In the course of interaction with Food Aid beneficiaries two highly illustrative cases came into sharp focus.
Siliya Devi, grandmother of Rabi Majhi had a roadside tea stall in front of Kalighat Kali Temple. Due to lockdown her business was collapsed. She was seeking help from us to run her tea stall again. After through survey and interview CSP help her by transferring Rs. 2000 interest free seed capital into her bank account directly, Now with that money she is running her business happily.
Sankar Paswan had a roadside sindoor stall in front of Kalighat Kali Temple. Before lockdown daily average sales was rupees 500 per day by which he used to run his family. In the month of September 20 daily profit came down at Rs. 50 rupees. He had survived on CSP’s Sanjeevani Food aid program till now .He was seeking help from us to run his sindoor stall. After through survey and interview CSP help him by transferring Rs. 3000 interest free seed capital into his bank account directly, To set up his business properly.
Both have been put back in business by CSP with seed capital required.
But it is clear there are countless cases of small independent people reduced to being destitute dependants on CSP (or others) charity losing their security, self-respect and sustainability.
1. Identifying beneficiaries Sambhav is going to try to identify such genuine cases and restore their businesses to them by arranging their capital, not as donation or grant but as interest free seed money. This is to ensure that self-respecting vendors are not converted into parasites or dependants.
CSP methodology is not geared towards disbursing or recovering loans but in these extraordinary times, small entrepreneurs whose working capital has been eroded due to no fault of their own, have to be rescued. However, the rescue has to ensure that their values and ethics are not demeaned.
Therefore, the seed money for capital will have to be returned /repaid as per when they will say they shall be able to. But that commitment has to be made at the time of loan is disbursed.
The returned money will be re circulated into seed money for other affected tiny entrepreneurs in an ever widening circle.
This whole operation will be done for the small and tiny operators, at a level of Rs 2000 to Rs 7000.
The primary objective is to restore these people their livelihood.
The secondary objective is to do it in a way that keeps their self respect and integrity intact
Hence not grants but interest free seed money to be returned
The apparatus for recirculation of the repaid money will follow the pattern that self -help groups follow. The mechanism will be set up with advice from extremely experienced professionals and pioneers in the field of micro finance.
- Certain protocols will be followed as here under for selection and screening of beneficiaries:-
(i). Opening a separate account in CSP to receive & disburse funds. This will avoid commingling of funds for other programs & keep your books open for inspection if anyone wants.
(ii). Getting a young volunteer who is doing CA to manage the accounts for this program & keep proper records.
(iii). From the beneficiary getting the following:
- Two identification documents: Aadhar, Voters, Ration Card….
- Local & permanent address.
- A reference from the neighbourhood who has known the person for 5 years.
- Runs an ongoing business not start-up. Has track record of running it successfully. Business requires up to 10K to resume operations.
- Owns or rents place of business.
- Contact details: Phone, email, WhatsApp, Telegraph……
- Bank account details. Payment ideally directly to bank account & he/should repay to CSP nominated bank account of new beneficiary, not cash. Can use Paytm, Googlepay etc.
- Taking a Pro-note in English & Bengali which also has the date when he/she will return the money one shot or in monthly instalments. The Note will clarify that money will be returned to be applied for same objectives that were applied for him/her
Sambhav uses CSP’s own survey mechanism, eligible individuals from our existing programs, referrals from reliable sources as well as those provided by the community and neighbourhood.
Documentation required from beneficiaries for the programme are-
- Any two of the following identity proofs- Aadhar Card, Voter ID Card, Ration Card
- Proof of local and permanent address.
- A referral from any individual in the neighbourhood who has known the applicant for a minimum of five years.
- Applicants must run an ongoing business, not a start-up. They must have a track record of running it successfully prior to Covid. The business must require up to ₹10, 000 to resume operations.
- Contact Details: Phone number, email, Whats App number
- Bank account details as refundable grants are credited directly to bank account.
Information Sheet prior to Grant Disbursement
Debt at unsustainable interest burdens
Many affected by livelihood loss have survived on loans accessed from money lenders at the usurious rates of interest going up to 10% per month. This is liable to completely derail their business recovery.
On a case by case basis, strictly monitored and investigated debt retirement seed money may be made available keeping all the parameters in operation. Such rehabilitation measures will be necessary to eliminate the cancer of unsustainable interest burdens.
Wherever deserving, and feasible, the poor must be leveraged out of the Debt Trap situation. Rigorous verification and scrutiny will be applied with documentation of debt being retired.
- Non financing of ongoing education as a result of the above two factors
CSP already runs a drop-out prevention program for slim and street children. This program ensures that under privileged children do not have to drop out of mainstream education for lack of financial ability of the parents to sustain it.
However thie present program will be different in the sense that the families who will be eligible for aid will be families that were previously sustaining the child’s education (tutorials, coaching, academic fees etc.) from their own means but have presently fallen into a 4-6 month default from loss of livelihood and will find it impossible to restore that deficit
In these cases after careful screening and with due regard to the child’s recorded academic performance CSP will provide a grant to ensure that the child is back in education irrespective of the status of livelihood of the family where he comes from . This will constitute,
- if need be a one-time non-recurring grant to make up deficits incurred since March 2020 till date
- ongoing expenses to ensure that the child is not deprived of a future due to the pandemic economic devastation.
In conclusion , these, are the outlines of the help that will be extended to combat the economic catastrophe that is wreaked on the poor by the pandemic.