In May, we talked to Ajaita to hear about what the COVID-19 Pandemic meant on the ground, in India's rural places, far from the urban centres that got most of the media attention.
Ajaita explained that to understand the nature of interventions needed from different partners in such an unpredictable context, it is important to capture the interconnectedness and intricacies of what happens on the ground in normal times, and the trigger effects that an event like COVID19 then brings about.
With the passion and the precision Ajaita is known for, Ajaita described:
About 551 million of these people live out of reach of traditional retail outlets and are not getting access to the products and services they need to build better, more dignified lives. Frontier Markets believed that rural households needed to be treated as dignified customers. They need to access high-quality services at their doorstep, and that women were the right investments to drive the rural economy to help rural households have an “Easy Life,” or as they call it, “Saral Jeevan.”
Initially, the company took clean and affordable energy products to rural households, supported by a fantastic network of rural women, or “Saral Jeevan Sahelis – or “easy-life friends”. Sahelis are trained rural women who convince communities to switch to solar energy; in 2018, Frontier Markets introduced their digital solution designed by these women to market not only solar products but also various appliances, smartphones, internet services that make life in the community better.
Driven by a consumer-centric model, the digital solution was both an e-commerce app, and marketing tool for Sahelis to collect customer data, insights, showcase solutions, and close sales to help coordinate doorstep deliveries. By February 2020, the company has invested in 3500 Saral Jeevan Sahelis, facilitated 1 million sales of solutions in 4 states of India. The Sahelis have become leaders in their community, earning $15 million of income to date, and inspiring young women to adopt technology, and drive change in their village.
If a social enterprise can meet the needs of the population it serves, it can then turn to serve the “wants”, and not just be there for survival only….
OGUNTE: What’s happening in rural India at the moment? What are the core challenges people need to be aware of today? (Read the full interview - part 1 here)
AJAITA SHAH: We hear a lot about COVID urban and health crisis and the number of deaths but we rarely hear about the trickle reality: because of the lockdown, masses of people have migrated back to their villages. As a result, the population in each house have virtually doubled up and this has had an impact on the household costs, as well as on household duties women are taking on in addition to their normal workload.
“WOMEN HAVE GONE FROM FREEDOM BACK TO ISOLATION”
A crisis like this reveals where women are fundamentally at their most vulnerable. They have to do more work at home, have less opportunities to go out and work, and are therefore less economically independent. They are more isolated and can be submitted to more domestic violence. All the societal gains women have acquired are really at risk now and threatened to vanish.
In the past weeks, women have experienced big income challenges, and to top it all up, we have noticed a massive misinformation emerging about the actual virus and how it functions.
We also faced issues with supply-chain access. As soon as the lockdown started, there has been an immediate lack of basic staple goods, such as basic food and hygiene items, medicine, masks, gloves: all of the things that were needed in towns and urban areas were completely inaccessible in these rural areas.
On another level, it is harvesting season. In normal times, this means an additional opportunity for entire families to earn an income. Because of the lockdown, people have been housebound and have lost the opportunity to earn this extra money. Farmers couldn’t access agricultural tools or seeds, which are essential in this season.
OGUNTE: How did Frontier Markets tackle these challenges innovatively and rapidly and how have you maximised your partnerships on the ground with your teams, NGOs, and the government? (Read the full interview - Part 2 - here)
AJAITA SHAH: When the lockdown happened, we needed to start checking in our women and all of our customers. We already had our technology in place, the e-commerce platform was already functioning, and the call centre operational – this transition was done to further optimize, and reach, our 700,000+ households and 3500 Sahelis fast.
But our customers in remote rural areas were removed from everything. Thanks to the knowledge acquired from our data, we encouraged the government to recognise a range of essential goods from solar products, to appliances and agricultural goods, to name just of few, and to let us open our selling branches. These branches were to provide a point of information, clarity and access to all solutions. We convinced FMCG [Fast Moving Consumer Goods) companies to ship their goods to our branches in towns and we took over to deliver their goods to the doorsteps, in rural villages.
We set up a new fintech partnership to enable cashless payments through our e-commerce app, to address the issue of cash withdrawals – and other problems, such as the fact that some people have never accessed their bank account online, among other issues.
OGUNTE: Which gaps still need to be filled despite all these efforts? (Read the full interview - part 3 - here)
AJAITA SHAH: As a social enterprise, we have a unique position to leverage our infrastructure to deliver to our customers, the best possible services, using a market-based approach. Within the value chain, we need to ensure our field staff, as well as the women entrepreneurs who distribute our products, are earning some income in this process. We're using an economic driver as an approach, and we also recognize our impact lens, which is about creating financial security, both for our staff and for the women.
But the crucial element that is missing, for now, is that we need support to give a stipend to women so that they have some income coming in, during this period. This stipend would compensate for the lack of earnings – they sell only low margin staple goods as opposed to their usual appliances. It would strengthen or retain their economic power until the situation stabilises.
Women need to retain this economic position in their family. It is important as we can’t let the advancement go backwards. When a woman brings in an additional $10 or $20 to support essential goods purchasing, it's a game-changer, she will retain her status in the house.
As she can't travel because of the lockdown, this is the best option for us now. But that can't be done through equity capital, because equity money is supposed to be there to support our staff and our infrastructure.
Impact investors – who provide the equity capital - are perfect to help employment objectives. They also assist with strategy, operations, potential bailout capital (equity) to sustain operations until the market stabilises.
The problem is that this segment of support doesn't address the opportunity to deepen the social impact.
If we think about the unintended consequences of poverty, working on delivering products that aren't profit-driven but impact-driven such as first necessity products, or focusing on women's getting access to stipends to guarantee some income so that they can deal with the negative repercussions of the crisis, this is the moment when we need a deeper concessionary capital.
We believe this is the support philanthropists can bring in, and that will allow us all to jointly create an impact.
OGUNTE: How can investors and philanthropists join forces in this ecosystem to create an impact and move in a smarter way?
AJAITA SHAH: If we are working together on the ground, with government, non-profits, to leverage our infrastructure and address this crisis in the most sustainable way possible, we need to recognise that the people supporting us also have to collaborate.
On one hand, impact investors ensure you can retain your existing infrastructure. But on the other hand, the nature of the capital they have doesn't allow them to provide the non-financial returnable investments. And this is where we're at.
OGUNTE: This whole situation for remote rural communities is unfortunately similar in many places, am thinking about poor conurbations, rural and/or remote indigenous communities in Brazil or sub-Saharan Africa, just to name these. So how should social entrepreneurs be supported, so that can keep doing their work?
AJAITA SHAH: We need to amplify the voices from the field, the voices from the frontlines, shed a light on the gender challenges in these communities. I hope that the philanthropic ecosystem is listening. Social entrepreneurs should be supported at this time because they're able to do something to leverage their infrastructure and their partnerships on the ground to alleviate the situation on the ground, immediately.
In this time of crisis, economic and financial security, as well as gender issues, are still very high priorities. We can't sideline them, the same way we can't sideline climate change. All these issues are interdependent. Ideally, funders should avoid allocating all their funds to help urban relief, because the issues that were supported and tackled with the programmes before the crisis, have now increasingly worsened.
We all appreciate the efforts and generosity when funds are directed to large government relief funds or large donor collectives, but in this instance, a donor cannot see the problem from the lens of the people who are suffering, and the funds are not reaching the people who need it the most right now.
OGUNTE: What is your call to action to philanthropists?
AJAITA SHAH: We need to close the loop. We would like philanthropists to join forces directly with the organisations on the ground doing the work, meeting the people and provide unrestricted funding for a while to bridge the gaps.
Whatever we've done in the last six weeks has been done in collaboration and fast, because there was no luxury of time. This had to be rapid, reactive, and effective. We embraced fast partnerships, quick interventions from the bottom up, we leveraged technology, and thought outside-the-box.
There was no time to do any "testing" or write lengthy funding applications. For us to be relevant, and efficient, the whole interventions needed to be shipped right away, at large scale. It’s important all players in the ecosystem work together and complement each other, at the same pace.
OGUNTE: Thank you so much for your time, Ajaita. Let’s go and close that loop!
Read the longer pieces, parts 1, 2 and 3, to get a deeper insight on how Frontier Markets managed its intervention on the ground, in collaboration with their partners.
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