Bringing 11 million workers under the social security net in India
It is very important to improve people’s living standards to eradicate poverty and achieve sustainable development goals. Social Security takes care of that.
What is Social Security?
According to the International Labor Organization (ILO), social security is the protection a society provides to individuals and households to ensure access to health care and to guarantee income security, especially in cases of old age, unemployment, illness, disability, work injury, maternity or loss of a breadwinner.
A family covered by Social Security is more likely to escape poverty once and for all because they do not have to rely on their meager savings in case of emergency health situations or loss of work, temporary or permanent disability, etc. In India, social security is not available to everyone.
India’s social protection framework is limited; and worse, many Indians cannot take advantage of the benefits they should be getting. Covid-19 has further widened the gaps. An average Indian is eligible for 40 claims. However, few have access to it even if they are qualified for and would benefit from the government privileges. Even the basic infrastructure for financial inclusion has gaps. For example, 260 million Indians still do not have a bank account. Providing individuals with better access to rights has a myriad of benefits, including providing them with a safety net – financially and otherwise – improving the effectiveness of policy interventions on behalf of the most deprived.
A coalition to bring more than 11 million workers under the social security network
Social tech start-up, Haqdarshak Empowerment Solutions Private Limited and Dvara Money have launched a unique pay-per-out financing model to connect workers in the informal and formal sectors to social security instruments. The other partners in the coalition include Dalberg and Acumen.
All coalition participants have signed an MOU to formalize the program, which will be spread over three years. While the program is currently in the 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 goal is to increase this SROI at least twice, with the participation of philanthropists, corporates and service providers.
The program also includes the launch of India’s first card-based social protection product co-created by Haqdarshak and Dvara. The product will revolutionize the way citizens access social protection; both public and private. This product will launch in January 2022. The product will be distributed through direct civilian channels and the program delivery through Haqdarshak’s 10 Yojana Kendras Stone and Mortar Centers.
“Haqdarshak is proud to be one of the first organizations in India to build a rules-based eligibility engine with over 7,000 welfare schemes digitized in 15 local languages. Over the past 5 years, we’ve helped more than 1.5 million citizens and micro-enterprises access government schemes and financial services. With the launch of this pay-per-performance model, supported by a revolutionary card-based platform, we will certainly accelerate the impact on the social protection ecosystem in the next 4-5 years. We are very grateful to Dvara, Acumen and Dalberg, who are co-designers of the program with us, and look forward to more organizations working with us in this journey,” said Aniket Doegar, CEO and Co-Founder of Haqdarshak.
“Our hope and ambition as actors in this effort is to support the government’s ambition to provide a social safety net for the millions of formal and informal workers who need it most. We know the great value of government rights based on our research and that of others during the pandemic. We are excited to co-design a results-driven innovative financial instrument built 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 be based in part on its potential to inspire the right stakeholders to work together to serve the country’s workforce,” said Tushar Thakkar, Associate Partner with Dalberg Advisers.
“Dvara Money is excited to partner with Haqdarshaq to provide comprehensive financial wellness through a custom Yojana card platform that offers Spark Money, a NeoBank powered by Dvara Money. The Yojana Card will serve millions of workers and enable them to achieve financial dignity and well-being by providing access to a range of social security and financial inclusion tools that are right for them,” said Pramod Ghorpade, Dvara Co-Founder and CEO money. .
In total, in the first phase, until March 2022, the coalition will raise $6 million from philanthropists, companies and multilateral organizations. It is estimated that the capital will be used to affect at least 1 million workers and give them access to social security schemes and other financial inclusion services. The implementation will be led by Haqdarshak, who will use its technology and a cadre of field agents. Dvara’s innovative and tailor-made financial products and services will be in the list of offers. Dalberg becomes program manager and lead design. Acumen has committed to provide the venture capital. There will also be a custodian for the funds raised and an independent evaluator.
“We are excited to partner with Haqdarshak and help them give 11 million beneficiaries access to benefits and rights. We’re particularly excited about the program’s design, which focuses on using a mix of technologies (Haqdarshak’s app and Dvara’s Spark Money card) to create a long-term point of contact with beneficiaries that can be used to sell multiple critical goods and services. to deliver,” said Mahesh Yagnaraman, India Country Director, Acumen.
This is the first time in India that such a results-oriented model has been designed on this scale. The coalition aims to increase its reach by 10x over the next 18 months with the participation of leading industrial houses.
The goal in the second phase of the program would be to increase its reach tenfold and reach ten million employees.