Microenterprise Development in Nashik, India

180 km northeast of Mumbai in Maharashtra state lays Nashik, India, an ancient city and a place of pilgrimage for Hindus. It is fast becoming an important industrial center for Western Maharashtra. Village Earth has focused on the rural area surrounding Nashik, which consists of 12 villages with around 2000 people each. The population of these rural areas consists of three major groups: Adivasi tribal members who are mostly landless laborers; Maratha Hindu farmers who are mostly small land holders; and Neo-Buddhists who are a combination of small land holders and landless laborers. Originally, eighty-percent of the population was solely dependent on agricultural activities that could only take place during the monsoon season. Once the harvest was over they would become migrant workers and flock to the city. After the monsoon season, the community also experienced a shortage of both drinking and irrigation water. This lack of water led to undernourishment and poor health of many vulnerable community members especially children.

Village Earth worked with these communities and developed a multi-sectored and sustainable village development plan that evolved from the villager’s aspirations. The villager’s selected three areas as being of the highest priority:

Economic Self-Sufficiency:

• To provide additional water for farmers to be able to grow more than one crop per year.
• To implement a large-scale watershed management effort.
• To establish a loan fund and micro-credit for entrepreneurs to start micro-enterprises.
  

Social Self-Reliance:

• To work in partnership with local government schemes that provide health services and mid-day meals to school children
• To establish an environmental rehabilitation program
• To assist schools with funding for basic materials such as books and upgraded flooring
• To improve computer literacy amongst the children
• To create an awareness program for women on health and family planning, as well as womens' literacy classes
  

Empowered Village Governance:

• To develop community organizations and training programs in sustainable community development
• To link up with single sector development and funding agencies
• To create local governing boards to give the community a voice in government.
  

Micro-Finance Loan Fund

To accomplish these goals, Village Earth worked with the communities to formulate a strategic plan of action. One action that has already been implemented was the establishment of a micro-finance loan fund for entrepreneurs to start small businesses.

Micro-finance has been established as an effective way to help economically-challenged rural people become self-dependent. One method of micro-finance is a savings-based program in which members of the community put their own money into a fund that is then lent out to members who wish to start small businesses. Initial money for starting the fund was provided the Village Earth INVEST fund. The loans associated with these funds are on the order of $50 to $500 equivalent in local currency. For larger projects that require more capital outlay, another type of fund is necessary. This is where the Village Earth Micro-Finance Loan Fund comes in to play, which provides loans from $500 to $5000 equivalent in local currency.

The Village Earth Micro-Finance Loan Fund is made available to developing communities supported by a local NGO that has established a relationship with Village Earth. Prior to establishing a specific fund for a community, the community will have participated in strategic planning event to establish a long-tern vision and a strategy for achieving it. Furthermore, they will have developed organizational structures and action plans to support their strategies.

Many small businesses have already been initiated using money from the Micro-Finance Loan Fund such as:

• An autorickshaw/ taxi/ ambulance service
• Three grocery stores
• A festival/ special events service provider
• A sugarcane juice stall
• A computer literacy institute
• A women’s agricultural trading cooperative
• A drinking water delivery business
  

After the loan fund was established and many small businesses had been established, the further economic development of this area was handed over to our partner specializing in economic development, Ecselance International.

According to a recent report from Vinod Parekh, Gramadoya Project Director, "We handed over the rural development project to the village based entity called GSBG , a self help group launched by us which is run by the youth we have trained. The micro finance project which has been adjudged a ' role model' by an Indian Bank and emulated by several banks in Malaysia is also being governed by them after they returned the loan with 5% interest to EI this January – 2 years before the stipulated timeline!