SAVINGS TO SECURE (STS)

While India continues to march ahead with its emerging economy, the rural population remains deeply grounded in their long-held beliefs and culture. One such example- the girl child is still not valued in many impoverished families. Many parents believe that educating their daughter is not important and early marriage (below the legal age of 18) is the right thing to do. Consequently, the girl child suffers unintended “neglect” due to parents’ low level of education, ignorance, and economic status.

STS has two major objectives: provide some level of financial security through incremental savings and empower the girl child through education. Vidya Gyan is promoting a special savings account for girls under 10 years of age (Sukanya Samridhi account; SSA, a Government of India initiative without any financial support) serves both objectives and more.

Vidya Gyan offers modest scholarships to girls (grades 1-5) to open a savings account in partnership with parents. The features of SSA include: (a) the girl owns it, (b) SSA earns a premium interest (~ 8%), (c) Vidya Gyan scholarship requires girls to attend school regularly (lower dropout rate), and (d) SSA funds can be withdrawn only at age 18 for education or marriage (more education and fewer child marriages).

Operationally, Vidya Gyan has held “camps” where local post office(s) and/or banks are invited to open SSA on the school site. The parents come with a minimum of Rs. 250 ($4) to be matched with Rs. 150 by Vidya Gyan. However, we make an effort that parents deposit  Rs. 500 (~$8) which is matched in equal amount by Vidya Gyan to open the account. Further, Vidya Gyan has committed an incentive of Rs. 100/year for every deposit of Rs. 250 by parents with a maximum of Rs. 400 for a parental deposit of Rs. 1000. Vidya Gyan does it for the next five years upon parents making a required minimum deposit to keep the account in good standing. 

Why 5 years? Because India has unfortunate statistics- about 24% of girls don’t go to school after 5th grade and 40% after 8th grade. Our hope is that a first-grader at the time of opening the account will reach 6th grade, and a 4th grader will advance to 9th grade if the parents continue the savings account. If a girl child gets to the 6th grade, it is highly likely that she will complete at least 8th-grade education. Likewise, if admitted in 9th grade, she will complete at least 10th grade. Our long-term goal is to change the mindset of parents in treating their sons and daughters equally, easily said than done but worth the effort.

Vidya Gyan has initiated over 1000 accounts as of mid-2020 but the challenges remain in having the accounts continued in good standing. The primary reasons: parents not making a financial commitment and lacking trust in long term savings; limited outreach and lack of appropriate information by school teachers, postal authorities and/or Vidya Gyan, and the long-held culture of not valuing daughters. Nevertheless, Vidya Gyan remains committed to the initiative and continues to increase outreach; coaching parents, particularly mothers, to save as little as Rs. 3-5/ day in a piggy-bank.