Livelihood
Strategy
Urban Livelihood & Microfinance
In urban areas, AIF’s work priorities go beyond large metro cities, i.e. focus on medium and small towns from poorer states in northern and eastern India. Urban population growth is much higher than the rate of overall population growth, and currently an estimated 29% of India’s population live in urban areas. By the year 2025, this number is expected to increase to 50 percent, with medium and small towns likely to experience the most rapid population growth. Many of the poor urban migrants, who have limited skills or formal educations, largely end up working in the urban informal sector. This generally offers them limited and unreliable livelihoods, with a lack of records pertaining to details of their employment and continuity, apart from exploitative terms of engagement.
AIF’s approach is to link the urban poor and migrants with various types of self-employment and wage employment opportunities that are emerging in an urban informal sector economy, by taking full advantage of a growing economy, mainly around the growing services, manufacturing and construction sectors. This is accomplished by AIF partners mainly by forming collectives, promoting saving and credit groups, exposure and training on employable skills, linking them up with markets, and promoting group enterprises. Forming groups or collectives of urban poor enable them to better negotiate their terms of engagement. Some of the urban poor who have been mobilized for livelihood enhancement are construction workers, rickshaw pullers, home managers, rag pickers and sweepers..
A majority of the self-employed workers are poor women with limited formal education. They receive regular on-the job training and exposures where their learning outcomes are closely monitored and evaluated. The thrust remains not just on one-time training, but equipping groups to lay systems and process where training and learning outcomes are systematically measured on a regular basis to push each group member towards a higher degree of specialization and up the value chain. Ensuring such practices is not only critical for group enterprise to gain speed and reach higher productivity but it also helps in ensuring an appropriate return for each group member.
Most of the urban poor are working poor, and form a major part of the informal sector of the economy. Although growingly invisible and casual, with changing employer-employee relationships in a range of occupations in recent times, the sector contributes nearly 65% of the national GDP, employing a sizable number of women, dalit and tribal groups who remain highly neglected and unprotected. The city economy and services depends largely on the urban poor, yet their livelihoods remain illegal and illegitimate in the eyes of the city authorities in many cases. The settlements they live in are either illegal or poorly served by the urban local bodies. It is thus important to also engage with urban governance to sustain the livelihoods of the urban poor.
AIF’s urban livelihoods experience shows that while it is true that an increasing gap does exist between the urban poor, especially a migrant’s skills and the opportunities offered by the urban economy causing a greater marginalization, there is an enormous potential for creating livelihoods for the urban poor in the informal sector through self-employment and job employment. However, the necessary understanding, skill and hands-on experience, to deal with the potential size and the complex challenges surrounding the urban informal sector, have remained either limited or few. Thus, a growing need of sharing and learning from the best practices in a collaborative manner with like-minded partners, has become of particular significance to AIF.