LIVELIHOODS AT THE MARGINS

CONFERENCE

SCHOOL OF ORIENTAL AND AFRICAN STUDIES

Thursday 8 - Friday 9 July 2004

Finance for Livelihoods at the Margins:

Moneylender Credit in a Rajasthan Village
(Draft Notes – not for quotation)

Howard Jones
International and Rural Development Department
University of Reading

j.h.m.jones@reading.ac.uk
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Finance for Livelihoods at the Margins:

Moneylender Credit in a Rajasthan Village

Howard Jones
International and Rural Development Department
University of Reading

Background
The presentation is based on an analysis of livelihood diversificationi and
informal finance with respect to a village (Chandrapur) in Dungarpur District,
Rajasthan. The particular focus is on three groups in the village having the most
marginal livelihoods, and the financing of such livelihoods from a village
moneylender.

The majority population in Dungarpur belongs to the Bhil tribe who inhabit dispersed
settlements (pals) across the district. In contrast, Chandrapur is a nucleated village
inhabited by Hindus and Jainsii, but also having a dispersed Bhil population living
within its land boundaries. Chandrapur is typical of nucleated settlements which act as
trading and service centres for the surrounding tribal hinterland in the district.

Chandrapur village
Over a 25 year period (1976/77 to 2001/02) the number of households with at
least one member resident in the village has increased from 134 to 244. At the same
time the number of households migrating away from the village, but retaining rights
to land and/or property in the village has increased from 3 to 44.

There has also been an increase in in-migration to the village, mainly through officials
posted to the village to work in the various Government Departmentsiii, and many of
whom commute from the district town (37 out of 53). There has been a smaller in-
migration of people to set up businesses in the village (e.g. a private primary school)
or for wage employment.

The village is like a mini-town with a busy bazaar area, mainly comprising of Jain run
shops (25 of the 30 shops), and a host of government departments. A public sector
commercial bank branch has been established in the village since 1983 (Jones, 1994).
Many of the Jain shopkeepers also work as village moneylendersiv providing credit on
the basis of jewellery, usually silver, left with the shopkeeper.

Marginality
There are 11 castes represented in the village, along with the Jains and the
Bhilsv. This presentation concentrates on the livelihoods and use of informal credit for
what are probably the three most marginal groups in the village: the tribal Bhil, and
the low caste Jogi (Mendicant) and Bhangi (Sweeper). Although the Bhil and the
Jogi are not marginal in terms of size of population, forming 41% and 12%
respectively of resident households, as with the Bhangi they are marginal in other
important respects.

For all three groups there is a physical marginality. The Bhil households (101 in
01/02) are dispersed over a large area quite separate from the nucleated part of the
village. The Jogi households (28 in 01/02) are largely just outside the old village
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walls, between the nucleated part of the village and the Bhil households. The Bhangi
households (6 in 01/02) are also sited outside the village walls.

There is also a clear economic marginality for the majority of households in these
three groups. Cultivated land holdings, for the Bhil and Jogi households, are
particularly small, especially for irrigated land. The Bhangi households own no
cultivable land. Regular jobs are few and far between, and high proportions of the
Bhil and Jogi households are officially classified as below the poverty line (BPL):
61% and 46% respectively.

There is also a social and ritual marginality. Footnote (iii) shows the caste hierarchy,
as well as the castes represented in the village. The Bhangi are Scheduled Caste (ST)
whose traditional work of cleaning places them at the bottom this hierarchy. In census
records the Jogis are described as low caste mendicants, who provide certain funeral
rites for the Bhils. The tribal Bhils have long been regarded with some derision by the
higher caste groups and Jains in the area. Nowadays, with the growing political clout
of the Bhils such distain is rather more muted.

The marginality of the majority population in these three groups is also expressed in
other ways. For example in education, and from a very early age. Forty-two percent of
the boys in a private primary school in the village are tribal Bhil compared to 87 per
cent for the Government primary school. The proportions for tribal girls in these two
schools are 46 per cent and 100 per cent respectively. However, the rest of this
presentation concentrates on economic marginalities, particularly in relation to
livelihood diversification and moneylender credit.

Livelihoods in 1976/77
In the 1970s the livelihood activities for the majority of households in
Chandrapur formed a complex and for some, ever changing mixture of activities.
Households engaged in multiple livelihood activities both locationally (inside and to
varying degrees outside the village) and sectorally (primary, secondary and tertiary).
Occupation and work patterns were far more complex than those depicted in local
census records, especially for women in the village.

The combinations and locations of livelihood activities were largely influenced by

caste/tribe membership, and to some degree by economic status within a particular
caste or the tribal group. The livelihoods of the Bhils were characterised by small-
scale cultivation supplemented by a range of casual employment, inside and outside
the village. Likewise for the Jogi, with the addition of their traditional caste work for
which they were remunerated twice a year in grain payments from their Bhil clients.
The few Jogi households which had secured salaried employment in the public sector
had eschewed their traditional caste work. The Bhangi households largely confined
themselves to sweeping the village streets and the making of bamboo baskets for sale.

For land owning households (90% of total households) per household cultivated land
holdings in 1976/77 were very small indeed: just 0.12H for irrigated land and 0.95H
for un-irrigated land, and this formed, and still forms an ever powerful push factor for
livelihood diversification (Bhalla, 2002). Since that time, what is interesting is not so
much the general push for livelihood diversification, but the distinctiveness of the
particular livelihood pathways taken by different groups of households in the village.
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This we now examine for the Bhil, the Jogi and the Bhangi households, to see any
changes in the marginality of their livelihoods over this period of time.

Livelihood Diversification and Location

Using six points of reference Table 1 shows a progressively more distant
movement away from the village for the location of livelihood activities over the
twenty-five year periodvi There has been a substantial increase in the proportion of
total households engaged in livelihood activities in other districts in Rajasthan, in
other States, in metropolitan cities (mainly Mumbai) and in the Middle East.

For the three groups under discussion it is striking that no households have anyone
working in the Middle East, and that for the Jogi and the Bhil there have been
substantial increases in the proportions of households with at least one member
working in other States and in a metropolitan city. In great contrast the Bhangi
households continue to derive their livelihoods within the village and for some
households in the District town also.

Table 1. The proportion (%) of Households engaging in livelihood activities by

location, 1976/77 and 2001/02, for all HHs, Jogi, Bhangi and Bhil

Community No. of Village/ Within Other Other Metro- Middle

HHs* nearby District Districts States politan East
Rajasthan
76/77 & 76/ 01/ 76/ 01/ 76/ 01/ 76/ 01/ 76/ 01/ 76/ 01/
01/02 77 02 77 02 77 02 77 02 77 02 77 02
All HHs 137/288 74 57 25 18 4 6 4 15 8 20 - 7
Caste
Jogi 20/45 75 31 15 7 - 4 - 16 40 53 - -
Bhangi 2/6 100 100 - 33 - - - - - - - -
Tribe
Bhil 52/103 71 52 31 12 4 6 2 24 - 18 - -
* Includes both “resident” and “non-resident” householdsvii

Livelihood Diversification and Type of Employment

Location of livelihood activities shows the where of livelihood diversification
but not the what of such diversification. Some indication of the latter is shown in
Table 2. For all households in the village and then separately for the three groups
under review, the Table shows the proportion of households working in their
traditional caste occupations (excluding the Bhils), in non-caste based enterprises, in
wage employment in the public sector and wage employment in the private sector.
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Table 2. Percentage of Households having at least one member working in

traditional caste work, running non-caste based enterprises, working in the
public sector and working in the private sector in 2001/02: for all HHs, Jogi,
Bhangi and Bhil

Community Traditional Non-Traditional Employment in Employment in

& number of Caste Work Caste Public Sector Private Sector
Households* Enterprises
2001/02
% HHs % HHs % HHs % HHs
All 49** 22 18 41
Households
Caste
Jogi: 45 4 18 11 62
Bhangi: 6 67 33 50 17
Tribe
Bhil: 103 NA (14)*** 8 66
* Includes both “resident” and “non-resident households”
** This % is for the non-Bhil (i.e. caste Hindus) households
***This % refers to non-agricultural activities rather than non-caste based activities

With respect to the type of livelihood activity nearly half of the caste households are
involved, to some degree, with their traditional caste work in 2001/02. However, for
the Jogi households the proportion is much lower (4%), perhaps one reason being
that poor monsoon rains have adversely affected the traditional grain payments for
such services. Conversely, just over two-thirds of the Bhangi households continue
with their traditional caste work.

Have new livelihood pathways provided an escape from traditional marginalities or

simply created new forms of economic marginality? Some indication of this is given
in Table 2. For the Jogi, and even more so for the tribal Bhil the main diversification
route has been through employment in the private sector, with relatively little
diversification through enterprise development and public sector employment. For the
Bhangi households the opposite is the case, with higher proportions of households
establishing non-caste based enterprises and gaining employment in the public sector.
However, to see if these provide escape routes from traditional marginalities or
comprise newer forms of economic marginality we need to take a closer look at the
types of non-caste based enterprise, and types of public and private sector
employment.
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Livelihood Diversification and Non-Caste based enterprises

Table 3 shows the range and number of non-caste based enterprises run in
2001/02 by all households in the village and then with respect to the Jogi, Bhangi and
Bhil households.

Table 3. The Number and Types of NON-CASTE based Enterprises undertaken

in 2001/02 by All Households, Jogi, Bhangi and Bhil
N0N-CASTE A J B B For all households in the village the range of
based enter- L O H H
prises L G A I different types of non-caste based enterprises is
I N L striking. At one extreme we have a hotel in the
HH G District town and owned by a village family,
s I
while at the other extreme we have a camel
No.HHs 288 45 6 rented out for Bhil marriage processions.
103
2001/02**
Factory 3 - - -
Private school 2 - - -
Moreover, not only do the three groups under
Medical 1 - - - discussion run relatively few enterprises, what
practice enterprises they do operate, are the more
Hotel 1 - - - marginal of enterprises listed in the table.
Flour mill 4 - - 1
Tea stalls 17 7 - 3
Photo shop 3 - - - Seven of the eight enterprises operated by the
STD booths 3 - - - Jogi households are tea stalls in Mumbaiviii The
Computer 1 - - -
shop
two Bhangi run enterprises are based on barter
Gen. Goods 5 - - 1 transactions with households in neighbouring
shop Bhil pals. Seven of the fifteen enterprises
Pan shop 1 - - - operated by Bhil households are illegal,
Tailoring 10 - - -
Electrical 1 - - -
involving the sale of adulterated ghi (clarified
Autogarage 1 - - - butter) in two town. Although one Bhil
Autorickshaw 1 - - - household has managed, through a Bank loan,
Car rental 1 - - -
to establish a flour mill, this is situated in the
Jeep rental 1 - - -
Tractor rental 1 - - - tribal part of the village, received little custom,
Shipping parts 1 - - - and the owner now wishes to sell.
Buying/ex- 2 - 2 -
change goods
Leaf plates 1 1 - -
Sale firewood 1 - - 1
Sale ghi 7 - - 7
Rent camel 1 - - 1
Temple 1 - - 1
Total 71 8 2 15
number of
Non-Caste
enterprises
Number and 62/ 8/ 2/ 14/
% of HHs 22 18 33 14
with Non-
Caste
enterprises
* All these enterprises run by women
** Includes both “resident” and “non-resident” households
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Livelihood Diversification and Public Sector Employment

Table 4 depicts a similar situation to enterprises with respect to public sector
employment and the three groups under review.

Table 4. Types of Employment in the PUBLIC Sector undertaken in 2001/02 by

All Households, Jogi, Bhangi and Bhil

Employment A J B B For all households the table shows quite an

in PUBLIC L O H H
Sector L G A I extensive range of different types of jobs
I N L held in the public sector by 2001/02.
HHs G
I
No. HHs 288 45 6 103
The range includes relatively high status
2001/02* and pensionable employment e.g. work in
Agric. Dept. 2 - - - the Agriculture and Forestry Departments,
Forestry Dept. 8 - - 2
but also includes very menial employment
Vet. Dept. 4 - - 2
Bank 5 1 - - e.g. cleaning streets in the District town.
Co-operative 1 - - -
Co-op. guard 1 - - 1 For both the Jogi and Bhil very few
Lecturer 2 - - -
Teacher 12 1 - -
households, compared to total numbers in
School Peon 5 1 - - these groups, have been able to secure the
Nursery cook 1 - - 1 better type of employment in the public
Literacy 1 - - - sector. In the case of the Jogi, where they
worker
Women & 4 - - - have, these are nearly all confined to a few
Child Devel. very closely related families in the village.
Social worker 1 - - -
Nurse 1 1 - -
Post office 2 1 - -
Although three of the six Bhangi
Police 1 - - - households are paid for out of public funds,
PWD 4 - - 1 the work they conduct comprises sweeping
Elect. Board 2 - - - and cleaning duties.
Accountant 1 - - -
Market 1 1 - -
supervisor
Bus conductor 2 1 - 1
Railways 1 - - 1
Village/town 3 - 3 -
cleaning
Number of 65 7 3 9
jobs
Number and 52/ 5/ 3/ 8/
% of HHs 18 11 50 8
with PUB. S
jobs
*Includes both “resident” and “non-resident” households
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Livelihood Diversification and Private Sector Employment

In terms of numbers and proportions of households in the two largest marginal
groups (the Jogi and the Bhil), we have seen from Table 2 that employment in the
private sector forms the major livelihood diversification pathway. However, with the
types of private sector employment identified in Table 5 we can see that such a
pathway more likely leads to new forms of marginality, indeed in some cases a
replication of existing inequalities, rather than an escape from traditional forms of
economic marginality in the village.

Table 5. Types of Employment in the PRIVATE Sector undertaken in 2001/02 by

All Households, Jogi, Bhangi and Bhil
Employment A J B B Although compared to the village as a whole
in PRIVATE L O H H
Sector L G A I the Jogi and the Bhil have high proportions of
I N L households working in the private sector, in
HHs G many cases, these jobs are generally more
I
No. HHs 288 45 6 103
menial and more irregular than the higher
2001/02* status and better remunerated jobs held by the
Teacher 3 1 - - other households in the village.
Accountant 2 - - -
Office worker 1 1 - -
Courier/ 2 1 - - Twenty-one of the Bhil and eight of the Jogi
delivery households have a member working in tea
Watchman 11 11 - - stalls, almost always in Mumbai. Where the
Hotel worker 1 - - -
Restaurant/ 3 - - -
hotels are owned by higher caste families in
club worker the village or nearby, this replicates in an
Tea stall 32 8 - 21 urban context, the vertical social capital of the
assist.
Tailoring 2 1 - -
village.
Shop Assist. 4 2 - -
Mines worker 2 - - 1 A further twenty-seven of the Bhil households
Carpentry 4 - - 3 are engaged in odd-job work, and this is very
Tubewell 3 - - 3
construction
likely an underestimate. Although a very few
Electrical 2 - - 1 Jogi households have managed to secure
Mechanic 1 - - - some better status private sector jobs (e.g.
Car/jeep 6 1 - 4
driver
private school teacher), work as watchmen
Tractor driver 3 - - 3 and domestic cleaners figure much more
Truck helper 1 - - 1 prominently.
Flour mill 2 - - 2
worker
Factory 7 1 - 6 Only one of the Bhangi households is
worker engaged in private sector employment and
Domestic 22 14 - 6 this just amounts to road repair work.
worker
Odd job work 31 3 - 27
Road repair 9 - 1 8
Construction 10 1 - 9
Farm work 3 - - 2
Number of 167 45 1 97
jobs
Number (and 117/ 28/ 1/ 68/
% of HHs 41 62 17 66
with PR. S.
jobs
* Includes both “resident” and “non-resident” households
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Finance for Livelihoods at the Margin

The following data are based on the daily lending records of a Jain moneylender in
the village. If access can be gained to the suppliers of informal finance then this can
tell us a great deal about the financial service needs of those leading marginal
livelihoods. Such information can tell us:

• Who is needing/using informal finance (community, gender, age etc.)

• Location/spread of clients
• For what purpose finance is required
• When finance is required
• Frequency of finance
• Scale of finance
• The cost of finance
• Repayment ability of those at the margins

Table 5 Clients of the Moneylender by Tribe/Caste 2000/01

Community Number of loans Percentage of loans (%)

Tribe
Bhil 309 90.3
Caste
Jogi: mendicant 10 2.0
Bhangi: sweeper 10 2.9
Vadi* 10 2.9
Panchal: blacksmith 3 0.9
Total 342 100
* Makers of hand mill stones

• 95% of loans going to the three groups we have identified previously: the
Bhils, the Jogi and the Bhangi
• By far the most important client group: the tribal Bhils with over 90% of all
loans taken during the 12 months

Table 6 Clients of the Moneylender by Location 2000/01

Inside/outside Number of loans Percentage of loans (%)

Chandrapur
Inside Chandrapur 55 16
In neighbouring villages 287 84

• Only 16% of the loans are for clients within the village
• 84% of loans are to mainly tribal clients in the surrounding Bhil pals
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Table 7 Clients of the Moneylender by Gender and Tribe/Caste 2000/01

Clients Number of loans % of Total loans

Women Clients 37 10.8

Tribe/Caste of Women Number of loans % of loans to Women

clients clients
Bhil 27 73.0
Vadi 7 18.9
Jogi 3 8.1

• Just over ten per cent of clients are women

• The majority of the women clients are Bhil
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Table 8 Loan Purposes of Moneylender Credit 2000/01

No of % of No of % of
loans loans loans loans
1. Life Cycle 5. Travel
birth 5 1.5 local 2 0.6
haircutting ceremony 1 0.3 non-local 53 15.5
marriage 40 11.7
death 10 2.9 6. Agriculture

2. Household (i) Seasonal

house construction/repairs 12 3.5 land tax 1 0.3
food 56 16.4 land penalty 3 0.9
festival expenses 3 0.9 labour for grain 16 4.7
guests 6 1.7 labour for levelling
field 2 0.6
medical 68 19.9 labour-sowing 1 0.3
education 6 1.7 seeds 9 2.6
employment 4 1.2 repair tractor 1 0.3
non-food goods 1 0.3 repair pump 2 0.6
phone call 1 0.3
vehicle diesel 1 0.3 (ii) Fixed Capital
motor cycle repair 1 0.3 bull 2 0.6
bullock 6 1.7
3. Finance cow 2 0.6
payback informal 1 0.3 buffalo 2 0.6
financial informal 2 0.6 well 5 1.5
help brother/sister 2 0.6
open bank account 1 0.3 7. Other
finalise bank loan 1 0.3 litigation 2 0.6
pay back bank instalment 3 0.9

4. Business
shop goods 1 0.3
raw materials 5 1.5
cart for band 1 0.3
buy/selling livestock 1 0.3
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• The table shows a great range and diversity of financial service needs for those
with marginal livelihoods.
• Some of these purposes relate directly to livelihoods: e.g. agriculture, business
• Some loans are to facilitate livelihoods e.g. loans for non-local travel used to
finance migration to Gujarat and Mumbai, loans to try and secure employment
and for education
• Loans are also taken to keep a roof over ones head i.e. loans to construct and
repair houses
• The precarious nature of livelihoods at the margins is shown by the high % of
loans needed to finance food consumption and medical expenses
• Some loans show interactions with parts of the financial services sector e.g
loans to repay other informal loans, loans to finance the provision of informal
credit, loans to repay bank loan instalments.

Table 9 Changes in proportions of major loan purposes for Moneylender Credit

1988/89 and 2000/01

Loan Purposes % Total Loans 1988/89 % Total Loans 2000/01

Medical 10.1 19.9
Food 21.2* 16.4
Non-local travel 9.8 15.5
Marriage 12.8 11.7

* In 1988/89 I did not record whether loans for grain were for food consumption or for
sowing. The food % for this year is likely to also include some loans to purchase seeds for
sowing.

• Nearly one in five loans in 2000/01 is taken for medical purposes

• Loans to purchase food, often grain from the fair price shop, account for just
over 16% of loans
• The increase in migration over the period of time is reflected in the increase in
% of loans taken for non-local travel.
• Marriage loans account for around 12% of total loans, but this proportion is
higher when analysed in terms of loan value.
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References

Bhalla, S. (2002) “Linked livelihoods: preliminary results of a study in eight villages

of Andra Pradesh and Haryana”, Paper prepared for the Workshop on Rural
Livelihood Futures, October 17-19, 2002.

Carrithers, M. and C. Humphrey (1990), “Jains as a Community”, in Carrithers M.

and C. Humphrey (eds.) The Assembley of Listeners: Jainism in Society. Cambridge:
Cambridge University Press, pp. 5-52.

Census of India, (1981) District Census Handbook, Dungarpur District, Parts X111-A
and B.

Jones, J.H.M. (1994) “A changing financial landscape in India: macro-level and

micro-level perspectives”, in Bouman F.J.A. and O. Hospes (eds.) Financial
Landscapes Reconstructed, Boulder, San Francisco, Oxford: Westview Press,
pp. 305 – 324.

Jones, H., Williams, M., Thorat, Y. and A. Thorat (2003) “Attitudes of Rural Branch
Managers in Madhya Pradesh, India, toward Their Role as Providers of Financial
Services to the Poor”, Journal of Microfinance, Vol.5 No.2, pp.139-167.

i
The work on livelihood diversification in the village was conducted as part of a much larger ODI
managed study of livelihood diversification in South Asia: ODI Livelihoods Options Study;
www.livelihoodoptions.info
ii
Although the Jains are a religious group rather than a caste as such, they nonetheless interact with the
Hindu castes around them “as part of a hierarchy of interaction and attribution” Carrithers and
Humphrey, 1991:9.
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iii
The Departments and number of staff employed: Cooperative (3), Auyurvedic Hospital (4), Primary
Health Centre (9), Veterinary Hospital (4), Telephone Exchange (2), Bank (3), Police post (5), Forest
Nursery (6), Middle School (14), Upper Primary School (7), Government Primary School (2),
Panchayat (2) and Patwari (1): a total of 62 of whom 53 were “outsiders” and 9 were from village
families.
iv
The term moneylender is used in this paper, though strictly speaking such individuals are
pawnbrokers, providing loans on the basis of jewellery deposited as collateral.
v
The castes and Jains represented in the village with their traditional occupations are
listed below:

Caste Traditional Occupation

Brahman Household priest
Sevak Temple priest
Jain Shopkeeper, trader, moneylender
Panchal Blacksmith
Derzi Tailor
Bhoi Gardener
Sutar Carpenter
Kumhar Potter
Nai Barber
Haraniya Knife maker
Jogi Mendicant
Bhangi Sweeper

vi
In some cases the location of work in Gujarat, a neighbouring state, was physically nearer the village
compared to some of the other districts in Rajasthan.
vii
The rather ungainly term “non-resident” households refers to households which no member residing
in the village but which nonetheless retain rights to land and/or property in the village.
viii
Apart from the Bhangi no other caste groups would be able to drink tea made by the Jogi in the
village.