In 2010-11, we were faced with the challenges of the microfinance crisis in India; which has fundamentally changed the whole of our industry. Rather than finding a new purely microfinance partner, we have taken the opportunity to start our own operations in West Bengal where our Shivia India team sits and directly address the needs of the poor where we work. We see considerable advantages in operating under our own ethos, financial, management and social impact controls. We can directly control how our money is spent in terms of customers selected and the terms under which they receive loans or business toolkits. Our own operations are centre around our livelihood model. See below......

Livelihood Model

We launched our “livelihood model” in 2011 to overcome the problems of pure lending and to incur significantly lower overheads than microfinance which is so costly to administer, with the ever-present risk of defaulting customers. Our aim is to provide clients with the necessary training, toolkits and finance to engage in household activities which will help them to lift themselves out of poverty. We shall no longer lend for a range of enterprises, based on trades that borrowers’ families have been engaged in for generations. Instead we shall introduce specific enterprises and provide training, initial business ‘toolkits’ and, if required finance, in activities that are market-driven and feasible from the home – our first enterprise is poultry farming. Once this has gained momentum, we envisage introducing other enterprises such as mushroom-growing and sericulture.

We have contracted BASIX, a well known livelihood organisation in India, to assist us in getting our operation off the ground at our chosen site, Familia Home, 30 miles north of Kolkata. Farmers pay 500 Rs (£7) upfront for an initial toolkit consisting of 10 chicks, a course of vaccinations and feed for the first 4 weeks. The space needed to rear that small number of chickens is about 4 square feet, so no special buildings are required and generally chickens are sold locally, so there is no need for marketing expertise. Each farmer should be able to rear 4-5 batches of chickens a year. At best they can sell the chickens and eggs to local markets; at worst they can feed their families with them. As well as the toolkits, we shall provide initial training and mentoring for the early months and be available for consultation thereafter. The expectation is that in time some families will choose to expand their business and we shall be able to help with finance for expanded facilities.

Our pilot phase, until December 2011, is for 30 households after which we will scale up the project to about 2,500 farmers by May 2012. We will continue to target the very poorest in West Bengal and complete initial and annual Social Impact Assessments for all those enrolled on the programme to measure their progress out of poverty.

The poultry project will be run through Nirdhan Microfinance and Development (“Nirdhan”) incorporated in West Bengal on 23rd August 2011, the Directors of which are the previous four Trustees of Shivia India, who have a team of four consultants responsible for all aspects of operations in the State. They will have a large degree of autonomy as they have a greater knowledge of local circumstances, but will be subject to a Memorandum of Understanding with Shivia, concerning matters over which we wish to exercise some control. The practical and legal challenges of operating in a remote overseas location are understood by the UK board and all decisions will be evaluated carefully.

Social Enterprise

The idea is to start a farm – initially a poultry farm – which can both breed and sell chickens and feed to generate an income for our livelihood model but also act as a centre of training and excellence for potential farmers to learn how to engage in poultry farming at different scales. Our Shivia India team has conducted extensive research from various sources, both governmental and non-governmental entities in West Bengal and Odisha. We are encouraged by the responses and our chosen site, land around Familia Home, is a good location for this enterprise. We now need to raise the funds to set up the farm and get going!