Action research with the poorest of the poor in Gaya
Livelihood Pathways for the Poorest” is an action research project, to develop a sustainable and scalable methodology to reach the poorest people, whom event the micro finance institutions have mostly failed to reach. With this research is being implemented with 200 very poor households in Gaya, by The Livelihood School, and supported under the Solution for the Poorest project of Grameen Foundation, USA. A project team is in place at Gaya, supported by the Advisory Committee, comprising members from academia and practice, which provides inputs to the research and project team. A holistic model of livelihood finance that incorporates both financial and non financial services for enhancing their livelihoods and bring them out of poverty.
The research hypothesis:
- Taking an integrated approach to servicing very poor people has a greater impact on their ability to move out of extreme poverty than a pure financial services approach
- The TRIAD strategy of BASIX integrating financial services with livelihood support services can be downscaled to work effectively with the very poor
- The very poor will be able to successfully utilize these services to improve the reliability and diversity of their income streams
- There is a viable business model and social case for the associated additional costs incurred to provide these services
The process adopted in the research is to design and
implement the products and services suitable for very poor households, to
refine them, demonstrate scalability and establish business model. Provided this
model becomes fruitful, a partnership to facilitate the replication/ scaling of
the demonstrated approach on an international platform. 
Project duration is 18 months in two phases: Design and Implementation phases. The design phase focused on targeting process, using tools and techniques to identify the very poor households, those who are resource and asset less and are devoid of access to financial institutions and its services. Tools like Poverty Wealth Ranking (PWR), Progress out of Poverty Index (PPI) and psychosocial behavioral tools were used.
This was followed with baseline study of the households using structured questionnaire. The analysis of the baseline data helped in understanding the basic characteristics of very poor households. The baseline picture showed that the people are engaged mainly as casual labor, agriculture, livestock and petty business. Labour (81%) stands out as major livelihood activity in the households studied. Within labour, most of the households are engaged in agriculture labour, earthwork, brick making, unskilled support to masons, rickshaw pulling, hand pump repair, incense stick rolling and domestic help. Almost all households depend on daily wage earning and have no savings, and are indebted. The average weekly income is about INR265 (about $ 5.89) for a family of 5. The difference between income and expenditure, in last year, was negative. The deficit is managed from moneylenders or relatives. In terms of entrepreneurial skills and business acumen, the selected households show false self confidence and a low score on ideas, decision making ability. Given the situation above, identifying suitable livelihood option to generate adequate resources to meet their deficit and therefore graduate to become potential microfinance client, stands a huge challenge for the research.
Further the research conducted a market study to understand and identify the potential livelihood activities these people could get engaged in, available market options for the targeted households. Two major areas of sub-sectors were studied – skill base and wage base.
Household livelihood profiling, another tool used in the research, helped the project to understand the deficit of income over expenditure and the existing livelihood engagement across seasons. Some of the bottlenecks were identified during the process.
Based on these it has been identified that the poor can get engaged in goat rearing, poulty rearing and insence stick rolling.
The information was shared with the villagers through a series of village meetings and the households were aggregated to form adated SHGS. Action plan and deliverables were listed out towards the end of the phase I. Currently the project is implementing the implementation phase, where number of capacity building initiatives has been taken to educate the target about the institutional processes and the wage and entrepreneurial activities planned in the project. The project expects to achieve the higher order goal and learn walking through the process of implementations.
It is prudent to mention here that while conducting the household livelihood profiling exercises, about 30 households (entire family) were found to have migrated to near by brick kiln to earn wages. The research would search alternatives for the migrated households and would develop products to address the livelihood challenges faced by them.