Community Led Microfinance

Despite being major contributors to India’s economic growth, women in the informal sector remain outside of traditional forms of financial institutions and services. Access to services, such as savings accounts and loans, are critical to protecting, managing, and growing assets. SEWA Bharat’s micro-finance program empowers women as independent financial actors giving them resources to save, invest, and protect their earnings.

SEWA’s microfinance work draws on the early methodologies of the SEWA Bank, by providing services and knowledge to help women grow and keep assets. SEWA provides access to financial services through self-help groups, financial cooperatives, and through business correspondent models throughout India. In addition, SEWA also leads financial literacy training sessions to help women make better financial decisions, create financial goals, and maximize their financial investments.

Informal women workers’ financial needs

Women in low-income and rural communities face many barriers to accessing formal and effective financial systems. Typically, families in marginalized communities rely on informal forms of finance, such as loan sharks, family members, and neighbors. Loan sharks and informal financial services often put families at risk to exorbitantly high interest rates and loss of important assets, such as land, housing, and savings. Unfortunately, it is the marginalized communities that need access to these financial services the most. Low-income population faces higher risks of health issues, poor education, economic shocks, and limited business opportunities, which often forces them to rely on informal sources of financial services. If families need to spend money on emergency medical expanses, pay for poor or damaged crops, or pay for higher education fees for their children, they often look to the easily accessible, yet expansive and risky informal loans. Families unable to pay back their loans spiral into a cycle of debt, further perpetuating poverty traps and contributing to the economic and social stagnation of families and communities.

Women also face several other barriers to accessing financial services.

  • Credit is not easily available: Since women remain outside of traditional financial services, poor women are unable to provide collateral to banking institutions. Women and marginalized families fall victim to loan sharks, who typically demand jewelry, land, and other assets at unfair interest rates. Additionally, illiteracy handicaps women and families navigating complex and complicated applications for loans, bank accounts, and insurance designed for middle-class clients.
  • Transaction costs of borrowing are high: Standard loan applications take time to process, and women often forgo  precious daily wages trying to obtain loans by visiting the banks.
  • Transaction costs of using savings facilities are high: Transportation to the bank, is another factor that can inhibit women from accessing banking services. In addition to forgoing wages, women have to face transportation costs. Banking services can be as far as 10-15 kilometers from villages.
  • Formal features of the banking system clash with women’s needs: The rigidity of loan terms and the lack of timeliness of formal credit, in particular, further negate the effects of low interest rates.

SEWA offers several types of services to provide equal access to loans to protect against economic and business shocks and promote business growth as well as savings and financial literacy training to help families plan and protect their earnings.

SEWA overcomes access and information barriers through two approaches: creation of institutions and services and financial literacy training.

SEWA Bharat’s Three Services for Women’s Financial Inclusion and Independence:

Self Help Groups (SHGs)


SHGa are small, economical, homogeneous, affinity groups of rural poor who contribute to a common fund to be lent to their members as per the group decision. SEWA Bharat operates using SHGs  in Bihar (Munger, Bhagalpur, Katihar and Siwan), Uttarakhand (Almora and Dehradun), and West Bengal (Murshidabad).

SHGs build stronger relationships within the community and provide support and accountability to women.

  • 10-20 women of similar occupation, residency, and economic condition
  • Monthly meetings, internal savings, loans, and repayment
  • SHG registration to open a single collectively-owned bank account in nationalized banks
  • Access to additional funding from banks through cash credit linkages




West Bengal


Uttar Pradesh


No of SHG







No of women







Total Savings (In Rs)







Total loans (In Rs)







Thrift and Credit Cooperatives

SEWA Bharat also supports Thrift and Credit Cooperatives. Thrift and Credit Cooperatives  are independently registered institutions that are self-managed and run by women at the grassroots level. The leadership, management, and direction is all run by and for the women who are shareholders and account owners. Not only do these institutions provide dynamic financial services, but they also allow women to invest and grow their assets within the institution. SEWA Bharat’s microfinance services have been greatly inspired by the SEWA Bank, see here for more.

T&C product portfolio
  • Savings: Members can choose from a range of savings schemes depending on their requirements that include daily, weekly and monthly savings. Savings can be done through compulsory deposit, recurring deposit, fixed deposit or optional deposit.
  • Credit and Loans: The co-operative offers regular loans to the members at a declining interest rate of 1.5% per month to be repaid in 10 installments. Gold loan is a secured loan that has been added to the portfolio of the co-operative following member demand. A gold loan up to Rs. 15,000 is to be repaid in 10 months, Rs. 15000-Rs 30000 in 15 months and Rs 30000- Rs 50000 in 24 months at a declining rate of 1.5%. Another product known as the emergency loan, where up to Rs 2000 is offered to members within 24 hours is to be repaid in 4 months at a declining rate of 2%.
Services and benefits

Bank saathis (Agents) are leaders within the community who serve their community on behalf of the Thrift and Credit Cooperative. These women provide door-to-door service to women who are limited by time, cost, and mobility. Saathis collect, deposit, and distribute savings, loans, and interest on behalf of the Credit Cooperative, ensuring everyone has access to fair financial services. By employing members of the community as saathis, SEWA also invests in the leadership of communities and provides employment to women.

Business Correspondent (BC) model


Uttarakhand and other remote areas in India are unbanked due to difficult terrain, poverty, and limited education. In Uttarakhand, bank centers and ATMs can take a day of travel, making a deposit or withdrawal extremely difficult. This unequal access causes areas to remain underdeveloped, under-financed, and underserved compared to other places in the country and forces women and their families to rely on loan sharks and other informal financial services.

In order to provide equal access to formal financial institutions, SEWA Bharat has partnered with the State Bank of India to provide banking solutions for remote communities in Uttarakhand. SEWA’s Business Correspondents model provides communities with door-to-door services on behalf of the State Bank of India. Additionally, this contributes to an employment opportunity for women in the area to serve as business correspondents, who provide financial services and information to their communities.

  • 83,056 savings accounts and 11,921 no frill accounts opened
  • Over 1,400 loans worth more than Rs. 36 million distributed
  • Employment to 34 SEWA members
  • Rs. 2,84,483 total income generated for poor women
  • State Bank of India issues a Business Correspondent Code to the SEWA women bank saathis engaged as customer service points CSPs, who provide a bank services. The rural poor are connected with bank accounts directly with the State Bank of India.
  • A Little World (ALW), the technology provider leverages low cost technology to integrate micro banking with network brand ZERO.
  • The ZERO platforms convert new Near Field Communication (NFC) mobile phones into secure and self-sufficient bank branches.

Financial Literacy Training

Not only do low-income and marginalized communities suffer from a lack of equal access to financial services, they are also less familiar with how to use and how to manage financial assets. SEWA strengthens its members’ capacity to use financial services by leading proprietary and frequent financial literacy trainings in communities. These sessions emphasize how members can plan, save, and invest their assets. SEWA’s financial literacy training has been an essential component to its microfinance solutions since the early 1970’s and has allowed women to invest and diversify their businesses, invest in their children’s education, and build a more secure financial future to protect against economic shocks and health emergencies.

Bridging the Digital and Financial Divide

Financial services are becoming increasingly digitized. Mobile payment systems, digital transactions, and online banking have revolutionized India’s financial landscape. However, due to low rates of digital access and digital literacy of women in poor communities, there is potential for a significant portion of the population to be left behind and unable to access these benefits. Women are less likely to own a phone, be able to access Internet. Therefore, SEWA has invested in not only providing financial services, but also digital financial services to women in the rural and low-income communities.

Learn more about SEWA’s digital initiatives here

Bijli Mobile App: Bringing Bihar Online

Mobile banking has revolutionized the way Indians conduct business, access financial resources, and manage their banking services. Mobile banking has allowed individuals to pay, transfer, and deposit money with just a few presses on their phones. The ability to quickly and remotely conduct transactions has sparked economic growth and business.

SEWA dismantles the access and knowledge gaps that prevent communities from accessing mobile banking systems. Through a proprietary mobile app, Bijli, SEWA has created a digital solution for over 13,000 account holders in rural areas in Bihar. Members are able to quickly conduct transactions with their accounts through the application, which offers them a quick, transparent, and accurate way to bank. Find out more about Bijli here.


SEWA Bharat is constantly looking for new, innovative  project opportunities. Please write to us at to partner with us.