It is very important to improve standard of living of people in order to eradicate poverty and fulfil the sustainable development goals. Social security ensures that.
What is Social Security?
According to the International Labour Organisation (ILO), social security is is the protection that a society provides to individuals and households to ensure access to health care and to guarantee income security, particularly in cases of old age, unemployment, sickness, invalidity, work injury, maternity or loss of a breadwinner.
A family covered under social security are more likely to escape poverty once and for all, because they do not need to fall back on their meagre savings in case of emergency health situations or loss of work, temporary or permanent decapacitation to work, etc. In India, social security is not available to everyone.
India’s social protection framework is limited; and worse, many Indians are unable to avail the benefits that they should be receiving. Covid-19 has further exacerbated the gaps. An average Indian is eligible for 40 entitlements. However, few access them even if they are qualified for, and would benefit from the government entitlements. Even basic financial inclusion infrastructure has gaps. For example, 260 million Indians still do not have bank accounts. Providing individuals with better access to entitlements has a multitude of benefits including providing them with a safety net – financially and otherwise, improving the efficacy of the policy interventions to benefit the neediest.
A Coalition to bring over eleven million workers under Social Security Net
Social tech start-up, Haqdarshak Empowerment Solutions Private Limited and Dvara Money have launched a one-of-a-kind pay per outcome financing model to link workers in the informal and formal sectors with social security instruments. The other partners in the coalition include Dalberg, and Acumen.
All the participants in the coalition have signed an MOU to formalise the program which will be spread over three years. While the program is currently in its design phase, through this model, the coalition aims to reach 11 million workers in three years and link them to social protection schemes and financial inclusion services. Currently Haqdarshak’s model has delivered a social return on investment (SROI) of at least 30X. With this program, the aim is to increase this SROI at least two times, with participation from philanthropies, corporates and service providers.
The program will also include the launch of India’s first card-based product for social protection which is co-created by Haqdarshak and Dvara. The product will revolutionise how citizens access social protection; both public and private. This product will hit the ground in January 2022. The product will be distributed through direct to citizen channels and the scheme delivery through Haqdarshak’s 10 Yojana Kendras–brick and mortar centres.
“Haqdarshak is proud to be one of the first organizations in India to build a rules-based eligibility engine with 7000+ welfare schemes digitized in 15 local languages. Over the last 5 years we have served over 1.5 million citizens and micro businesses with access to government schemes and financial services. With the launch of this pay per performance model backed by a revolutionary card-based platform, we are sure to expedite the impact in the social protection ecosystem in the next 4-5 years. We are really grateful to Dvara, Acumen and Dalberg who are the program’s co-designers with us and are looking forward to more organizations collaborating with us in this journey,” said Aniket Doegar, CEO and co-founder, Haqdarshak.
“Our hope and ambition as actors in this effort is to support the government’s aspiration in providing a social security net for the millions of formal and informal workers who need it the most. We know the great value government entitlements bring based on our studies and those of others during the pandemic. We are excited to codesign an outcome based innovative financial instrument that is set up for success with the right incentive structure and appropriate accountability measures. If we are able to create a model that is sustainable in the long term it will, in part, be based on its potential to inspire the right stakeholders to work together in service of the workforce of the country,” said Tushar Thakkar, Associate Partner with Dalberg Advisors.
“Dvara Money is delighted to partner with Haqdarshaq to provide comprehensive financial wellness through a custom-built Yojana card platform that Spark Money, a NeoBank powered by Dvara Money, offers. The Yojana card will serve millions of workers and empower them towards financial dignity and well-being by enabling access to an array of social security and financial inclusion instruments that are suitable for them,” said Pramod Ghorpade, Co-Founder & CEO, Dvara Money.
In all, the coalition is raising USD 6 million in the first phase, till March 2022, from philanthropies, corporates and multilateral organizations. It is estimated that the capital will be used to impact at least 1 million workers and enable them to access social security schemes and other financial inclusion services. The implementation will be led by Haqdarshak which will leverage its technology and a cadre of field agents. Dvara’s innovative and customised financial products and services will be in the list of offerings. Dalberg will be the program manager and lead design. Acumen has committed to provide the risk capital. There will also be a custodian for the funds raised, and independent evaluator.
“We are thrilled to work with Haqdarshak and to help them provide 11 million beneficiaries with access to benefits and entitlements. We are particularly excited about the design of the program, focused on leveraging a mix of technologies (Haqdarshak’s app and Dvara’s Spark Money card) to create a long-lasting touchpoint with beneficiaries that can be used to provide multiple critical goods and services,” said Mahesh Yagnaraman, India Country Director, Acumen.
This is the first time in India that such an outcome based model at this scale is being designed. The coalition will aim to increase the scope by 10X over the next 18 months with the participation of leading industrial houses.
The objective in the second phase of the program would be to increase the scope tenfold and target ten million workers.