The slums of Delhi contain a large proportion of the city's workforce. Many people are employed in low-paying jobs, and are responsible for sending money to support their struggling relatives in rural areas. Typical jobs are rickshaw-pulling, driving, domestic cleaning or cooking, labouring, and working in or running small businesses such as tailor shops, tea stalls or cigarette shops.
Some people are able to earn a reasonable income, but they can still only live from day to day. It's difficult for them to save money due to family commitments (many people send much of their earnings home to their families in villages), a lack of security (their homes may not even have doors, so theft is a big risk) and problems such as illness that can leave them without an income for weeks.
People who need to buy a form of transport, pay for a son or daughter's wedding, start or expand a business, or just get themselves out of financial difficulties have nowhere to go for help. They often feel that banks are only for more privileged members of society, or they may have approached a bank and been turned away. The only option left is loan sharks who charge interest of up to 10% per month - 120% per annum - and who often resort to violence and intimidation if repayments are overdue.
We worked with the Ministry of Finance, Government of India, and 9 national banks to devise a scheme that allows slum dwellers to manage their money and become bank customers like other members of society. Most importantly, the scheme gives people a real chance to escape from poverty.
Asha staff and community volunteers are perfectly placed to speak to thousands of individuals in slum areas each day. They encourage residents to open bank accounts, and make sure that everyone who could benefit from a loan is aware that the option is available.
The scheme was launched in June 2008, and already several people have repaid their first loan and are able to take out another, larger loan. Millions of rupees in loans have been put to good use: people have strengthened, repaired or extended their homes, paid for their children's education, bought 2-wheelers in order to travel and get better jobs, and started or expanded a wide variety of businesses.
Some have tripled their incomes, and everyone is happy that they are no longer denied the basic financial services which so many of us take for granted. On top of these positive results, the bankers have been pleasantly surprised at the reliability of loanees from slum areas - 99% make their repayments on time, in contrast to the 95-96% repayment rate the banks report of their other customers!
Click to donate if you'd like to give more people the chance to lift themselves out of poverty.
I joined Asha's women's group and they taught me a lot. I've been able to take a loan and build another room on my house - our family income has doubled, and I can even give my children some pocket money as well as saving for their education.
Rainu, women's group member, Ekta Vihar
