Financial Services for Marginalised Populations

Out of the 2,08,638 HIV positive people living in India, over 50 % belong to the five southern states of India (Source: NACO)

The Avahan India AIDS Initiative, funded by Bill and Melinda Gates Foundation (BMGF) focuses on HIV prevention among key population (female sex workers, men having sex with men, transgendered people and people who inject drugs). The programme has worked in six States (Karnataka, Tamil Nadu, Andhra Pradesh,Maharashtra, Manipur and Nagaland) of India that had recorded high HIV prevalence. This strategic investment has been in India since 2003 and is one of the world's largest HIV prevention program for key populations. Over a decade (2003- 2013) and two phases (Avahan I and Avahan II), the programme has achieved tremendous success by obviating 600,000 new infections and reversing the HIV infection trends in the six high prevalent states.

In 2014, BMGF chose Swasti to lead the third phase of the Avahan Initiative. The aim of this phase is to sustain the HIV prevention impact achieved through earlier phases of Avahan. Vrutti is supporting the Financial Services pillar under the Avahan programme

The current programme will focus on the 5 high prevalent southern states in India- Andhra Pradesh, Karnataka, Maharashtra, Tamil Nadu and Telangana. It will provide services to about 200,000 vulnerable people through 95 community based organisations. The program is directed towards achieving its two major priorities: - (i) At an individual level, reducing vulnerabilities to HIV (which affect risks) and (ii) Strengthening Community Organizations to make them robust and sustainable. The programme is has four pillars that are mutually reinforcing. While the first three focuses on the individual (and eco-system), the last one focuses on the Organization (agency). The four pillars are:

  • Safety, security and justice
  • Social protection
  • Financial security

· Community institution strengthening

The initiative seeks to ensure that the Avahan communities will be empowered to enjoy their rights as citizens, accessing services and support with dignity, and have substantially reduced their vulnerability to HIV, thereby certifying that the investment made has had a significant differential impact

Sex workers in many places are highly vulnerable to HIV and other sexually transmitted infections (STIs) due to multiple factors, including large numbers of sex partners, unsafe working conditions and barriers to the negotiation of consistent condom use. This is true of all the sexually vulnerable communities such as female sex workers, men having sex with men, transgender and injecting drug users. Moreover, these communities often have little control over these factors because of social marginalization and criminalized work environments. Alcohol, drug use and violence in some settings may further exacerbate their vulnerability and risk.

Reducing the stigma and discrimination associated with both HIV/AIDS and a marginalized group is fundamental for any HIV prevention strategy. Stigma refers to a negative mark or characteristic differentiating some people from others. Such a mark may not be visible, and most often individuals are stigmatized due to their behaviours, physical attributes, or social conditions. Most of them suffer stigma from mainstream institutions and service providers and therefore are vulnerable to exploitation.

Access to financial services is one such critical service that is essential to these communities to help them overcome their vulnerability and also build stability and confidence in them to overcome hardships. Access to financial services is critical because:

a. Most of the women sex work is due to poverty and income vulnerability. They need access to credit which is not available to them from mainstream financial institutions. (80% of the Key Population in the Project are Women in Sex Work).

b. Safety of their savings is important, that is otherwise vulnerable to cheating from peers and middlemen.

c. Savings for a future as they are aware that they have short work tenure. They need to save more as well.

d. Savings critical for meeting expenses during lean periods/days. They also need savings for unexpected expenses such as police cases and legal/lawyer payments.

e. Remittance of their earnings to the family in their home towns.

f. Access to safe keeping of their valuables

In short, economic empowerment activities provide critical assistance to women, enabling them to generate income, increase bargaining power, transform that bargaining power into desired actions and outcomes, build a savings base for emergencies, and avoid selling assets that may affect their future livelihood. To that end, gender-responsive economic empowerment/strengthening activities give women access to and control over vital economic resources.

Financial Security in the Avahan 3 Project:

Objectives

The objects of the interventions under Financial Security for the Key Populations are that they are:

- Aware or having knowledge of their short and long-term financial needs and

- Have access and control over financial resources to be able to address all critical financial needs , and not to resort to high risk behaviour making them vulnerable to HIV due to financial pressures

Key Commitments

To achieve the above objectives some of the commitments made under the project are as follows:

• At least one functional bank account

• Financial literacy education and Financial planning for life

• Quantum of Savings increased among key population

• Access to

- formal sources of credit

- Insurance - health and life

- Pension

• Reduced level of dependency on informal sources for any of the financial services

• Functional and viable location-specific appropriate financial institutional mechanism, providing community-friendly critical financial services

The potential Key Population

The Primary Key Population is female sex workers, men having sex with men, transgender and injecting drug users. The project already has identified the Key Population numbering about 200,000 in 102 locations across four states of India - Maharashtra, Karnataka, Andhra Pradesh and Tamil Nadu. Details are as given below:

· Four States - Karnataka, Tamil Nadu, Andhra Pradesh and Maharashtra

· 102 community organization - 80 COs of FSW and 22 MSMs

· A total of 206,938 key population of which 182045 are FSWs and 24893 are MSMs/TG

· A total of 126209 key population have membership in community organizations

Opportunities/challenges on the ground for financial inclusion:

The communities have specific needs for financial inclusion which may be different from routine banking products available. Some of the opportunities and challenges we have come across as important for banks/financial institutions to understand are as follows:

• Most of the KPs in the cities seem to be having SB account especially when they have to remit money to their families.

• About 50% of them don't save and spend money in alcohol, other addictions and lifestyle spending - an opportunity for converting a sizeable number of them to start saving through member education.

• Financial Literacy and education is a key intervention under the project and this has to be done in all the 103 CBOs - an opportunity for the bank.

• The loudest voice was that we heard was that they don't get loans from Banks. For loans they depend on 'Anna', Money lenders and if they are in SHG, they borrow from SHGs.

• Most SHGs are new - not even 6 months old and are not linked to banks.

• Even internal lending has not started in most SHGs.

• None of the SHGs have availed any loans from Banks.

• There are no MFIs operating in the area or they are not known.

• The savings is by way of pigmy deposits - daily small ticket savings. Need for product design as also some safe mechanism to take small ticket deposits at their door step.

• Most KPs also seem to be saving in "Bishi's" - probably BCs or Benefit Chit Funds either run informally or formal - clearly showing the demand for savings products.

• Gold Loan is availed by KPs from the jeweller himself from where they bought the jewels. Interest rates are high.

• Members of Nashik seem to be using bank lockers for keeping their jewels. Otherwise they keep it with the brothel keepers.

• The KPs want to educate their children and most want to own their own houses.

• Jewelry, land and other assets including a good lifestyle seem to be the aspiration of most KPs.

• Most of the women are illiterates but seem capable of getting things done through the employees of the CBO.

• Some of the older members of Nashik CO seem to be well connected with the Police - even with a reach extending to the state capitals!!

Value proposition for the Bank/Financial Institution:

This initiative provides a great potential to achieve business and social objectives of the banks/financial institutions. It is necessary to sensitize the banks/financial institutions on the value propositions of the Avahan programme which are as follows:

a. A large number of unbanked population can be financially included - a business as well as a social proposition. Business projections can be estimated based on the experience of the Swathi Jyothi initiative.

b. The Avahan Project is for 3 years and covers a population of over 2 lakh people collectivized into 103 CBOs with diverse financial needs - a huge opportunity

c. Financial Literacy and Education for the communities directly - an opportunity for popularizing the banks schemes.

Highlights
Locations
Andhra Pradesh, Karnataka, Maharashtra, Tamil Nadu and Telangana
Funder
Bill and Melinda Gates Foundation (BMGF)
Supported by
Swasti
Vrutti
Catalyst Management Serices
Objective

The objects of the interventions under Financial Security for the Key Populations are that they are:

– Aware or having knowledge of their short and long-term financial needs and

– Have access and control over financial resources to be able to address all critical financial needs , and not to resort to high risk behaviour making them vulnerable to HIV due to financial pressures

Coverage

Key Population numbering about 200,000 in 102 locations across four states of India – Maharashtra, Karnataka, Andhra Pradesh and Tamil Nadu. Details are as given below:

· Four States – Karnataka, Tamil Nadu, Andhra Pradesh and Maharashtra · 102 community organization – 80 COs of FSW and 22 MSMs · A total of 206,938 key population of which 182045 are FSWs and 24893 are MSMs/TG · A total of 126209 key population have membership in community organizations

Vrutti's Role

Economic empowerment activities providing critical assistance to women, enabling them to generate income, increase bargaining power, transform that bargaining power into desired actions and outcomes, build a savings base for emergencies, and avoid selling assets that may affect their future livelihood. To that end, gender-responsive economic empowerment/strengthening activities giving women access to and control over vital economic resources.