A Case For Financial Inclusion of Sex Workers


Let’s take a tour through the immoral red light areas of your city. As we traverse through the bylanes of the dark streets lined with unabashed women, ‘selling their dignity’ for cash per hour, escaping the clutches of the police and entertaining men, blind your biases and numb your mind. If you can, wear on an oblivious brain and an open heart, for what you are aware of may crumble under the weight of reality.

The woman in the first room provides sex services on the same bed under which her infant child sleeps. She never went to school and was married off early in her life. Her abusive husband abandoned her and their son. She was determined to ensure that his son didn’t have to lead the life of an ignorant destitute that she was, all her life. Without an education or any formal training in any skill of any kind, she turned to sex work.

She works through the night, pays the brothel owners, feeds her child and saves money by stitching the wad of notes into one of her spare clothes, and hiding it under a lump of her belongings. She hopes that with whatever little she saves each day, she’ll be able to afford books for her child when he grows up.

There are nights when she is tired and doesn’t want to work. This is not an option. There are mornings when she wakes up with stomach-wrenching pain and then there are mornings when she wishes she didn’t have to wake up at all. She loves to paint and her eyes gleam at every piece of art on the streets. She breaks down but always musters the courage to work relentlessly in the hope of a better future for her and her child. Is her courage an embarrassment or an inspiration? Are her aspirations or rather, is her work unabashed and morally demeaning or is our worldview so narrow, we never recognized that several women like her need strong institutional support?

Although precise estimates of the number of sex workers in India is not available, Sonagachi in Kolkata is deemed to be Asia’s largest red light area, which explains the magnitude of women in who work as sex workers in India. Not all out of choice- some out of destitution, some out of lack of other employment opportunities and some because they were sold or trafficked into prostitution.

Criminalizing an activity doesn’t end it – it merely pushes it underground which then becomes the breeding ground for exploitation. To put an end to anything, the system has to understand it from the perspective of people involved in it and create sustainable alternatives for them. This is what the sex industry and the women working in it need the most – opportunities to pursue alternative career options and lead an exploitation-free, healthy life even if they continue to work as sex workers. One way to achieve this goal is through the financial inclusion of prostitutes.

Before we delve into exploring the need for financial inclusion for sex workers, let’s delve into why regular commercial banks don’t provide financial services to sex workers.

Salman Ansari / DNA

Mainstream financial institutions such as public and private banks are inaccessible to prostitutes for a variety of reasons. Maya Lama, an activist working with sex workers in Kamathipura, Mumbai says, “Most of these women were sold into sexual slavery by their relatives or pimps. They do not have birth certificates, school leaving certificates or proof of residence – documents that are required to open bank accounts in India. Worse, regular banks have asked us to keep sex workers away since other customers protest against banking with them.”

Moreover, the stigma associated with sex work implies that it can be difficult for sex workers to approach officials in regular banks, who may be insensitive or even discriminate against them. The shame and embarrassment attached to this profession may deter sex workers from even thinking of approaching mainstream banks. Further, the financial needs of sex workers may be very different from those of customers which these banks usually serve. Sex workers have small amounts of savings on a daily basis and the frequency of their withdrawals may also be higher. These characteristics, in turn, imply that banks may not be able to yield enough profits from sex workers’ accounts, which again is a disincentive for them to provide banking services to this community.

No access to financial services, banks implies that sex workers have to be in charge of storing the money safely with themselves, which is often difficult because often they don’t have a house of their own– they live either in the brothels or in the slums, places in which it is rarely ever safe to leave money. This also makes them more vulnerable to abuse. Uzma, a sex worker in Mumbai’s Kamathipura says, “Money needs to be hidden. In the past, clients have beaten me up after they learned I was hoarding cash, took the money and fled. Even my boyfriend tends to get violent and takes off with the money.” Further, with lack of interest-bearing savings, sex workers are unable to amass any wealth at all and have to survive from day to day on their minimal earnings. This severely affects the quality of life that their children lead and the educational opportunities available to them. The consequence of this is that children of sex workers are unable to develop their earning potential and may have to lead poverty-stricken lives. With no amassed wealth, no financial institution to seek a loan from, these women are compelled to depend on sex work for daily survival – they don’t have the resources to feed their family while training to take up another job. In the absence of formal financial services, they may have to also turn to informal sources of finance such as moneylenders and loan sharks, which again makes them vulnerable to exploitation. Rita Roy, a sex worker in Bengal had to borrow an amount of Rs.2000 from a loan shark to support the treatment of her father’s medical condition. A year later, the interest amount totalled to a whopping Rs. 13000.  Her desperate need for money and lack of sources for the same, allowed the loan shark to financially exploit her by charging unbelievably high-interest rates. Further, she says, “When I couldn’t repay it, the money lender posted two men outside the kotha [brothel] to harass me every time I went out to shop.”

Thus, it becomes nearly impossible to break the cycle of poverty and abuse.

There are thousands of women in India working as sex workers in neglected corners of cities. Without access to financial services, they may have to continue to suffer abuse. Financial inclusion is the key to empowering them.

Financial inclusion refers to providing access to formal financial services to every individual, across socio-economic backgrounds and income strata. This term is used especially in reference to providing financial services to the marginalised, poor and rural communities because these are the very communities that are not served by mainstream regular banks as their financial needs are often micro in nature compared to the those of relatively well-off customers that such banks serve and hence, need special institutions such as microfinance institutions to cater to their financial needs.

An exemplary effort towards financial inclusion of sex workers is the Usha Multipurpose Cooperative Bank in Kolkata. It is an institution run by the sex workers and for the sex workers. The importance of such a financial institution can be understood by the fact that the bank which began with merely 13 women pooling their savings, today deals with Rs. 30 crores each year, with a membership of 31,000 sex workers from across West Bengal. Such an initiative not only provides a safe place for the sex workers to deposit their savings and earn interest but also protects them from informal sources of finance and their gargantuan interest rates. Further, having a bank account, a passbook allows sex workers to become a part of the mainstream population — they can procure official identity documents because the passbook has their name and address. Official identity documents, allow them to rent a house, to vote and to be a beneficiary of government welfare schemes. It instills in them a sense of dignity, improves the quality of their life and empowers them to provide a better life for their children. It’s a very basic yet significant step in helping them to break the cycle of poverty and abuse.

Sangini cooperative bank, a bank by and for sex workers in Kamathipura, Mumbai was set up following the example set by Usha Bank. The far-reaching impact of the Sangini Bank is highlighted by Ms Shilpa Merchant, the former national coordinator of the U.S.-based non-profit Population Services International (PSI) that initially funded the project, “Some sex workers could get their children married, some left the profession and started a shop. We documented all this. The bank was giving them alternative options of livelihood.” Further, Maya Lama, a board member of the Sangini Bank emphasizes, “This bank brought us together. Our collection agents had access to brothels. We were able to rescue many young girls from brothels in the last few years.” However, this bank shut down in 2017 due to a funding crunch, leaving sex workers in Kamathipura (Asia’s second-largest red light area) with no place to hide their funds and vulnerable to exploitation.

These examples highlight three important aspects. Firstly, the success of the Usha Bank and the Sangini Bank highlight the need for empathy and respect for sex workers in our society. Sex workers eagerly accessed the banking facilities provided by these banks because their problems were understood and they were comfortable banking with fellow sex workers. This safe and comfortable environment may not exist for sex workers in regular commercial banks. Secondly, the fact that these banks are set-up especially for sex workers allows them to develop a structure that can cater to the specific financial needs of sex workers. For instance, the Sangini Bank accepted deposits of amounts as low as Rs. 5 and never demanded any paperwork or identity documents apart from a photograph. Such a structure may not be feasible for regular banks. Thirdly, these banks not only solved the sex workers’ financial needs but in the process allowed them to pursue alternative jobs, rent houses, access formal identity documents. A network of agents was formed with the bank. These agents, usually sex workers themselves, volunteered to visit brothels where they would collect women’s savings and issue receipts on behalf of the bank. The proximity of these collection agents to sex workers and their greater access to brothels, helped them to even rescue women and girls who were forced into prostitution — a task which would be more challenging for external parties such as the police or non-profit organizations. They are safety nets, escape routes and a channel for venting grievances for the sex workers.

However, it is also important to emphasize the major challenges of running such a bank- profitability, sustainability and stigma. Narayan Hegde, a trustee of the Sangini Bank explains why the bank had to eventually shut down: “We gave 3% interest to account holders on their deposits. We, in turn, deposited all the money into another nationalized bank that gave us 5% interest. To run the bank on 2% margin was becoming unsustainable. We had a liability of Rs. 4 million when we closed. We had no support. The minute we said sex workers, nobody was interested (in funding the bank)”. Profitability is quintessential to sustain any financial institution and innovation in this sector is now required to make banks such as Sangini co-operative profitable yet flexible enough to cater to the niche banking needs of sex workers.

The stigma surrounding sex work needs to be dismantled to empower sex workers and to put an end to their abuse.

Sara Sethia is a Research Associate (Gender Justice) at One Future Collective.

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