First of its kind project in India

Gujarat based Sewa bank, a powerful tool for the economic empowerment of self employed women, has now created history by initiating 50,000 poor women to go for micro pension scheme. The project first of its kind in India offers old age security through pension to self employed women working as labourers and vendor to eke out a living.

In country where billions are living below poverty line and only 11 percent of the organized sector have some kind of pension scheme, the number 50,000 may sound a pea nut. But the fact that in the last three years only 1.25 lakh have taken up micro pension shows the strength of these numbers which comes to 40 per cent of the total number in the country.

UTI is a partner in the project. It CMD U K Sinha, admits that the overall achievement was very embarrassing. Lack of awareness among people is the biggest reason for such a poor show of an excellent scheme, he said. Even among all states, the performance of Gujarat was the best because of the dedicated involvement of the bank and its MD Jayshree Vyas, he said.

Explaining the concept she said, “the program allows all women under 55 to save as little as Rs. 50 a month in a pension account. At age 58, participants in the program receive their savings with the accumulated interest to finance their retirement. Our program makes saving for retirement extremely simple.

Any interested applicant need only to open a savings account with SEWA Bank, and deposit enough money to finance their monthly pension deposit. SEWA Bank has set up a software program that automatically transfers money from the client’s savings account to their pension account every month.”

The money contributed by the pension account holders is invested in equity and debt instruments by professional team of the UTI which is a partner in the project. Ideally, it is 40 percent equity and 60 percent debt instruments. However, because of volatile market, the equity portion has remained 23 percent, according to Sinha of the UTI. The average of the three year is 11 percent plus interest.