Livelihoods and Financial
Inclusion of Rickshaw Pullers
Manik L. Bose, Phd.
Economist and Social Scientist
Independent Consultant
Workshop on
“Livelihood and Financial Inclusion of Rickshaw Pullers”
National Institute of Urban Affairs, New Delhi
19th November 2013
Scope of this Presentation
Knowledge and findings from the following two
documents:
– First, ‘A Research Study on Financial Inclusion
related aspects of Rickshaw Pullers’ of UNDP
prepared by the researchers and coordinated by
the Centre for Rural Development (CRD), Guwahati,
Assam conducted at the field level in 2012
– Second, ‘E-Discussions document’ prepared by
the Solution Exchange Microfinance Community
Members of UN-India through initiating debate
among professionals for specific queries and from
stakeholder participants of workshops in 2012
The First Study
Livelihood Findings
• The Rickshaw Pullers (RPs):
– About 10 millions known from literatures + 10 millions
(+ 50 to 100 millions people directly or indirectly dependent?)
• (but could not find reliable source for this information)
• Of course all of them are economically poor and socially vulnerable
too (regret their life, wife /children feel ill fate)
• They are 100% migrants (seasonal, temporal and long-term)
• Become RPs, because they see RTS sector is one of the most
available immediate opportunity for income and survival
• Seasonal migrants come only to drive rickshaw for additional income
during the lean period at rural area (value added)
• Live in various insecured places (e.g. slums, platform, etc)
• Community feelings is very poor among RPs (individualism)
• RPs provide multiple services to the urban dwellers & market (take
challenges mentally, physically and powered by leg)
• Their life found full of socio-cultural problems (marriage and
education of children, driving at old age, values in society, etc)
Livelihood Findings…..contd.
•
Most of them are unskilled and illiterate and lack livelihood
capitals (resource poor)
•
Lack of awareness of social security and human rights (not
clearly know, are they eligible for it and how?)
•
Very weakly motivated for development of next generation (an
alarming case)
•
Women and children of their family also work for odd jobs (they
accept hardship is part of their life)
•
Very bad financial manager as earn daily and spend daily,
although earning is not bad (daily planner not tomorrow)
•
Savings is not their regular habit due to various reasons (their
women try hard traditionally)
•
Most of the RPs have smoking and alcohol habits (reduce home
take money)
•
They spend almost one-thirds of their daily income during the
working period for food and energy (operating cost investment)
Infrastructural and Institutional
• Most RPs driving rental rickshaw and paying Rs. 20 to 35
varied location to location and maintenance arrangement
with owner
– (it is more convenient for seasonal and temporal migrants)
• In most cities there is no allocated rickshaw stand, fare
chart and parking place (municipality & traffic system?)
• The municipal authority is not giving them adequate support
for RTS and RPs (license, institutional linkages)
• RPs are organizationally very weak (no union and
cooperatives)
• They face many problems related to road infrastructure,
traffic system, accident related, etc. (ban, police torture)
Infras. and Inst…..contd.
• The RPs face entitlement problem due to lack official KYC
documents (entry barriers)
• Except the client of MFI and NGOs, very few people /
organisations are hard to find helping for institutional service
• Many rickshaw owners claim that we are the one helping
them most while not getting adequate help from municipality
and police department (become traditional practice)
• The owners also said that we are the one providing
employment support to seasonal and temporal migrant
labours, not the government or any other organisation, but
we are blamed for their any mistake. But, do not have
capacity to help them in all areas, like shelter/housing,
drinking water, their spending for families , etc (unlinkage)
• Innovation and technology largely helped to both RPs and
users (light and comfortable)
Financial Inclusion of RPs
• Many RPs do not know exactly what is their financial
inclusion, but they do understand savings, loan and
insurance
• The seasonal and temporal migrants only know that they
need a bank account for their small savings for short
period and transferring money to home.
• They do not like any FIs that have market risk to loss
money (e.g. unit base Insurance, mutual funds, bonds)
• The micro-credit and micro-lease arrangement by many
organisation are doing well with RPs for giving them
ownership of rickshaw and some are also arranging other
FIs only for the lease period (after that many drop-out can
be seen)
Fl of RPs……..contd.
Key Benefits / Advantages:
• The one particular benefit is visible to the RPs that they
are the owner of rickshaw without having capital
(indirectly until repay loan later directly)
• The RPs are highly benefited through ownership of
rickshaw at the end of lease arrangement (creating asset
base and increasing cost-saving income)
• The payback installment of credit/lease amount is
playing role of mandatory savings (creating habits of
savings)
• The owner RPs run rickshaw according to their choice
(enhancing freedom of work-life balance)
• Few are selling rickshaw after completion of credit/loan
and opening other business (change in livelihood)
• Owner RPs enjoy rides of family to market & relatives
(no hardship for love one and children)
Fl of RPs……..contd.
Major Disadvantages:
• Many organisations avoided seasonal and temporal
migrants as they not live for whole year (financial
exclusion of a large number)
• In many cases, this arrangement did not cover secured
garage in the city (security of rickshaw)
• Sometimes they are not serious to repair and
maintenance of rickshaw which increase cost of
depreciation (reduce life of rickshaw).
• Single rickshaw owner has very high probability of
increasing cost of rickshaw if face accident (risk
probability)
• A RP will have right to sale his rickshaw after returning
full amount of credit /loan (it is happening at the ground
and seeking new loan, not going to face consequences)
Demand for RPs and their FI
• Demand for rickshaw is unquestionable in urban areas
based on current socioeconomic condition of large
number low- and middle-income group, connecting
people at short distance, transporting market goods,
available at close to residence, helpful during hazardous
period, good for local travel of tourists, etc. (demand for
multipurpose vehicle)
• Following are the demand for FI findings from the study
– Personal savings account
– Group savings account
– Micro-credit facilities (asset, business, housing)
– Transfer of remittance
– Micro-insurance (life and health)
– Micro pension
Supply of Financial Products
and Services incl. Livelihood
All demand side financial products and services are
regularly available at public and private bank
/institutions but condition apply & read carefully!!).
There are four distinct suppliers of financial products and
services (credit/lease & grant/donation)
1.
Public inst. (bank / financial inst.)
2.
Private inst. (bank / financial inst./ MFI)
3.
NGOs (MFI / development org.)
4.
Mission / Philanthropic organisation / Individuals
In general, all recipients need identity, however No.3 & 4
involve directly with activities (e.g CRD, AIF, PNB, etc)
and public and private institutions look for authentic
KYC and collateral guarantee for providing microcredit and financial products and services.
Conclusions
• In general RPs livelihood is vulnerable and deprived from
social and economic development of the country
• They are resource poor and have not fully aware of how to
improve their livelihood
• They need financial education and livelihood support
• They need reliable source for savings and remittance
transfer
• Long-term migrants living in the city need credit support
to buy rickshaw for cost-saving income
• They need strong RPs community and union to deal with
various institutions
• They need financial support for other IGAs to involve their
family members, particularly for women both in rural and
urban areas to protect and reduce migration
Policy and Strategy
• The government and other organisation need to develop a
holistic approach considering migration, livelihood, financial
support, IGAs for women and social security (policy & strategy
for livelihood development)
• The local government such as municipality in collaboration with
urban development authority and traffic police should look into
their identity (i.e. KYC) card/certificate to organize them, control
them and assisting them for social development and financial
inclusion) (Institutional Policy and implementation strategy)
• The MFIs and NGOs need to be included in government
programme for organizing them, assisting them for microfinance
and other financial products and services that best fit case to
case of RP. (policy & strategy for M&E)
• The government, local authority and NGOs need to come up with
a new model for their collectivization and improved RTS service
system (i.e. rules and regulations).
• A strategy for GO-NGO collaboration is needed to improve RPs
awareness through various audio-visual and rally programs
Many Thanks
for your time and patience to listen
The Voice of RPs
Feel Free 2 Forward First w/Family &/Friends