Omidyar Network India's ReSolve Initiative: Next phase of response to Covid-19 focuses on migration and MSMEs

Omidyar Network India's ReSolve Initiative: Next phase of response to Covid-19 focuses on migration and MSMEs

The devastating effects of the Covid-19 pandemic will be felt for at least the next 12-24 months. So, after funding solutions addressing the urgent situation in the immediate aftermath through our Rapid Response Funding initiative, we are now shifting focus to longer-term issues that have got renewed focus due to the pandemic. We are calling this the ON India ReSolve Initiative.

As an investment firm focussed on social impact, our response to the pandemic and its consequent economic impact needs to recognise the new challenges they have created for our focus segment – India’s “Next Half Billion” (NHB), those in the lower 60% of India’s income distribution. The challenges themselves will change over time requiring us to have different responses over different time horizons.

Our response in the short term was our Rapid Response Funding Initiative. The objective was to get money flowing quickly to those who were in the frontline of pandemic management and relief efforts.

Over three months, we evaluated over 2000 proposals and selected 67 for funding, deploying a capital pool of Rs 10.75 crores. The initiative has funded organisations in 17 states, and 21 of the proposals funded are creating nationwide impact. While the work is still ongoing, an estimated 3.3 million people are likely to benefit from this direct relief. Awareness campaigns, education and other support will likely touch the lives of another 48 million Indians.

Under the ReSolve initiative, we have prioritised two longstanding themes that have got renewed focus due to the pandemic: (a) Supporting migrant workers; and (b) Empowering Micro, Small, and Medium Enterprises (MSMEs). Both are long-standing national priorities with a large unfinished agenda. Both have faced devastating setbacks due to the pandemic. Both fit squarely within our focus segment – migrant workers and those working in the MSME sector predominantly come from the Next Half Billion.

110 million Indians help run micro and small businesses, and the size of India’s migrant worker population is estimated to be between 80 and 130 million. Together, they are the beating heart of the Indian economy. MSMEs and the phenomenon of migration allow millions of Indians to dream of better lives, earning more and creating a new future for the coming generation. Yet, despite, their deep seated importance, socially and culturally, both these national priorities have not been addressed systemically.

And now, with the onset of Covid-19, they are bearing the brunt of the socio-economic fallout of the pandemic with devastating consequences.

We believe it is time for India’s boldest and brightest minds – entrepreneurs, thought leaders, policy makers and citizens – to come together to reframe and resolve the issues plaguing these areas.

Our work in these two areas will aim to find the balance between the ambitious and the pragmatic, between the strategic and the tactical. Over the next 12-18 months, our goal will be to support and fund a few high-leverage lighthouse investments that can contribute to the transformation agenda in these two spaces. We define lighthouse investments as those that can ‘show the light’ to the sector. These could include seeding of new institutions or solutions and supporting investments with large demonstration effects. Hence, our preference will be to selectively fund projects in the range of Rs 3.75 crore ($500,000) to Rs 15 crore ($2 million) per project. The type of investments we would seek to initiate (or join coalitions of funding efforts) would thus include:

  1. New for-profit/ non-profit ventures with unique solutions
  2. Experiments with solutions that have not been tried before
  3. Seeding new properties like marquee surveys, databases etc
  4. Strengthening institutions, mechanisms, market infrastructure
  5. Creating digital infrastructure and ecosystems

An indicative list of focus areas for each theme under the ReSolve Initiative are:

Empowering MSME theme:

1: Amplifying the voice of MSMEs: High-quality data systems that capture MSME pain points, financial and operational health, and channel this into feedback loops for necessary industry action and policy interventions.

2: Stimulating capital in a risk-averse environment: Initiatives that look to build sector infrastructure to solve systemic challenges – dearth of wholesale finance, lack of risk capital, lack of sufficient data –  that would lead to substantial benefits for the MSME sector in the form of better access to cheaper capital.

3: Promoting digital infrastructure for MSMEs: Digital building blocks, platforms and ecosystems that address key problems the sector faces, like access to credit & government services, compliance and access to markets.

4. Pilot projects at a cluster or state level to seed system-level innovations: Sandbox/viable pilot solutions that aim to reimagine the business environment for MSMEs by seeding system-level innovations.

Supporting Migrant workers theme:

1: Evidence based narratives to inform public and policy: Amplifying data, research and evidence backed narratives, to make the scale and nature of the migrants’ problem more visible. This can support more informed public discourse, program design and policymaking.

2:  Pilot projects in ethical employment practices, worker welfare, safety nets and inter-state collaboration: Sandbox/ viable pilot solutions to support adoption of ethical employment practices, and improve access to welfare and safety nets. These are often unique challenges that migrants face in cities. Projects could also include enhancing coordination of migration support efforts between states.

3: ‘Ease of living’ for migrant workers: access to housing and civic services: Innovative models of housing and access to essential services (civic amenities) for migrant communities. This will lead to better economic, social and health outcomes and integration into our cities.

In both areas, we are keen to work in partnership with other funders and support coalitions that work on solutions.

If you’re looking to work on these issues of national significance and want to help resolve and reimagine these two sectors, we look forward to hearing from you and partnering with you to build resolve and resilience for a secure long term future for migrant workers and MSMEs.

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