The Women's Bank is a cooperative society built, owned and operated by and
for poor women in Sri Lanka. It was incorporated under the Cooperative
Societies law in 1991 as a District Society and upgraded to national level
in 1998 as the Sri Lanka Women's Development Services Cooperative Society
Ltd (Women's Bank). It is engaged in a mission to put the resources, ideas
and support of its own members to solve their own problems using the
cooperative principles of self-help and mutual aid.
The Bank has around 25,000 low-income members and operates in16 out of the
24 administrative districts in Sri Lanka. It has 55 Bank Branches in 6
districts to serve about 15,000 members through around 1,400 groups. In
another 10 districts it has mobilized around 10,000 poor women into about
800 groups. These groups are now in the process of being federated into
Bank Branches.
The Women's Bank has established a unique management structure to ensure
transparency and accountability at every point of its operation. It is a
bottom-up and member-focussed organisation built solidly upon a base of
women's groups who in turn are clustered into bank branches which in turn
are federated into a unity of elected national leaders who in turn account
to the annual general meeting of the members.
The base of the Bank is made up of some 2,200 small solidarity groups
called Women's Groups. These Groups have a membership ranging from 5 to 15
poor women living in close proximity to each other and who choose to come
together voluntarily. They mobilize their own savings and use them to
provide small loans to their fellow group members thereby enabling them to
meet many of their immediate urgent day-to-day needs. An elected Treasurer
known as a Group Leader manages this group fund. The other office-bearers
of the group are the President and the Secretary.
The Bank Branch or Pradeshikaya is the next layer of management in the
structure. It is a pool of 10 or more Women's Groups who live within
reasonable travel distance of each other. The average Branch size is
around 250 members. Its purpose is to address the issues that members
cannot tackle at the group level. A board of directors elected from among
leaders (Treasurers) of the constituent Women's Groups manages these Bank
Branches. The membership of Bank Branches consists of both constituent
groups and their individual members. Although the Women's Bank is a
primary cooperative society, these Bank Branches are empowered through its
by-laws to function as autonomous accounting units. They can enrol
members, accept deposits and grant loans. They maintain their own sets of
books of accounts and prepare periodical financial statements as
stipulated by the Women's Bank by-laws and directed by the Bank's National
Council.
At the unity or apex level the Women's Bank has the National Council and
the National Executive Council. The National Council consists of leaders
(Treasurers) of the Bank Branches. The National Council is responsible for
making policy decisions and for all monitoring and coordinating functions
of Bank Branches. Research, development, training and promotional
activities also come within the purview of the National Council.
The National Executive Council is an elected body from among the National
Council members and executes its decisions through the General Manager.
The General Manager is the only paid officer in the entire Women's Banks
set-up. The National Executive Council is responsible for preparing
consolidated accounts of all Bank branches and submits them for the
statutory audit done by the Department of Cooperative Development.
The Women's Bank is basically a savings (thrift) and credit cooperative
society. Its loan packages range from Rs.250 (UK£1.46) to Rs300,000
(UK£1,750). In addition to providing loans it also gives the following
added services to its members: Insurance scheme; Children savings
programme; Welfare fund; Death donation scheme; Human resource development
programme; Education fund; and Health care service.
The health care service is now in the process of promoting cooperative
health centres providing facilities for every patient to be a member. Even
with all these added services and geographical expansion the Women's Bank
is able to maintain high levels of accountability and transparency at
every point of its operation and at the same time achieve viability and
maintain almost a 100 percent loan recovery rate.
Over the last 15-years the Women's Bank has periodically drawn lessons
from its operations as a means of enhancing the provision of its services
to its member-owners. Nine of these best practices are outlined below. The
listing is not prioritised in any particular way.
1. In Sri Lanka cooperatives have been recognized since early in the 1900s
as an effective tool for poverty alleviation and economic development. Out
of a population of about 19 million (around 4.5 million families) some 2.9
million are members of Multi-Purpose Cooperative Societies. A further 1
million have become members of the 8,400 registered Thrift and Credit
Cooperative Societies that operate mainly in the rural areas. According to
recent Central Bank reports these cooperatives have mobilized rural
savings amounting to Rs.12.9 billion (UK£75.4m) from their members. But
they have been successful in utilising only Rs.3.5 billion (UK£20.4m) or
27 percent as loans for these members. Seventy-three percent of the funds
collected have seeped out of the areas from which they were mobilized. The
Women' Bank on the other hand has provided Rs.187 million (UK£109k) as
loans to its members in 2003 utilising a funding base of Rs.140 million
(UK£81.8k). One of the important principles adopted by the Women's Bank is
to utilise funds in the same areas that they were mobilized.
2. Many cooperative societies are unable to convene a general meeting due
to their inability to gather the required quorum. The Women's Bank has set
up a dynamic management structure enabling it do its business with almost
a 100 percent effective participation of the membership.
3. The Women's Bank has built-up a 100 percent reliable customer base. Its
membership is open only to poor women who have acquired a savings and
credit culture by being a member of a Women's Group. All members before
being graduated to mature membership have to go through a 2-step loan
process each of which has 3-loan stages. In Step 1 the members must
complete 3 cycles of the loans process (Rs.250; Rs.375; Rs.500) while in
Step 2 they must complete 2 cycles of the loans process (Rs.1000; Rs.1500;
Rs.2000). When the members become matured after borrowing and duly
settling these loans they become entitled for bigger loans depending on
their entrepreneurial capacity and the resource availability of their
particular Bank Branch. The normal size of a loan given by a senior Bank
Branch is around Rs.300,000 (UK£1,750).
4. The Women's Bank does not seek any collateral for any loan except the
solidarity group guarantee. As groups become responsible for all loans
given to their particular group members the Women's Bank has no problem of
recovering them. It has almost a 100 percent recovery rate.
5. The Women's Bank does not undertake any business other than savings
(thrift), credit and member promotional activities.
6. The Women's Bank provides loans for any socially acceptable purpose
such as sickness, marriages, funerals, meeting social obligation,
education or redeeming external loans including pawned goods, etc.
7. The Women's Bank does not depend on subsidies or handouts.
8. It does not deposit member's money in any outside institutions or
banks. One important technique used in the Women's Bank system is to keep
its cash balances to the minimum level. Its funds are always in
circulation being used by one or another of the members.
9. Although the Women's Bank charges interest of 24 percent it is paid
back to the members as interest on their savings and the redistribution of
excess income over actual costs. Thus the Women's Bank's effective
interest rate has become not 24 percent but between 6 to 7 percent.
Nandasiri Gamage is the General Manager and Justin Keppetiyagama is a
financial advisor to the Bank. E-mail: wbank@sltnet.lk
Tel: 94 1 2681 355
Exchange Rates: Rs100 = UK£0.58435 (31/12/2003)
For further information see: Our Money Our Movement: Building a poor
people's credit union, Alana Albee and Nandasiri Gamage, ITDG
Publications, London, 1996. ISBN 1853393386
Real Voices in Development - A Hundred Stories of Women's Bank Members
http://www.caledonia.org.uk/realvoices.htm
Women's Credit Union of Sri Lanka
http://www.caledonia.org.uk/realvoices.htm#credit
