84: Building sustainable livelihoods in rural India: A conversation with Dhruvi Shah, CEO Axis Bank Foundation

The Elephant in the Room

Shownotes:

In the 84th Episode of The Elephant in the Room Podcast, I spoke with Dhruvi Shah, Executive Trustee and CEO of Axis Bank Foundation about her journey as a banker and transitioning to working for the foundation.

In the episode we talked about the work being done by Axis Bank Foundation in the ‘sustainable livelihoods’ in rural India, priorities for the Foundation, the state of the social sector in India. We also chatted about 👇🏾👇🏾

👉🏾 The importance of taking into account the cultural context of local communities to solve problems

👉🏾 Grant funds as a catalyst to enable local communities to access credit from government programmes, build capacity, form SHGs etc

👉🏾 Measuring return on investment - for every rupee the Foundation spends, the Foundation is able to leverage between five to seven rupees

👉🏾 Changing operating model of foundations in the social sector today, where they are no longer just grant making bodies but also implementers of projects.

👉🏾 Changing priorities in a post Covid world - supporting community health initiatives and rural youth

👉🏾 Sustainability not being the destination - but focusing on the lifecycle of the journey

👉🏾 Allowing communities to experience the learning curve and acknowledging failure

👉🏾 Build the capacity of NGOs to enable them to grow as an organisation. The need for competitive pay to attract the best talent

👉🏾 Existential challenges facing the social sector in India

“So like I said, we've been doing rural livelihoods since 2010, giving us like 12 years. At an operating level, there are two or three opportunities where we need to kind of invest further. One, is on the communities participation in the markets, they're now able to produce more than subsistence. They are going to engage and interact with the market. So how do you build that capacity to have informed engagement with the market? And on the other side concerns around ecological sustainability, degradation. That's kind of two spectrums of the value chain. Now, this is more on the operating side. We are at this nice cusp of market and the society and how do we get the communities or the society to demand more from the market and how do we influence the market to be profitable at the bottom of the pyramid?” Dhruvi Shah

Memorable Passages from the podcast

👉🏾 So, I lead Axis Bank Foundation. I'm based in Bombay and I'm a migrant here. So I've been in Bombay for many years now. I came here for work. I was with a ABN AMRO for a 18 years and after that I joined Axis for about six years. I'm a commerce graduate and during the banking I got the opportunity to move to the not-for-profit side. I think it's a nice thing that happened, because it's not only helped me grow professionally, I think even as a person it's been a wonderful journey for me. And I, feel lucky that I have found something that I enjoy doing and something that I also believe in very strongly.

👉🏾 It was definitely not by design or even by accident. I honestly didn't plan as much. And you know, in those days, like 20, 25 years ago, you studied something and you did something it kind of very well aligned and I was lucky to have transversed into something very different than whatever I ever intended to do.

👉🏾 So when I look back, it feels like a very natural progression for me. I was part of the banking system, we've kind of made these silos. But to be very honest, they’re just in the design of operating else, you are still trying to solve a problem, right? And again, being part of a bank you get to see many facets of the economy.

👉🏾 And through banking I got the chance to work on micro finance and that kind of brought me closer to the grassroots so as to speak. I was travelling, I went to the hinterlands of the country. There were many different kinds of challenges that you saw. And all of us were trying to solve this problem from the bank side, from the NGOs trying to solve the problem. And we were at a very good intersection where we could see how the businesses was trying to operate in this space and what is the role that NGOs were playing as frontline organisations, who knew the community so well. And I think it's these explorations and the curiosity that kind of helped me take a decision to move away from what could have been like a mainstream banking career.

👉🏾 And work more closely with the social sector, we used to call it the development sector, to be very honest. So that's how the journey has been, it's neither accident nor design. It's been honestly, a very natural progression, I never felt, Oh, I let go of something and I keep hearing this you know, we let go, sort of sacrifice. No, it was a very natural progression, just kind of aligned to probably how I was as a person and I feel quite proud about it.

👉🏾 So the foundation was set up in 2006 and as any new foundation, we also dabbled in few things, we did education, we did few other things, and probably as a bank, also our travels, conversation with people in the sector, as a bank we felt we understood livelihoods better. Also we wanted to do something wherein you can have some form of transfer to the community. And not exit, exit per se, but there is a clear demarcation between what you transfer to the community and then you fit into the next kind of role.

👉🏾 So that's how we started getting into livelihoods and rural livelihoods because the challenges were much more than in urban livelihood, even today working in an urban landscape is very, very different. So that's how we started the programs on livelihood. We call it sustainable livelihood so that there is a bit of a focus on what we really believed in at that point of time. So livelihood is what we do, we've been doing that since now 2010.

👉🏾 So I mean, what does livelihood mean in a rural community or let's say for a rural household large part of our communities have small parcels of land, what we call a small and marginal farmers, and there are people who are landless. They typically depend on what they grow in one season, which means right after the rains and the rest of the year, they do farm labor, they migrate to cities for work. Our attempt is to try and find income from the assets that they have, by enhancing the scope of what they can do in the village. So the asset that they have is land, so try and see how much of income they can earn from the farm and farm allied activities.

👉🏾 So typically what you need is water, water for irrigation. So work on the water resource development, wherein farmers have enough irrigation to take the second crop and maybe the third crop. Create alternates, which means, let's say livestock, could be micro enterprises, so that they have a second or a third source of income. I mean this is what we call creating a basket of livelihood. What happens gradually is that two or three sources of income get developed, the farmer has cash income which allows him to migrate for lesser months than before, allows them to migrate out of choice than distress migration. Farmers or families who do not have land find it a little more difficult. So the focus there becomes creating livestock as a major source of income. They always have some small parcel of land, so try and see if they can do vegetable cultivation, they can set up micro-enterprises around the rural value chains. Credit is a very important part of enhancing any kind of livelihoods. And there are many programs available, so try and link them to some sort of credit form collectives, like self help groups, farmer producer groups, so on so forth. It takes about three to four years to be able to confidently say that the incomes have now stabilised and will continue for a long period of time. So that's what we call as sustainable livelihoods.

👉🏾 So we work with the NGOs. We very early on realised there is a set of organisations who know the local grass root issues very, very well. They also know the cultural context in which communities live. And I think that's a very, very important part of knowing how to solve a problem with them because it's not a mechanical process. It's a process which a lot of trust building is required and until you know the community and in the context in which they live you cannot really help them solve the problem. It's very easy to go and solve the problems for somebody, but sustainability comes in when people take more ownership. So we found that the NGOs are skilled to do that, so we work with NGOs.

👉🏾 Do we work simply on grant making? No, we don't just cut a cheque to an NGO to say, Okay, do what you do. When we started the livelihood program, we did a lot of research , conversations moved around in the communities, in the villages. And we've co-created this program, it's the same program that we implement across the geography that we do. It evolves over a period of time. Every few years we get together with our partners, we look at the newer challenges that are emerging, and then kind of design the next step. Our money is used more like a catalytic fund. There are many funds which are available for the community, there are several government programs, like I said, there is credit, which is available. We don't want to replace any of it, we actually can't, right? Grant money is very tiny in the whole scheme of things. So let's use our money as a catalytic fund to bring all of these things that are designed for the community, available for the community. So a lot of access, capacity building, joining the dots, collectives, all of that kind of work is facilitated through our grant. Back of the envelope calculations, for every rupee that we spend, we are able to leverage anywhere between five to seven rupees, for the community. And that is what kind of triggers largest change than what just our grant money could have done. So that's how the operating model is.

👉🏾 So no, our priority remain livelihood and will remain livelihood and became very evident in Covid that creating sustaining incomes, especially in the rural area is even more important than before. It gives families certain sort of stability, right?

👉🏾 Yet there were changes, there were some things which became very apparent which may not have kind of been so important. So a couple of things one, we really found health as I mean, something that one should now focus on, right? It was there always, but it just gave us an opportunity as larger number of stakeholders to acknowledge that yes, health needs support. Youth in the village, that's a segment that we don't typically focus on, right? And these are the youth who are educated or they're youth who are not interested in everyday kind of farming. They want to do something different and they are people who typically migrate short term, long term, and they also want to try and see if something in the rural India is possible. So that's a segment we kind of want to focus on. So I think the focus on livelihood remains, what kind of emerged as newer priorities will seamlessly fit into the design at some point of time, and we've started kind of focusing on these things. Any design takes time, it takes time to gather resources, it takes time to design a program. But it did open our eyes to newer challenges which are to be kind of looked at post covid. It also gave us time to think through things.

👉🏾 So you know, sustainability is not a destination. It's a very ideal space to be. It's not a destination, it's the journey. So success is not about what you will achieve in four years, five years, because it takes time to change, make any kind of change. You're working with people, you're working with human beings, you're working with families. So one of the critical thing we like to focus on is the process part of it. If your processes are working today, you will get certain sort of desired outcomes, but if you just wait for something to happen with assumptions in three, four years, there is going to be a lot of unpredictability. And rural lives are very, the conditions in which you operate are very unpredictable.

👉🏾 So focus on the processes and what are these processes that I'm talking about? So it's getting the right ingredients in place. It's getting the community involved at every stage, this slows things down, right? If I take a very simple and a basic example, if I go to a farmer and tell him, I'm gonna dig a well for you, he's not one saying no, right? He'll say, Okay, come dig a well, I mean, what have I to lose? But if you want to get the whole community together, for them to decide who needs that well, where should the well be, how will you do the water sharing, who will own the decision making?

👉🏾 This process is a longer process, but it's a more sustainable process because you have the chance of having that well in the right place, by right place, I mean where the water will be. You have scope of helping more farmers and families because there is water sharing. Now, these are processes which will give you a certain outcome, but these are processes that take time. So for us, measuring what will work, what'll sustain, comes through assessing the processes which the organisations follow, and that's where we partner with a certain kind of organisation, it's a continuous exercise. It's not something you measure, at three years or four years. You do assessments and all of that. But it's something that you do on an ongoing basis through engagement with our partners, with the communities, sometimes by simply listening to the communities and most importantly be agile. I think that's very, very important to be. We also have to understand that the area in which we operate is a very high risk area, so as much as there are successes, there are failures.

👉🏾 Sometimes it's important to let the community go through their learning curves. Like anybody who's trying to learn, gain confidence and trust, it's important that they're allowed to make certain mistakes. You may know it'll not work, they have traditional knowledges, it's okay to sometimes let it run its course and be there with the community as they are learning in a new journey which is very unknown to them. So we have to be mindful of these aspects as well.

👉🏾 Let them have their conflicts. Let them find a solution. They know how to deal with conflicts when they will happen later. So it's important to allow a learning journey for the communities you're working with.

👉🏾 Oh there are many areas. I think post covid also and post changes in how the funding is going to happen. See the sector has always evolved, if we kind of look at last 50 years or 70 years of it. But these are too many changes happening at the same time, it is sort of unprecedented and transformation is not easy. With this change of nature of funding and that's going to remain like that for a long period of time, organisations are required to change at an operating level, and this is not without heartaches, right? So all of us are going through that and any sector goes through that, and I'm hoping something more stable or better may merge out of it. Again, it'll all depend on how we as practitioners kind of shape it up in the future, right? So the onus equally lies on all of us. The other challenges, and these are going to become bigger is that any organisation, you're working with organisation and institutions, there is a need to build them as organisations. So there are very limited opportunities for NGOs to build onto their corpus which allows them to grow as an organisation.

👉🏾 And it becomes very difficult for NGOs to operate without any kind of equity. So, that's a challenge. There are opportunities because there's a lot of philanthropic funding now coming in, other than corporate CSR and that's an opportunity which wasn't there so much at past. But now it depends on are you able to capitalise on this new source of funding to build organisations? Are you willing to kind of walk halfway to do what is required? But the opportunity does kind of exist. HR continues to honestly be challenge in the sector. And like all the organisations post Covid, there was a lot of attrition in the sector as well. Again, a lot is linked to how local you are.

👉🏾 The sector also lacks pay parity. The salaries in the sector don't match up to any other sector, so I think that's something which should change, allowing an equal opportunity for people to make a choice of working in the social sector.

👉🏾 I sleep very well.

👉🏾 We see challenges every day, but it should also bother you. Right? So I'm not saying there are things that bother me immensely. But I have reached a level where I can sleep with those challenges with me. I feel there is a disproportionate focus on scale. NGOs are not designed for scale, they are not supposed to solve the problem, the entire problem. Right?

👉🏾 They're designed to find a solution in many challenges that are there and help other people, the government, the businesses, community themselves to solve this problem. So this disproportionate focus on scale, sustainability just with the NGO is not the solution. So I think this bothers me a lot because a lot of our conversation you are not able to scale up. I am not designed to scale up, right? You know there is this inherent conflict that I see, it also takes away from the responsibility from people who are supposed to solve the problem at scale. Also the grant, like I said, the sector works in challenges that have not been solved, the challenges that happen every day. So there's a very high risk of success and failure there. And I think with the ask of positive outcomes alone. And many other sort of funding that is trying to come, we are trying to change this inherent nature of risk funding, right?

👉🏾 CSR grants are the highest risk-taking fund, and that is what is allowing NGOs to walk that path of finding difficult challenges to solve. I think that shouldn't change, it'll again, kind of push things behind if you don't take up those challenges. And we are very, very silent on the role of failures in finding successes. A lot of what we see as success also comes after a lot of experimenting, piloting, and there are a lot of failures. Only out of failures you know, this will work, this will not work. So two things happens, one, you're creating a perception of everything that happens has to succeed. Second, you're not sharing failures for others to learn and make the same mistake, and if you keep making the same mistake, you're also kind of...