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Organization: Organisation for Awareness of Integrated Social Security (OASiS)
Year initiative/program began: - 2005
Field of work - Banking/Financial Services
Service / Activity focus (If "other" please explain in entry form) - Delivery Method
Year organization founded (yyyy) - 2003
Positioning in the Mosaic of solutions
What is your signature innovation, your new idea, in one sentence? - Free lifelong social security for disadvantaged and rural communities without requiring them to pay any taxes or premiums or save a penny.
Describe what makes your idea unique—different from all others in the field. - While all other approaches try to generate insurances premiums for their beneficiaries through forced savings, income cuts or microfinance, my idea provides all such insurances for FREE. This is the first expense based model that derives the insurance premiums for social security from the existing expenses of people. Also unlike others, where insurances are provided selectively only to those who can afford it, my model provides group insurances to the entire community. The model organizes economic activities within the community in such a manner that it provides additional livelihoods to many, binds all of them through a single business model, and helps sustain such business activities by providing Free Social Security as an incentive to the customers, making the village self-sufficient and self-reliant. The premiums for insurances come out of the net profits generated from the business model. The net profit is apportioned into individual social security accounts depending upon the family’s purchases within the business model, that accounts for their component of the premium.
How do you implement your innovation and apply it to the challenge/problem you are addressing? - We give income generation training to the SHG members and organize them into Self Employed Groups (SEG) by giving them group livelihoods. All such group livelihoods are integrated into a common business model by setting up retail outlets that are also managed by SEGs. Each SHG owns a Retail SEG and commodities are divided among them. The manufacturing SEGs sell their products to the Retail SEGs that further sell the products at existing market rates to the community. When the community members buy from the retail SEGs, the net profit from the sale is apportioned into their Social Security Account. Such accumulations out of their existing expenses are used to provide them social security through insurances and long term deposits. Free social security acts as the incentive to customers for buying from the Retail SEGs. This in turn ensures that the products made by the manufacturing SEGs sell locally. This secondary livelihood ensures income security for the poor families. The entire business model is self-sustainable as it involves and revolves within the community. The variety of products and services ensures self-sufficiency of the village.
Do you have any existing partnerships, and if so, how did you create them? - We have partnered with NGOs for replicating our Social Security Model for their beneficiaries. We have also partnered with the State Governments for infrastructure development for the Self Employed Group businesses as part of their Rural Infrastructure Development initiatives. We have partnered with Funding organizations and Banks and are in talk with the Private Sector for financial support for working capital and skills training to the Self Employed Groups. We are also in talks with the private sector for introducing technology and plastic money for the transactions. We create such partnerships by leveraging on the existing resources of such organizations and showing them the competitive social edge that they would get by supporting various components in the model. The Social security model is applicable to all Citizen Sector organizations working for rural development and empowerment and is also the missing link in their activities. We have thus started educating all NGOs on the Social Security model and helping them in implementing the same for their beneficiaries.
In which sector do these partners work? (Check all that apply) - Citizen sector (nonprofits, NGOs)
Provide one sentence describing your impact/intended impact. - Making every village self-sufficient, building a strong rural economy and empowering rural communities to ensure social security for themselves without depending on any outside source.
Please list any other measures of the impact of your innovation. - The fact that a social security fund of Rs 8000/- has been accumulated in six months from profits made by the SEGs in a tribal village with a consumer base of 70 families speaks of the potential of the model. The confidence among the villagers that they can ensure their own economic security without waiting for the Government, speaks well of the social impact that the model is bringing into their lives. The planned inter-linkages between the systems implemented at different locations will create a social security net in the country. The rural consumption pattern that will emerge out of the data from the social security model will reflect a true picture of the rural economy and its potential and also become the base for designing and monitoring new policies and schemes for rural development in future. The fact that every rural family is covered by health insurance will encourage the private sector to take healthcare into rural areas and also support the Government health infrastructure.
How many people does your innovation serve or plan to serve? Exactly who will benefit from your innovation? - The entire rural community will benefit from the innovation as it addresses everyone’s social security needs. SHG formation and functioning will get a boost as it would get a base for improving the economic status of its members. The SEG based businesses will provide additional livelihoods and hence livelihood security to the SEG members. Getting non-adulterated and quality goods will ensure better health for the community. Presently we serve 7000 people in 3 villages and plan to serve all villages of India.
How is your initiative financed (or how do you expect your initiative will be financed)? - Being in the pilot stage, the initiative is presently financed through grants from funding organisations. In some locations, the working capital has been financed partly through SHG deposits as well. The model has been designed in such a manner that it can be financed from various sources whole or partly for different components. We are now offering the model for replication to NGOs, Funding organizations, Corporate, Government, Banks, MFIs, Public representatives, SHGs and Individual Donors who can implement the model for their beneficiaries at different rural locations. The model becomes self sustainable after some time, hence does not require further financial inputs. OASiS shall link up all such implementations to knit the social security net for the country and facilitate inter location transactions.
If known, provide information on your finances and organization: -
OASiS works in a very different manner, trying to identify gaps in social sector, designing and testing solutions to address the gaps, developing models and then giving it out to the formal and non-formal sector for replication. We follow the approach of scaling out and then scaling up. While our Annual budget depends upon the number of such models being tested, it works on an average to Rs 10 lakhs per annum. The annual revenues generated out of such models go towards making the models self-sustainable. OASiS intends to become a consulting and support organisation for those who implement our models. The revenues generated out of such consultancy services will go towards identifying more gaps in the social sector and designing and developing new models to address the same. We have 4 full time staff, 8 part time staff and 15 volunteers. What are the main financial barriers and how do you plan to address them? - The main financial barrier has been the domain focused approach of funding organizations. Since our models stretch across domains, it becomes very difficult to raise the entire fund from a single source. Also just like any other industry, it is very difficult to get funds for experimentation. We have experimented all the models using our own savings initially. We hope to get the support of some angel investor who would help us set up a corpus to churn out social innovations in future.
Aside from financial sustainability, how do you plan to grow the initiative? - We plan to adopt a scale-out approach for replicating our initiative across the length and breadth of the country. Following multiple implementations of the social security model at different locations, OASiS intends to scale up the initiative by forming a nodal setup that would link all social security implementations and facilitate inter-location transactions. This would help the beneficiary families (having social security numbers) accumulate their social security collections whenever they incur an expense at any of the social security implementations across the country.
OASiS also plans to set up a training and incubation centre for NGOs, CSOs and other groups who plan to implement our Social Innovations in their locations and for their beneficiaries. What was the motivation or defining moment that led to the creation of this innovation? Tell us the story. - My background as an Information Technology professional that took me to 10 countries in a span of 15 years, working with the Government sector, private sector and Multinationals, could not satisfy my inner soul that craved to help the needy. My middle class upbringing always used to make me feel guilty about the high expenditures involved in my air travel, lodging and boarding. The plight of poverty rampant on the streets in comparison to the luxuries enjoyed by others presented a sharp contrast in our ideologies. A growing GDP along with an increasing population below the poverty line demonstrated the growing economic disparity between the haves and the have-nots. I found that the while the haves were tempted to accumulate more to allay their fears of economic insecurity, the have-nots were completely vulnerable to economic, livelihood, food and health insecurity. This realization led me to believe that lack of a social security system in the country was one of the main reasons behind poverty and growing economic disparity. Since the social security systems in developed countries were all tax based, it was difficult to implement the same in India, as any tax is a forced saving and more than 60% of our population do not have any savings potential. Hence India needed a different social security model that was not tax or savings based and could give social security to the poorest. This was the defining moment that made me quit my profession and give India its Social Security System.
Please provide a personal bio of the social innovator behind this initiative. - Note this may be used in Changemakers marketing material. Please upload a photo of the project innovator or innovation at the bottom of the page. From Information technology to Social development, from computers to economics and from aircrafts to bullock carts; this was the road that Pradeep traversed to become a Social Entrepreneur and give the poorest in India their right to complete social security. Being the youngest of four siblings, he was always a rebel challenging the impossible. Using his creativity and experience that he gathered in 15 years, he set upon the road to give India a social security system independent of taxes or savings.
a) Please identify the individuals that your innovation benefits (Please check all that apply) - Producers, Consumers
b) Do you help the people you serve to buy goods or services using financial innovation? If so, how? - We help the SHGs design financial innovations using their deposits in many ways to help people buy goods or services. Since the SHGs have decided not to give goods on credit from the retail outlets managed by their SEGs, they have offered short term credits to their members from their SHG deposits at higher interest rates for the same. They have even lent their deposits at prevailing interest rates to raise working capital for their SEG managed shops. Since the revenue generated from sales from their SEG shops come back to the SHG, the liquidity of their deposits is maintained, allowing them to lend and grow their deposits further. They have even offered short term small credits at high interest rates to non-SHG members for buying goods and services from their shops. This makes them also act as moneylenders in the village that socially discriminated them because of their poor economic status.
c) Do you help the people you serve to sell goods or services using financial innovation? If so, how? - The SEGs take loan from their SHGs to raise working capital for their business that produces goods to be kept in the SEG managed retail outlets. Thus when these SEGs sell their good to the other SEG managed retail outlets, the loan amount with interest comes back to the SHG and the SEG members get their cost of labour. Thus the loan is recovered almost immediately and is ready to be offered for the next cycle. This helps in increasing the deposit base of the SHG (with interest), while maintaining cash flow within the system and the members. So just by lending the SHG deposits for sales and purchase within the Social Security model, the SHGs grow their deposits and every family grows its social security collection. This makes the rural economy volatile and thriving and also keeps the money within the village instead of being siphoned off to urban areas.
Contact Information:
Pradeep Ghosh
Founder and President Organisation for Awareness of Integrated Social Security (OASiS) (NGO) ghosh.pradeep@gmail.com 158, Sector - 1, Shakti Nagar, Bhopal, MP Pin: 462024 India Tel: 0091-755-4274407 Fax: 0091-755-4274407 Website: http://sites.google.com/site/oasisorgindia/ Discussions about this entry
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Dear Mr. Ghosh,
On November 3, 2008, the judges reviewed the entries for the Changemakers “Banking on Social Change: Seeking Financial Solutions for All” competition and would like to pass on the following feedback (listed below) for your entry. Thank you for applying and for your hard work in the field. We are excited to archive your entry to serve as a leading solution for the worldwide community of innovators who are seeking solutions that allow financial security to become a reality for everyone. We wish you continued luck with your sustainable, innovative, and socially impactful initiatives.
All the best, The Changemakers Team
“I am intrigued by this idea of establishing a community-based income generation where a part of the profits are allocated to a social security fund. However, I would like to learn more about the strength of the business model and the level of social impact. How significant is the amount saved in the social security fund to provide long-term benefits?”
- Changemakers “Banking on Social Change: Seeking Financial Solutions for All” Judges: Citi, The Times of India, Nokia, Soros Fund Management LLC, PlaNet Finance.
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Kaylena Bray
Ashoka's Changemakers
Organize you concept stating from Centralized citizen data than Social Security system for all
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Gurbinder Singh - Citizen of India
www.IndianSocialSecurity.org
Dear Mr. Ghosh,
Thank you for submitting your entry!
This is a very interesting idea, particularly the aspects that incorporate group livelihoods and social security based on increased incomes. Can you tell us more about these components and how they help your initiative to stay unique in the field? Also, would you mind clarifying your language: is it “free” social security or “earned” social security?
Since the judges spend more time reading the entry form than the comments, please also update your entry in addition to responding to our questions and other comments. This will provide the panel of expert judges with the most comprehensive explanation.
Thanks so much! We look forward to learning more.
Best wishes,
The Changemakers Team
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Kaylena Bray
Ashoka's Changemakers
Dear Mr. Ghosh,
You have proposed an interesting model and I understand from the entry that you have already started piloting it. I congratulate you for that. I have a few comments/questions on the model:
1) It is not clear how the insurance in the model is FREE. When the premiums are being deducted from the incomes generated by the activities undertaken by the people, any premium deducted is a fee on the people.
2) If the premium is being automatically allocated for insurance, then people do not have the choice to opt out if they want to. Is the decision based on the assumption that people, when left to their own, will not make the right choices? It may be a good idea to give people choice, and inform them about the implications of the choice.
3) Why and how will the banks pay more on the deposits, unless you are intending to put the money in fixed deposits, which are less liquid?
4) The main challenge in scaling the model is of ensuring collective action happens. We know from experiences from across the country and world that in spite of the advantages of collective action in agriculture and other activities, there are hardly any examples where people have come together to work in groups on livelihood activities. Please do spell out a more detailed strategy for addressing this challenges.
5) Though the overall idea sounds interesting, please do put some numbers to back up your arguments. Once we put the idea through the acid test of empirical data, we can identify the strengths and weaknesses more clearly.
Best regards,
Suyash
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Commentator
Ashoka's Changemakers
4) The main challenge in scaling the model is of ensuring collective action happens. We know from experiences from across the country and world that in spite of the advantages of collective action in agriculture and other activities, there are hardly any examples where people have come together to work in groups on livelihood activities. Please do spell out a more detailed strategy for addressing this challenges.
A. You are right. Ensuring collective action is the toughest thing. That is why we have tried to adopt a different strategy. In this model, the SHG members feel directly responsible for managing the shop. They employ someone literate to run the shop, but keep a daily tab on its affairs. They have slowly started appreciating the importance of having their own shop. Although each SEG outlet (owned by an SHG) is not allowed to keep the items in the other SEG shop, and salaries are kept equal, there is a healthy competition among the SEGs that makes their SHG feel proud of them. We had some ups and downs in this strategy too, but have been able to overcome all obstacles till now.
5) Though the overall idea sounds interesting, please do put some numbers to back up your arguments. Once we put the idea through the acid test of empirical data, we can identify the strengths and weaknesses more clearly.
A. Well to quote examples: A village in MP has 121 families, out of which 80 families are regularly buying from the SEG outlets. They have been buying only 50% of their needs from these shops, as they have not been able to come out of debts of the shopkeepers in the common market. With such restraints and limitations, the social security fund collection has been Rs 9000 in 10 months.
Another village in Maharashtra has 157 families, 90% of them buying from these shops, the social security fund collection has already reached Rs 8000 in 4 months.
Hope to hear more from you.
Regards
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Pradeep Ghosh (Ashoka Fellow)
Q. 2) If the premium is being automatically allocated for insurance, then people do not have the choice to opt out if they want to. Is the decision based on the assumption that people, when left to their own, will not make the right choices? It may be a good idea to give people choice, and inform them about the implications of the choice.
A. The objective is to provide them social security without straining their existing financial condition. The people do make the choice on the insurance product as a group. We only facilitate by bringing the insurance companies to them and helping them to understand and analyse dfferent products and compare with others. So we give them the choices and inform them about the pros and cons. They make their choice.
The only mandatory thing here is that we use the social security fund for providing social security only. We do not allow them to use the collection for any other purpose.
Q. 3) Why and how will the banks pay more on the deposits, unless you are intending to put the money in fixed deposits, which are less liquid?
A. Since the deposits will be recurring in nature and will lie untouched for a year, the banks can give the interest rates of recurring deposits that is more than the normal savings a/c interest rate. As the social security fund collection varies proportionately depending upon the number of families involved in the system and their transactions, banks would love to provide social security accounts to an entire group / village.
Replies to other queries are in the following comments.
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Pradeep Ghosh (Ashoka Fellow)
Dear Mr Suyash and Kaylena,
Many thanks for your comments.
I sincerely apologise for not being able to respond soon, as I was traveling and entrapped with some messy issues in other projects. I wanted to have a cool head before answering your queries. Let me do that one by one:
Q 1) It is not clear how the insurance in the model is FREE. When the premiums are being deducted from the incomes generated by the activities undertaken by the people, any premium deducted is a fee on the people.
A. The premium is not a fee on the people. In this model, the SHG members work in groups to run their retail outlets, where the commodities are sold at the same rate as the common market. After paying salaries and overheads, the net profit is divided into 2 halves. While one half goes back into the business for growth, the other half is collected as Social Security Fund. It is the same amount that currently goes to the trader at the common market for building his personal riches. Now this amount goes back to the people in the form of social security.
It does not even come out of an individual's income. It is the balance profit left after paying all salaries (as decided by the SHG members for the ones who manage the shops), overheads and putting back into the business for growth.
Hope this makes the model clearer.
Answer to your other questions follow in the next comments.
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Pradeep Ghosh (Ashoka Fellow)
Hi,
This entry caters no only to social security, but also to many other aspects of rural economy, livelihoods, self-sufficiency, etc. I would love to have your critical assessment of this entry, as it would help me to look into other aspects as well and improve my solution.
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Pradeep Ghosh (Ashoka Fellow)
Hi,
I would love to have your critical assessment of my entry, as it would help me look into other aspects and improve my solution.
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Pradeep Ghosh (Ashoka Fellow)