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Tag: Returnable Grant

The REVIVE Alliance – Creating A Sustainable Future For India’s Informal Sector

The REVIVE Alliance – Creating A Sustainable Future For India’s Informal Sector

 

India’s informal sector makes up a significant portion of the country’s workforce ~43% and provides employment opportunities for millions, especially those from the marginalized communities. 

However, despite its huge contribution to the economy, the informal sector operates without formal recognition. Currently only ~16% of all MSMEs have access to formal credit, creating a huge credit demand for working capital and capacity building support. This gap is further exacerbated for women, with 92.1% of women-owned MSMEs being unregistered / informal, and are therefore unable to access formal finance. 

As majority of the micro enterprises are either New to Credit (NTC) or New to Income(NTI), they are not deemed to be creditworthy, and are considered “high-risk customers” by formal lending institutions (LIs). 

This lack of support leaves individuals vulnerable to economic shocks, hindering their growth and preventing them from realizing their full potential.

Informal workers, including micro-entrepreneurs, have a huge potential to contribute to India’s economic growth, social progress, inclusive growth, and reduced poverty.

Samhita Revive Alliance clients

The REVIVE Alliance: A Catalyst for Change

Over 80% of solo, nano and micro entrepreneurs are either NTI, NTC, or New to Formal Credit (NTFC), have not completed basic KYC, GST, and other formalization activities, and do not have access to diverse markets. 

This shows the dire need for support from the private, philanthropic, financial and public sectors to band together to bridge this credit gap, and enable the rapid formalization and growth of these entrepreneurs. 

To support these efforts, Samhita-CGF founded the REVIVE Alliance, a collaborative platform that aims to increase incomes, improve livelihood opportunities, and enable the formalization of micro-entrepreneurs, making them more resilient to potential future shocks.

Through a multi-year, multi-intervention approach, REVIVE addresses critical challenges faced by informal workers, providing them with comprehensive support across 5 key interventions.

 

     1 . Financial Literacy and Inclusion

REVIVE focuses on enhancing financial literacy, facilitating access to formal credit through the Returnable Grant, as well as offering savings and investment support. 

Training programs and workshops are conducted to enhance financial literacy and promote savings habits. Additionally, REVIVE collaborates with financial institutions to facilitate access to formal credit and capital, catalyzed by the Returnable Grant that facilitates a graduation model. 

By enabling participants to navigate the financial landscape, REVIVE paves the way for financial inclusion and improved financial stability. 

 

     2. Skills Development and Job Progression

Limited skills and job opportunities often result in low wages for informal sector workers. REVIVE addresses this challenge by offering skill development programs that upskill / reskill job seekers and entrepreneurs. 

By partnering with training institutions, sector skills councils, and industry experts, REVIVE is able to deliver skilling programs to enhance technical and management skills, as well as entrepreneurial capabilities.

Woman artisan painting a pot

     

3. Enterprise Strengthening and Market Linkages

REVIVE aims to bridge this gap by providing enterprise development support and facilitating market linkages, so as to bridge the network gap and equip micro-entrepreneurs with the resources they need to thrive. 

Through these connections, micro-entrepreneurs are able to scale their businesses and expand their customer base.

     

     4. Digital Empowerment

REVIVE bridges the digital-divide through digital literacy and empowering participants with the necessary digital skills, covering topics like digital safety, financial tools as well as platforms that can help them with employment opportunities.  

Rural man and woman making digital payment

 

     5. Social Protection

REVIVE unlocks government schemes and facilitates access to affordable healthcare, insurance, pension schemes, trade-specific benefits and other social security benefits that provide a safety net for informal sector workers for income security and protection against unforeseen risks.

 

Fostering an Enabling Environment

REVIVE brings together a whole ecosystem of players – the government, corporates,, foundations, financial institutions, nonprofits, and other such stakeholders to create an enabling environment. 

Blended finance tools, such as the Returnable Grant, play a crucial role in providing NTC and NTI workers with access to capital on favorable terms, allowing them to invest in their businesses, scale their operations, skilling, get formal loans, etc. 

Through the co-creation of public goods, such as a pre-credit score, REVIVE aims to enable micro-entrepreneurs to access formal finance easily. The pre-credit score, backed by a credit guarantee, can be used by financial institutions to offer credit to first time borrowers, acting as a proxy for credit ratings and proof of ability to repay.

 

Impact and Potential for Scale

The REVIVE Alliance has the potential to create a transformative impact on the lives of millions of informal workers. By enhancing their livelihoods through improving access to finance, and enabling skills development, REVIVE aims to uplift micro-entrepreneurs and drive socio-economic progress. 

The ripple effect it can create extends beyond the immediate participants, positively impacting their families and communities.

With an initial target of impacting 10 million individuals, the REVIVE Alliance aims to scale its interventions and reach an even larger segment of the informal sector in the coming years.

By empowering informal workers through financial literacy, skills development, enterprise strengthening, and digital empowerment, REVIVE aims to build a thriving future where every individual has the opportunity to succeed and reach their full potential.

 

The Blended Finance Continuum: A Catalytic Pathway for Financial Inclusion

The Blended Finance Continuum: A Catalytic Pathway for Financial Inclusion

In India, the informal sector represents a significant portion of the workforce, employing more than 90% of workers and contributing around 50% to the country’s GDP. However more than 160 Million Indians remain underserved by formal credit systems

Access to formal credit, economic growth, and financial inclusion are critical for the development and empowerment for entrepreneurs in underserved communities. The lack of credit score and credit history is an impediment for getting credit opportunities, as many lenders are hesitant to extend credit to consumers without any credit history or score.

The innovative approach of a blended finance continuum can be a catalyst and pathway towards accessing future formal credit, driving economic growth, and providing financial inclusion for underserved communities.

In this blog, we will explore how the Returnable Grants, in conjunction with a pre-credit score, and credit guarantee, has the potential to create opportunities to transform lives for those in the informal sector.

 

Blended finance continuum: Opportunities or graduation into the formal economy

Blended Finance Continuum

The blended finance continuum offers a progressive pathway for participants to move up the chain of financial instruments from grants to commercial debt. As participants repay grants, they build a credit history and become eligible to unlock more capital from mainstream financial institutions. 

The aim of the model is to eventually make participants eligible for commercial loans. A large proportion of women are first-time borrowers and don’t have the credit history, collateral or documents to take formal loans. 

The pre-credit score with financial institutions and experts can be used by banks and NBFCs to offer affordable credit to first time borrowers; acting as a proxy for credit ratings and proof of ability to payback.

A rural women using a laptop

Paving the Way for Financial Inclusion

The Returnable Grants(RG) serves as a stepping stone for individuals and enterprises to transition from the informal sector to the formal financial system. By providing safe and flexible capital, the RG model enables micro-entrepreneurs, artisans, and job seekers to expand their businesses, invest in raw materials, and access new markets. 

As participants successfully utilize and repay the Returnable Grants, they build a credit history, gain financial knowledge, and establish their creditworthiness. This process aligns with the graduation model, which helps individuals progress from informality to formality, increasing their chances of accessing future formal credit.

“Fairoza Banu, a beauty-entrepreneur, used the RG model to expand her business. With the capital she received, Fairoza invested in high-quality materials and diversified her services. As Fairoza repaid the grant, she was able to show that she was able to pay back and be creditworthy.”

 

Pre-Credit Score: Unlocking Opportunities for New Borrowers

One of the significant barriers faced by individuals with no previous credit history is the lack of assets or creditworthiness. A pre-credit score framework is able to assess the creditworthiness and enable them to transition to the formal economy for accessing credit. 

Through evaluating repayment behavior and financial capacity, the RG model assesses the creditworthiness of underbanked individuals. Data collected from first time borrowers of the returnable grants along with other interventions can serve as a proxy to a traditional borrower..

This approach can provide first to credit borrowers with an opportunity to establish a credit history, demonstrate their repayment abilities and credit worthiness. 

Steps for building credit history:

  • First-time borrower repays returnable grant/debt
  • Provides access to financial, behavioral and repayments data which will feed into the pre-credit score
  • Pre-credit score will be used to estimate repayment capability of the borrower when trying to avail commercial credit from Banks/NBFCs

“Repayment of the Returnable grant builds positive credit history and for entrepreneurs like  Fairoza, can put the on a pathway toward formalization to access formal capital, so that in the future she could potentially take formal business loan and expand her business, and even support in the creation of jobs as her business expands.”

 

Improve access to relevant financial services on appropriate terms

A credit guarantee can mitigate the risk associated with lending to underserved communities and individuals. It acts as a form of assurance for financial institutions to provide formal credit to these marginalized groups.

  1. Risk Mitigation: A credit guarantee reduces the risk for lenders by providing a backup plan in case of default. This increased security will encourage financial institutions to extend credit to underserved communities who would otherwise be denied access. 
  2. Access to Formal Credit: A credit guarantee can bridge the gap between underserved communities and formal financial institutions, ensuring they have equal access to credit opportunities, establish financial stability, and become part of the mainstream financial ecosystem.

“As Fairoza’s business grows she may want to access higher credit amounts and access financial services, with a pre-credit score and a credit guarantee, a bank, confident in the credit guarantee provided by the RG model, can offer Fairoza and entrepreneurs like her access to great financial services. Such a collaboration can not only facilitate Fairoza’s growth but also encourage other financial institutions to support underserved communities.”

Indian women smiling

 

The Returnable Grant (RG), in conjunction with the graduation model, pre-credit score, and credit guarantee, has the potential to be a transformative approach to improve access to  future formal credit, increase economic growth, and provide financial inclusion for underserved communities. 

Through the graduation model, individuals and enterprises in the informal sector can overcome the barriers that traditional financial institutions impose on them,

  • The Returnable Grant: acts as a stepping stone for individuals to transition from the informal to the formal financial system, enabling them to access future formal credit and expand their businesses.
  • Pre-Credit Score: Evaluates repayment behavior and financial capacity of participants, to establish a proxy credit score, which paves the way for accessing formal credit in the future.
  • Credit Guarantee: mitigates the risk for financial institutions, encouraging them to lend to underserved communities and fostering economic growth.

The impact of the RG model can be seen through real-life examples of individuals who have transformed their lives and communities. 

It has empowered women like Fairoza to access formal credit, formalize and expand their businesses, and contribute to local economic growth and her family’s needs.

Through partnerships with financial institutions and philanthropic agencies we aim to create public goods like the pre-credit score and credit guarantee facilities, and unlock the full potential of the MSME sector to drive sustainable and inclusive economic growth.

Frequently Asked Questions: Compliance & The Returnable Grant

Frequently Asked Questions: Compliance & The Returnable Grant

Returnable Grants (RGs) have emerged as a transformative financial instrument, driving economic empowerment and livelihood for vulnerable communities. A Returnable Grant (RG) provides short-term, affordable, and flexible capital (zero interest and zero collateral) to individuals and entrepreneurs. The RG levies individuals with a moral (and not legal) obligation to repay.

Organisations such as Godrej, S&P Global, 360 One, Michael Susan, and Dell Foundation have embraced RGs as a central component of their projects aimed at supporting financial inclusion and livelihoods of informal workers, microentrepreneurs, farmers, artisans, and beauty entrepreneurs, and have seen its transformative impact through increased financial knowledge, increased incomes, and access to new skills and jobs.

This blog addresses frequently asked questions on compliance of Returnable Grants.

Here’s how it works

Returnable Grant Fund flow

Donors who are interested in adopting Returnable Grants as a feature in their projects onboard a technical partner (Collective Good Foundation), who designs and structures the returnable grant, provides performance management support, and identifies the donor’s choice of recipients.

The criteria for selection are as follows:

  • First-time participants who are in need of capital, also known as ‘New to Credit’ or NTC, and can be introduced to the credit ecosystem through the returnable grants model
  • Potential ability of selected participants to repay as a cohort
  • Existing engagement or relationship with non-profit partners, to understand if the Returnable Grant can be a good layer on other interventions

Where does the Money Go?

Returnable Grants allow money to be directly credited into the  beneficiaryaccounts or given out as cash equivalents such as vouchers. This process is supported by non-profit organisations or non-banking financial company (NBFC) partners. Once a returnable grant is repaid, it is circulated back into the repayment ecosystem to support additional participants with similar needs.

What are the FCRA/CSR norms, and how does it apply to organizations (donor and non-profits) using the RG model?

Compliance from an FCRA lens

What is the FCRA, and how does it apply to organizations using the RG model?

  • The FCRA is a regulatory framework that aims to regulate foreign contributions for economic and social programs.
  • This applies to foreign funds from foreign donors (foundations, bilateral agencies, multilateral agencies, HNIs, etc.)
  • RGs, designed within the FCRA guidelines, fall within the ambit of an economic and social program under Section 11(1) of the FCRA, 2010. This ensures the utilization of funds aligns with the intended purpose.

How does the RG model comply with FCRA regulations?

  • RGs are implemented through trusted partners, such as Non-Banking Financial Companies (NBFCs).
  • These partners distribute the funds to selected participants, who repay the partners instead of repatriating the money to the original funders.
  • This continuous circulation within the beneficiary ecosystem maximizes outreach and impact while complying with the FCRA guidelines.
  • Funds given by CGF (registered under FCRA) to the beneficiary Is not considered as sub-granting under FCRA as amended In September 2020.
  • Also, the NBFC Is simply the channel for transfer of FCRA funds to the beneficiaries Bank Account

Compliance from a CSR lens

CSR regulations apply to corporates registered under the Indian Companies Act.

How do RGs align with CSR regulations?

  • RGs can be categorized under Schedule VII of the Companies Act, 2013, which outlines eligible CSR activities.
  • By deploying RGs for approved initiatives, organizations fulfil their CSR expenditure obligations and contribute to social impact.

How is the utilization of RG funds tracked to ensure CSR compliance?

  • Once RG funds are received by the first set of beneficiaries, they are deemed to be utilized, satisfying the company’s CSR obligation.
  • As participants repay the funds, they are recirculated within the participant ecosystem and tracked to ensure compliance with CSR regulations. The recirculation within the beneficiary ecosystem Is purely a value added advantage of this model.

Common compliance:

  • Once the first round of RGs are disbursed, funds are recorded as utilised for the project – fulfilling FCRA and CSR regulations
  • Repaid funds are given to other deserving participants within the eco-system. Money is never returned to the donor and continues to rotate in the participant ecosystem until all funds are utilized.
  • Alternatively, at the end of a certain period, the donor can choose to spend the money as a grant for aligned activities, compliant with CSR and FCRA norms
  • Donors can choose to receive updates and impact reports until all funds are exhausted

 

What are some key considerations for non-profits using the RG model to ensure compliance with CSR regulations? 

  • Adhering to FCRA guidelines when utilizing foreign funds for RGs.
  • Aligning RG activities with the approved categories in Schedule VII of the Companies Act, 2013.
  • Ensuring beneficiaries receive the funds in their designated bank accounts.
  • Verifying that the funds are used for specific business use cases and not for activities prohibited by law.

Are Indian not for profits typically tax exempt? Who are the secondary recipients who can recover and redeploy Returnable Grants

  • Yes, Indian non-profits are tax exempt
  • Secondary recipients can only be not for profits, or designated intermediaries on behalf of the NGOs such as NBFCs (Non Banking Financial Corporations)

What are the factors affecting the returnability of a Returnable Grant?

  • The timeline of a Returnable Grant depends on nature and requirement of the cohort.
  • It may be returned during any time period – from a few months or within a few years – depending on the size of Returnable Grant, nature of cohorts and changed field conditions.

Are there any restrictions on the use of RG funds for CSR activities, and if so, what are they?

  • While there are no specific restrictions, organizations must ensure that the utilization of RG funds aligns with approved CSR activities as per Schedule VII of the Companies Act, 2013.

What reporting and monitoring requirements are associated with the use of RG funds for FCRA/CSR activities?

  • Organizations must maintain proper records of fund utilization, prepare periodic reports, and ensure transparency in reporting.

Returnable grants (RGs) provide a compliant and transformative approach for donors and non-governmental organizations (NGOs) to create sustainable impact in communities they service. By embracing RGs, donors can unlock greater financial resources to drive economic empowerment and improve livelihoods for vulnerable individuals and entrepreneurs. The unique design of RGs instils a sense of responsibility and empowerment among recipients, fostering a culture of self-sufficiency and long-term success.

Through the adoption of RGs, donors and NGOs have a powerful tool to effect long term positive change with vulnerable and at-risk communities.

Amplifying Impact: The Multiplier Effect of Returnable Grants in Financial and Social Transformation

Amplifying Impact: The Multiplier Effect of Returnable Grants in Financial and Social Transformation

Returnable Grants (RGs) have revolutionized the landscape of financing and social impact, providing leverage from a funding perspective while creating a multiplier effect for participants that drives positive change. The RG with its unique zero-interest, zero-collateral, no legal obligation to repay has the potential to become a catalysing tool that can empowering individuals and businesses that were previously deemed “ineligible” or “high-risk” to access formal credit.

Since 2021, our experience with the RG has shown success and scalability across various communities:

  • Over 32,000+ participants have already been impacted
  • Outstanding overall repayment rate of 93%.
  • More than 50% of these participants are women, emphasizing the role of RGs in promoting gender equality and empowering marginalized groups.

In this blog, we will explore the transformative potential of RGs and how they have garnered support from leading donors – corporate and philanthropic – to create a ripple effect leading to sustainable change for the communities they serve.

Driving Leverage from Funding and Financial Perspectives

RGs have captured the attention from corporate and philanthropic donors due to their ability to mobilise additional capital and maximize the reach and effectiveness of financial support. This ‘leverage’ expands the pool of resources,  bridges funding gaps. As RGs are repaid, the funds can be recycled and reinvested, creating a sustainable funding cycle that perpetuates the impact over time. Additionally, RGs can complement larger-scale initiatives, multiplying their impact through the integration of financial resources.

Creating a Multiplier Effect for Lasting Impact

The multiplier effect of RGs goes beyond the immediate participant group. By supporting micro-entrepreneurs access capital, RGs can stimulate local economies, generate employment opportunities, and contribute to community development. As these businesses flourish and incomes increase for the microentrepreneur, they are able to expand their business and create more employment opportunities leading to overall economic growth in their community – demonstrating the transformative potential of RGs in addressing socio-economic challenges and fostering sustainable development. Several successful cohorts have witnessed multiplier effects of 2-3x, indicating the power of RGs when supported by the right partners and infrastructure.

Examples of Donor Support for Returnable Grants

Returnable Grants have garnered significant attention and support from  donors who recognize the transformative power of the RG and have actively supported their implementation across various stakeholder groups. For instance:

  • Vinati Organics where over 4000 people got the RG at 100% repayment rate
  • Arvind Ltd has supported 297 blue-collar workers, providing RGs to enhance their livelihoods and create economic opportunities.
  • S&P Global has targeted 1920 street vendors and artisans, enabling them to thrive through RG support.
  • Godrej has focused on empowering 692 beauty entrepreneurs, fostering their growth through RG investments

 

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These initiatives have been able to demonstrate the tangible benefits of RGs in transforming communities, promoting gender equality, revitalizing rural economies, preserving
traditional crafts, and improving livelihoods. Moreover, RGs provide a sustainable funding cycle, as they can be recycled and reinvested into new cohorts, ensuring a continuous flow of capital for long-term impact amplifying the effectiveness of their philanthropic efforts.

Towards Institutionalization and Financial Inclusion

To further enhance financial inclusion, efforts are underway to institutionalize RGs as a viable alternative for improving livelihoods. Collaborations with regulators and financial institutions aim to link RGs with pre-credit scores and a credit guarantee to providing access to formal credit for high-risk individuals who would otherwise be excluded. By leveraging RG repayment rates to build pre-credit scores, participants’ creditworthiness is enhanced, opening doors to the formal economy. This integration fosters sustainable economic growth and development, benefiting both individuals and the larger community.

Returnable Grants offer a unique approach to funding and financial inclusion, providing leverage and driving a multiplier effect of impact. As the momentum behind RGs continues to grow, we see potential to enhance the way we address social challenges, paving the way for a future where finance empowerment becomes a force for positive change and where everyone has the opportunity to thrive.

Entrepreneurs with Disabilities

Entrepreneurs with Disabilities

The COVID – 19 lockdown has adversely impacted the most vulnerable sections of society, such as informal workers, farmers, street vendors, gig economy workers, etc. Even among the sections of society hit the hardest, Persons with Disabilities (PwDs) have been among the worst affected due to an intersection of circumstances which include economic vulnerability, reduced mobility even in regular times and other hindrances which resulted from the lockdown.

Additionally, as entrepreneurs look to recover from these economic shocks, PwDs find it harder to obtain capital to start new enterprises or for working capital for existing enterprises. ATPAR is an organization that looks to create an enabling ecosystem for entrepreneurs with disabilities. ATPAR works with Entrepreneurs with Disabilities & their family members for their economic empowerment, social inclusion and rehabilitation by training them through NSIC Delhi on entrepreneurship development and mentoring them for 4 to 6 months to enable them to start, sustain and scale their entrepreneurial ventures. 

ATPAR’s NEDAR (Network of Entrepreneurs with Disabilities for Assistance and Rehabilitation) provides business mentorship, handholding support, financial and market linkages to the entrepreneurs over and above the entrepreneurship development training. Many of these entrepreneurs needed financial assistance to restart business and recover from the economic impact of the pandemic.

REVIVE has been working with 35 such entrepreneurs in Delhi – NCR, Jammu and Kashmir, Rajasthan, Uttar Pradesh, Bihar and Puducherry to provide financial assistance to fulfil their working capital needs, make asset purchases, etc. They have received zero – cost finance in the form of returnable grants (RGs) of INR 20,000 / 40,000 from REVIVE which would be repaid over the course of 1 year. The RG carries a moral obligation to repay as opposed to a legal obligation. During this period, all entrepreneurs will continue to receive ATPAR’s in-depth support through the NEDAR network as well.

Street Vendors

Street Vendors

When a nationwide lockdown was announced, it immediately had a harsh effect on street vendors. An almost empty city without people stepping out of their homes meant that the city’s vendors immediately lost their source of income and were confronted with hunger and deprivation.

For women street vendors, the vulnerability doubled in such cases as they faced sharp repercussions after completely losing their livelihoods in the wake of the pandemic. A study shows that in the initial months of lockdown roughly 90% of vendors lost work, and even when the lockdown was lifted, recovery was slow, and it has not come back to pre-lockdown times. Women street vendors suffered most because they lacked access to assets and savings due to the lack of work and earnings. Most of these women street vendors used their savings to feed themselves and their families. Given this backdrop, restarting livelihood has become even more difficult but also the need of the hour. 

Across the country, many vendors have openly talked about issues in accessing loans since they are not recognised as ‘legal’ while also reporting a slowdown in the processing of loans. 

In the wake of these pressing problems, Samhita-CGF along with Brihati Foundation and S&P Global is supporting SEWA in reviving the livelihoods of 350 women street vendors. Spread across Gujarat, these women street vendors have received Returnable Grants within the REVIVE Alliance to be used as working capital to revive their livelihoods and tackle the cash crunch within their occupation. 

Although they are in the process of slowly recovering from this crisis, it is critical to take action to remove the barriers that are leading to their increased vulnerability. Returnable grants act as a 0% interest loan to these women which they have invested in buying raw materials for their vending business. However, there is an existing social stigma that these street vendors have to face as they are quite often seen as illegal occupants of public space. SEWA reported how these women are frequently targeted, harassed and evicted by officials of gated society, police, and sometimes government officials. 

For so many vendors, their businesses have fallen due to a perceived fear among people that the disease will spread more easily in markets. It is through continuous efforts by SEWA within the REVIVE Alliance that gradually the corporators/government officials have started to support these street vendors and their access to space for vending is not being denied anymore by the police. Challenges of entering gated communities/societies still persist, however, with enough vaccinated street vendors, this picture might change soon enough. 

Overwhelming demand from street vendors remains for support to resume working. Easier and faster access to capital and permission to work without harassment is essential to expedite recovery for vendors. Therefore, as a recovery model, Samhita-CGF along with Brihati Foundation and S&P Global is supporting SEWA in reviving the livelihood of 350 women street vendors by giving them returnable grants as a form of 0% interest loan.

Farmers

Farmers

Through the REVIVE Allaince, Brihati Foundation is supporting 2 batches of farmer cohorts in the state of Gujarat, by providing them with working capital through Returnable Grants as a financial instrument. The farmer cohort funded by Brihati is supported by Somnath Farmers Producer Company as an on-ground implementation partner. The grant was provided in the form of subsidized vouchers to avail agricultural inputs such as fertilizers, pesticides, seeds etc for their harvesting season.

The farmer cohort’s first batch has been completed with 100% repayment rate. The amounts recovered has now been channelised into supporting another set of farmers. Following are the challenges faced by the Farmers which fueled the need for timely working capital support:

  • Being small scale farmers, each member holds between 2 to 19 acres of land which is used for crop farming or animal husbandry. They usually grow groundnut & cotton crops.
  • Depending on the crop season, farmers reach out to various farmer producer organizations for the supply of agricultural inputs.
  • Due to seasonality, however, most small to marginal farmers remain reliant on money lenders in their regions; to whom they end up paying very high-interest rates.
  • Due to COVID-19, and recent take cyclones caused heavy disruption, leading to  uncertainty of funds and high-interest rates prevailing this year
  • Grant to these farmers allowed them to continue production even in times of crisis
  • In the past, scenarios of high-interest costs have led to inflation of prices; a timely grant aims to mitigate such a situation.

Blue-Collared Workers

Blue-Collared Workers

Given the steep hit that the garment industry took due to COVID-19 and the impact it had on the livelihood of garment workers, Arvind Foundation has partnered with Samhita-CGF and impact partner Learnet to provide financial support, re-skilling and placements to ex-Arvind workers who were laid off during the pandemic. Arvind Foundation is the CSR arm of Arvind Ltd, a global player in the textile and apparel manufacturing industry and they became an integral member of the REVIVE alliance – aiming to create a better normal.

Program Structure 

Training:

  • Basic job readiness training

Placement:

  • Identification & mapping of jobs according to the skills and location preference of the selected candidate
  • Collection of placement proofs from employers and KYC documents from candidates 

Returnable Grant:

  • After preliminary KYC and placement verification conducted by Learnet and CGF, the list of candidates and their documents are shared with Supermoney for verification and onboarding
  • After candidates accept terms of the returnable grant through calls conducted by Supermoney, the batch is finalized by CGF 
  • The equivalent amount is transferred from CGF to Supermoney after a round of internal approvals
  • Upon receipt of the transferred amount, the grant worth INR 4,500 is disbursed to the candidates before they receive their first salary
  • After the deferment period of one month, Supermoney sends out repayment reminders and links to the candidates
  • The candidate repays the grant in five instalments of INR 900 each
  • Repayments are collected, reconciled and transferred back to CGF account by Supermoney

What did we learn?

Mobilization:

Learnet is a training and placement agency and they have limited connections with the local communities. There is a need for the intervention of a grassroots NGO or organization that can aid mobilization and ensure that the program serves the beneficiaries in need (people who lost jobs on account of the pandemic in this case). 

Learnet, CGF and SuperMoney struggled to reach out to these communities and conduct monitoring/impact assessment after their placements and receipt of RG. The involvement of an intermediary organisation can improve accountability when it comes to repayment and will further streamline the RG related processes. 

Curriculum Design:

Candidates are associated with Learnet for a short span of 4.5 hours and are mapped to a job almost immediately and have very limited connection with them. The curriculum is very basic and does not equip them with the required skill sets. Since the cohort was heterogeneous in terms of their socio-economic background, qualifications and technical skills, Learnet struggled to map the available openings to their skill sets and could not fully satisfy their requirements. There is a need to design a longer upskilling/reskilling program with a focused approach that aims to train candidates to take up job roles that are in demand (Refer reskilling note proposed to Arvind). 

It is also imperative to incorporate financial and digital literacy modules into the curriculum to ensure uptake of digital tools amongst communities. 

Capacity Building:

Training partners are new to hybrid programs including financial instruments like Returnable Grants. There is a need for capacity building of these training partners to improve communication and ensure a seamless flow of clean data. 

Returnable Grant:

These salaried blue-collar workers earn an average salary of INR 10,000 – 12,000 and have the capacity to repay. Based on informed consent and prior assessment of their financial health, e-mandates can be executed for the candidates willing to accept the terms & conditions. Alternatively, suitable channels can be created for candidates who wish to make offline payments (via cash/cheque) and the repayment options should be designed in such a way that it leaves no one behind. Additional support to open bank accounts, correction of KYC particulars and encouraging the community to adopt healthier financial practices and be undertaken by implementing agencies.

Beautypreneurs

Beautypreneurs

The COVID pandemic resulted in the shutting down of a lot of businesses and beauty salons were one of them. The extended lockdowns resulted in low to absolutely nil customer footfall. 

The beauty and personal care market is expected to touch $10 billion by 2021, growing at an annual rate of 5-6%, according to a report by the Indian Beauty & Hygiene Association. However, the majority of beauty and wellness businesses, including salons, spas, and barbershops, fall either in the small and medium enterprise or the unorganised category. This sector employs approximately seven million skill-based professionals, mostly from the weaker sections of society, according to industry estimates. Two out of three employees in the industry are women or migrant workers who have been the worst hit by the extended lockdowns.

When the lockdown was lifted, the entrepreneurs showed a desire to adapt their businesses to the new reality but did not have the resources to do so. Innovative financing in the form of a returnable grant was the solution here. Under the Salon-I program, Godrej became the mentor of these businesses and funded this particular initiative. The entrepreneurs were provided with small ticket sized grants ranging from INR 5000 to INR 20000 which was to be used as working capital to restart and build the resilience of their respective businesses. 

The entrepreneurs had only a moral obligation to repay the grant given to them with the vision that if the money comes back, it will be used to aid more such entrepreneurs in the network. A total of INR 55 lakhs has been disbursed among 472 beautypreneurs so far.

Samhita-CGF’s REVIVE Alliance Among 34 Initiatives Worldwide to Receive Support from Google.org Impact Challenge

Samhita-CGF’s REVIVE Alliance Among 34 Initiatives Worldwide to Receive Support from Google.org Impact Challenge

Samhita – CGF has been named one of 34 selected organizations to receive funds from the Google.org Impact Challenge for Women and Girls.

The Google.org funding will strengthen the efforts Samhita-CGF launched in October 2020 via the REVIVE Alliance, one of the largest private sector and philanthropy-led alliances in India to help facilitate a long-term recovery of the informal sector, with a focus on women, youth, and other marginalized populations, whose livelihoods are impacted by the COVID-19 pandemic.

Samhita-CGF is one of 9 Asia-Pacific projects selected for this funding cohort out of nearly 8,000 applications globally. In addition to funding, Samhita-CGF will participate in a four-month accelerator program led by Google’s Accelerator and Women Techmakers communities and Impact Challenge partner Vital Voices to move projects forward.

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