Mumbai,  March 30 –Intellecap’s Sudhanshu Dikshit and Vivekandhan T co-authored an article,  “Farm Laws 2020: Efficiency Vs Equity” for India Development Review (IDR).

In the article, talking about the new farm laws, the coauthors opine that while there is agreement on the importance of improving food production and productivity, there are differing views on the ways to achieve both.

The new farm laws have become a politically contentious issue nationally, but if one were to steer clear of the political rhetoric, it becomes apparent that at the heart of the issue is the long standing efficiency vs equity debate.

Those on the efficiency side highlight the long overdue agri-sector reforms to move the sector from its stagnancy to higher levels of production and productivity. People on this side also bat for reduction of the government’s direct participation and an increased role for market forces (including more private players in agriculture).

On the other hand, those arguing for equity look at agriculture as a livelihood option for large numbers of small and marginal farmers. As a result, they oppose a reduction of the state’s role and express reservations about whether the farmers’ interests will be protected in a free market scenario.

Understanding how small and marginal farmers work

As per the Agriculture Census of 2015-16, approximately 86 percent of the farm holdings in India fall under the small and marginal category (up to two hectares). This small and marginal land holding, in turn, contributes to about 47 percent of the total agriculture land under cultivation. Looking at these figures, it is abundantly clear that small and marginal farmers’ productivity plays a critical role in improving the overall productivity of the sector.

Successive partitioning of agriculture land over generations has reduced the average size of the operational farm holdings, from an average size of 2.28 hectares in 1971 to 1.08 hectares in 2016. This small land holding is the core challenge for increasing farm productivity: The cost of producing one quintal of wheat varies drastically across different farm holding sizes.

Approximately 86 percent of the farm holdings in India fall under the small and marginal category

So, while one might argue that the productivity of a small farm holding is likely to be high because of better control on farm practices, it is important to understand that in these smallholdings, contribution of self and household labour is not monetised as a cost. There is actually an opportunity cost to this household labour; however the absence of gainful employment opportunities in rural areas makes way for this disguised unemployment.

While large and medium farmers are in a better position to leverage technology and manoeuvre economies of scale to their benefit, small and marginal farmers are unable to do either.

 Small holder farmers face challenges regarding economies of scale on farm inputs as well as outputs. In comparison with large and medium farmers, they spend more on per unit of farm inputs (seeds, fertilizer and pesticides) but experience lesser realisation on per unit of commodity sale. This disparity does not get compensated in a free market scenario wherein small holder farmers have to compete on equal footing with large and medium farmers.

Looking at the farm laws through the lens of small and marginal farmers

In this context, it becomes important to analyse the new farm laws 2020 and see how they may potentially play out for small holder farmers.

If free market forces are unleashed on an existing set of actors, the existing power dynamics will determine who gets how much

The larger intent of the farm laws is to increase private sector investment across the entire agriculture value chain. Among the laws, the contract farming act enables legal provisions for private sector to enter into contractual arrangements with farmers and improve primary production. These contract farming arrangements have the potential to leverage private investments to improve farm level infrastructure like irrigation facilities, poly houses, trellis, etc.  Improving infrastructure, along with the price assurance provisions in contract farming can provide the right incentives for small holder farmers to move away from subsistence cereal crop farming to commercial cash crop farming. This market oriented incentive for small and marginal farmers has the potential to reduce, and in certain cases, replace the existing need for support from development intervention agencies like nonprofits and government departments.

 However, the above economic argument does not factor in prevailing power dynamics among different economic actors in the current agriculture market. Practitioners with even little exposure to ground realities will appreciate that if free market forces are unleashed on an existing set of actors, the existing power dynamics among the actors will determine who gets how much. This is the fundamental premise of the equity school of thought, which has concerns regarding the protection of small holder farmers’ interests and hence they are opposed to the removal of government participation.

 The average farmers’ share in the end consumer rupee for 16 major food items is in the range of INR 28 paise to INR 78 paise

 In its publication Supply Chain Dynamics and Food Inflation in India (2019) the RBI has estimated the average farmers’ share in the end consumer rupee for 16 major food items is in the range of INR 28 paise to INR 78 paise. The report also highlighted that among factors critical for increase of farmers’ realisation, are the literacy levels and the availability of market information, as these two factors empower the farmers to negotiate better with their buyers and get a better price for their outputs. In the absence of market information and low literacy, small and marginal farmers are at a greater risk of being exploited by other market players (traders, processors etc).

 Where do we go from here?

As a country, we do have examples of market liberalisation in many sectors, the most prominent one being the economic liberalisation of the 90s. Those reforms did increase production and productivity. The private sector had championed these initiatives and they were duly aided by increased supply of credit, access to technology, and favourable government policies. As a consequence, employment opportunities increased in these sectors and the overall economy boomed. It therefore appears that as long as there is growth in market demand, micro and small producers can coexist with large producers.

But there are larger questions that we must consider-

– Is it prudent to compare the predicament of relatively well organised sectors like manufacturing to that of agriculture, which is less organised and has higher levels of disaggregated production?

– Have we exhausted all other means and is this the only route left to improve total crop production and average crop productivity?

– Have we focused on small and marginal farmers as a separate constituency in our efforts to improve food production?

In the overall efficiency vs equity debate, there is no opposing view regarding the importance of improving production and productivity to meet the future food demand in the country. However, there are differing views on the ways to achieve it. By taking a free market approach, the new farm laws have been criticised as inequitable, as they fail to account for empowering small and marginal farmers.

Intellecap, the advisory arm of Aavishkaar Group announced 100% acquisition of NR Management Consultants India Private Limited (NRMC) to drive capital towards Natural resource driven Carbon Sequestration solutions to mitigate Climate change.

Intellecap is a global consulting firm dedicated to finding solutions that mitigate global risks of inequity in areas such as Impact investing, Climate Change and Gender. NRMC has deep research focus and understanding of natural resources and rural development in India and South East Asia. Drawing on its focus on nurturing entrepreneurship, Intellecap, through this acquisition looks to strengthen its Global positioning in Climate Change by incubating new initiatives and channelize strategic pools of capital to achieve tangible outcomes.

Speaking about the acquisition, Vikas Bali, CEO, Intellecap said, “Our objective of acquiring NRMC is focused on strengthening our resolve to build an effective Natural Resource based climate resilience strategy and drawing capital and delivering inclusive interventions through them. We see Climate change as humanities biggest challenge and Intellecap and Aavishkaar Group are committed to being significant part of the solution to this global problem. I invite all likeminded institutions, DFIs, Donors and commercial investors with focus on Climate Change to join hands with us, as together we can deliver real change and impact”

Speaking about the acquisition, Vineet Rai, Founder and Chairman, Aavishkaar Group said, “I am thrilled by this acquisition by Intellecap. Aavishkaar Group identifies Climate Resilience Investing as a Global Mega trend for the next decade and Intellecap has a big responsibility to lead the group in showing us solutions that would help us allocate capital effectively to combat Climate risk and offer true Resilience.”

“Intellecap and through it, the Aavishkaar Group offers a wide umbrella to NRMC expertise in Natural Resources. We all acknowledge that Climate change is the biggest challenge humanity is facing and with this partnership we would be able to use our knowledge and deep understanding of associated development challenges to drive capital toward real solutions that address climate resilience,” said Jayesh Bhatia, Founding Director, NRMC.

Mumbai, March 04 : The Government of India, Federation of Indian Chambers of Commerce and Industry (FICCI), and UN-based Better Than Cash Alliance today hosted Merchant Digitization Summit 2021: Towards Aatma Nirbhar (Self Reliance) Bharat with special focus on Himalayan Regions, North East Regions and Aspirational Districts of India.

The Summit brought together leaders from the public and private sectors for the Responsible Merchant Digitization Summit to accelerate responsible digitization of merchants in India’s North-Eastern and Himalayan regions, and Aspirational districts. Empowering women merchants who play critical roles in their communities is one of the priorities to help achieve the mission of Digital India. This Summit is part of the series of Learning Exchange amongst all States and Union Territories under which DEA had also co-organized the webinar titled “Unlocking the value of Fintech in promoting Digital Payments’ on December 9, 2020.

Intellecap was a proud Technical Partner to the UN based “Better Than Cash Alliance” (BTCA) at the Merchant Digitization Summit 2021, which saw participation and commitments to action for merchant digitization from the central and state governments, industry, and civil society organizations. The stakeholders discussed the challenges, solutions and potential for collaboration to scale up the merchant digitization efforts in the North-East, Himalayan Region, and Aspirational Districts across India, with a special focus on digitising payments for women merchants.

“The Government, under the leadership of the Honorable Prime Minister, is taking bold steps towards an inclusive Digital India,” said ShriK. Rajaraman, Additional Secretary, Department of Economic Affairs, Ministry of Finance. “Along with the increased focus on ‘Make in India’ through AatmaNirbhar Bharat Scheme, responsible digitization must more strongly include rural networks such as Self Help Groups and community enablers to create the local digital ecosystems to help millions of merchants join the formal economy, access credit, and grow their business.”

From an average of 2-3 billion digital transactions monthly[1], India has set ambitious target for 1 billion digital transactions per day[2]. Person to merchant (P2M) digital payment transactions will scale to 10-12 billion transactions every month to contribute to India’s digital economy. This is an enormous opportunity for digitized merchants. However, most digital payments solutions designed for smart phone whose penetration amongst merchants in these focus regions is very low. There was consensus during today’s Merchant Digitization event that an industry-level approach was required to address the unique and fundamental challenges including gender targeting in national, regional and state-level merchant initiatives.

Smt. Reema ben Nanavaty, Self Employed Women’s Association (SEWA), a Padma Shri recipient, applauded this focus on women merchants in the priority regions from the Government and the private sector, saying “our experience at SEWA shows that technology when put in to the hands of women they put it to their best use for economic security, asset creation, food security, and bringing support services such as health care, and nutrition at the doorstep of citizens”.

“Merchants, including kirana shops, emerged as local saviors during COVID-19, proving themselves to be both agile and resilient. It also increased the pace of digitization among kiranas.” said Shri Dilip Chenoy, Secretary General, FICCI. “As industry leaders, we are thrilled to support the Government in its focus on women merchants as an economic priority and build greater trust in the Himalayan Region, the North East, and in the aspirational districts with our members.”

The participants agreed that the National Language Translation Mission can be used to disseminate digital payments information, privacy clauses and consent in local languages for trust and empowerment. They also identified opportunities to address the challenges of connectivity, access to smart phones, and digital literacy for merchants at the last mile.

“Taking active measures to ensure merchants are protected from risks such as loss of privacy, exposure to fraud, and unauthorized fees are the tenets of the responsible digital payments guidelines,” said Keyzom Ngodup Massally, Head of Asia-Pacific, Better Than Cash Alliance. “Our member Hindustan Unilever with FICCI and other FMCG leaders have joined the Government to ensure that fairness is systematically embedded in merchant digitization.”

The Summit, organized with technical assistance of Intellecap, saw representatives from Telangana, J&K, Maharashtra, Bihar, Jharkhand, Rajasthan, Manipur, Nagaland, Mizoram, Sikkim, Uttar Pradesh, Himachal Pradesh, Odisha, Chhattisgarh, Meghalaya, Dadar and Nagar Haveli, Delhi, and Daman and Diu, among othersdiscuss solutions that can be scaled across all aspirational districts and the focus regions.

The Government, FICCI, and the Better Than Cash Alliance will continue their partnership this year with catalytic actions to achieve the industry level commitment of responsible digitization of merchants agreed during today’s event.

Intellecap and Transform Rural India Foundation launch “India Agriculture and Food Systems – Circularity Action Platform” (IAFS-CAP) to promote circularity in production, processing and distribution of agriculture products in India

 Mumbai 12^th February – In their quest to solve problems for the smallholder farmers, businesses and consumers, Intellecap and Transform Rural India Foundation today announced the launch of IAFS-CAP to promote circularity in production, processing and distribution of agriculture products (food, fibre and fuels). As part of this initiative, they are looking to operationalize 6-7 projects across the country impacting 1,00,000 farmers, several businesses and consumers while scaling at least 3 innovations in technology and business models within three years in the circularity space in agriculture and food sectors.

The system of circularity in agriculture is based on four basic principles – arable land should be used primarily to produce plant biomass for human consumption; by-products from food production, processing and consumption should be recycled back in the food system; adoption of the principles of regenerative agriculture and finally promoting consumption at low trophic levels.

The platform will operationalize challenge funds for surfacing circular technologies and business models, help them achieve proof of concept, curate pilots and scale them to help further the circularity agenda in agriculture and food sector in India.  Further, the platform will enable farmer collectives and contract farming enterprises to access technology, philanthropic capital and premium markets. It will also enable sector stakeholders to curate partnerships to ensure that adequate quantities of agricultural produce, bearing the right quality specifications, are made available to processors, exporters, organized retail and e-commerce platforms in a timely manner.  Additionally, the platform will also be capable of undertaking deep research and advocacy to identify best practices, ecosystem gaps and ways to stimulate demand for circular food in the country.

Speaking on the launch of this initiative, Mr. Anish Kumar of Transforming Rural India Foundation said, “TRIF is wedded to the idea of adoption of circular practices in production of food while ensuring a sustainable increase in smallholders’ incomes and helping the consumer access safe food in a manner that is friendly to our planet.”

Mr. Santosh Kumar Singh, Director, Intellecap said, “Agriculture has been one of the core focus areas for Intellecap since its inception. Given the need for closing the loops for materials and substances in agriculture and food sector, which includes reducing food loss and waste, this platform will help in making the agriculture and food systems in the country circular while increasing the incomes and resilience of the smallholder farmers, helping the businesses achieve triple bottom lines and consumers access safe and healthy foods and maintaining sustainability of our food and agriculture systems.”

Despite bringing with it several economic and environmental advantages, circularity in agriculture has failed to spread its wings in India. Limited awareness of the benefits of practicing circularity in agriculture among farmers and consumers, fragmented innovation ecosystems, and a weak and deeply flawed positioning of circularity among farmers are some of the roadblocks hampering the adoption of circularity in agriculture. Intellecap-Transform Rural India Foundation (TRIF) partnership has devised a four pronged strategy to mitigate these challenges and realize a self-sustaining circularity ecosystem in India: (i) Identifying the ecosystem gaps which exist (finance, policy, consumer awareness, etc.);(ii) bridging these gaps through collaborations; (iii) Improving the economies and business case for circular agriculture through value addition and certification; (iv) Catalyzing on-ground action to support test bedding, piloting and scaling of identified innovations.

With 30% of land in India degraded, 25% of the water which is used for producing food wasted, and farmers losing over US$ 12 billion as post-harvest losses makes adoption of circular practices in agriculture is extremely important. According to research conducted by ICAR, 85.5 megatons of carbon emissions could be reduced in India by simply adopting practices like those followed in circular agriculture. Further, Ellen MacArthur Foundation estimates that practicing circularity in agriculture could lead to an annual economic benefit of US$ 61 billion in India by 2050.

NAIROBI (Reuters)- Recently Reuters covered a story titled, “Kenyan recycles plastic waste into bricks stronger than concrete” which featured the innovation by waste management startup, Kenya based, Gjenge Makers, who have been supported by Intellecap Africa, as part of the accelerator by BestSeller Foundation.

Nzambi Matee hurls a brick hard against a school footpath constructed from bricks made of recycled plastic that her factory turns out in the Kenyan capital.

It makes a loud bang, but does not crack.

“Our product is almost five to seven times stronger than concrete,” said Matee, the founder of Nairobi-based Gjenge Makers, which transforms plastic waste into durable building materials.

“There is that waste they cannot process anymore; they cannot recycle. That is what we get,” Matee said, strolling past sacks of plastic waste.

Matee gets the waste from packaging factories for free, although she pays for the plastic she gets from other recyclers.

Her factory produces 1,500 bricks each day, made from a mix of different kinds of plastic.

These are high density polyethylene, used in milk and shampoo bottles; low density polyethylene, often used for bags for cerals or sandwiches; and polypropylene, used for ropes, flip-top lids and buckets.

But she does not work with polyethylene terephthalate or PET, commonly used for plastic bottles.

The plastic waste is mixed with sand, heated and then compressed into bricks, which are sold at varying prices, depending on thickness and colour. Their common grey bricks cost 850 Kenyan shillings ($7.70) per square metre, for example.

Matee, a materials engineer who designed her own machines, said her factory has recycled 20 tonnes of waste plastic since its founding in 2017.

She plans to add another, bigger, production line that could triple capacity, and hopes to break even by year end.

Matee set up her factory after she ran out of patience waiting for the government to solve the problem of plastic pollution.

“I was tired of being on the sidelines,” she said.

($1=110.0500 Kenyan shillings)

“If women in rural areas have access to land, technology, and financial services farm yield could increase by 20-30 percent.”

Charu Thukral and Shreejit Borthakur from the Intellecap team, recently contributed to an an article for India Development Review (IDR) that highlighted the current technology gap that exists for women farmers in India, and shared five principles that #technology service providers could integrate in design, development, and deployment phases to make their solutions more inclusive for women.

According to the Food and Agriculture Organisation (FAO) of the United Nations, women produce approximately 60-70 percent of the food in most developing countries and are responsible for almost 50 percent of all global food production. In India, 48 percent of all self-employed farmers are women. In Sri Lanka and Bhutan respectively, 41.5 percent and 62 percent of women work in agriculture. And in Sub-Saharan Africa, 50 percent of the total agricultural workforce is made up of women farmers.

Despite these figures, the work of women in agriculture is often unaccounted for, rendered marginal, or invisibilised. In addition, women farmers are paid significantly lower than their male counterparts—estimates suggest that, as of 2016–2017, there was close to a 22 percent wage difference. Furthermore, the role of women farmers is often limited to less skilled work such as sowing, weeding, and harvesting. They are seldom included in decision-making processes and are not often seen participating in work that is mechanised.

Many of these gender disparities in smallholder agriculture are an outcome of systemic challenges. For instance, land ownership and other entitlements have been a major cause of concern for women farmers— in India, women own only 10 percent of agricultural land, while in Africa the figure is 20 percent…

Mumbai, Dec 23 –A few weeks ago India Climate Dialogue, one of the few reputed media that converges and covers conversations specifically around Climate Change spoke to Santosh Kumar Singh , Director , Energy, Agriculture and Climate Change, Intellecap for  a story titled, “Climate risk strategies needed for investors in India” which talks about the imperative need of Financial institutions in India to integrate climate risk considerations in their investment decisions and portfolio management to mitigate impacts 

India have lost over USD 80 billion in the 20 years to 2019 due to climate change and the losses could only multiply in the coming years, a recent report has said.

Businesses and investors need to be more proactive in incorporating climate risk considerations in their operations , along with the government, which needs to include climate change resilience initiatives in its policies, said the Climate Risk Mainstreaming; Approaches for Indian Financial Institutions report by the Shakti Sustainable Energy Foundation .

“The country has faced intense and increased events of floods, drought, cyclones, erratic rainfall, heat (and) water stress, which has impacted livelihoods, businesses, and thus the portfolio of financial institutions,” the report said. “Hence, it is important for financial institutions to rethink their financing strategies and deploy capital with careful consideration of climate risk mainstreaming strategies.”

The study carried out by Intellecap, a financial advisory, mapped the understanding of financial institutions in India on climate risk mainstreaming requirements as well as implementation strategies.

“As of now, Indian financial institutions do not have a specific strategy to manage risks induced by extreme weather events in their operations and portfolios,” said Santosh Kumar Singh, director, energy, agriculture and climate change, Intellecap. “A majority of financial institutions suggested that it will take another 3-4 years for them to develop and consider climate risk mainstreaming models for their investments.”

For instance, in its annual survey of energy transition in developing countries in Climatescope 2020, BloombergNEF found a 12% decline in clean energy investments in 2018-19 to USD 8.5 billion. The fall was as much as 32% since the peak of USD 12.6 billion in 2017.

Policy action

Realising the gravity of the situation, India’s environment ministry in December announced forming a high-level inter-ministerial Apex Committee for Implementation of Paris Agreement (AIPA).

“The purpose of the AIPA is to generate a coordinated response on climate change matters, which ensures that India is on track to meet its obligations under the Paris Agreement, including its Nationally Determined Contributions (NDCs),” the ministry said in a statement.

“Climate change must be fought not in silos but in an integrated, comprehensive and holistic way,” Prime Minister Narendra Modi said at the summit of G20 nations on November 22. “The entire world can progress faster if there is greater support of technology and finance to developing nations”.

Policy can play in coming up with climate solutions when calamities strike, Singh said. “One of the most critical aspects of managing climate risk is to understand the portfolio exposure to different sectors that are vulnerable to climate hazards and have both physical and transition risks. The next step is to disclose the exposures to these risks to larger stakeholders,” he said.

“Once you start understanding and disclosing climate risk, then managing them and mainstreaming them follow.”

In the absence of any government mandate or push from the central bank, financial institutions have not been proactive in reporting exposure to climate risks or their exposure to different sectors that are vulnerable to climate hazards and risks, Singh said.

Mainstreaming climate risks

Government guidelines and regulations can push financial institutions to report their exposure to climate risks and make them act to mainstream climate risks in their portfolios and

operations.

Government institutions such as the National Disaster Management Authority (NDMA) need to set up appropriate and dedicated climate collection data mechanisms in the country and make them available to relevant stakeholders. “These will act as inputs to scenario analysis,” Singh said. “Legitimate inputs are essential for accurate predictions and will greatly aid investors to initiate climate action.”

Climate change could cost businesses and investors across the world over USD 1.2 trillion over the next 15 years, the Intellicap report said. The private sector has a role in mitigating this, Singh said.

There has to be efforts to create climate risk indicators and modes of collecting relevant data required for climate risk modelling, which could be provided for consideration of everyone, he said. Insurance companies and credit rating agencies, for instance, could share knowledge and experience in managing climate risk owing to the nature of the business they are involved in, where it is essential to factor all important risks.

In 2015, a private sector led initiative called Climate-related Financial Disclosures (TCFD) was set-up in India to help develop voluntary, consistent climate-related financial risk disclosures for use by companies in providing information to investors, lenders, insurers, and other stakeholders.

TCFD recommendations are intended to help build considerations of the effects of climate change into routine business and financial decisions.

Responsibility and foresight

“Their adoption can help companies demonstrate responsibility and foresight. Also, better disclosure will lead to more informed and more efficient allocation of capital,” Singh said. “Overall, 1,500 organisations globally, including over 1,340 companies with a market capitalisation of USD 12.6 trillion and financial institutions responsible for assets of USD 150 trillion have expressed support for TCFD recommendations.”

Akin to the growth in the number of organisations supporting TCFD, investor demand for companies to report information in line with the TCFD recommendations has also grown dramatically, he said.

As part of Climate Action 100+, more than 500 investors with over USD 47 trillion in assets under management are engaging the world’s largest corporate greenhouse gas emitters to strengthen their climate-related disclosures by implementing the TCFD recommendations.

In addition, many large asset managers and asset owners have asked or encouraged investee companies to report in line with the TCFD recommendations and reflected this in their investment practices or policies.

Along with recommendations, the task force has issued guidance on two topics — conducting climate-related scenario analysis and integrating climate-related risks — into existing risk management processes and disclosing those processes.

Such metrics would help financial institutions understand the process of integrating climate risks along with understanding from other organizations that are part of TCFD recommendations, Singh said.

November 25, Mumbai –  Recently Vikas Bali , CEO, Intellecap was interviewed by Hindu Business Line for  an article titled ‘Why digital financial inclusion is still an unfinished project ‘ on how the biggest challenge in the adoption of digital payments has been the lack of awareness and trust.
Gajraj, a farmer from Madhya Pradesh, has started using digital payment platforms. Nearly 75 per cent of his financial transactions are done either through online bank transactions or via applications such as Google Pay and Paytm. The only time he uses cash is to pay the daily wage labourers working on his farm. “Most of these daily labourers working for me are illiterate or do not have access to smartphones, that is why they are much more comfortable receiving and spending money in cash,” he says.
Daya Ram, a farmer from a village near Bhopal, Madhya Pradesh, says he doesn’t use digital payment apps or other online services because “I don’t know how to read too well….and, therefore, I am hesitant”.
Ram and labourers working for Gajraj are two examples of the challenges being faced when it comes to the financial inclusion of India’s rural population.

Obstacles faced

Recently, global social-policy data analytics firm IDinsight, set out to explore the obstacles faced by migrant communities, particularly women workers in the apparel manufacturing industry, in using digital payment services for sending remittances. The women were trained in using the BHIM app to send remittances via mobile phones. However, there were obstacles to onboard these workers, including lack of access to smartphones, reliable internet, and phone-banking account linkages, among others.

Sonakshi Sharma a Senior Manager at IDinsight, says: “Our findings illustrate that the migrant workers we studied are particularly vulnerable to these issues. However, it would be hard for us to extrapolate this to other populations.”

A number of policy initiatives have been taken over the last six years to drive financial inclusion through digital platforms. Pawan Bakhshi, India Lead of Financial Services for the Poor, at Bill and Melinda Gates Foundation, says: “India’s journey towards the accelerated induction of members of poor and marginalised communities into formal financial inclusion began with Aadhaar…..With the coming of Aadhaar, E-KYC has driven down the cost by almost 99 per cent, therefore, technology and the digital age have reduced the costs of entry into the system.”

Now, an index for digital payments as online transactions grow rapidly

A recent report facilitated by USAID titled, ‘India Digital Financial Inclusion’, found that since 2014, key events have occurred in the Digital Financial Services ecosysem in India to further drive digital financial inclusion. This includes the PMJDY drive and onboarding over 330 million new bank account holders into the formal system; Jan Dhan, Aadhaar, and the induction of UPI and mobile wallets into the ecosystem have contributed in creating financial infrastructure. However, the report also emphasises that despite the establishment of infrastructure, payment services also face the ‘last-mile problem’, where certain obstacles unique to certain sections of the population still exist.

For instance, migrant worker Arun Sharma – who hails from Bihar and works in construction sites in the Delhi NCR region – lost his proof of identity years ago. Now, he is unable to use digital payment services or set up a bank accountto transfer remittances to his family. Instead, he prefers to take cash with him when he visits his family every two years or transfer money to his brother-in-law’s bank account using an over-the-counter agent. “Someone told me I need the sarpanch’s signature to get my Aadhaar made again, and also that since I am not from here, I can’t make it here in Delhi..I am not too sure, I haven’t looked into it too deeply,” says Sharma.

Why investors prefer large players in the online payments sector

IDinsight provides training for organisations working with migrant workers to support the members of these communities to onboard them onto digital payment systems. Kiran, a migrant worker, says: “My employers (Shahi Exports) helped me create my account a year ago when I joined; since then I have been doing most of my

digital transactions using Phonepe and send digital remittances using my phone as well.”

USAID also partnered with organisations such as Intellecap to conduct pilot activities in rural and urban settings. Intellecap implemented pilot activities in Maharashtra, Odisha, and Jharkhand, where the adoption of digital payment services across three value chains – dairy, food and beverages and poultry – was studied.

One of the biggest concerns cited by these entrepreneurs is access to cash. Vikas Bali, CEO of Intellecap, says: “The immediate feeling for the participants was that once they had money in their mobile phones, how can they convert this money back into cash? Establishing trust within these communities, making them believe that they can convert mobile money to cash whenever they want through the BC network or Kirana stores, is critical.”

For Daya Ram, the hesitancy to use digital payment services is not just related to his illiteracy; he is also afraid about the safety of his money on these applications. “I have not used these services ever before, I don’t know what I will do if I lose my money on these applications..Who will I go to?”

Security and trust

Industry leaders in this ecosystem also recognise security and trust to be a probem. Karthik Raghupathy, V-P, Strategy and Business Development, PhonePe, says the biggest challenge in the adoption of digital payments has been the lack of awareness and trust. First-time users often think that digital payments are complicated and are also worried about the safety of transactions. PhonePe has undertaken a massive user awareness exercise to highlight the safety of digital payments as well as the ease of using digital payments for everyday use cases. Vikas further adds: “While the digital ecosystem is progressively creating new alternatives and solutions to make these financial products more inclusive and easily adaptable for all sections of the population, a new challenge that can emerge is what will happen in a scenario when transactions fail – especially in case of new users. If transactions fail for a multitude of reasons, such as net connectivity, mistakes in using an app etc, we need to understand how that pushes back the progress that we have made so far. If people lose confidence in digital transactions because of such issues, it will be much harder for us to convince them to adopt these payment systems again.”

Monday, November 9^th  – Intellecap Circular Apparel Innovation Factory in partnership with Circular Design Challenge an initiative of R|Elan, United Nations Environment Programme and Lakmé Fashion Week, presented the second edition of  Circular Changemakers 2020, in a digital-first format, on Day 2 of Sustainable Fashion Day of LFW, where circular startups presented and showcased their ideas.

The coverage was basis a talk with the finalists of the second edition of Circular Changemakers by LFW 2020 about the concepts behind their unique start-ups and how they are planning to change the industry with their own perspective of Circular Fashion via this platform.

Six start-ups recently presented their ideas promoting circular fashion in the second edition of the Circular Changemakers which started in 2019.

Presented by Intellecap’s Circular Apparel Innovation Factory (CAIF) in partnership with Circular Design Challenge, an initiative of R|Elan, United Nations Environment Programme and Lakmé Fashion Week, the programme took place on Day 2 of Sustainable Fashion Day at LFW 2020. Infinichains, BigThinx, Phabio, Twirl Store, Desi Hangover and Paiwand Studio were chosen to present their business models to an esteemed panel after having gone through a rigorous online enterprise bootcamp to fine tune their business models, financial models and presentations.

The investor & strategic partner panel comprised industry experts namely, Disha Gandhi, Associate Director, Aavishkaar Capital, Marieke Lenders, Head – Reweave Program, Enviu, Vineet Gautam, CEO, Bestseller India and Pinar Ademoglu, Investment Director, Sagana Capital. The changemakers undertook a rigorous bootcamp by CAIF which focused on three modules, Capital Raising, Business & Financial Modelling and Investor Pitch Preparation, delivered by industry experts.

Darshana Gajare, Lead Sustainable Fashion at IMG Reliance, said, “This year, we have a very promising cohort of enterprises doing some incredible work across the value chain”: Our vision is to enable strategic partnerships, through the online bootcamp curated by CAIF, we could already see great synergies for these start-ups to work together,” while Vikas Bali, CEO, Intellecap, chimed in, “Circular Changemakers Program is a great example of a platform that can provide both investment support and facilitate strategic collaborations for innovators with circular solutions to help them scale.”

Each of these enterprises works at different segments of the value chain aiming to make fashion truly circular. A talk with the Circular Changemakers sheds light on their prospective business models, their utility in different avenues of the fashion space along with their aspirations of leveraging this platform to propagate their business in the industry.

Paiwand Studio

Launched in 2018 as an upcycling textile studio by Ashita Singhal, Paiwand believes in adding value by repurposing waste garments. With willingness to help designers who lacked time and resources to repurpose waste materials, Ashita explored weaving with textile waste to produce upcycled yardages for apparel, which later led to her winning an International Business Grant of US $ 25,000 by Laureate International Universities Network, USA to support her social enterprise, Paiwand Studio.

“Following a B2B model, we collaborate with design houses and fashion brands and help them upcycle their textile waste through various handcrafted techniques like handloom weaving, patchwork, knitting, embroidery and felting,” says Ashita, continuing, “We then sell the fabric back to the fashion houses at a higher price so that they can create an exclusive upcycled sustainable product range for their respective clientele, opening up a revenue channel for brands collaborating with them.” In their B2C model, Paiwand designs upcycled range of products including apparel, home textiles and accessories retailed through multi-designer stores and online platforms.

Twirl Store

Twirl store works to solve the endless issues of excess and unwanted clothing. Sujata Chatterjee, Founder of the start-up, avers, “At Twirl.store, customers are urged to send their unwanted clothes, and in return are rewarded with points which they can redeem to buy new things from our online portal www.twirl.store. All the unwanted clothes that Twirl receives are either donated or upcycled to form fabrics for new collection.”

Adding to this, the start-up employs rural women to upcycle the fabric, thus giving them a source of livelihood. Their offerings include bags, accessories, gift items etc. retailed through omnichannel portals. “We also hope that after being a Lakmé Fashion Week’s Circular Changemaker, more people will join the Twirl Circle and actively send unwanted clothing as well as embrace our handcrafted, upcycled products,” says Sujata.

BigThinx

BigThinx was Chandralika Hazarika and Shivang Desai’s idea to aid customers who face issues during online shopping due to incorrect sizing, leading to returns and further losses incurred by businesses. Chandralika says, “Realising the problem, we started working on our AI-based products in 2017,” while Shivang elucidates, “The business model is a Software as a Service (SaaS) B2B model working with products that include 3D body scanning to help one find the perfect size in any clothing from any fashion brand, and personalised digital avatars to try on any clothing virtually and see how it looks, fits and drapes before purchasing.”

Chandralika & Shivang, Founders, BigThinx

These products are API based and can easily integrate into any existing website or app, or even in-store via interactive displays. Consumers can carry out body scans or create avatars to instantly find their size and browse inventory of thousands of items with just a click of a button. Retailers benefit from an average 20 per cent increase in order values, 40 per cent decrease in product returns and up to 250 per cent greater conversion rates. “Our suite of products – mobile body scanning, digital twins, virtual showrooms, and virtual fashion shows – significantly contribute towards reducing emissions and apparel waste and saving freshwater,” says Chandralika.

Desi Hangover

Inspired by the craftsmanship of the artisan communities across small villages of India, Hitesh Kenjale along with Abha Agrawal and Lakshay Arora launched this start-up in 2014, to share each of their expertise globally. “Our business model is extremely simple, and glocal as we say – Handcrafted in India for the world,” expresses Hitesh, while Abha adds, “We attempt to tell the story of our shoemakers, based in a small village in Karnataka. We deliver conscious fashion for your feet.”

Hitesh Kenjale, Abha Agrawal and Lakshay Arora, Founders, Desi Hangover

The start-up upcycles leather in the production village, treated using natural ingredients like turmeric and the barks of the Sal tree, and later used to handcraft ‘Desis’. Their mission was to develop rural craft clusters through social innovation, ensuring secure and sustainable livelihood for artisans in India.

Hitesh maintains, “Through LFW’s platform, we wish to send across a global uniform message to fellow brands, customers, and anyone else concerned – that fashion can be healthy, harmless, and yet beautiful.”

InfiniChains®

After working closely with Shreyaskar Choudhary from Pratibha Syntex about challenges in the textile industry around traceability and sustainability reporting to brands, Parth Patil, Ravi Agrawal and Jitesh Shetty launched the blockchain start-up InfiniChains®. “We provide a traceability dashboard to the brands that allows them to visualise the supply chain for sourced products, check claims associated with them and inspect the origin of the raw materials,” explains Parth, while Jitesh says, “We charge the brand an annual licensing fee for the use of our platform that is proportional with the volume of products they are tracking on our system.”

Parth Patil, Co-Founder, Infinichains

For the suppliers and vendors of the brands, there’s no cost to use the system and they get their own dashboards and login from where they can submit data for the supply chain stages they are responsible for and also get visibility into their upstream supply chain. Through LFW, the start-up wants to work with prospective partners to understand the challenges that stand in the way of rapid adoption of sustainability practices and engage brands by sharing their expertise and technology to become 100 per cent sustainable.

Phabio

Sukanya Dikshit started Phabio with the zeal to curb the environmental impacts posed by single use plastics by working on a cutting-edge technology for low cost production of an exact replacement of plastic. This material is a biopolymer known as PHA (polyhydroxyalkanoates) and is made from microorganisms using waste organic byproducts from various food and beverage industries. It is 100 per cent naturally biodegradable under home and marine composting conditions. Their business model involves direct sales of bioplastic resins to product manufacturers and also, licensing of the technology to third parties interested in taking up production.

Founders of Phabio

“We want to help the world reimagine and redefine plastics with us. Not everything that is plastic needs to remain in the nature forever and the Circular Changemaker programme is a hopeful start,” Sukanya says.

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