As the earth shook violently on April 25, 2015, the women of Lamosangu watched their homes and businesses fall, their livestock die. They watched as their entire livelihoods were destroyed. In their small village in the mountains of Nepal, all hope for the future was lost in minutes.
After the quake, Nani Maya and her friends – who have led a local women’s NGO, Gramin Mahila Srijanshil Pariwar, for years – sat under the mango tree next to the road. At first they expected help to come quickly, but gradually the scale of Nepal’s disaster sank in. When the first relief vehicles arrived, a few days after the earthquake, the women flagged them down and explained that even though they had neither homes nor an office, they were used to getting things done in the community and were ready to work to make things better.
While most donors focused on tents, sacks of rice and blankets, these women sought a different form of help. In 1996, they had worked with our NGO, World Education, to learn financial literacy skills. Back then, they were poor and struggling for survival every day. Twenty years later, they had prospered, and their savings group had grown; by the time the earthquake struck, they had about $14,000 in capital – almost all of which was out on loan.
In the weeks that followed the earthquake, the women, like many of the 700,000 families who lost their homes, had to borrow money to build shelter or purchase goods on credit. Those who had taken loans from the women’s NGO could not repay them. A month after the quake, the women met and decided they would just have to start over. Savings and credit had transformed their lives once. Could it do so again?
After the earthquake, World Education again partnered with the women of Lamosangu, and gave them a chance to test their theory about the power of microfinance.
Rather than construct houses or distribute supplies directly, we saw microfinance as a way to multiply the impact of modest relief resources by channeling funds through women’s groups. Combining small grants to rebuild their capital base with technical help, such as vocational skills training, has helped families revive farming efforts and small businesses.
The women have quickly turned over loans to replace livestock, buy seeds and equipment to get crops in, restock small shops and expand temporary shelters to accommodate homestay tourists.
They tell us there have been three major impacts from the support they received.
Many had felt powerless to do anything in the wake of the earthquake. Reviving their savings groups gave them a way to organize and advocate for support. This meant they were able to tap into additional resources from the government, such as health services, livestock camps and outreach services.
In several affected areas that had been left out of the initial relief process, due to distance from roads or lack of adequate documentation, women’s groups have successfully fought for their villages to be included. Some groups organized collective work to repair infrastructure. Others have started nurseries to produce fodder grass and tree seedlings to stabilize land damaged by the earthquake.
Investing in Livelihoods
Many households lost their stored food and saw their incomes dry up. Tarpaulins provided by relief groups and the initial cash transfer from the government of 10,000 rupees ($96) helped with temporary shelter. Despite this, many families still went into debt to local shopkeepers and moneylenders. While World Education provided just 624 rupees ($6) per person, infusing this cash into the group ensured that it rotated quickly between members as one loan was repaid and another taken.
Many of the women in Lamosangu are the wives of migrant workers, who are typically based in Malaysia and the Middle East, and were thus left to deal with the aftermath of the disaster on their own, often while caring for children and elderly parents. The women we assisted say the support they receive from each other has been lifesaving. There are few mental health services in remote mountain communities at the best of times, so peer groups bring women together to support each other in hard times.
It is often more photogenic for a donor to provide tarpaulins, sacks of rice, blankets or cash directly to a family in the aftermath of a disaster. Post-earthquake experience in Nepal, though, shows that recapitalizing and investing in women’s savings and credit groups is a valuable strategy to speed up recovery.
As the women of Lamosangu know – now from two experiences – microfinance can give people tremendous power to rebuild their lives.