Today the Michael & Susan Dell Foundation in India announced its support of the Road to Recovery, an initiative formed by a coalition of funders to stabilize small businesses, micro entrepreneurs and gig workers, whose livelihoods are so important to their families, communities, and the Indian economy. Leveraging their experience in supporting low-income gig workers and micro entrepreneurs over the last several years, the Dell foundation is working with the Global Alliance for the Mass Entrepreneurship and Impact Investors Council to help seed two funds – a COVID-19 Sustenance Fund and a COVID-19 Liquidity Fund.
The Dell Foundation is making an initial commitment of Rs. 20 crores across both funds to support gig workers and micro entrepreneurs with recoverable grants and loans to help them get back to business. Ford Foundation, Kris Gopalakrishnan, and the CSR arms of Arvind Group and Claris Lifesciences Ltd. are the early funders that have already committed their support to the Road to Recovery initiative.
“Our commitment is to ensure that MSMEs and gig workers can get back to work for their families, communities, and the economy,” said Geeta Goel, Country Director – India, Michael & Susan Dell Foundation. “We encourage other funders, investors, CSRs and philanthropies to join these collaborative platforms with the goal of supporting the stabilization of small and micro businesses gig workers whose livelihoods impact the community and the overall economy. Together, these sectors employ over 100 million of the country’s workforce.”
The COVID- 19 Sustenance Fund is targeted to raise Rs. 100 crore and will provide concessional loans or returnable grants for gig workers who have experienced a substantial drop in their income levels. Companies such as Super Money and Shubh loans, and the CSR platform, Samhita, will help to disburse grants and loans from the fund to support gig workers to navigate this new normal and regain their livelihoods. The COVID-19 Liquidity Fund is a Rs 500 crore fund being set up with Northern Arc (formerly IFMR), with the primary objective of lending to micro and small businesses through Non-Banking Financial Corporations (NBFC).
Current research shows that gig workers across the country have seen a decrease in their income levels from 50 percent, and in some cases, no income at all. As gig workers experience some of the worst dips in their incomes, it is important that we get them back to work in a meaningful way. As we come out of lockdown, there will be an urgent need to assist the workforce to transition back to work and help them meet their financial obligations.
MSMEs in India contribute to 29 percent employment and 25 percent GDP. More than 90 percent of people in the micro and small segment have limited savings and safety nets. Both funds will help to inject much-needed liquidity in the market for gig workers and micro entrepreneurs to help reduce repayment issues and stabilize their livelihoods.