SEWA BANK

SEWA
• Self Employed Women’s Association
• Promoter : Mrs. Elaben Bhatt
• Started in : 1972 (with 4000 members
registered as SEWA bank in 1974)
• Share capital: starting time : Rs. 40,000/-
(Registration)
• Membership : more than 9,00,000 in the
country
• Savings of members: over Rs. 70 crores
• Turning point:
Small Co-operative Bank to a multi-service
organization providing integrated set of
services.
• It is an NGO with multi-activities.
• Ms. Jayshreeben Vyas
Managing Director
SEWA Bank.
You can see Case Study on SEWA Bank
in Handbook on Management Cases; by
B.S. Sahay, Tojo Thatchenkery and G.D.
Sardana.
• SEWA is an organization of women (trade
union for organizing self-employed
women) workers in the informal sector
• 96% women workers are in India in
SEWA.
 Initial member’s occupation
• Vegetable vendor
• Home based workers
• Construction workers
• Head-loaders
• Laborers
• Rag-pickers
• These workers were not getting a regular
salary/ employment with welfare benefits
like other workers in the organized sector.
• These workers were contributing in a big
way to the nation’s economy, but they
were invisible & inaudible.
 Position of Members
a. Work for 18 hrs. on an average basis
b. Lived in extremely poor condition
c. Earning not more than Rs.50 to 100 per
day
d. Position: continuous exploitation by
middleman or moneylenders
 Two common problems faced by these
women were:
1. High interest rates to be paid to money
lenders, &
2. Lack of assets (No assets)
Q. What was the need of these women?
Ans. These women needed CREDIT
Initial try: SEWA arranged loans from
local banks but due to :--
a. illiteracy
b. poor socio-economic status of women
was not acceptable to banks.
• In one Meeting of SEWA in 1973 gave one idea-
WHY NOT START A NEW BANK ESPECIALLY
FOR THEM .
• Women leaders had collected Rs. 10/- each
from 4000 members for 6 months & created a
corpus fund
(10x4000=40,000x6=2,40,000)
• Amount was sufficient to start a Bank & get
Registration.
 HURDLES
• Several hurdles came in the way but
“Shri Mahila Sewa cooperative bank was
registered as a Cooperative Bank in May
1974”
Two controlling authority:
1. RBI (As Regulatory Authority)
2. State Govt. (As Registering Authority)
 Mission of SEWA bank
“ SEWA bank exists to reach to maximum
number of poor women workers engaged
in un-organized sector & provide them
suitable financial services for their socio-
economic empowerment & self-
development, through their own
management & ownership”.
 Main objective of SEWA bank
• Bringing poor self-employed women out of
the vicious circle of poverty (out of the
clutches of money lenders)
 SEWA Bank applied the approach:
a) Freedom from debt :
(by providing loan at Lower rate of interest
i.e. about 12%)
b) Capital formation:
( To inculcate habit of saving to form
Capital)
 Objectives of SEWA bank
1. Providing facilities for savings & FD.
2. Providing credit for productive , economic &
income –generating activities to self-employed
& the poor.
3. Extending technical & management assistance
in:
a. Production
b. Storage
c. Procuring
d. Designing
e. Sale of goods & services
f. Buying raw materials , equipments tools
4. Establishing direct links with industries,
wholesalers & producers.
5. Guidance in marketing of their goods.
6. Accounting services to members
individually & to women’s groups.
7. Helping in maintenance of proper
accounts of their business/activity.
• Providing facilities to rescue their
Jewellery from Brokers (Lenders) and
private money-lenders and giving loans
against Jewellery.
• Adopting procedures and designing
Schemes suitable to poor Self-employed
Women, like– collecting daily Savings from
their place of business/work, or houses.
• Providing Saving Boxes and giving
Training and assistance in understanding
Banking procedures.
• Providing Financial Literacy Services
which include Financial Planning,
Retirement Planning etc.
 BUSINESS MODEL
1.SEWA Bank works as other Bank with a
difference.
2.The difference is that –In the SEWA Bank
the Bank has to go to the Customer
(Whereas, in other Banks, the customer
comes to the Bank).
3.Account holders of SEWA Bank are 80%
Urban Self Employed women and 20%
from Rural Self Employed women.
4.Urban depositors are :
• Vendors
• Laborers or small service providers.
• Home-based workers.
• Average monthly income is Rs.1500 to 3000 per
family.
• Depositors are from THREE sources :-
(i) Through SEWA Organizers who work in
the field and are in personal contact with
self employed women.
(ii) Through existing members of SEWA and
SEWA Bank.
(iii) Through word of mouth (when people
say to each other- Individual publicity.).
 SEWA BANK’s Head-office:Ahmedabad.
• There are THREE Branches having
members over 4.00 Lacs.
• OTHER FACILITIES OF SEWA BANK:
(1)Regular meetings of members – where they
share experiences with each other.
(2)SEWA is set-up in the form of a Cooperative
Society – each member gets the right to vote
when she joins the Bank.
 (3) Members elect Board of 15 members.
(4) If the Bank earn profit, it distributes dividend
among its members.
(5) SEWA Bank started Banking activities in
Rural Gujarat in 1997 (with permission of
RBI)

• SEWA Bank follows the Association

based Model (Like AMUL) i.e. Village
Milk Cooperative Society.
• Head Office in Ahmedabad.
• District Associations in SIX districts:
1. Sambarkanta
2. Vadodara
3. Ahmedabad
4. Anand
5. Mehsana
6. Gandhinagar.
• Every District has one Group-Leader who
is having 3-5 years experience known as
Spearhead (i.e. Commission Agent and
not an Employee).
• One District Group-Leader has under him
35 to 40 SHGs (each having 15 to 20
Women) per Taluka/Block or village.
• At Taluka level there is one Association’s office
where following staff is working:
1. Coordinator
2. Trainee
3. Clerk
4. Auditor
• In Villages there is One SHG Leader having
their own Bye-laws, Membership rules,
Savings rules, Loaning rules and
Management. Group-leader gives Training to
all members.
ORGANISATIONAL STRUCTURE:
• Poor Self Employed Women (Owners)
|
Board of Directors
|
Managing Director
|
General Manager
|
Branch Managers
Structure of Bank Branch
Branch Manager
|
Functional Departments
|
Counters
|
Helping Hands
|
Bank Sathi
 Governance
Structure

Members
(self employed)

Elect
Directors elect Chair person,
vice-chair person
(out of total 15-12 are elected ,
2 nominated by women organization
1 paid MD)
Appoint

MD

Gen Manager

Manager

Staff
• Deposits : Sewa has many deposit schemes.
• Loans:
– Internal lending (interest is 24%)
– Association loans (6 %to group+18%to Association)
– Individual loans (24%) = 3% to group,6%to
association,15% to SEWA bank)
– Interest is 20%(Scheme under experiment):
• Experiment basis: 1% goes to group
1% goes to the agent
18% goes to the bank
• Door-step Banking : Their mobile Van
travels in the area and collect cash. Two
mobile vans run in Ahmedabad. Daily
collection is more than Rs.30,000 per day.
• Bank Sathis : They are Bank’s frontline
workers. A Bank Sathi works in many-
fold: Maintains A/cs of depositors, local
leader, Good credibility, strong, energetic
and alert, active within SEWA.
 Deposit scheme
1. Recurring deposit for : Rs50/-p.m.in 1styr.
(“Riddhi Siddhi Yojna”) Rs.100/-pm in2nd yr
Rs.150/-pm in 3rd yr
Rs. 200/- pm in 4th yr
Rs.250/- pm in 5th yr
Returns: After 5 yrs Rs.10,169
After 10 yrs.Rs.15,110
After 15 yrs. Rs.22,452
2. Ghar fund yojna (house fund scheme)
• deposit Rs.250/- , Rs.500/- or Rs.750/-
monthly for a period of 5 years or more
• Pay regular installments for 5 yrs & participate
in a lucky draw
• Build own house after 5 years with the amount
received
• Client may get some loan from bank, if
required
 INVESTMENT SCHEMES:
• Rs. 250 p.m. Rs.500 p.m. Rs.750 pm
Return after 5 yrs.
• Rs.18,466 Rs.36,932 Rs.55,398
Return after 10 yrs.
Rs.45,906 Rs.91,811 Rs.1,37,716
 MANGAL PRASANG YOJNA:
• Special occasion Scheme:
• Rs.200/- p.m. for 5 years Plus(+)
• Lucky Draw yearly basis (gets lump-sum
amount under draw)
• Rs.200/- p.m. after 5 years becomes
Rs.14,773/-
CHINTA NIWARAN YOJNA :
1. Rs.40/-p.m. for 5 years
becomes Rs.2955.
2. Rs.80/- p.m. for 5 years
becomes Rs.5910.
3. Rs.120/-p.m. for 5 years
becomes Rs.8865.
 SWAPNA SIDDHI YOJNA :
• Fixed Deposit for 3,5,7,10 years.
• Rs. 500/- after 5 years becomes Rs.743/-
• Rs.500/- after 10 years becomes Rs.1104/-
• Compound interest is given in this scheme
• Interest is calculated on quarterly basis.
• Interest on Rs.1000 @ 12% per annum will be
Rs.120 with simple interest and Rs.126 with
compound Interest for one year.
 RECURRING GOLD YOJNA:
• Recurring deposit of Rs.50/-per month will
be Rs. 620 after 1 year.
• Like-wise Rs.50/-p.m.
After 2 years Rs.1275/-
After 3 years Rs.1990/-
After 5 years Rs.3610/-
After 10 years Rs.9060/-
Thus, small savings becomes big amount for
poor people who can buy some GOLD also.
 INSURANCE SCHEMES
Member's Insurance( Started in 1992)
• There are three different Schemes:-
• SCHEME NO. I :
Annual premium Rs.75 FD Rs.700
Natural Death Rs.3000/-
Accidental Death Rs.40,000/-
Accidental Death of Husband Rs. 15,000/-
Hospitalization up to Rs.1300
House & Asset Insurance up to Rs.5000/-
Against Fire, Flood, Natural calamities.
 Husband’s Insurance
Annual Premium Rs.45/- & FD Rs.450
Natural Death Rs.3000
Accidental Death Rs.25,000/-
Hospitalization Up to Rs.1300/-
Total Risk Covered for
Member and her Husband Rs.120 (as premium)
FD Rs.1150
(Rs. 700 +450= 1150)
 Scheme II
• Annual Premium Rs.180
• FD Rs.1800
• Natural Death Rs.5000/-
• Accidental Death Rs.40,000/-
• Accidental Death of Husband Rs.15000/-
• Hospitalization Rs.4500/-
• House & Assets insurance Rs.10,000/-
• Likewise there are other Schemes, Scheme III
and Scheme IV with more premium and other
benefits.
 IMPORTANAT DATA OF SEWA
BANK AS ON 31-3-2008
1. No. of Deposit Accounts: 2.50 Lacs.
2. Total Deposit of Bank 70.00 Crores
3. Total No. of Loan A/cs >1.00 Lacs
4. Amount of Loans >30.00 Crores
5. No. of Shareholders >60,000
6. Amount of Share Capital >3.50 Crores
7. Total Working Capital >100 Crores
8. Net Profit (Decreasing) >50 Lacs
OTHER IMPORTANT FEATURES
OF SEWA BANK :
1. Pension Scheme – 2006 :Bank introduced
India’s first Micro-pension Scheme in association
with Unit Trust of India Asset Management
Company.
2. SEWA Bank collects individual contributions and
sends them to UTI on a monthly basis.
3. UTI have opened individual retirement accounts
from which cash is invested in Debt and Equity
by UTI.
3. Energy Product :- SEWA bank initiated
Project Urja in 2006 with SELCO, the
technological partner that designs solar
and bio-gas cooking/ lighting devices.
The users of this gas/light are :
(a) Mahila Housing Trust.
(b) Sewa Bank.
 Use of solar and bio-gas Urja:
1.Smokeless stove by members.
2.Solar Lantern for vendors and midwives.
3.Solar lights
4.Portable solar cookers and
5.Bio-gas
To improve the living standards of Sewa
members (more than 3 lac members)
4.Financial and Business Counselling.
5.Information Technology : Sewa Bank uses
I-flex software for its Core Banking as is
used by any other commercial Bank.
Sewa has its ATMs at Head-office at
Ashram Road. It works in Hindi, English
and Gujarati language. MIS reports are
prepared reg. Loans, Deposits etc.
6. SEWA Bank is working on the Mobile Bank
branch in the city and hand-held device for
Bank Sathi working in the Branches.
7. SEWA Bank has adopted marketing of its
products and services on a Marketing Vehicle
i.e. a Mobile Van with a 29” colour TV, CD and
Cassette player, generator and posters. The Van
covers over 200 areas and covers around 6000
women. It makes publicity and makes aware
the common people in chawls, and slums.
8. Human Resource Management : Total
strength of staff is 120. Bank recruits
only women for most of its positions.
Proper Training is imparted by SEWA
bank.
9. Others who are associated with SEWA
are Agents and Group Workers who gets
commission on deposits and other
works.
10. Collaborations and Alliances : SEWA has
collaborations with National and International
Organizations in its developmental activities.
Some of them are :
(a) Coady International Institute, Canada.
(b) Indian School of Microfinance for Women,
Ahmedabad, India.
(c) Women’s World Banking, New York, USA.
(d) Friends of Women’s World Banking, Ahmedabad,
India. ********