evening. Since then it has become an AGM tradition.
After the AGM lunch. We invite women to share their stories. They talk about how this is the one day in the year that they can get together,relax and enjoy themselves. They describe how their children are well educated, how they’ve grown their businesses, how they’ve struggled and succeeded despite numerous obstacles.It is my favourite day of the year.Everyone leaves energized and inspired, proud of being a member of a home-grown rural women’s bank.

*CEO, Mann Deshi Mahila Sahakari Bank. In conversation with Devika Mahadevan, Head, Strategy and Communication, Mann Deshi Foundation

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