0427 - 2415850
48, Chairman Chinnaiah Road,
NM Extension, Salem 636007, Tamilnadu.

A Rationale

Village communities are primarily agrarian communities where the local people eke out an existence from the land for daily wages.

With the failing monsoons and lack of adequate irrigation facility, a large percentage of this agrarian community remains unemployed for almost 6 to 8 months of the year. An almost natural consequence of this circumstance is that the farmers borrow money from money lenders. Up until the past decade, these money lenders within villages extended small loans at very high interest rates. Often the terms are so onerous that it takes a lifetime of payments to fulfill the debt.

Without a steady source of income, the debts become impossible to repay. A survey revealed that the rate of suicide among these farmers is increasing. In addition, unemployment has led to other social problems in the community. Alcoholism and domestic violence are widely prevalent. Some of the unemployed try to eke out an existence through livestock, but they are unable to sustain their efforts because of a lack of knowledge on proper care of the animals.

Having identified these problems and their causes, IGL encourages the people, especially women, to start micro business such as a retail grocery shops, firewood shops, vegetable shops, and rearing goats and cows to generate an income both for their families as well as to develop the village economy.

By providing micro-credits loans to the tune of INR 5000-10,000 (approximately USD $100-$200) per person, IGL is able to help them establish these micro business through which the women will be able to raise a significant income and have the possibility of improving their businesses.

These micro-credit loans are not distributed randomly but are provided based on recommendations of the village Women’s Transformation Groups (WTGs). These groups also provide the guarantee for the repayment of the loans. The micro-credits loans are usually repaid in monthly installments with a small interest. Repayments are set up as an ongoing revolving fund to help other families in the village.

This approach in turn facilitates the sustainability of the development initiatives in the village. The micro-credit loan program serves to uplift both the individual family as well as local economy.