In 1987, six clusters of pavement dwellers in Mumbai who had come together for a training course discovered that their pursuit was not just better housing but a new way of life. Most participants in the training course were women and their exchange of ideas and experiences created a bonding that demanded sustained interaction.

The outcome was the formation of Mahila Milan ("Women Together"), a federation of women collectives that proceeded to design various activities for its members. The activities of Mahila Milan include the formation of a cooperative to seek an alternative site for their housing, the opening of bank accounts to save money for new homes, the provision of essential food and clothing for each family and the extension of emergency loans.

The credit system is managed by the women themselves and can start as soon as they are able to save one or two rupees. The money remains available for each saver at any time, and as the members know one another, mutual trust plays a major part. Units organize themselves around small groups of fifteen slum households and each group nominates a woman to collect the savings and repayments from her local group and submit any credit requests to the group.

The scale of the savings attracted the attention of the Housing Development Finance Corporation. The Corporation now treats Mahila Milan as a body through which credit can be distributed to improve the living conditions of the urban poor.