This project aimed for higher upward socio-economic mobility of unserved/underserved unorganized workers, with enhanced inclusion and resilience through the Dignity in Labour Platform.
Background
More than 80% of India’s non-agricultural labour force comprises informal employees (ILO, 2018) where low productivity and skill levels, meager and irregular income, lack of a social safety net, and restricted access to information about markets, finances, education, and technology are common. Informal employees are often compelled to resort to personal networks or money lenders to cover their financial needs, business or personal, at exorbitant interest rates. The formal access to credit market is also highly gendered; despite female employees accounting for about 50% of India’s informal sector and having a higher track record of repaying and using microloans, they continue to face disproportionately high barriers to begin and expand their enterprises, particularly when it comes to accessing funds. The majority of government, public, and private sector financial inclusion activities in India have prioritized serving underprivileged populations. Yet, there is limited emphasis on integrating the unserved population into the ambit of the formal financial ecosystem.
Objective
The goal of this project was to develop a Theory of Change for a platform that seeks to enable socioeconomic mobility of unserved/underserved unorganized workers, with enhanced inclusion and resilience. It is envisioned as a multi-stakeholder platform that will leverage catalytic capital to connect vulnerable, new-to-credit, unbanked & under-banked customer groups to suitable lending partners. It will also enable access to relevant government social security programs for all workers that interact with the facility. The Platform, a consortium of organizations (service providers, lenders and donors) will be brought together to develop and deploy systemic financial solutions and infrastructure to accelerate socio-economic mobility of the unserved and underserved informal economy workers. LEAD at Krea University has worked closely with KOIS to refine the Theory of Change and develop the MEL framework which assesses the value addition of the Platform.
Approach
LEAD collaboratively worked with KOIS to refine the Theory of Change and to design the MEL framework pathways focusing on three pathways of change i.e., financial inclusion, economic mobility and social security with gender as a cross cutting theme. The LEAD research team conducted key informant interviews with various service providers with support from KOIS. Extensive desk research was conducted to gain insights on access to formal credit, its short-term and long-term impact on upward socioeconomic mobility of unserved and underserved workers in the informal sector, along with the idea of dignity at work and measures/ indicators/ tools to measure the same. The insights were critical inputs to shape the Theory of Change and MEL framework.
Implications
The Theory of Change and MEL framework lay down three key pathways of financial inclusion, economic mobility and social security, which would serve as a blueprint for attaining upward socioeconomic mobility of unserved/underserved unorganized workers, with enhanced financial inclusion and resilience.