Livelihood

Through its livelihood support service, CCFID aims to facilitate the development of marginalized and poor families through various livelihood promotion programmes. CCFID’s key programmatic focus areas are:

Cluster, Sub-sector and Activities
The approach to livelihood promotion is three fold that entails support to enterprise clusters, conduct sub-sector studies for exploring livelihood opportunities and also encourage group and individual based enterprises.

Employability and Entrepreneurship skills
Provide orientation and engage in knowledge building for orienting youth to employment & entrepreneurship, managing work life and enhancing marketable skills.

Institution Building
This includes setting up of activity groups and institutionalizing livelihood promotion through a single window – could be Federation, Producer Company or Resource Centre.

Gender Balance
The end impact monitoring is at household level. Hence, CCFID’s livelihood promotion activities are amongst women and men, especially youth men.

Partnership approach
This involves continuous “engagement” with community to ensure symbiotic and organic link to all implementation activities. CCFID also works with government, private and civil society organizations.

A fledgling organization when the tsunami struck CCFID’s focus on livelihood development targeting women and youth positioned the organization well to play a key role in addressing long-term livelihood needs. IYF selected CCFID to implement the Tsunami Reconstruction Initiative in India based on its role as a locally-rooted, professionally-run organization capable of delivering on the Initiative’s goals. Having responded to the tsunami with an immediate donation of funds and in-kind support, Nokia conceived of the Initiative as a means of promoting long-term recovery in affected regions.

CCFID’s efforts in India directly impacted the lives of 7,014 young people and indirectly benefited more than 26,000 youth and community members. More than 1,900 youth received skills training, with 80% securing jobs. Over 5,800 loans were made over three years, totalling US$880,000, enabling 1,500 small enterprises to take root. From cashew processing to soda making, from sari weaving to handicraft production, CCFID contributed to the creation of a range of local businesses. Long-Term outcomes improved income During the program period, CCFID launched the Livelihood Resource and Training Centre (LRC) to provide customized and non-financial services to better meet the needs of youth entrepreneurs and women. Recognizing that most microenterprises lack market linkages and access to business development services, the LRC works to fill these gaps.

‘Our greatest achievement has been creating a sustainable income for the tsunami-affected population. Other charities provided supplies and materials but there was no long-term plan to support youth.’ — R. Sudhakar, Chief Executive Officer, Community Collective Society for Integrated Development

LRC- Livelihood Training and Resource Centre

Promoting Micro Finance Services for Poor Livelihood Enhancement Services for Poor Institutional Development Services for Poor
Knowledge centre: This is a cross cutting theme and run through all the services that CCFID offers to its member communities. To conduct action-research, document and produce reports and other information materials for wider sharing of learning
Capacity building of people’s institutions for financial intermediation. Provide technical support in assessing and identifying livelihood opportunities for ensuring food security. Provide technical support and services to women and youth to organize themselves as groups and federate the groups for larger coordination, sharing and pooling of resources.
Capacities building for self help groups/ JLG promotion and undertaking micro-finance. Training in micro-entrepreneurship development. Capacity building for leadership development, change management for good governance.
Facilitate credit linkages to meet business and other livelihood needs. Market access linkages. Conduct institutional and field assessment, monitoring and handholding for institutional development.

INTRODUCTION

CCFID as one of the lead professionally managed development organisations working in tsunami affected regions of south India recognizes this complementary nature of microfinance and livelihood promotion. As a first step to adopting the Livelihood Financing approach, CCFID initiated an in-depth two month field oriented research study with support from one of the lead management institutions, the Indian Institute of Forest Management, Bhopal, India. The study was conducted in April-June, 2007 in Cuddalore district of Tamil Nadu and Karaikal district of Pondicherry.

Livelihood Resource and Training Centre (LRC) of CCFID was started to provide the much needed interface by offering the business development services and institutional development services along with the financial services like credit and insurance. For ensuring that the LRC provides the desired services to the people in an effective and efficient way, a business plan for the coming five years is prepared on with keeping two processes in perspective – strategic planning and operational planning.

Strategic planning entails articulating broad institutional goals, assessing the institution’s performance in achieving its goals, and then selecting a strategy that enhances the institution’s ability to expand outreach and achieve (or maintain) profitability.

Operational planning involves creating a framework for implementing the strategy, expressed concretely in detailed financial projections. The business plan for LRC is prepared by incorporating the perspectives of key stakeholders-such as the CCFID’s board, staff, and clients for ensuring the regular and uninterrupted services for the clients to achieve the twin objectives of broad outreach and profitability.

FINANCIAL SERVICES

Through the livelihood finance service provision plan the LRC supports up scaling efforts of existing entrepreneurs and starting new enterprises as well. Our Livelihood Financing potential and impact potential studies have help in identifying the scale of investment needed and the returns after implementing the Livelihood Financing approach.

For determining Livelihood Financing potential and impact potential, the major activities are selected from all the identified livelihood activities as livelihood opportunities on the basis of two criteria – scope of Livelihood Financing and employment generation potential. The Livelihood Financing potential and impact potential for the activities is identified by determining the scope of growth of the activities if they are provided with the required financial and non-financial support.

NON FINANCIAL SERVICES

CCFID realises that there is a need for supporting the local entrepreneurs in their livelihood activities so that they can develop their businesses. The Livelihood Financing approach to microfinance is based on providing continuous support to the people for helping them to earn their livelihoods on a sustainable basis. For this purpose, there is a need for an interface between the institution and the people so that they can get all the financial and non-financial support for the promotion of their activities.

Livelihood Resource and Training Centre (LRC) of CCFID will provide that much needed interface by offering the business development services and institutional development services along with the financial services like credit and insurance. For ensuring that the LRC provides the desired services to the people in an effective and efficient way, a business plan for the coming five years is prepared on with keeping two processes in perspective – strategic planning and operational planning.

Marketing support: Market Information, Market Linkage, Raw Material procurement, Value Addition, Transportation

Technical support: Employability skills, Marketing skills, Business skills development, Quality Training, Other alternative livelihood activities training

BUSINESS DEVELOPMENT SERVICES

Access to markets is of paramount importance for any enterprise, be it in the large, small or micro scale. The success of any enterprise, to a great extent, depends on its ability to gain access to markets. Most micro enterprises are established on technical skill, traditional knowledge or production orientation without identifying target markets and the market needs. Our study revealed that the microenterprises suffer from lack of market dynamics understanding and linkage. Also they remain vulnerable to the market forces and the changing and volatile markets as also to the natural calamities. To ensure protection from these problems, the knowledge of benefits of insurance in livelihood activities needs to be disseminated. With this in mind the business development services are designed for the people with the objective of developing entrepreneurship and management skills among the people of local communities.

Business development services:

  • Insurance Linkage – Link to External Agency for Insurance
  • Business Development – Business Counselling
  • Markets Linkage – Potential markets, Exhibitions
  • Market Information – Market Demand, Competitive Pricing
  • Technology – Latest Updates, Machine procurement
  • Transportation – Transportation Linkage
  • Trainings – Skill and Business Enhancement Trainings

INSTITUTIONAL DEVELOPMENT SERVICES

One of the major constraints facing microenterprises is economies of scale. The microenterprises lack adequate infrastructural support and they face the problem of ability to scale up production and services due to lack of capital. The idea of working in groups eliminates the burden of many expenses that are borne by an individual micro enterprise. This leads to reduced expenses due to collective procurements and sharing of the expenses. CCFID recognizes the strength of forming the producer groups and cooperatives and envisages helping its customer reap the benefits of togetherness.

Institutional development services:

Cooperative formation
Producer group formation
Capacity Building Programs
Strategic Business planning

CONVERGENCE

PROMOTION AND PROTECTION OF PEOPLE’S LIVELIHOODS
FINANCIAL SERVICES:

Savings; Credit both short- and long-term, for investment in natural resources: land, water, trees, livestock, energy Insurance for the lives and livelihoods of the poor, covering health, crops and livestock Infrastructure finance: roads, power, market-places, telecom, as needed; and Investment in human development including in nutrition, health, education, vocational training.

BUSINESS DEVELOPMENT SERVICES:

Productivity enhancement; risk mitigation, other than insurance (such as vaccination of livestock); local value addition; and alternate market linkages.

INSTITUTIONAL DEVELOPMENT SERVICES

Forming and strengthening of various producer organisations such as self-help groups, water users’associations, credit and commodity cooperatives, panchayats and Establishing systems for accounting, performance measurement, incentives, MIS, etc. Thus an approach to microfinance promotion, Livelihood Finance aims at developing assets, abilities and capabilities of the people so that they can earn their livelihoods in a sustainable manner.

FOCUS ON ALL THE ELEMENTS OF MICRO-FINANCE:

Although credit is an important financial service, it is not the only financial service that can help people, the other two financial services savings and insurance are also important. Savings are particularly important, as these act as self insurance in case of smaller contingencies; meet sudden demands of cash such as due to illness in the family; act as margin money or ‘equity’ for borrowing; and finally, to some extent act as a collateral for repayment of loans, where savings are deposited with lenders. Insurance is another important financial service for the individuals, given their vulnerability to livelihood and personal risks. Insurance may include life and general insurance to cover assets such as physical assets, livestock, crop and so on.

SUSTAINABLE LIVELIHOODS GENERATION :

Livelihood Financing leads to sustainable livelihood generation for the communities as the development of physical, natural, human, social and financial capital is also undertaken along with the financing of the activities.

HOLISTIC NEED-BASED APPROACH :

Livelihood Financing approach is based on identification of livelihood opportunities, selection and motivation of the micro-entrepreneurs, business, employability and skill training, establishing of market linkages for sourcing and outsourcing,creation of common infrastructure and some times obtaining legal mandates/regulatory approvals and providing credit as per activity requirement.

EMPLOYMENT GENERATION :

Livelihood Financing approach helps in employment generation by identifying the activities having potential for growth. It not only help people in getting self employed but also it provides steady wage employment to many others. This is certainly a diversion from micro credit approach that primarily focuses on self employment.