What is Livelihood ? Nobody understands this word outside the cocoon of the development sector. The problem with the word livelihoods is that it has overtones of subsistence. It hints that poor people should only have enough just to live – not to prosper. As Kate Magro says : “Why is it that Westerners have careers, jobs, employment opportunities and everyone else has a livelihood?”
Livelihood is a convergence of multiple disciplines of profession leading to the cash flow in the household. Mostly the poor are engaged in a “diversified portfolio of subsistence activities” (DPSA) for earning their livelihoods. Hence, Understanding smallholders' financial needs will be the key step to understand livelihood scenario. A new survey of 1,800 banks conducted by the Initiative for Smallholder Finance reveals that the total amount of debt financing supplied by local banks to smallholder farmers in the developing world is approximately $9 billion.
The first step towards designing livelihood plan for the beneficiary will be to seek information on all of the income sources, various consumption and investments, interplay among cash flows, barter arrangements, credit sources and the financial tools in use throughout the year. Migration is a major livelihood strategy for the rural poor that must be included in the project design. That will give us ideas to better understand their needs, preferences, aspirations and behaviors. This information set must be shared with Donors, Government, Financial Institution and NGOs. The future programs designed to strengthen and develop rural livelihoods must grasp the whole range of vulnerabilities and risks faced by an entrepreneur or farmer/ artisan.
To understand what NGOs are doing, it is important to understand what they are not doing. There have been various attempts to improve income of farmers & artisans in order to making the value chains more inclusive. While addressing the critical gaps in the respective value chains, the donors put more emphasis on the capacity building than market linkages. The utter disdain for market forces by such initiatives and short planning without critically looking sustainability factor has led to massive failure till now. Sustainability parameter evaluates the likelihood of continuation of interventions initiated due the project by the community, scaling of pilot activities, leadership development in the community, institutional and financial arrangement in post project scenario. Hence, a livelihood intervention requires a critical first step in the process : Development of a livelihood project, as proof of concept and live workable model on the ground.
Micro Small and Medium Enterprises (MSME) sector has huge potential for growth in the semi urban and rural India. Throughout they also account for a disproportionately large share of new jobs in OECD countries. The rural entrepreneurs operating and managing the solar lighting enterprises at village level constitute the backbone of TERI’s Lighting a Billion Lives Campaign. There are successful cases make us arrive at a conclusion that with a very little financial help and skill training, the villagers are able to be enterprising. The rural entrepreneur has been enrolled into skill development programs promoted by the government for livelihood enhancement. Now, there must be urgent focus on provision of soft loans and vulnerability reduction funds with financial tools designed as per the cash flow of the occupation.
Any livelihood programs must build up the physical, financial and social assets of the rural poor using local resources. Empowering communities to take control of economic development is slow, patient work and even end as failure —and people funding or supporting development work need to take into account when designing livelihood programmes.