Bihar Rural Livelihoods Project is Liberating the Poor from Debt Trap

June 22, 2010


Kunti Devi, mother of four, in Shekhwara village in Gaya district of Bihar had barely an acre of farmland. Faced with frequent droughts, the land was clearly not helping the family earn enough to run their household expenses. Kunti Devi had to mortgage her land to the local moneylender and the family was forced to work as laborers in other farmlands.

That was five years ago. Today, sitting amidst a group of women from her village, Kunti Devi has a different story to tell. Two years ago newer avenues opened for Kunti Devi in the form of the $73-million Bihar Rural Livelihoods Project (BRLP), known as JEEViKA, supported by the World Bank. In less than three years, the project that aims to mobilize farmers into Self-Help Groups (SHGs) and to empower them to retrieve assets, credit and social services such as food and health security, has come a long way – from lowering social barriers to raising productivity, and from introducing farmers to savings to opening doors to credit. “I took a loan of Rs 10,000 from the self-help group to free my land from the local moneylender. Today I’m able to repay it at a very low rate of interest as against what I was forced to pay to the moneylender. Thanks to better farming methods introduced under the project, the productivity from my land has gone up four times. My income has increased and I am able to send my son to college,” said a beaming Kunti Devi. Villagers had to borrow money at a considerably higher interest rate from local money-lenders, a practice that ended with the loans that came from the SHGs.

Shedding Poverty

Not only Kunti Devi, but thousands like her have taken loans for repaying old debts, reclaiming their fields and pawned assets; some have turned entrepreneurs, opening small shops. Once the SHGs were established, the women soon discovered that they could also act as pressure groups to lobby for benefits and services their villages were entitled to, such as electricity supply and roads as well as access to government food and employment schemes.

A resident of Shekhwara village, Sobha Devi’s husband threatened to throw her out of the house if she insisted on joining a SHG where she was expected to contribute Rs.5 every month. “He beat me up, but I did not give up. I kept coming for the meetings (each SHG has regular meetings, and members are penalized for not attending). Finally, when I took a loan of Rs.20,000 to pay off our old debts, that is when he realized the importance of what I was doing,” she recalled.

In fact the SHGs have tied-up with the local banks that grant them loans. These loans are in turn disbursed among the group members on the basis of need. They have a meeting and take stock of each other’s needs, decide who the most disadvantaged is and decide the loan amount.

The women also decide the repayment strategy and have an excellent record at the bank. Sunil Narayan, the Manager at the Bank of India in Gaya, said that the women have never defaulted. “They are good business for the bank with a 100 per cent repayment record. It is profitable to give them loans and our branch alone has lent out Rs.45 lakh to the SHGs.”

Till February 2010, about 17,044 SHGs, with 96,000 members, have been formed in 1,366 villages of 18 blocks in Bihar. When completed in 2012, the project will have covered 500,000 families in 4,000 villages spread across the districts of Nalanda, Gaya, Khagaria, Muzaffarpur, Madhubani, Purnia, Supaul and Madhepura.

New method of farming

Kunti Devi, like several others, also decided to adopt a new way of growing wheat that the project was promoting. It takes particular care of the root– boosting yields at least three-fold. “This method of farming focuses on better root growth as the root is the mouth of the plant,” said Debaraj Behera, State Project Manager for Livelihoods for JEEViKA. “If the root is taken care of, it gives support to the tillers, and in the last three years we have seen yields in wheat increasing dramatically.”

JEEViKA introduced the System of Wheat Intensification or SWI in Bihar’s drought-prone Gaya district in 2007 and 25,000 wheat farmers are piloting the scheme throughout the state.

The system, based on low-tech methods, may be more labor-intensive than traditional techniques, but it requires less seeds, water, pesticide and fertilizer, farmers and experts say. “We were living a hand-to-mouth existence before and we just couldn’t manage to eat, let alone put our children through school,” said Manna Devi, mother of three.

“We were only producing about 30 kg of wheat which lasted us four months and we had to take loans, and my husband had also taken a second job as a rickshaw puller in order to make ends meet.”

Devi says she now produces about 80 kg of wheat - enough to feed her family for a year - and hopes to start selling extra crop.

In the nearby village of Nawadhee, villagers using SWI proudly display their plots filled with tall, bold and bulky wheat crops which stand alongside their shrunken and skinny traditionally cultivated counterparts.“You can see the difference immediately - the number of tillers was on average about four, and now from one of my crops I have counted 75 effective tillers,” said Sudha Devi, who adopted the new technique last year after seeing results in neighboring villages.

Own Identity

“The JEEViKA project is creating space for the poor and generating self-respecting and self-confident women,” said Budhabhhati Kartikeya, assistant collector of Gaya district.

Today these women have etched out an identity for themselves. A Class VIII drop-out Baijanti Devi has become a community mobilizer, but is best remembered for the work she did in getting a road constructed. In her Bhusia village there was no road, even after work was sanctioned the road continued to elude the people. “We tracked down the contractor and forced him to begin construction. Later, we realized that he was not providing the mandatory drainage system, so we talked to the laborers engaged and sought their help. They suspended work and forced the contractor to do the job properly,” said Baijanti.

Running the Public Distribution System or PDS

Meena Devi, coordinator of Jeevika in Sekhwara village explained how SHGs in Purnia and Shekhwara applied for licences and took over the running of the PDS in their villages.

Announcing an end to the faulty execution of PDS, these women manage the scheme to show how a well-managed PDS can improve access to food and health outcomes.