Ever since we started the Elderly Welfare projects at RUHSA we have struggled to find a way of making them sustainable. There has always been a sense that unless the centre itself can be self-sufficient or community are able to support it, then it is just another example of an paternalistic imposition, ultimately creating dependency not independency and as a model is not one which can be applied to beyond how it is being used now. Certainly, the initial centre in Keelalathur was a victim of this. Our attempts to get some income generation program or garden grown to generate some funds for the running of the project were not successful in the way in which we wanted it to be. Income generating programs did not generate income, Richard Smith's funding for goats given to the elderly gave some elderly some small income and passed on a goat to another person in the village, but it felt like a separate program as it generated no funds for the centre, however, it was the closest thing to sustainability we managed. The next group of elderly who were given goats ate them, so that did not work. Again the garden there, despite the participants being keen and asking to run it, was also not a success. The monkey nets to protect the fruit & veg were simply used as giant trampolines by the monkeys until the nets caved in and gave them access to snacking after their vigourous gymnastic routines.
A glimmer of possibility was seen shimmering when a self help group came to ask whether they could start an elderly centre. This was a new development. Raising the profile of the elderly in the area was giving them a hitherto unheard of status and local women's groups keen to provide a social service to their community wanted to run an elderly centre. In fact 2 groups wanted to and they share the work, providing meals for 40, which is almost twice as many as the RUHSA-run centres. So now there is a desire in the communities to run the centres and the money is being used to benefit two groups. The charity pays the self help group to run the centre and the more efficiently they do it the more profit they make. It is starting to feel as if this is a model which, whilst not sustainable, is at least supporting a community welfare system. The goat scheme, meanwhile had captured the imagination of donors in the UK and money has come in for 20 more goats. Reluctant to give goats to people who are too hungry, RUHSA decided to give the goats to a self-help group using a different model. Previously, the goat owners would give the first kid back to RUHSA to pass on and then every kid after that belonged to the new owner, but now their scheme is slightly different. RUHSA & the SHG are business partners. RUHSA retains ownership of the goat, but all profits from selling the goat are halved, RUHSA's half being used to contribute to the elderly fund. Now we have a potential income stream for the elderly program. but it was still having to be financially managed by RUHSA and therefore incurring the added expense of RUHSA staff working on it, which does not cost the charity any more, but does use up resources and limits the amount of programs which can be started.
So. The final piece in the jigsaw evolved during the course of our first meeting. But first, a little background to set the scene. SHGs (self help groups) were set up in Bangladesh as part of the micro-finance model, which is a grass roots financial lending initiative, enabling women to form co-operatives and develop or start small businesses with small amounts of capital. It has been deemed successful and the guy who developed it in Bangladesh, Muhammed Yunus won the Nobel Peace prize in 2006. His micro-credit organisation, Grameen Bank, has 7 million of the poorest women in Bangladesh as it's customers. These women are in SHGs. India has adopted the concept of SHG development and nowhere is this more evident than in South India. All the four S Indian states - Tamil Nadu, Kerala, Andra Pradesh & Karnataka - are effectively committed to the empowerment of women & other of the poorest members within communities and there are many government schemes supporting these principles. In Tamil Nadu in particular, the government has gone a step further. The Bangladeshi model is only an economic model, but in TN, the government has incentivised social development as well. Each SHG is graded and on the basis of their grading, may be eligible for microfinancial assistance or micro-credit. They will get extra points if they contribute to the social welfare of their community, which helps to explain why the women have been interested in starting up elderly centres within their communities. Not only is there a social drive, but also there is financial benefit, because it improves their credit rating.
One more piece of background. Clearly the effectiveness of any micro-finance scheme depends on the loan repayments and of course one of the difficulties of keeping track of what's going on is the sheer number of borrowers. A system like this run from a bank is open to abuse, either by the borrowers who default because there is no incentive to pay back (there is no means of legally recouping small amounts of money from very poor people in India) and secondly from corrupt lenders or their minions who say a rupee for the bank and a rupee for me. In Tamil Nadu (and perhaps elsewhere) they have developed a system of local corporations called a PLF - Panchayat level federation, I think (panchayat meaning district) - to which the SHGs must belong. The executive members are elected from the full membership of women in the SHGs. The PLF is then responsible for the financial interactions. They collect the money from the SHGs, they pay the loans out, they administer funds, they ensure financial probity within the groups and because everybody either benefits or loses out depending on how effective the PLF is at managing funds, there is is strong collective peer pressure to run things smoothly. It is a very clever system which uses big business principles at a local level where there are still direct relationships between social equals, which makes the peer pressure more meaningful.
So...the plan as it unfolds is this. The PLF are given goats to distribute to those members who wish to rear them for profit. It's quite a hard job, so not everyone is keen. Each goat costs, say 2000 rs (roughly 30 quid). The goat can be reared and then sold at peak, goat-eating season (often Islamic festivals) for 5000 rs. That means there is 2000rs available to invest in another goat (in the non-eating season) and 3000rs to share. The goat owner will get 1500rs and another goat and the PLF will get the remaining profit, which they will hold in a new bank account specifically for Social Development (elderly welfare). It can then be used to pay another SHG, of which there are several, who wish to start an elderly welfare centre in their village. RUHSA will calculate how many goats are needed to pay for each centre over the course of a year and can raise funds as a one off payment (seed funding). As we have already given goats to an SHG, in 6 months time we will know what the actual earnings are and develop a business model for future goat schemes. So now, we have an model whereby the elderly get fed, women in the community earn money from goat rearing, another SHG can earn money by running an elderly welfare centre AND improve their credit ratings for future projects (and improve the PLFs rating too) and the very poor elderly in more villages are given an increased status and lunch 5 times a week. All RUHSA has to do is keep an eye on the overall equation: Number of goats = so many elderly meals. Call me old-fashioned, but I think it's brilliant and seems run along everyone's incentive lines smoothly. Everyone at RUHSA is very excited and thinks it will facilitate many more elderly centres being started. In addition, it is JUST the kind of thing people like to put their hands in their pockets for and has already proven extremely attractive. Genius.
So. The final piece in the jigsaw evolved during the course of our first meeting. But first, a little background to set the scene. SHGs (self help groups) were set up in Bangladesh as part of the micro-finance model, which is a grass roots financial lending initiative, enabling women to form co-operatives and develop or start small businesses with small amounts of capital. It has been deemed successful and the guy who developed it in Bangladesh, Muhammed Yunus won the Nobel Peace prize in 2006. His micro-credit organisation, Grameen Bank, has 7 million of the poorest women in Bangladesh as it's customers. These women are in SHGs. India has adopted the concept of SHG development and nowhere is this more evident than in South India. All the four S Indian states - Tamil Nadu, Kerala, Andra Pradesh & Karnataka - are effectively committed to the empowerment of women & other of the poorest members within communities and there are many government schemes supporting these principles. In Tamil Nadu in particular, the government has gone a step further. The Bangladeshi model is only an economic model, but in TN, the government has incentivised social development as well. Each SHG is graded and on the basis of their grading, may be eligible for microfinancial assistance or micro-credit. They will get extra points if they contribute to the social welfare of their community, which helps to explain why the women have been interested in starting up elderly centres within their communities. Not only is there a social drive, but also there is financial benefit, because it improves their credit rating.
One more piece of background. Clearly the effectiveness of any micro-finance scheme depends on the loan repayments and of course one of the difficulties of keeping track of what's going on is the sheer number of borrowers. A system like this run from a bank is open to abuse, either by the borrowers who default because there is no incentive to pay back (there is no means of legally recouping small amounts of money from very poor people in India) and secondly from corrupt lenders or their minions who say a rupee for the bank and a rupee for me. In Tamil Nadu (and perhaps elsewhere) they have developed a system of local corporations called a PLF - Panchayat level federation, I think (panchayat meaning district) - to which the SHGs must belong. The executive members are elected from the full membership of women in the SHGs. The PLF is then responsible for the financial interactions. They collect the money from the SHGs, they pay the loans out, they administer funds, they ensure financial probity within the groups and because everybody either benefits or loses out depending on how effective the PLF is at managing funds, there is is strong collective peer pressure to run things smoothly. It is a very clever system which uses big business principles at a local level where there are still direct relationships between social equals, which makes the peer pressure more meaningful.
So...the plan as it unfolds is this. The PLF are given goats to distribute to those members who wish to rear them for profit. It's quite a hard job, so not everyone is keen. Each goat costs, say 2000 rs (roughly 30 quid). The goat can be reared and then sold at peak, goat-eating season (often Islamic festivals) for 5000 rs. That means there is 2000rs available to invest in another goat (in the non-eating season) and 3000rs to share. The goat owner will get 1500rs and another goat and the PLF will get the remaining profit, which they will hold in a new bank account specifically for Social Development (elderly welfare). It can then be used to pay another SHG, of which there are several, who wish to start an elderly welfare centre in their village. RUHSA will calculate how many goats are needed to pay for each centre over the course of a year and can raise funds as a one off payment (seed funding). As we have already given goats to an SHG, in 6 months time we will know what the actual earnings are and develop a business model for future goat schemes. So now, we have an model whereby the elderly get fed, women in the community earn money from goat rearing, another SHG can earn money by running an elderly welfare centre AND improve their credit ratings for future projects (and improve the PLFs rating too) and the very poor elderly in more villages are given an increased status and lunch 5 times a week. All RUHSA has to do is keep an eye on the overall equation: Number of goats = so many elderly meals. Call me old-fashioned, but I think it's brilliant and seems run along everyone's incentive lines smoothly. Everyone at RUHSA is very excited and thinks it will facilitate many more elderly centres being started. In addition, it is JUST the kind of thing people like to put their hands in their pockets for and has already proven extremely attractive. Genius.
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