Rediscovering Co-operatives for Employment and Income Generation: A Case Study of the Utkarsh Purush Bachat Gat in Kedgaon
This is an account of how 10 enterprising young men residing in a small village named Kedgaon in the Pune district of India have rediscovered the co-operative way for generating self-employment and income. All of them, in the age group of 21 to 26 years, with little formal education, are engaged in making a living through skills they acquired without any specific planning or training. For instance, Santosh is a potter making small clay idols for festivals, Ajit is in the business of supplying cable connections, Sanjay is a ward boy in a Pune hospital, and Ganesh is a worker in a nearby packaging company. Four others are in the business of photography; three own/rent studios and one operates from his home.
It began when Nitin Shinde became fascinated with photography while still in his teenage years. He learned the skills from an experienced photographer in the village who owned the only photo studio. He nurtured his talent and expanded it into a business venture. He taught his elder brother and two friends the required skills. They too wanted to develop their skills into a business but did not know exactly how. Any idea they had was foiled because of the problem of procuring capital and finance. Their scale of operation was small, but their hurdle was a real one: how to secure sufficient funds to buy or even rent the equipment needed: namely, a still camera, a video camera, rolls of film, a place for the studio and funds for their day-to-day needs?
The solution to their problem came from an unexpected quarter. Rajiv Shinde noticed his mother’s role in a women’s Self Help Group that was being promoted as part of a rural poverty alleviation programme of the government, called the Swarnajayanti Grameen Swarojgar Yojana (SGSY). This scheme, limited to women, was based on using a group or co-operative model to enable women to save and generate adequate funds to pursue income-generating activities. The youngsters saw the women from their families participating in these SHGs, starting a credit co-operative and borrowing from their self-saved funds for meeting contingency needs – like finance for raw materials or even for such general household needs as health services and house repairs. They also saw the well functioning SHGs get a bank loan to further expand their income generating activities. They witnessed the results of these activities: namely, expansion of individual businesses, easing of financial crunches and overall better economics of the household.
This inspired them to start their own credit co-operative. The question now was: how to proceed?
They first tried to find out if the government had a similar scheme for men or youth. They did not find any, but undeterred, they decided to proceed on their own. With the help of the social worker, who visited the village regularly for the women’s group, they started the “Utkarsh Purush Bachat Gat” on the 12th of December 2003. Initially, there were 15 potential youth members, but five of them were dropped and only the present 10 were retained. This was because the five members were not in agreement with the majority about the structure of the co-operative, and the existing members were clear that all members should share similar goals for the co-operative to be successful.
Having established a credit co-operative, with a President and Secretary in place, they started to meet monthly and the business of saving began in earnest. Although the members lacked the skills and experience to put forth a clear vision and mission statement, they were clear about the purpose of their co-operative. They came together to address their individual needs for capital, working capital and/or personal expenses. They contributed Rs. 100 monthly and continued to save for the first five months. These savings were deposited in the Kedgaon branch of the “Pune District Madhyavarti Sahakari Bank Ltd”. Members could take out loans after six months of savings, but loans were not sanctioned easily: demanders had to satisfy the group about the extent of the need and their repayment capacity. In the first year, three loans of Rs. 1500 were given to three members; a farmer who used it to buy fertilizers; a photographer who bought a still camera, and a member who needed funds to help buy a second-hand video camera. An interest rate of two percent per month was charged for the use of the funds.
Why did these young men not approach the bank directly for the required funds? To this question, all of them gave the same vehement answers: namely, that approaching a bank involves a lot of procedures, they would have to provide collateral, and, their requirements for working capital were small and recurrent, not worth the expenses and effort of approaching a bank. And finally, their credit co-operative was a much better way because they could interact with friends while receiving the financial help they needed.
These small loans have helped the co-operative members expand their businesses, not only monetarily, but also in terms of mutual support, as the members are able to support each other in times of need. Since four members are involved in providing photographic services, they never refuse any assignment that comes to any of them, even if it is at a far off place (e.g., for video shooting a marriage). They co-operate, rather than compete amongst themselves, to service such orders. The other members too are doing quite well in their respective occupations.
Ms. Amita Dharmadhikary-Yadwadkar holds a doctorate in Economics from the Gokhale Institute of Politics and Economics, Pune, India. She specializes in Applied Macroeconomics and Development Economics. She has observed and studied co-operatives, specifically, women self-help groups in India, in rural development and poverty alleviation efforts. She was involved in an evaluation study of the project, Development of Women and Children in Rural Areas undertaken by National Institute of Bank Management, Pune. She has also written about the Maharashtra Rural Credit Project. She is currently a visiting faculty member at the University of Pune and Centre for Development Studies and Activities, Pune.
