Rocket Learning

As with any other undertaking this size, there were multiple complications and obstacles limiting the effective functioning of CLFs. These challenges could be categorised into the following buckets:

1. Institutional Challenges
   Though many CLFs, VOs and SHGs were registered on paper, the ground realities painted a very different picture. Many of them were largely non-operational for a variety of fairly basic reasons – general body meetings did not take place routinely because many of them did not even have premises in which to work from. Additional gaps like a lack of any effective grievance redressal mechanism were also common. 
2. Financial Challenges
   The quality of record keeping, especially of essential books of accounts and records, was poor among SHGs and VOs. In fact, many SHGs did not even have bank accounts. This was a fairly core problem that affected the functioning of the whole programme given that these were the bodies tasked with dispersing funds under the NRLM. This lack of regular accounting practices resulted in a significant portion of the funding instruments under the programme like revolving funds, community investment funds, and start-up funds remaining untapped even though they were made available to SHGs/VOs.
3. Operational Challenges
   A significant portion of the work that CLFs and VOs do is to supervise SHGs and assist them in dealing with their individual requirements. The scale and complexity of this role requires a considerable amount of managerial expertise and know-how that was lacking in many CLF and VO office bearers.
4. Monitoring Challenges
   The success of any government programme, especially one like the NRLM, is contingent on how successfully the policies are implemented. Successful implementation requires constant monitoring as even the best designed policies can run into unanticipated problems. Monitoring is also required to ensure that a broad, generic policy can be tweaked and customised to suit the specific needs of a certain location or area. Due to a combination of some of the previously mentioned factors, many CLFs were unable to monitor their financial records, repayment of loans and overall financial health. 

Given the deficiencies identified in CLFs, VOs and SHGs, the primary goal for Veddis Foundation was to support these community institutions, and make them more sustainable and efficient. The complexity and variety of challenges involved in improving the effectiveness of these SHGs, VOs and CLFs requires action to be taken on multiple fronts. We identified five priority areas to achieve this transformative change:

1. Institutional Strengthening
   Though many of the bodies under the HSRLM that are crucial to its performance were ostensibly set up on paper, they weren’t fully functioning institutions. As such, one of the first interventions was to bring all of these bodies up to a basic working standard. This involved mobilising the SHGs/VOs and setting up CLF offices with clear protocols and processes of how these bodies must function. These will include the proper maintenance of books of record, a practice of regular and well attended meetings, forming sub-committees, ensuring the rotation of leaders, establishing grievance redressal mechanisms, and setting up monetary monitoring mechanisms.
2. Financial Inclusion
   Given that the core objective of the HSRLM involves empowering SHGs to function as a node of support in a village, it is vital that they have the financial resources to do so. This goal is to open bank accounts for them as well as increase accessibility to institutional start-up funds, revolving funds, community investment funds and funds through rotation.
3. Training and Capacity Building
   As mentioned earlier, there is a significant lack of expertise across the system, whether it is the financial record keeping of SHGs or the project management expertise of CLF and VO staff. Allocating resources to a programme does not serve the public unless they can be deployed effectively, making it vital that the capacity of staff members from CLFs, VOs and SHGs be of a certain standard. As such, Veddis Foundation conducts training sessions of SHG members, livelihood groups, office bearers, community cadres and CLF staff.
4. Sustainable Livelihood Prototypes
   The nitty gritty of the work that SHGs do is simply to, as the programme states, provide livelihoods. As such, they stand to benefit from initiating a variety of sustainable and replicable livelihood models. This may include best agricultural practices like the effective use of fertiliser and pesticide, crop rotation and irrigation, or different revenue streams like goat rearing.
5. Convergence
   The remit of large government schemes like HSRLMs is sufficiently large enough that it will overlap other state/union welfare schemes. This is especially true for a programme that involves something as core to people as livelihood. It was thus a priority to build convergence with state/central government welfare schemes under allied departments such as health, education, women and child development. Through this convergence, the HSRLM is able to alleviate poverty in a way that also brings about improvements in the quality of life of its recipients, who are often the poorest of poor living at the bottom rungs of society.
6. Monitoring Mechanisms
   In order to assess the overall health of the HSRLM programme and ensure its success it is vital to have robust monitoring mechanisms. As such, we sought to introduce a variety of best practices under our ‘Demand, Collection, and Balance’ intervention. This included grading VOs and SHGs as well as conducting internal audits.

   Veddis Foundation also posted field level associates to each of the 31 CLFs across the 7 districts to assist in monitoring efforts. These 31 field associates were supported by 4 coordinators and 1 state level programme manager. A monitoring and evaluation support unit with technical and advisory expertise was also set up at Veddis Foundation premises in Gurugram, Haryana.

Institutional Strengthening

• 100% of CLFs now have established offices and utilise their start-up funds.
• 100% sub-committees formed in all 31 CLFs and 585 VOs in the 7 districts.
• 84% attendance of SHG members in general body meetings.

Financial Capacity Building

• 220% increase in corpus funds of CLFs (up from ₹8.1 crore to ₹25.9 crore).
  Achieved in large part by completing the establishment of CLFs, VOs and SHGs by setting up office premises and bank accounts.
• 26x increase in rotation funds (from ₹85 lakh to ₹20.1 crore).
  The improvement in financial and accounting practices allowed for better utilization of existing funds, allowing the cycle of rotation funding to be utilised more and cover a larger swathe of society.
• 100% increase in project funds made available to CLFs (from ₹7.4 crore to ₹14.9 crore).
• 94% VOs now have access to funds through rotation (up from 13%).
• 4% repayment of loans (up from 46%).

Financial Sustainability & Income Generation

It is also important to keep the overall objective of NRLM programmes in mind and examine the impact it has on its target beneficiaries – the rural population of India.

• Annual agricultural income increased by:
  • 74% in Rabi season (from ₹29,000 to ₹51,000).
  • 57% in Kharif season (from ₹38,000 to ₹60,000).
• Cost of cultivation decreased by an average 22% during Rabi season and 17% during Kharif season.