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 ??
2
Key Questions for the Session
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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”
3
Ecosystem
Institutions
Macro – Economic
Framework
Education/Vocational
System
Livelihood
is a
function of
( Skill , Opportunity & Assets )
Technology
Social System, Values , Beliefs etc
Distribution Patterns
Income /Assets
Financial Inclusion & Sustainable
Livelihood
Two-way relationship which is mutually reinforcing, but
more fundamental are…..
 Need for prioritisation of financial products
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Income earning opportunities
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Access to social security (PF, pensions, etc)
Risk mitigation products (Insurance – life and non-life)
Savings
credit
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Education (basic)
Employability
Empowerment
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Evaluation of SGSY – salient aspects
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23% of total SHGs formed graduated to Micro enterprises
22% of SHG were able to access bank credit
Success Factors
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Need for ….
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Systematic mobilisation into SHG (eg. AP, TN)
Capacity building
Skill Development
systematic capacity in skill building and
sustained technical, marketing and placement support
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Lack of Capacity building due to……..
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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
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The Context
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14 March 2016
Macroeconomic Context
Growth Rate (NNP at Factor Cost)
12
10
9.6
9.7
8.7
8
9.4
7.2
6
5.8
4
3.6
2
0
-India on Growth Path
- Even in downturn the growth
projected at 7%
Services and Manufacturing sector to
expand – increasing share of the
economy
Agriculture to grow at negative rate
HOWEVER, POVERTY STILL PREVAILS – As per World Bank
statistics, India’s poor are at 400 million
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Constraints in Agriculture sector for livelihoods
Millions 450
400
•
54% of population
dependent on
agriculture, but….
•
Contribution of
agriculture to
economy reduced
from 32% in 199091 to 18.5% in
2004-05
350
300
250
200
150
100
50
0
1993-94
1999-00
Agriculture
10
Secondary
2004-05
Tertiary
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
- 36 % of the population in 2011 would be
people in age group of 15-34 years
- These represent YOUTH entering workforce
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- 69% of unemployed are
educated but without
professional training or skills
Opportunities in the Environment
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Textile, Garment & Apparel
Leather & Leather Products
Construction
Logistics
Auto & Auto Components
Organised Retail
Banking, FS, & Insurance
Tourism & Hospitality
General Engineering
26.2 million
4.6 million
47.3 million
4.0 million
11.7 million
17.3 million
4.2 million
4.5 million
3 – 5 million (by 2012)
Source: General Engineering and Logistics: IL&FS Analysis, NSDC Report
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Rationale for Industry
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Globalisation leading to
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Competitiveness – vital for survival
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Greater opportunities in world trade – better technology,
larger markets
Competition – more players & relocation of global brands
to low-cost production destinations
through productivity improvement (capital and labor)
Actualise Growth Potential
Inclusive Growth Agenda
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
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Vicious cycle of Low-Skill Economy
Low
Skill
Lesser incentives
to invest in
training
Low
Product
ivity
Fewer
Jobs
Low
Competetiveness
Lower
Growth
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Low
Technol
ogy
Lesser
Orders
Policy Context
NRLM Mission
 reduce poverty among rural BPL through
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Output
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promotion of diversified and gainful self-employment
and
wage employment
opportunities to provide appreciable increase in income
on sustainable basis.
160 lac SHGs to enter Micro enterprise level
75 lac rural BPL youth to be provided placement
support (20% of total NRLM funds allocation)
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Market-relevant skill development converges
industry need with poverty eradication goal
Marketrelevant Skill
No
Development 
education
Poverty
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/school
drop out
Organized
sector
employment
and social
security
Improved,
stable
standard of
living
Courses designed to meet the specific needs of the
industry, across sectors
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Employment linkages with organized sector
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Short-duration courses to improve accessibility to
trainees
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No artificial educational requirement barriers
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Formal certification
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Employment in organised sector forms the basis for
financial inclusion and access to social security
IL&FS Response & Experience
as a Practitioner
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IL&FS Framework for Livelihoods
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Income earning opportunities
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Program for
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Education (basic)
Employability
Empowerment
Education
Skill Development
Livelihoods promotion (through integrated package of
inputs)
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Basic principles
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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
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We work with
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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)
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Some of IL&FS Projects
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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)
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INNOVATIVE USE OF TECHNOLOGY
UNRELENTING FOCUS ON QUALITY
(IN DESIGN, CONTENT, DELIVERY &
STANDARDS)
OPTIMUM UTILIZATION OF EXISTING
TRAINING INFRASTRUCTURE
Strategic Framework
MULTI-STAKEHOLDER PARTNERSHIPS
(Govt., Industry, Experts)
DEMAND LED TRAINING APPROACH
Components of Approach
How………..
 Establish Multi-Stakeholder Partnerships
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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
How………..
 Establish Multi-Stakeholder Partnerships
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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
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Adoption of Technology
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Multimedia
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Revolutionize teaching / skill development process
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Prepare students for life through soft skills and life
skills
26
Multi-stakeholder partnership to pool in core
strengths and ensure “buy-in”
NGO, Community
Government
(SGSY, MES, NACO,
state govt.
resources,)
Industry /Employer
Training
Holistic
(Technical &
Soft, Life
skills)
Technical Partners
& Certifying Agency
IMPLEMENT MANAGEMENT AND SUPPORT AGENCY
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Skill Development Programs -Key Highlights
Our Journey since September 2007
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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.
Highlights
No. of Trainees Enrolled
Of which Dropped out
As on
March
13, 2010
46,185
3,967
Completed training
40,794
Of which placed in the
industry
Placement in progress
36,847
Placement %
Dropout %
3,947
90.32
8.8
Impact on Trainee
PARAMETER
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PRE - TRAINING
POST – TRAINING
Core Employable Skills None
Certified industrial
sewing machine
operator
Monthly Income
Rs. 300-350
Prescribed Minimum
wages plus productivity
linked bonuses
Social Security (PF,
Insurance)
None
Covered as per the
company policy
Nutrition
Under nourished
Improved nutrition due
to meals provided by
Company
Life management
skills/soft skills
No organized inputs
Greater awareness
Impact on Industry
BEFORE TRAINING
Industry recruits
raw untrained
persons (0%
efficiency)
Industry trains new
recruits for 4 weeks
New Recruit placed
in production line
(55% efficiency)
30
AFTER TRAINING
Trainees undergo
training for 30
working days –
Achieve 55%
efficiency
Industry recruits
trained youth and
trains them further
on shop floor for
adaptation
New Recruit placed
in production line
(85% efficiency)
Independent evaluation study of Pilot
project
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Study conducted by MIDS
States covered-Tamil Nadu,
Andhra Pradesh & Karnataka.
Total 1,087 respondents
surveyed.
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Dropouts-between 5% to 8%
Gender compositionPredominately 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.
Livelihood Programs – Artisan Clusters
Tripura Rubber
Park
Narsapur Lace
Mega Cluster
Tripura Bamboo Mission – a case
study in Livelihoods promotion
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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
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
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
o
o
o
o
o
o
o
Bamboo treatment
Basic Dyeing
Natural Dye
Power tools
Juki machine
Pneumatic tools
Finishing
DESIGN DEVELOPMENT -PARTNERS
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o
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
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.
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
Utility items for Hotel & Restaurants
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Lamps and Lampshade
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Candle and Lighting Stands
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Bamboo Basketry
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Product Development: Home Utility
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Product Development: Hand Bags
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Product Development: Lighting
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Product Development: Table Ware
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Product Development: Furniture
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Product Development: Yoga Kit,
Mats & Cushions
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StoryBoard.ppt
14 March 2016
Convergence
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Brought in
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ESIC
Account opening
PF
Basic health services
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Working on …………
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Pensions
Housing & housing loan
Insurance
14 March 2016
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??
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14 March 2016
Thanks
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14 March 2016
IL&FS Skill Development
Projects – Some visuals
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SESS centre in Ahmadabad
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Welding Centre-Trichy
14 March 2016
Quality in Delivery - Use of technology
and innovative learning tools
K-Yan (projector and Computer) loaded
with multimedia content
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Multimedia Based Training
K-Yan
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Quality in Delivery – Blend with Soft
Skills
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Quality in Delivery – Blend with Soft
Skills
A GLIMPSE FROM THE TRAINING OF TRAINER PROGRAMME FOR SELF
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Thanks once again !
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14 March 2016