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Tamil Nadu - India

Access to loans changing women's lives

With a negligible default rate and large, new loans coming in, micro-bank Valar Aditi, is on a course to expand across Southern India. In August 2018 it received an excellence award and in October 2018 it got its biggest loan so far of 50M INR. To the benefit of poor women in Tamil Nadu and Puducherry.

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 “Microfinance is very useful. Husbands now depend on us. We get more respect and our social lives improve as a result. We get out, we get a say and we get to decide the future for us and our families.”

A woman at a group meeting at Amarauthi Nagar (right) in Tamil Nadu explains what advantages women get from microfinance. It is collection day and the women have gathered to make their monthly instalments on loans given by Valar Aditi Social Finance. 

Joint Liability Groups
The larger group is comprised of a handful of smaller so-called 'joint liability groups'. A joint liability group is a group in which members have been assessed individually, and the group composition is decided by Valar Aditi and the women involved. Each member of the group is liable for a loan given to any other member of the group. This creates a high level of self-regulation within the group and all members help assess loan applications of other members. When a loan is given, the women support and help each other because it is in everybody’s interest that the loan can be paid back. 

 We get more respect and our social lives improve as a result. We get out, we get a say and we get to decide the future for us and our families 

Valar Aditi Social Finance Private Limited (Valar Aditi) has four branches in Tamil Nadu and Puducherry in Southern India. By end of 2018 there were 8,650 borrowers and active loans to the tune of just under 130 million rupees (INR) - or 1,8 million USD.

Building trust raises credit
First time borrowers can get a loan of 20,000 INR (280 USD) to be paid back in 12 monthly instalments. After successfully paying back the first loan, a borrower can add 5,000 (70 USD) INR to the amount she can borrow until she reaches the maximum amount of 40,000 INR (560 USD) by the fourth loan (and beyond).

Aranthangi branch 
The Aranthangi branch is the second best performing branch in 2018 - and it is run almost exclusively by women. The branch manager, Anandhi, believes that the good performance owes to the fact that all loan officers on the ground are women.

"The women borrowers are more comfortable speaking to another woman. So us being an all female team, makes a difference," she says.

At the end of 2018 there were 156 Joint Liability Groups in the branch and 1,754 active borrowers. BESTSELLER FOUNDATION visited Mangudi Village, Ethanivayal Village and Amarauthi Nagar in October 2018 and below you can meet some of the women who have used the access to credit to start businesses and improve their lives.

Mangudi Village is one of the more remote locations for the Aranthangi Branch. There are two groups in the village. 

Vijaye (32) is in one of the groups. She is on her third cycle of loans - the first two were spent on cows and the third she has spent on a shed for the cows. She sells the milk from her cows to the state dairy. She has 20,000 rupees in her bank account that she has saved from selling milk.

Her fourth loan will go towards her husband’s business – he sells fruit in town. She will buy him a proper fruit stall to sell from.

Vijaye and her husband have two girls - one is in standard 12 and 9. With a steady income and savings she can now support their education. “They are good students. One wants to be a medical doctor and the other an engineer. I will give them all the support I can,” she says and adds with pride that one also takes music classes.


Ethanivayal village is off the main road not far from the nearest town. It has several loan groups and many loans go towards businesses offering services and products to people with some means - primarily in town. Cows are still popular but many women do tailoring, basket making, mechanic workshops, brick making etc.

Arockiamary's (53) husband Alphonse is a tailor and has a shop in the nearby town. With the loans Arockiamary (Mary) has taken she has bought two sewing machines for her husband’s business and they now employ three tailors and take in small and big orders (including bulk orders for (school) uniforms and similar). Their income from the shop is approximately 60,000 INR (835.00 USD) per month. Mary's next loan will go towards buying a special machine for stitching buttons. 

Mary worked 21 years as a maid in Singapore to pay for tuition to get her children through school and university. All four children now have degrees and are married and/or work in bigger cities

Amarauthi Nagar is on the outskirts of town. A handful of loan groups are represented here. One lady runs a tailor shop with her husband - they employ two tailors. Another weaves plastic baskets while helping her husband expand his business of buying scrap metal.

Several women have bought cows. A liter of milk here can be sold privately to shops or restaurants in town and fetches up to 40 rupees per liter - considerably more than what you get (26 rupees) in more remote locations outside town where there's only one buyer; the state dairy. A cow normally gives 10-12 liters daily and so with two cows a lady can earn +12,000 rupees (166 USD) per month here.

Lohambar (26) has helped build her husband's business as a motorcycle mechanic. Her husband – Murijesem – has taught himself to fix motorcycles. With her first two loans she helped him buy tools and start a business fixing motorcycles from their house. Things have been going well and Lohambar and her husband are now building their own house and moving out of the one they have been renting. With the next loan she hopes to find a space to rent in town for a bicycle repair shop.


In August 2018 Valar Aditi won the 'MINE Excellence Award' in recognition of the service provided to the women in the communities where Valar Aditi works. The award was given at the 'Microfinance and NBFCs Exhibition cum Conference' in Chennai.

Moreover Valar Aditi's grading as a Microfinance Institution (MFI) has improved in 2018 and its credit rating was renewed at the end of 2017. The new grading as well as the positive trajectory Valar Aditi has been on for some years now has ensured that it could successfully raise debt - which is the fuel that can help Valar Aditi expand further in the region.  

BESTSELLER FOUNDATION invested in Valar Aditi in 2013 and owns 51% of the shares.