Tag: Returnable Grant

The COVID – 19 lockdown has adversely impacted the most vulnerable sections of society, such as informal workers, farmers, street vendors, gig economy workers, etc. Even among the sections of society hit the hardest, Persons with Disabilities (PwDs) have been among the worst affected due to an intersection of circumstances which include economic vulnerability, reduced mobility even in regular times and other hindrances which resulted from the lockdown.

Additionally, as entrepreneurs look to recover from these economic shocks, PwDs find it harder to obtain capital to start new enterprises or for working capital for existing enterprises. ATPAR is an organization that looks to create an enabling ecosystem for entrepreneurs with disabilities. ATPAR works with Entrepreneurs with Disabilities & their family members for their economic empowerment, social inclusion and rehabilitation by training them through NSIC Delhi on entrepreneurship development and mentoring them for 4 to 6 months to enable them to start, sustain and scale their entrepreneurial ventures. 

ATPAR’s NEDAR (Network of Entrepreneurs with Disabilities for Assistance and Rehabilitation) provides business mentorship, handholding support, financial and market linkages to the entrepreneurs over and above the entrepreneurship development training. Many of these entrepreneurs needed financial assistance to restart business and recover from the economic impact of the pandemic.

REVIVE has been working with 35 such entrepreneurs in Delhi – NCR, Jammu and Kashmir, Rajasthan, Uttar Pradesh, Bihar and Puducherry to provide financial assistance to fulfil their working capital needs, make asset purchases, etc. They have received zero – cost finance in the form of returnable grants (RGs) of INR 20,000 / 40,000 from REVIVE which would be repaid over the course of 1 year. The RG carries a moral obligation to repay as opposed to a legal obligation. During this period, all entrepreneurs will continue to receive ATPAR’s in-depth support through the NEDAR network as well.

When a nationwide lockdown was announced, it immediately had a harsh effect on street vendors. An almost empty city without people stepping out of their homes meant that the city’s vendors immediately lost their source of income and were confronted with hunger and deprivation.

For women street vendors, the vulnerability doubled in such cases as they faced sharp repercussions after completely losing their livelihoods in the wake of the pandemic. A study shows that in the initial months of lockdown roughly 90% of vendors lost work, and even when the lockdown was lifted, recovery was slow, and it has not come back to pre-lockdown times. Women street vendors suffered most because they lacked access to assets and savings due to the lack of work and earnings. Most of these women street vendors used their savings to feed themselves and their families. Given this backdrop, restarting livelihood has become even more difficult but also the need of the hour. 

Across the country, many vendors have openly talked about issues in accessing loans since they are not recognised as ‘legal’ while also reporting a slowdown in the processing of loans. 

In the wake of these pressing problems, Samhita-CGF along with Brihati Foundation and S&P Global is supporting SEWA in reviving the livelihoods of 350 women street vendors. Spread across Gujarat, these women street vendors have received Returnable Grants within the REVIVE Alliance to be used as working capital to revive their livelihoods and tackle the cash crunch within their occupation. 

Although they are in the process of slowly recovering from this crisis, it is critical to take action to remove the barriers that are leading to their increased vulnerability. Returnable grants act as a 0% interest loan to these women which they have invested in buying raw materials for their vending business. However, there is an existing social stigma that these street vendors have to face as they are quite often seen as illegal occupants of public space. SEWA reported how these women are frequently targeted, harassed and evicted by officials of gated society, police, and sometimes government officials. 

For so many vendors, their businesses have fallen due to a perceived fear among people that the disease will spread more easily in markets. It is through continuous efforts by SEWA within the REVIVE Alliance that gradually the corporators/government officials have started to support these street vendors and their access to space for vending is not being denied anymore by the police. Challenges of entering gated communities/societies still persist, however, with enough vaccinated street vendors, this picture might change soon enough. 

Overwhelming demand from street vendors remains for support to resume working. Easier and faster access to capital and permission to work without harassment is essential to expedite recovery for vendors. Therefore, as a recovery model, Samhita-CGF along with Brihati Foundation and S&P Global is supporting SEWA in reviving the livelihood of 350 women street vendors by giving them returnable grants as a form of 0% interest loan.

Through the REVIVE Allaince, Brihati Foundation is supporting 2 batches of farmer cohorts in the state of Gujarat, by providing them with working capital through Returnable Grants as a financial instrument. The farmer cohort funded by Brihati is supported by Somnath Farmers Producer Company as an on-ground implementation partner. The grant was provided in the form of subsidized vouchers to avail agricultural inputs such as fertilizers, pesticides, seeds etc for their harvesting season.

The farmer cohort’s first batch has been completed with 100% repayment rate. The amounts recovered has now been channelised into supporting another set of farmers. Following are the challenges faced by the Farmers which fueled the need for timely working capital support:

• Being small scale farmers, each member holds between 2 to 19 acres of land which is used for crop farming or animal husbandry. They usually grow groundnut & cotton crops.
• Depending on the crop season, farmers reach out to various farmer producer organizations for the supply of agricultural inputs.
• Due to seasonality, however, most small to marginal farmers remain reliant on money lenders in their regions; to whom they end up paying very high-interest rates.
• Due to COVID-19, and recent take cyclones caused heavy disruption, leading to  uncertainty of funds and high-interest rates prevailing this year
• Grant to these farmers allowed them to continue production even in times of crisis
• In the past, scenarios of high-interest costs have led to inflation of prices; a timely grant aims to mitigate such a situation.

The COVID pandemic resulted in the shutting down of a lot of businesses and beauty salons were one of them. The extended lockdowns resulted in low to absolutely nil customer footfall. 

The beauty and personal care market is expected to touch $10 billion by 2021, growing at an annual rate of 5-6%, according to a report by the Indian Beauty & Hygiene Association. However, the majority of beauty and wellness businesses, including salons, spas, and barbershops, fall either in the small and medium enterprise or the unorganised category. This sector employs approximately seven million skill-based professionals, mostly from the weaker sections of society, according to industry estimates. Two out of three employees in the industry are women or migrant workers who have been the worst hit by the extended lockdowns.

When the lockdown was lifted, the entrepreneurs showed a desire to adapt their businesses to the new reality but did not have the resources to do so. Innovative financing in the form of a returnable grant was the solution here. Under the Salon-I program, Godrej became the mentor of these businesses and funded this particular initiative. The entrepreneurs were provided with small ticket sized grants ranging from INR 5000 to INR 20000 which was to be used as working capital to restart and build the resilience of their respective businesses. 

The entrepreneurs had only a moral obligation to repay the grant given to them with the vision that if the money comes back, it will be used to aid more such entrepreneurs in the network. A total of INR 55 lakhs has been disbursed among 472 beautypreneurs so far.