Could a one-time business loan bring people out of poverty for good?

By Satya Kothimangalam (Campaign Manager, Milaap)

There are too many problems plaguing the developing world. Sexual trafficking is a big one – and sometimes, it’s even tied to “religion”. In India, there exists an ancient practice called the Devadasi System that dates back several centuries. This practice involved dedicating young girls – sometimes as young as five or six years – to the worship and praise of the temple deity. Historically, Devadasis enjoyed royal protection and were of high social standing.

The Exploitation of Devadasis

Over time, what was initially a time-honored tradition became a way for corrupt high-caste men to profit from the helplessness of poor, low-caste girls. These girls would be taken from their homes, dedicated to the temple deities, and then forced into prostitution, usually against their will. This led to many Devadasis being incorrectly referred to as “temple prostitutes.” This practice was made illegal in 1980s, but is still prevalent in India today.

The stigma of having been a Devadasi continues to cling to women who try to escape the system. Because of the social stigma, they are denied employment opportunities, which forces them to remain in the sex trade.

Changing the Course of History

Last year, Milaap (an online crowdsourced micro-lending platform) wanted to explore whether business loans to these women would be a sustainable way to keep them, and their children, out of this system. They decided to test it with a group of oppressed Devadasi women in India working with an NGO called MASS, which provides self-help groups and training to these women to start their own businesses. In order to tackle the potential defaults on loans to these women, Milaap even received a corpus from a foundation. However, they found that these Devadasi women were so hardworking and dedicated that they were very prompt in making loan repayments!

The stories that came out of this experiment were nothing short of amazing. Mahananda, an ex-devadasi and daughter of a devadasi, was forced into sex trade to re-pay her mother’s medical loans to her extended family. After a long struggle, she was able to save enough money to pay her trafficker to free her – and then got in touch with MASS. Subsequently, Mahananda was able to get a loan from Milaap, start a small tailoring business and make enough money to put her two daughters through school. In this video, she says that she is now looking to employ four more women in her village and is determined to help her girls achieve their dreams.

All Mahananda received was a small business loan of about $600 from kind strangers worldwide – which will be repaid within 18 months. But this one-time helping hand is altering the future of her family and her community.

A Poverty-Free Future?

To extend the impact of these loans, Milaap is now exploring how empowered, successful women in places like Singapore and the United States can help these women come out of this system. Their latest initiative, The Hope Project, is encouraging empowered urban women to give a helping hand to lesser fortunate women in India, by fundraising for them and raising awareness about the cause.

If this experiment is successful, “business loans for good” may be a great business model for for-profit social enterprises to replicate for similar causes worldwide!

Would you be interested in getting involved with the The Hope Project?

131216_asia_12About the writer: Satya is a startup, innovation and social enterprise enthusiast based out of Singapore. She writes about startups in South East Asia for YourStory and works as a Campaign Manager for Milaap.