CSI has encouraged the formation of Village Community Forums (VCFs) and Self-Help Groups (SHGs) with revolving loans to help people establish small businesses in many tsunami-affected communities.  The idea for VCFs was based on a model used in the fishing industry. 

A common practice in South India is for a boat-owner to rent their boat to a group of fishermen – let’s say, 7 people.  These 7 will go out on a fishing trip and upon return will divide the catch into 8 equal shares – one for each of the fishers and one for the man who lent the boat.  VCFs operate similarly -- however, in this case, the additional share is provided to the community which could be put into a revolving fund for business development or other purposes.

One group is composed of tsunami widows and the other of ordinary women, each group has about 25 members.  Each member of the women’s group donates roughly INR 100 per month, creating a revolving loan fund of INR 2,500. 

The widows group receives slightly higher loans, in the range of INR 4,000-5,000 because they are the sole income source for their families.  The loan is then rotated among the women allowing them to start small businesses.  By charging an interest rate of 2%, which is higher than the banks’ rate, the VCFs are able to generate additional income for the group which accumulates and can be added as a principal permanently to the fund. 

Maranesam is starting a milk vending business, while Kanikai and Lourdes Mary will be involved in door-to-door fish selling.  Others will start petty shops or fruit-and-vegetable stands.  Antonia Amma is a widow who has three unemployed children to support.  She lost her house in the tsunami and is living in a temporary shelter.  Christian Mary, 40, is handicapped.  Prior to the tsunami she was a tailor and she needs INR 5,000 to replace a motorized sewing machine destroyed by the waves so she can resume her work.

One of the most important aspect of recovery is economic independence.  Poverty and starvation are tragic sights not uncommon to the streets of India.  But as much as one feels the desire to help, providing handouts to individuals is not a sustainable solution. 

Enterprise development is one of the best ways to help someone help themselves for the long term.  Providing skills training or offering small loans so that entrepreneurs can start small business gives people the tools they need to lift themselves out of the cycle of poverty and feed their families for years to come.