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 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 Income earning opportunities 5 Access to social security (PF, pensions, etc) Risk mitigation products (Insurance – life and non-life) Savings credit Education (basic) Employability Empowerment 14 March 2016 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 Need for …. 6 Systematic mobilisation into SHG (eg. AP, TN) Capacity building Skill Development systematic capacity in skill building and sustained technical, marketing and placement support 14 March 2016 Lack of Capacity building due to…….. 7 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 14 March 2016 The Context 8 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 9 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 11 - 69% of unemployed are educated but without professional training or skills Opportunities in the Environment 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 12 Rationale for Industry Globalisation leading to Competitiveness – vital for survival 13 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 14 14 March 2016 Vicious cycle of Low-Skill Economy Low Skill Lesser incentives to invest in training Low Product ivity Fewer Jobs Low Competetiveness Lower Growth 15 Low Technol ogy Lesser Orders Policy Context NRLM Mission reduce poverty among rural BPL through Output 16 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) 14 March 2016 Market-relevant skill development converges industry need with poverty eradication goal Marketrelevant Skill No Development education Poverty 17 /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 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 IL&FS Response & Experience as a Practitioner 18 IL&FS Framework for Livelihoods Income earning opportunities Program for 19 Education (basic) Employability Empowerment Education Skill Development Livelihoods promotion (through integrated package of inputs) 14 March 2016 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 20 14 March 2016 We work with 21 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) 14 March 2016 Some of IL&FS Projects 22 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) 14 March 2016 23 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 24 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 25 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 Adoption of Technology Multimedia Revolutionize teaching / skill development process 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 27 Skill Development Programs -Key Highlights Our Journey since September 2007 28 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 29 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 Study conducted by MIDS States covered-Tamil Nadu, Andhra Pradesh & Karnataka. Total 1,087 respondents surveyed. 31 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 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 o o o o o o o o o 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 40 Lamps and Lampshade 41 Candle and Lighting Stands 42 Bamboo Basketry 43 Product Development: Home Utility 44 Product Development: Hand Bags 45 Product Development: Lighting 46 Product Development: Table Ware 47 Product Development: Furniture 48 Product Development: Yoga Kit, Mats & Cushions 49 50 StoryBoard.ppt 14 March 2016 Convergence Brought in 51 ESIC Account opening PF Basic health services Working on ………… 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?? 52 14 March 2016 Thanks 53 14 March 2016 IL&FS Skill Development Projects – Some visuals 54 55 SESS centre in Ahmadabad 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 56 Multimedia Based Training K-Yan 57 Quality in Delivery – Blend with Soft Skills 58 Quality in Delivery – Blend with Soft Skills A GLIMPSE FROM THE TRAINING OF TRAINER PROGRAMME FOR SELF 60 62 Thanks once again ! 63 14 March 2016