ILKAL, India—Cooperative societies for poor, disabled Indians are growing across the state of Karnataka, helping entrepreneurs expand their businesses like never before possible.
Chaman Shab, a 38-year-old disabled villager from Benakanakonda, India, used to earn 200 rupees ($3) a day selling bangles, traditional Indian bracelets, but after joining a microfinancing society, he now earns 500-600 rupees ($8-$10) a day.
“When I was 25 years old, I sold bangles,” Shab said, “I would carry bangles in a basket on my head and roam around 5-6 villages every day.”
After saving some money for a few years, he upgraded his basket to a pushcart, and just last month Shab took out a loan from his cooperative society.
“I recently joined a society for disabled people, Sidharoda Angaviklara Swasaya Sangha (SASS), and got a 5,000 rupee ($82) loan last month to add stationary to my mobile shop,” Shab explained. “I now earn 500-600 rupees ($8-$10) a day,” doubling and tripling his income.
Shab suffers from a permanent hunchback he developed after a high fever when he was 12 years old.
“My parents were vegetable sellers and earned just 3-4 rupees ($0.05) a day,” Shab said. They were too poor to afford medical care for him.
SASS currently has 21 members, all with physical disabilities. They have a savings of 10,000 rupees ($163) and every month each member contributes 50 rupees to the groups’ fund. And whenever a member needs money for their business, a portion of their fund gets distributed.
Sunil Rajappa Balagavi, a shoe polisher with polio, has worked at the crowded bus stand in Ilkal for years. Today, he dreams of opening a chain of shoe shops, thanks to the cooperative society he joined.
“I got a loan of 54,500 rupees ($900) from the cooperative society we formed in town and I set up this shoe shop,” Balagavi said. “I want to be a businessman. I learned that to start a business you need an investment. My dream is to start a chain of shoe shops around town,” he explained.
Balagavi has already paid back 48,500 rupees ($800) of the 54,500 rupees he owes. “I make a loan repayment of 1,000 rupees every month and I save 100 rupees every month,” he said proudly.
According to Paul Ramanathan, the director of the SAMA Foundation that helps disabled people in India establish cooperative societies, 779 people with disabilities have organized to create similar cooperatives in the state of Karnataka. Their total loan distribution among themselves is 12 lakhs ($19,600) and their total savings is 6 lakhs ($9,800).
The government program called Adhara that provides financial services for disabled people, by comparison, only provides 20,000 rupees ($326) for a small number of disabled people, according to Ramanathan. On the other hand, loans from cooperative societies are more accessible, as it’s the groups’ own savings, and they have relatively lower interest rates.
Self-employment through securing a loan is vital to people with disabilities in India, as being physically disabled disqualifies them from manual labor jobs where most Indians of the lower economic strata work.
Encouraged by the availability of loans through the cooperative society, Shab dreams of motorizing his cart, then eventually setting up a bangle shop in the town market near his village.
“Our future plan is to have a cooperative bank for people with disabilities at the state level where people with disabilities can easily get a 3-5 lakhs [$4900-$8170] loan for their business,” Ramanathan said.