Social Enterprise Helping India’s Salt Harvesters
Sabras, a social enterprise organization based in India, is using micro-lending to help the country’s poverty-stricken salt workers gain freedom from predatory lenders and non-cooperative banks.
In the state of Gujarat, where nearly 70% of India’s salt is sourced from, self-employed salt pan workers are subject to harsh physical conditions as well as predatory loans leading to little profit. Temperatures reach harsh highs in summer and lows during winter, causing adverse health effects for workers. Since the workers are self-employed, a majority of them need to borrow money from lenders who fix the price of the salt much lower than it normally would be, cutting profits for the salt pan workers down to nearly nothing, most often just 1% of the market value. Most of the banks in the country are not willing to lend to poor people, leaving the workers without options.
Rajesh Shah, the founder of Sabras, recognized these hardships and created an organization that is not only for the poor but mostly owned and operated by the poor as well, with workers holding nearly 74% of shares in the company. Before there was an alternative lender like Sabras, workers were forced to take out loans with interest rates as high as 48%. Sabras’ interest rates are just 12.5% with the ability to purchase advanced solar pumps that allow workers to increase output over the long run.
Sabras has already made a large impact as nearly 70,000 people are employed in the salt industry in Gujarat. Shah contends that the company’s 400 shareholders have seen a profit increase of 400% within the last two years since they used Sabras loans to purchase the solar pumps.
Looking ahead, Sabras hopes to begin including women in the salt industry’s processes in order to increase profits and improve the quality of life for them as well.
– Christina Kindlon
Source: The Guardian