Q. Tell us about Grameen Foundation India’s (GFI) breakthrough initiatives ? What has been their impact on the target audience?

A. Grameen Foundation India is a pioneer in advancing access to financial services for low income populations, with a particular focus on women. Our breakthrough programming is built on three pillars:

• Deep understanding of the financial lives and livelihoods of low income people
• Leveraging digital technologies to create large scale impact
• Partnership with other organizations to create an outsized and sustainable impact.

Deploying these three in tandem helps us develop breakthrough programming. For low income customers, particularly women – our key target – this has meant access to knowledge, tools and services that empower them to overcome barriers and receive enhanced access to financial services to improve their lives. Our programs bridge the gender gap and digital divide, facilitate low income people to onboard the digital platforms and benefit from the products and services delivered through these platforms.

An exciting initiative we are working on these days is a social business called ‘Grameen Impact Ventures’ which is setting up a network of last mile agents, also called as Grameen Mittra, for the financial and economic inclusion of low income people as well as job creation for a large number of women. We aim to take this breakthrough model to a much larger scale by working with social impact investors.

Q. Is the lack of market linkages / market structures the biggest impediment for livelihoods projects of our rural communities?

A. The lack of market linkages is certainly a key impediment for livelihoods projects, particularly for rural communities. This is an outcome of other deficiencies that result in the lack of market access. For example, consider a smallholder farmer producing fruits and vegetables, which have a short shelf life. Due to deficient storage and cold chain infrastructure, the farmer does not have a choice but to sell the produce in the nearest wholesale market at whatever price quoted. Better infrastructure and access to information would enable the farmer to make an informed decision.

India today possesses sophisticated infrastructure for digital payments. However, a large segment of its people are still untouched by the benefits of these digital platforms. These are the real root causes that lead to the lack of market access.

“You can’t benefit from the markets that are there – unless you can access it”

Intervening in unorganized value chains to create market access is difficult. So, the imperative is to organize people around a particular livelihood activity. Then one can facilitate access to credit, digital payments and other services to improve their livelihoods.

Q. How do you see future changes in India’s development finance market? Outside of traditional donor agencies, what are the new sources of funds emerging for this?

A. The development finance market in India is undergoing a complete transformation as a result of multiple trends. With improved tax collections, the government spending on the social sector has seen a consistent increase. On the other hand, traditional bilateral and international philanthropic funding coming into India has seen a constant decline.

Evolution of CSR as an important instrument for development financing is another big trend. This is worth approximately Rs. 15,000 crore (US$ 2.2 billion) annually. However, a number of corporate houses are setting up their own foundations and channeling financing to these or to the national priorities identified by the government. So, actual inflow of CSR funds is more modest than what the headline numbers show.

“Shorter time horizon for the CSR funds means little funding goes towards addressing more complex problems that require longer term engagement”

Another important source of financing that has emerged is impact investing. The amount of capital available to be deployed for creating social impact is massive. This is giving rise to many new social sector focused startups who leverage impact investment. However, impact investment requires a different kind of organizational set up. In order to attract investment, one has to have a business model that not only creates social impact but also creates financial return. We are mentoring social impact organizations so they can access such funds and scale their programs for creating larger impact.

Our social enterprise startup ‘Grameen Impact Ventures’ also leverages impact investment to foster financial inclusion and livelihood development of low income women. Our model Grameen Mittra is a last mile agent who is a female from the same community she then serves. As a familiar face she helps her marginalized community access financial and non financial services therefore making informed decisions.

Finally, development impact bonds have also emerged as a new financing instrument. While they have certain advantages over traditional donor funding, the risk tolerance of such funds is lower than traditional philanthropic funds. These financing instruments, therefore, cannot be deployed for experimentation or innovation. We are currently exploring how we can access such funding mechanisms to scale our programs.

Q. GFI has done a lot of work on digital finance inclusion. What is the biggest challenge on this front, while converting local communities in India?

A. GFI is a pioneer in driving digital financial inclusion. Lack of awareness and trust and enabling convenient access are some of the key challenges when it comes to adoption of digital finance. Our digital financial inclusion efforts stand out because they are built on the sound understanding of these barriers and offer a roadmap for building awareness, trust, trial and continuous usage.

Our client-centric approaches are built on a sound understanding of the needs and challenges faced by low income communities, particularly women and those with low levels of literacy and numeracy.

“Since these low income communities have never interacted with digital systems before, our programs follow an iterative framework of design, test, evaluate, learn and improve”

Moreover, as we embrace digital technologies, we use them in combination with human interface to overcome adoption barriers by offering an assisted transaction model.

Q. Rural people are not tech-blind, even if they may be text-blind? Bangladesh’s microfinance is an example of this. Do you see the same occurring in India?

A. Rural and low income people are certainly not tech-blind, as one can see with the large scale adoption of mobile phones, WhatsApp and Tik Tok. At the same time, they are extremely value conscious and do not have the luxury of testing out something that they do not understand or whose value proposition is in doubt. Systems that are robust and offer a compelling value proposition lead to uptake. We have seen people with low levels of literacy and numeracy embrace digital payment platforms. It takes more than coding skills to build such programs.

“Building such platforms also requires a deep understanding of the behavior pattern, needs and concerns of low income people. And it takes empathy and an attitude to design for the rural and low income people based on their context”

While being a pioneer in deploying technology for social good, we are also deeply conscious of the impact of technology on the broader society. In particular, there is a lot of conversation these days about whether digitization and artificial intelligence can take jobs away from human beings. We are organizing a major conference called ‘The Jobs Conference’ (www.TheJobsConference.org) on Dec 09 and 10, 2019 to discuss this and other issues affecting jobs, self- employment and entrepreneurship.

Q. When it comes to private-public partnerships in inclusive development projects, most of the private sector involvement is through CSR. How do you see private sector players making inclusiveness a part of their broader business?

A. CSR is just one of the ways in which business can make a difference. A much larger impact can be created if businesses embrace the values of inclusiveness and social impact as part of their broader business goals. We do see some enlightened organizations looking at their carbon footprint, exploitation of water and other natural resources, their sourcing practices, hiring and HR practices and seeing how they can do these things differently, which can create impact across their entire business cycle, and not just with a small contribution to CSR.

At the same time, it is also important to note that CSR, however small, has its utility, since it gives businesses an opportunity to think deeply about its social responsibility and interact with other organizations in this space. This engagement and increased consciousness about social issues are equally important outcomes for CSR.

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