• Inspiration

Over 20 years ago, when Jaya Arunachalam’s brother died of a heart attack, the seven sisters of the family found out that Brahmin rites prevented a woman from lighting the funeral pyre. Even as elaborate rituals were being made to propitiate the gods so that the soul may be given unhindered passage to its next destination, Arunachalam defied age-old traditions and set the body on fire. And years later, when her father died, she did the same. “I don’t mind breaking traditions if traditions have nothing to teach us. Learn from the tradition only if it does some good,” says Arunachalam.

Born into an orthodox family in a village near Kanchipuram, Arunachalam was shunned by society after her marriage to a non-Brahmin. She studied economics and geography at the University of Madras during the 1950s. Subsequently, she completed a management course in the U.S. and also received an honorary degree from a university in Germany. In 1978, she founded and became President of the Working Women’s Forum (WWF). Needless to say, she doesn’t believe in namesake rituals. Instead, she works tirelessly to uplift underprivileged women in society.

Upon joining the Congress party in 1961, Arunachalam worked with the Gandhi of the South—the great Kamaraj—and was deeply influenced by him. “He gave me good values of working with the poor and working toward poverty reduction,” she says. As an activist in the Congress till 1977, she would call for political rallies to initiate change. However, she soon realized that India’s major political parties had failed the poor.

In 1977, when floods hit her native region, she and her friends distributed clothing, blankets, sheets and free rice for a whole year—and this continued even after the flood had subsided. That’s when Arunachalam realized that it was only after natural disasters like floods that most poor households get even just the basic necessities of life. “It was not the flood but poverty that’s the greatest disaster,” she says.

“I then started wondering if something could be done to [deal with the
situation] permanently. After the flood had subsided, people from communities and the urban slums of Chennai sat together and managed to find some answers. We realized that 68 percent of the women were heads of
the households; they were responsible for generating income for a living, apart from taking care of the house. It was a double drudgery,” she adds.

Arunachalam and her group examined the proposal of obtaining bank loans and the prospect of repaying them. When banks declined to extend loans to poor women, Arunachalam started her own cooperative and encouraged a system in which go-betweens would collect loan money from banks for underprivileged women and repay the loans on their behalf.

Besides this, 2,500 leaders of the WWF—with a share of Rs. 20 each and a seed capital of about Rs. 50,000—initiated and established their own Working Women’s Cooperative Society in 1981 (now registered as the Indian Cooperative Network for Women). This organization, as a wing of WWF, reaches over 410,545 poor entrepreneurs, effecting nearly $25.5 million. Moreover, it accomplishes a recovery rate of about 98.66 percent in the urban slums and rural areas.

According to Arunachalam, microfinance works because you are getting into a sector that is involved with poverty reduction and has been completely neglected by financial institutions and government agencies. “There is much demand for finance in this sector. Secondly, these people are anxious to avail of a second or a repeat loan. The participants in this sector are those who want to be independent. Earlier, microfinance was seen as a solution to end the indebtedness of the poor and save them from the clutches of the moneylenders. Sickness, accidents, epidemics and natural disasters are equally disastrous, pushing families into poverty for years.”

Arunachalam then devised a unique system of microinsurance. Vendors and hawkers, service specialists, fisherwomen, landless women, lace makers, cigarette rollers, silk weavers, embroidery workers, and several other types
of working class women now spend only a small portion of their income on insurance premiums under this plan. The entrepreneur has also insured every woman in her organization.

“The insurance scheme was set up in partnership with the Life Insurance Corporation of India (LIC) and Royal Sundaram, [so that] in the eventuality of a sickness, a family is not pushed back into poverty. In case of death, it ensures a decent cremation.”

Applauded by the government for being the group with the largest number of people insured, the premium for a life insurance policy in this unique project is in the range of Rs. 100 for disaster insurance; for sickness and hospitalization, it is in the range of Rs. 125 to Rs. 135, depending upon the age group.

“More than microcredit, it is the insurance [project] that is a success story for us. Nobody has this system of social security in the country for women like we do,” says Arunachalam.

The group has now moved on. What had started as a women’s empowerment movement in South India is today identifying potential NGOs in North India to replicate this model. It is providing access to finance, education and training for women and children in slums and villages, as they bravely struggle against the forces arrayed against them.

©Entrepreneur October 2009

Tags:
activist, Congress, Indian Cooperative Network for Women, Jaya Arunachalam, Kamaraj, LIC, microcredit, microfinance, microinsurance, NGO, poor, Rural, slums, underprivileged, women, Working Women’s Cooperative Society, Working Women’s Forum, WWF