Why Aajeevika ?

• The self-help group (SHG) based microfinance movement of the past decade has not touched the urban poor in a significant manner. Success stories of large SHG networks, especially of poor women that have mobilised impressive savings and achieved linkage to formal credit institutions are primarily rural. There is a huge unmet demand for financial services among the urban poor.

• Urban microfinance interventions have had to grapple with issues of migration (often in the form of forced relocation of urban slums), low levels of trust and vulnerability to external shocks (e.g. cancellation of hawking rights by municipalities, seizure of cycle rickshaws, arrests etc.).

• Building viable models to meet the need for financial services of the urban poor (savings, credit, savings linked health cover and insurance etc.) is not an area of major NGO or donor focus.  Funds for social intermediation, capacity building, infrastructure and on-lending are meagre. Banks are also unwilling to enter the high-risk, low value retail credit market of urban slums.

• In a large metro such as Delhi, the poor are physically marginalized (as more and more slum clusters are shifted to the outer periphery of the city) and adversely impacted by a sharp restriction of their livelihood space in recent times (e.g. stricter bans on pavement and mobile hawking, physical restrictions of movement in residential colonies through the erection of barriers and the deployment of private security by residents, the privatization of garbage collection etc.) Macro trends, such as the large scale shifting of polluting industries from the heart of the city to neighbouring states, have also adversely impacted livelihoods.

• The squeeze on livelihoods is reflected in the human condition of the poor : higher morbidity rates, a higher percentage of low birth weight babies, lower enrolment and higher school drop-out rates, to name but a few. This is exacerbated by poor habitat, lack of adequate access to drinking water and sanitation facilities.

• Despite these disadvantages and deprivations, the poor cope and survive. They rely both on their intuitive skills as well as the opportunities offered by the physical and legal gaps that they inhabit. They function in the face of the stiffest odds and an unsupportive policy environment and represent both a challenge and an opportunity in social investment and human capital building.

• Aajeevika seeks to use this environment to build a model of viable microfinance.  The objective is to work through the agency of women towards community empowerment and to build institutions that help to address basic livelihood issues.  The vehicle of entry to achieve this goal is microfinance.  We believe that economic empowerment is the most basic form of empowerment and this can be the route to building institutions of the poor that are able to negotiate and demand a better life for themselves.

• Aajeevika’s strategy may be summed up as under: