What is Livelihood Development ?
• Livelihood development is designed to help improve the quality of life of marginalised and excluded people.
• It provides them with access to basic human rights, for example health care; three meals a day; education; clean drinking water and sanitation.
• It offers training and skills to ensure the livelihood which has been learnt has impact for a life time, for a community, for the future.
• It empowers the poor to lift themselves above the poverty line of less than USD $1.25 / day.
Shivia’s journey from Microfinance to Livelihood development
In 2009, Shivia started working through local NGOs in India on microfinance projects where we provided the finance and social impact functions and the local NGOs implemented the projects in the field. Many families set up successful home-based enterprises and improved their lives but we realised that we were not achieving the real and permanent impact that we were striving for. Although we continued to work with SAATH and BASE, two exceptional organisations, in the field of training in microfinance, we turned our focus to livelihood development.
Some of the problems we discovered with microfinance were:
• Our loans were meant for productive purposes but they were often used for consumption purposes or paying off other loans.
• It was unfeasible to offering training in a array of different enterprises.
• Due to where we were operating, transaction costs were high, resulting in high interest rates.
• Aggressive lending from other organisations meant group, social collateral had broken down.
• Clients favoured supply-led rather than demand, market-led enterprises - industries families had been involved in for generations but the end-products were not selling.
• There is no defined exit route – clients repay as long as they know a bigger loan is coming. As soon as you stop lending, they stop repaying!
After one year of research and addressing all these concerns, we decided to turn the microfinance model on its head. In 2011, we started our Poultry Development Services, through our partner organisation in India, Nirdhan, which we set up for this purpose. We wanted to provide excellent training to our beneficiaries to give them life-long skills and know-how in particular enterprises that had a demand, could be done from the home, run by anyone in the household and if the products could not be sold, they could be consumed: money saved is money earned!
Thank you Shivia. I have finally been able to afford to send my children to school and I am now important to my sons which I wasn’t before. I feel empowered.” MRS BEGUM, Home farmer, West Bengal
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Research books and articles
- Prof. Malcom Harper, "Whose Sustainability Counts?: BASIX's Long March from Microfinance to Livelihoods"
- "Microfinance: A Practitioner's Handbook edited by Ranajoy Basu" - (A chapter on Livelihoods was co-written by Ms. Olly Donnelly and Prof. Malcom Harper)