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National Micro Finance Conference 2010 “FINANCIAL INCLUSION AND RESPONSIBLE MICRO FINANCE” Translating Financial Inclusion into Sustainable Livelihood 18 March 2010 Mythili Ravi IL&FS Cluster Development Initiative Ltd. OR…. Translating Sustainable Livelihood into Financial Inclusion ??.

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National Micro Finance Conference 2010 “FINANCIAL INCLUSION AND RESPONSIBLE MICRO FINANCE”

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National micro finance conference 2010 financial inclusion and responsible micro finance

National Micro Finance Conference 2010

“FINANCIAL INCLUSION AND RESPONSIBLE MICRO FINANCE”

Translating Financial Inclusion into Sustainable Livelihood

18 March 2010

Mythili Ravi

IL&FS Cluster Development Initiative Ltd.


National micro finance conference 2010 financial inclusion and responsible micro finance

OR…

Translating Sustainable Livelihood into Financial Inclusion ??


National micro finance conference 2010 financial inclusion and responsible micro finance

Key Questions for the Session

  • Does the transition to livelihoods demand institutions beyond microfinance? If so, how to coordinate?

  • Is there a way to integrate National Skill Development Mission and National Rural Livelihood Mission?

  • Is there a way such that SHGs, NREGA, NRLM and Financial Inclusion agenda work in tandem with each other?

    Answer to all – A resounding “YES”


National micro finance conference 2010 financial inclusion and responsible micro finance

Ecosystem

Institutions

Macro – Economic Framework

Education/Vocational System

Policies

Livelihood

is a

function of

( Skill , Opportunity & Assets )

Political Framework & Government

Financial System Formal/Informal

Social System, Values , Beliefs etc

Technology

Distribution Patterns

Income /Assets


Financial inclusion sustainable livelihood

Financial Inclusion & Sustainable Livelihood

Two-way relationship which is mutually reinforcing, but more fundamental are…..

  • Need for prioritisation of financial products

    • Access to social security (PF, pensions, etc)

    • Risk mitigation products (Insurance – life and non-life)

    • Savings

    • credit

  • Income earning opportunities

    • Education (basic)

    • Employability

    • Empowerment


Evaluation of sgsy salient aspects

Evaluation of SGSY – salient aspects

  • 23% of total SHGs formed graduated to Micro enterprises

  • 22% of SHG were able to access bank credit

  • Success Factors

    • Systematic mobilisation into SHG (eg. AP, TN)

    • Capacity building

    • Skill Development

  • Need for ….

    • systematic capacity in skill building and

    • sustained technical, marketing and placement support


Lack of capacity building due to

Lack of Capacity building due to……..

  • Inadequate institutional infrastructure

  • lack of trainers

  • limited capacity of existing institution

  • inaccessibility of training facilities to rural poor due to entry level barriers, high costs and distant locations

  • lack of umbrella organization for implementation


National micro finance conference 2010 financial inclusion and responsible micro finance

The Context


Macroeconomic context

Macroeconomic Context

Services and Manufacturing sector to expand – increasing share of the economy

Agriculture to grow at negative rate

  • India on Growth Path

  • Even in downturn the growth projected at 7%

HOWEVER, POVERTY STILL PREVAILS – As per World Bank statistics, India’s poor are at 400 million


Constraints in agriculture sector for livelihoods

Constraints in Agriculture sector for livelihoods

  • 54% of population dependent on agriculture, but….

  • Contribution of agriculture to economy reduced from 32% in 1990-91 to 18.5% in 2004-05


National micro finance conference 2010 financial inclusion and responsible micro finance

By 2026, majority of Indian population will be in younger age bracket, but at present only 2% of them are vocationally trained

  • However, they cannot be classified as Employable because:

  • School Drop out ratio is very high

  • Only 2% of the labour force aged 15-35 have received any vocational training

  • 67% of the labour force are either illiterate or primary school level educated

  • 69% of unemployed are educated but without professional training or skills

  • 36 % of the population in 2011 would be people in age group of 15-34 years

  • These represent YOUTH entering workforce


National micro finance conference 2010 financial inclusion and responsible micro finance

Opportunities in the Environment

  • Textile, Garment & Apparel26.2 million

  • Leather & Leather Products 4.6 million

  • Construction 47.3 million

  • Logistics 4.0 million

  • Auto & Auto Components 11.7 million

  • Organised Retail 17.3 million

  • Banking, FS, & Insurance 4.2 million

  • Tourism & Hospitality 4.5 million

  • General Engineering 3 – 5 million (by 2012)

Source: General Engineering and Logistics: IL&FS Analysis, NSDC Report


Rationale for industry

Rationale for Industry

  • Globalisation leading to

    • Greater opportunities in world trade – better technology, larger markets

    • Competition – more players & relocation of global brands to low-cost production destinations

  • Competitiveness – vital for survival

    • through productivity improvement (capital and labor)

  • Actualise Growth Potential

  • Inclusive Growth Agenda


Findings of nmcc

Findings of NMCC

With Liberalization, Indian industry deployed more capital, but ….

during 1990-2004, there has been continuous reduction in capital productivity across all major sectors

This implied substitution of capital for labor without technological upgradation

Because of scarcity of skilled workforce to work on new installed capital

2008, A study on Labour Intensity & Employment potential of Indian Manufacturing, ICRIER


Vicious cycle of low skill economy

Vicious cycle of Low-Skill Economy


Policy context

Policy Context

NRLM Mission

  • reduce poverty among rural BPL through

    • promotion of diversified and gainful self-employment and

    • wage employment

    • opportunities to provide appreciable increase in income on sustainable basis.

  • Output

    • 160 lac SHGs to enter Micro enterprise level

    • 75 lac rural BPL youth to be provided placement support (20% of total NRLM funds allocation)


National micro finance conference 2010 financial inclusion and responsible micro finance

Market-relevant skill development converges industry need with poverty eradication goal

  • Courses designed to meet the specific needs of the industry, across sectors

  • Employment linkages with organized sector

  • Short-duration courses to improve accessibility to trainees

  • No artificial educational requirement barriers

  • Formal certification

  • Employment in organised sector forms the basis for financial inclusion and access to social security

17


National micro finance conference 2010 financial inclusion and responsible micro finance

IL&FS Response & Experience

as a Practitioner


Il fs framework for livelihoods

IL&FS Framework for Livelihoods

  • Income earning opportunities

    • Education (basic)

    • Employability

    • Empowerment

  • Program for

    • Education

    • Skill Development

    • Livelihoods promotion (through integrated package of inputs)


Basic principles

Basic principles

  • Sustainability through emphasis on commercial viability

  • Market-driven basis

  • Convergence of schemes for enhanced outcomes

  • Multi-stakeholder partnership

    • to converge towards common goal

    • Leverage upon individual strengths

      Into self-sustaining synergies


We work with

We work with

  • School drop-outs (Persons with basic primary education only)

  • Academically less oriented

  • Socially and economically underprivileged (BPL youth, Poor women, SC/ST/OBC)

  • Persons facing entry barriers in formal education / vocational education space

  • Traditional artisans (even without formal literacy)


Some of il fs projects

Some of IL&FS Projects

  • MORD Supported SGSY- Special Projects for training and placement of Rural BPL youth (1,12,600)

  • State- supported projects (Eg. Haryana, Manipur, Rajasthan)

  • Corporate Mandates (Vedanta, Brandix, Trichy ancillaries)

  • Livelihood Projects (Tripura, Bihar, Rajasthan, UP)


Strategic framework

Strategic Framework


Components of approach

Components of Approach

How………..

  • Establish Multi-Stakeholder Partnerships

    • Linkage with business development services and network with market players

    • Integrate with employment generation /livelihood strategies of GoI

    • Creating and operationalising platforms for linkages (informal-formal, industry, civil society, local government)

  • Blend with the Institutional structure – Dovetail with schemes / policies (DIPP, MORD, MoLE)

  • Create institutional Capacities (Trained Trainers)

  • Scalability

  • Quality (Design, content, delivery, standards)

  • Accountability & Transparency


Components of approach1

Components of Approach

How………..

  • Establish Multi-Stakeholder Partnerships

    • Linkage with business development services and network with market players

    • Integrate with employment generation /livelihood strategies of GoI

    • Creating and operationalising platforms for linkages (informal-formal, industry, civil society, local government)

  • Blend with the Institutional structure – Dovetail with schemes / policies (DIPP, MORD, MoLE)

  • Create institutional Capacities (Trained Trainers)

  • Scalability

  • Quality (Design, content, delivery, standards)

  • Accountability & Transparency


Components of approach tools methods

Components of Approach- Tools & Methods

  • Adoption of Technology

  • Multimedia

  • Revolutionize teaching / skill development process

  • Prepare students for life through soft skills and life skills


Multi stakeholder partnership to pool in core strengths and ensure buy in

Multi-stakeholder partnership to pool in core strengths and ensure “buy-in”

NGO, Community

Industry /Employer

Training Holistic (Technical & Soft, Life skills)

Technical Partners & Certifying Agency

Government

(SGSY, MES, NACO, state govt. resources,)

IMPLEMENT MANAGEMENT AND SUPPORT AGENCY


National micro finance conference 2010 financial inclusion and responsible micro finance

3-Year pilot project to train 30,000 BPL Youth completed 1 year ahead of schedule in August, 2009 with 93% placement rate.

Industry & Placement partners over 487.

85% women placed

Over 80% - SC/ST/ OBC

Trained more than 195 trainers

Enhanced use of underutilised or unutilised infrastructure with government, institutions, etc.

Established 101 training centers in 14 states.

Training module available for 8 trades in 9 languages.

Skill Development Programs -Key Highlights

28


Impact on trainee

Impact on Trainee

29


Impact on industry

Impact on Industry

BEFORETRAINING

AFTERTRAINING

30


Independent evaluation study of pilot project

Independent evaluation study of Pilot project

  • Dropouts-between 5% to 8%

  • Gender composition-Predominately women, only 7% male.

  • Age group-18-25 Years

  • Caste composition-More than 50% beneficiaries were from BC and Most BC caste.

  • Educational qualification: 52% to 60% had completed higher secondary school.

  • Occupational structure of families:33% from Agricultural and 66% non agricultural-Shift due to SEAM Programme.

  • Distribution income of household: Respondents contribution more than 50% of household income.

31

Study conducted by MIDS

States covered-Tamil Nadu, Andhra Pradesh & Karnataka.

Total 1,087 respondents surveyed.


National micro finance conference 2010 financial inclusion and responsible micro finance

Livelihood Programs – Artisan Clusters

Narsapur Lace

Mega Cluster

Tripura Rubber Park


National micro finance conference 2010 financial inclusion and responsible micro finance

Tripura Bamboo Mission – a case study in Livelihoods promotion

Government of Tripura initiative for Integrated Development of Bamboo Sector

Objective: Scale up the turnover from Rs 28 cr to Rs 76 cr in 4 years and Double livelihoods

Address entire value chain - “Farm to Market”

Provide infrastructure, skill training, design support, market linkages, O&M support

Resource mobilization of Rs 48 crores


National micro finance conference 2010 financial inclusion and responsible micro finance

Progress Achieved 2007-2009

  • Turnover Increase: from Rs 27 cr to Rs 56 crores in two years

  • Livelihoods Generated: 4000 incremental across four districts

  • Capacity Building: Over 5000 artisans trained

  • Institution Development: State Level SPV and 14 village level producer collectives.

  • New Product Development: Incense rolling, industrial Mat weaving and range of home utility products

  • Private Investment: Rs 5 crs across three machine stick making units

  • Resource Mobilization: Rs 38 crores mobilized .

  • Market Linkage: linkages with leading retailers (Fabindia, Shoppers Stop, Mother Earth) and industry partners


National micro finance conference 2010 financial inclusion and responsible micro finance

Community Production Infrastructure

  • 15 community based production centers established at the village level with:

    • Introduction of upgraded production infrastructure

    • State of art machines, tools and equipment

    • Treatment and processing facilities

    • Access to quality Raw Material and Accessories

    • Finishing and packaging facilities


Technology introduction

TECHNOLOGY INTRODUCTION

  • Bamboo treatment

  • Basic Dyeing

  • Natural Dye

  • Power tools

  • Juki machine

  • Pneumatic tools

  • Finishing


Design development partners

DESIGN DEVELOPMENT -PARTNERS

  • NID-Ahmedabad

  • AIACA-New Delhi

  • Industree Crafts Foundation

  • Eric Benque- Paris

  • Sandeep Sangaru-Bangalore

  • Sangeeta Sen – Ex Fabindia

  • Siddhartha Das – NID

  • Hrishikesh - NIFT

  • Nandini - NIFT

  • Tulip Sinha


National micro finance conference 2010 financial inclusion and responsible micro finance

Skill Development

  • Training of over 5000 artisans across four districts.

  • Induction of reputed designers and bamboo technical experts

  • Focus on treatment of bamboo & new techniques

  • Development of utility based designs & new contemporary products.

  • Production management to achieve economies of scale.


National micro finance conference 2010 financial inclusion and responsible micro finance

Market Linkages

  • Linkages with leading retailers Shoppers Stop, Fabindia, Mother Earth

  • Marketing tie up exporters, institutions, corporates and distributors

  • Appointment of Marketing agents in major cities.

  • Exhibitions and Trade Fairs

  • E-Portal for promotion and market development (www.tripurabamboo.com)


New product development

New Product Development

Utility items for Hotel & Restaurants


National micro finance conference 2010 financial inclusion and responsible micro finance

Lamps and Lampshade


National micro finance conference 2010 financial inclusion and responsible micro finance

Candle and Lighting Stands


National micro finance conference 2010 financial inclusion and responsible micro finance

Bamboo Basketry


National micro finance conference 2010 financial inclusion and responsible micro finance

Product Development: Home Utility


National micro finance conference 2010 financial inclusion and responsible micro finance

Product Development: Hand Bags


National micro finance conference 2010 financial inclusion and responsible micro finance

Product Development: Lighting


National micro finance conference 2010 financial inclusion and responsible micro finance

Product Development: Table Ware


National micro finance conference 2010 financial inclusion and responsible micro finance

Product Development: Furniture


National micro finance conference 2010 financial inclusion and responsible micro finance

Product Development: Yoga Kit, Mats & Cushions


National micro finance conference 2010 financial inclusion and responsible micro finance

  • StoryBoard.ppt


Convergence

Convergence

  • Working on …………

    • Pensions

    • Housing & housing loan

    • Insurance

  • Brought in

    • ESIC

    • Account opening

    • PF

    • Basic health services


Convergence the unfinished agenda

Convergence – the Unfinished Agenda

  • Sustainability through skill upgradation - NSDC

    • Enable school dropouts to “complete” their education through a bridge course –NSDC

    • Converge ‘Poverty alleviation – urban and rural’ at policy making level

    • Update ‘Poverty’ criteria and ‘BPL status’

    • Policy asymmetry in minimum wage and BPL cut off??


National micro finance conference 2010 financial inclusion and responsible micro finance

Thanks


Il fs skill development projects some visuals

IL&FS Skill Development Projects – Some visuals


National micro finance conference 2010 financial inclusion and responsible micro finance

  • SESS centre in Ahmadabad

  • Welding Centre-Trichy


Quality in delivery use of technology and innovative learning tools

Quality in Delivery - Use of technology and innovative learning tools

K-Yan (projector and Computer) loaded with multimedia content


Multimedia based training

Multimedia Based Training

K-Yan


Quality in delivery blend with soft skills

Quality in Delivery – Blend with Soft Skills


Quality in delivery blend with soft skills1

Quality in Delivery – Blend with Soft Skills


National micro finance conference 2010 financial inclusion and responsible micro finance

A glimpse from the Training of Trainer programme for SELF


National micro finance conference 2010 financial inclusion and responsible micro finance

Thanks once again !


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