Posted On: 15 Feb 22
As we emerge out of yet another wave, I can’t help but reflect on what transpired the previous times. While the pandemic affected everyone in different ways, its impact on those with limited financial resources has been particularly devastating. It is in this context that I got to thinking about the cash transfers we had made to our audience of nano-entrepreneurs during the last two waves and the ensuing lockdowns.
Cash transfers per se, are a much contested subject with plenty of debate on their efficacy and impact. And while there is no dearth of research papers that argue its pros and cons, the last two years have given us at Udhyam Vyapaar, an experience of how they can be deployed during trying times such as those in the wake of the covid-19 pandemic.
Back when covid first reached Indian shores in 2020, it caught most everyone unawares. And while the lockdowns affected practically everyone, the effect on those who live day to day and depend on their daily earnings for their very livelihoods, was most pronounced.
Working as we do at Udhyam Vyapaar with the nano business owners, we saw first hand just how bad their situation was at this time. These are the small businesses that most of us interact with on an almost daily basis; the street vendor, the tea shop, the ironing vendor, the tailor, and many such other businesses.
These nano-entrepreneurs typically depend on their daily earnings to make ends meet. So much so that even a few days absence owing to ill health or any other reason could result in a dire situation for them.
How then would this audience be able to cope with these lockdowns?
That was a question we needed to find an answer to, in short order.
Given the pandemic meant we couldn’t work directly on field without the risk of contagion, our ability to curate and distribute relief packages was much curtailed. Added to this was the fact that when covid first struck, there were ever so many organisations providing ration and cooked food, both. We soon realised that while the immediate need for food was being met by ever so many organisations, there were other equally important needs that were not being met. Urgent medical requirements, utility bills, rent, all of these were staying unmet.
Which was why, when the first wave of the pandemic struck, we cast our net wide, trying to access funds that we might deploy as grants to this audience. These grants could serve as emergency relief funds that our nano entrepreneurs could utilise towards their absolute essentials.
But many philanthropic funds had a concern! How could we ensure that these cash grants were utilised for emergency relief and not on discretionary spends? And the reason they cared about this was because at a time of such stress, they wanted to deploy as much of their philanthropic capital as possible towards providing urgent relief.
In order to access these funds therefore, we needed to figure a way of ensuring that cash grants out of these funds ended up being utilised for urgent relief alone!
Towards this end, we built out and tested a simple three step process, that led us to the desired outcome.
Our first step towards this was our pre-program need assessment. At this stage we understood the specific needs of each respondent and determined the urgency of their needs. We accordingly prioritised the fund deployments, given the funds we had access to were finite.
The next point of action was the naming of the cash transfer program itself. By calling it Udhyam Aapat Neravu, we labeled it outright as an emergency fund. This meant that right from the beginning, the fund was being positioned as something for emergency situations and urgent need. Every call that our field staff made to the audience was anchored by this program name, ensuring that there was subliminal cueing of the intent behind this fund.
Finally, just before the funds were being deployed, the field staff once again spoke with the recipients and suggested that they either use the fund towards their emergency requirements, or else set it aside for a rainy day. While there was no compulsion to comply, we found that the power of this suggestion went a long way towards ensuring usage of the funds in the manner we had intended.
A month after the grant disbursals, we went back to understand how this intervention had worked, and what the impact was. Our data collection involved self-reporting on fund usage by the entrepreneurs themselves. What we found was that during that period, 98% of the grants had been entirely exhausted, and respondents reported that they had used the grant money for urgent requirements. The various expense headers that the grant money had been used for included monthly ration, daily essentials, medical needs, business use, rent & utilities.
While a few of these entrepreneurs were able to ply their trade during the lockdown, given their business qualified as an essential service, the large majority had to completely shut down and had no income and little to no savings. The cash grant therefore went a long way towards helping them sort out the essentials for their family’s survival. In some cases of urgent medical need, it also helped pay those bills. Being able to at least part pay their rent also ensured they had a place to stay, without the fear of eviction during such turbulent times.
The overall data on grant utilisation by the beneficiaries corroborated that our 3 step process of need assessment, program nomenclature & subtle nudges at the time of disbursal; resulted in funds being utilised as intended.
While the Omicron wave thankfully did not necessitate measures as drastic as were required the last two times, our experience from the cash transfer programs we ran has shown us how we can potentially allay funders’ concerns about ensuring the money is prioritised for emergency relief measures by the end beneficiary. This could in turn help direct more philanthropic capital towards cash transfer programs during times of urgent need.