Karnataka, a state in the South of India, has been declared drought ridden for 11 of the past 16 years and yet there is no comprehensive drought management policy in place that can kick off immediately to address rural distress.

139 out of 176 taluks[1] have been declared as being under severe drought this year. This has had a massive impact on rural Karnataka with farmers and farm workers suffering massive crop losses and being unable to repay loans taken for agricultural purposes.

For peasant women, drought presents a double whammy. Women make up the majority of the agricultural workforce in India and yet their identity as a farmer or a farm worker remains unrecognised and their labour remains largely invisible. Land ownership among women is also dismally low, affecting their access to institutional and public credit systems. In a predominantly patriarchal system, peasant women are left to bear the burdens of both family and work.

It is in this context that self-help-groups came about, as an alternative to address the problems faced by peasant women.  A Self-Help Group (SHG) is a group of 10-20 women, usually very poor, from the same neighbourhood who know each other and come together. They save money regularly (weekly, fornightly, monthly) and this pooled savings become the source of credit for these neighborhood women.

The idea got a boost when it was scaled up by the Government of Karnataka, in 2000-2001, under a State run initiative called  “Stree Shakti” (Women’s Power!). The stated objective of the program was to improve the financial conditions for rural women enabling them to gain more control over their lives through access to credit, trainings on skills that could create livelihoods and building a community based support and monitoring system that ensured compliance.

The SHGs were linked to nationalized/public sector banks. This system enabled women to take more control over their lives, guaranteed financial independence while simultaneously fostering a sense of community, thus providing an impetus to rural economies and helping curb the migration to cities.

As Farida, a peasant woman says, “what used to be individual savings earlier in one’s own kitchen became a community’s saving”

As of 2012[2], Stree Shakthi group members had saved Rs. 1118.05 crores (11 Billion Indian Rupees) since inception. 120,155 SHGs availed bank loans to the extent of Rs.1305.97 crores and have done internal lending of Rs. 3215.88 crores to take up various income generating activities.


Over the past decade, these SHGs have been approached by ‘private financial firms’ offering them better access to credit services if they banked with them. Their attractive offers coupled with the lack of access to government schemes/credit for women enabled the easy moving over from nationalized banks to private ones.

One of the biggest players in the field the Shri Kshethra Dharmasthala Rural Development Project is associated with a temple that enabled it to quickly build trust among the rural populations. Having now moved their savings these women have been accessing credit for various reasons which include agricultural investments such as expenditure on seeds, fertilisers etc; educational needs; health costs at private hospitals.

Over the past few years with successive droughts these SHGs have started to default on repayment. The failure of crops, the lack of compensation for crop loss, the lack of a drought management policy, no disbursal of insurance amounts for crop loss, within the State of Karnataka, leaves these women unable to pay their monthly installments.

Since 2016,  conditions have worsened and these companies have been harassing peasant women in a variety of ways to recover their money. These tactics include turning up at odd hours in the night, verbally abusing women in front of others, pressurizing all the women from the self help group, locking up their houses and so forth.

In a society that is patriarchal and conservative, these tactics put women under extreme distress.  Suicides by peasant women and women farmers[3] are now increasingly reported from rural Karnataka and several reports suggest the inability to repay loans[4] as a triggering factor.


There are nearly 23 officially registered micro finance companies in Haveri district and some of them are:

Shri Kshethra Dharmasthala Rural Development Project

  1. Gramshakti, Fullerton India
  2. Grameen Koota Financial Services Pvt Ltd
  3. Spandana Sphoorty Financial Limited (‘SSFL’)
  4. Bharat Financial Inclusion Ltd (formerly SKS Microfinance ltd)
  5. Navchetana Microfin services pvt ltd
  6. Belstar Investment and Finance Private Limited (BIFPL) from Hand in Hand
  7. L&T Financial services
  8. Equitas Microfinance/ Equitas Holdings Limited
  9. Muthoot Fincorp Mahila Mitra

Legally – these micro finance companies come under the Central Bank’s (RBI) fair practices code[5]wherein they are not allowed to use coercive methods in loan collection and cannot engage in harassment. Staff, from these organisations, are mandated to engage with defaulters in a non-coercive way. Although such a code is in place, very often women are unable to reach out to concerned authorities due to several cultural and social barriers.

In December 2017, Karnataka Rajya Raitha Sangha – KRRS (a member of LVC) carried out a campaign to demand a complete waiver of loans loans taken by farmers including the SHGs. This was a demand that was articulated especially within the context of drought and other extreme climatic events. While the tenure over which loans have to be repaid has been extended owing to campaign pressure, small-farmers in the region say that it doesn’t really mean much.

On 9thMarch 2017, the women’s wing of KRRS took out a protest rally in Haveri  region and blocked roads. They demanded an end to harassments by the agents of the micro finance companies; asked for access to credit from public banks at 0% interest; and called for information dissemination about government schemes; apart from demanding access to such schemes; and an increase in funds made available to SHGs via nationalized banks.

On 7thApril 2017, the women’s wing met with the Deputy Collector, Haveri. Later on in a joint meeting with the women’s group and the representatives of the private firms, the Deputy Collector ordered micro finance companies to carry out their tasks as per the fair practices code and warned against any form of harassments. All financial organisations have been asked to put on hold collection of loans till January 2018. It is a significant decision that provides an interim relief to affected families.

However the role played by private financial firms in rural credit calls for much deeper introspection and action and an international instrument in the form of a UN Declaration can play a crucial role in defending the rights of peasants.

This is an edited version of a report written by Rashmi Munikempanna at KRRS, with additional inputs from Faridabanu, Manjula Akki, Guttyamma, Sharada – all members of KRRS women’s wing in Haveri.

[1]It is the ultimate executive agency for land records and related administrative matters. The chief official is called the tahsildar or, less officially, the talukdar or taluka muktiarkar or Tehsildar. Taluk or Tehsil can be said sub districts in Indian (Bharat) context.

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