In 1990, DHAN Foundation initiated a thematic programme viz., Kalanjiam Community Banking programme(KCBP) to empower the women. KCBP’s more than two and half decades’ journey led to the promotion of 55,000 self-help groups benefitting 1.5 million households among urban, rural, coastal and tribal contexts across 14 states in the country.

The programme, subsequently through its intervention, has exploded several myths that have long been in practice, with several interventions:

Savings first; Credit next

KCBP has eradicated the myth that ‘poor cannot save,’ by demonstrating the successful savings-led microfinance model. Savings bring equity and builds ownership by the people at the grassroots level. It enlightens the poor about their rights and ensures their entitlements for financial services actually reaching them. The savings that the members mobilize in their groups are again provided as loans to members in need of credit to meet their consumption and production needs. Savings of the SHG members have reached a level of Rs. 499 crores in their institutions, which was instrumental in mobilizing credit from the commercial and regional rural banks.

Insurance is Must; Pension is Best

The multiple risks and vulnerabilities poor families’ subjected to are risks associated with life, health, crop and assets. Poor are often exposes to these risks, which causes losses beyond their capacities. KCBP addresses in providing insurance products to mitigate the various risks poor are exposed to. Insurance cover for the member’s life, health and productive assets can insulate the savings and credit, which are often at the risk at times of emergencies.

Income security at the old age for the poor men and women can be achieved through micro-pension product, for which they are ready to save for their future. Micro Insurance initiatives have helped reach one million poor families with an annual premium of Rs. 40 crores to provide a risk cover to the tune of about Rs. 1200 crores. The micro-pension product is offered by 26 federations benefitting 26,000 women across the different states in the country.

Connecting the Poor with Banks

DHAN KCBP programme with its more than two and half decades of experience has proved, ‘banking with poor is a viable business proposition.’In the early nineties, KCBP started as a small experiment, now it has shaped and transformed into a nationwide movement. KCBP ensured the mutual trust relationship between banks and groups and the secured the long-term sustainable business partnership. DHAN’s experimentation of continuous cash credit to SHGs has gained national recognition and has been implemented across the states.

The Kalanjiam Groups have been successful in establishing and nurturing viable and sustainable business linkages with 322 branches of 36 commercial banks and Regional Rural Banks. Annual credit turnover of Kalanjiams through Bank-linkage have reached a robust level of Rs. 300 crores.

Building Sustainable People’s Organizations

The principle of cooperation and mutuality has been foundation for the Kalanjiam SHGs and their Federations. Kalanjiam Community Banking Institutions promoted by DHAN is achieving sustainability in social, financial and technological aspects are its hallmark. The SHGs start meeting their costs of operation from day–one, which builds their confidence and capacity to manage both financial and human resources on their own. By making decisions, monitoring their own progress, and solving conflicts, people acquire a sense of solidarity, as well as competence to govern their institutions.

Contribution of the poor women to meet all the running cost of their institutions, which makes their institutions financially self-reliant, stood at Rs. 67 crores.

Enhancing Livelihoods

Three distinct livelihood models in Kalanjiam eco-system are 1. Access to credit or markets or technologies or skill building; 2. Aggregation and collective marketing, 3. Value addition through processing.Kalanjiams work for enhancing livelihoods by addressing four distinct needs such as availability, accessibility, appropriateness and affordability of financial resources. People have graduated from the state of survival and subsistence to self-employed and enterprises.

Three lakh families across 14 states have themselves declared they have ‘Move out of Poverty,’ due to Kalanjiam Community Banking Programme.

Building Leadership

KCBP has oriented its initiatives to provide ample space for women to gain self-confidence, courage to face any environment travel outside their villages. The programme has its design wherein women involve in cooperative decision making and resolving the conflicts. This resulted in women exercising their decision making power within their families. The mechanism of SHGs and Federations have shaped every woman into a leader and financial independent. Over 1,50,000 women were holding various leadership positions in their SHGs and Federations across 14 states.

Empowering Women

KCBP ensured empowering the women with financial and social inclusions. Through SHGs, women were provided with financial independency and created space for taking various leaderships roles. When women gain control over financial and livelihood resources, they gain visibility and have their ‘say’ over things affecting them within their family and the society. Their active role in household economy increased their physical mobility as they attend skill building training programmes, business related and regular group meetings, and make frequent visits to and interface with banks, local and distant markets, and nearby villages and districts sometimes to other states. The social network and interaction processes brings them recognition and creates space in the community decision making, which lead to increase in their confidence level and self-esteem.