To stimulate long-term economic growth in the country, AKDN operates across the spectrum, from facilitating community-based savings groups that enable very poor remote households – who do not have access to formal financial services – to save and borrow in small amounts to help smooth erratic incomes and cope with emergencies, to developing vocational skills of rural youth and matching them with job opportunities beyond agriculture, to commercial banking and corporate financial services.
Long-held traditions of self-help gave impetus to small community-based co-operative societies that have evolved, with the help of the Aga Khan Fund for Economic Development (AKFED), into small co-operative banks, which then merged to form the Development Co-operative Bank, and eventually metamorphosed during the 1990s into what is now known as DCB Bank.
India has high levels of rural-urban migration and a large population of young people who are not keen to work in agriculture. In response, the Aga Khan Foundation (AKF) and the Aga Khan Rural Support Programme, India (AKRSP (I)) are working to develop the capacities of rural youth and match them with job opportunities.
Migrant support
In response to widespread rural-urban migration AKF is also supporting a migrant support initiative which is being piloted in the districts of Bahraich district in Uttar Pradesh. The initiative is focused on preparing migrant youth with skills, knowledge and social support for safer and more profitable migration. Through a Migrant Support Centre handholding and information about social security schemes as well as linkages to relevant schemes are being provided.
Alternate Energy
AKF and AKRSP (I) have been promoting alternate energy amongst the communities it works with to reduce energy deficiencies in rural areas. These programmes have focused on bringing energy to poor households while at the same reducing the drudgery of women and children (from collection of wood and dung), provide pollution free environments; provide domestic light and reduce the reliance on expensive, carbon polluting fuels for irrigation and drinking water distribution. This programme has helped youth and women from marginalised communities become solar energy entrepreneurs who now earn a livelihood from selling, assembling and repairing low-cost solar energy products in their communities.
In order to increase financial inclusion for India’s most marginalised communities, the Aga Khan Foundation (AKF) and the Aga Khan Rural Support Programme, India (AKRSP (I)) has established more than 5,000 self-help groups (SHGs) in Gujarat, Madhya Pradesh and Bihar, 86% of whose members are women.
These groups have accumulated savings of over US$1m since 2002 and with the savings members have been able to pay for healthcare, existing and new livelihoods activities and repay existing debts to moneylenders. AKRSP (I) and the Aga Khan Foundation (AKF) are increasingly working to link SHGs with formal financial services, specifically the Development Credit Bank (DCB) which has added three branch offices in the tribal areas of south Gujarat, with support from AKRSP (I) since 2009.
Over 20 SHG federations provide capacity building and oversight support to 1,096 of the SHGs. In Bihar, AKF/AKRSP (I) and local implementing partners have mobilised 35,300 individuals (92% women) into 1,807 CBSGs. Unlike SHGs, CBSG members save in varying amounts and liquidate their funds annually. CBSG savings rates appear to be several times higher as a result. Drawing on the CBSG model developed by AKF in East Africa, Central Asia and South Asia as well as the existing SHG model, in India AKF has also pioneered a new model combining CBSG and SHG components and which enables its members to have a high rate of savings and access credit from financial institutions. This SHG Plus model is being implemented in rural Bihar with a view to expanding it to other states where AKF and AKRSP (I) are present and in urban areas as well.
