99.9% Recovery: Challenge to Social Protection

Microfinance for microbusinesses through interest free in-kind or cash financial support is always an eye-catching endeavor from a social enterprise to alleviate poverty. Several public and private sector organizations are supporting and executing this activity through domestic and international funding or donations. Concept of such a remarkable effort is that instead of feeding someone fish, tell them how to catch a fish and keep this chain developing and growing. This is purely a social concept and well-acclaimed by executors that they are doing this activity for a noble cause. However, while establishing micro-enterprises or scaling someone’s micro-establishment; the executing agency makes business models for sustainable growth avoiding risk. This way, the executing agencies try to recover the donated funds in the shape of small and easy-to-pay installments and put funds into revolving streams to help others and keep this chain going.

There are challenges one can face during running their businesses whether it is based on donated funds or other financial resources and interest-free or with interest streams. There is a natural statement that one is aware of when doing business: Profit and Loss. Here we are discussing micro businesses based on interest-free financial support, so consequently one will establish impacts on a noble cause e.g. increase in income, better living standards, scale-up, schooling of children, accessibility to necessities, and affordability etc. The execution agencies and policy communicators always try to address challenges faced by micro-entrepreneurs and rightly so: “ready to accept the losses as well”. Having said this, a question arises “why are most of these agencies claiming 99.9% recovery and how do they ensure this unnatural impact?” During global economic unrest, profit schemes shrink, and inflation rises. Micro-businesses face tough times to earn for their necessities and pay liabilities through their respective micro-establishments.

During the current pandemic or particularly, in any crisis, social protection becomes mandatory for any society. Significant ratios of society that fall under the poverty line are called as vulnerable, however, they are the middle class and some upper class fall just at the edge and become a silent part of the aforementioned vulnerable part of society.

A recent case is the private school system, which charges about Rs.500-2000 per month. After the first lockdown (March 2020), school fees were affected. A dip of 60-70% and 40-50% in monthly fee in the month of April and May 2020 respectively was observed. A little ease in the lockdown situation made the people go back to work, so the fee collection in the month of June 2020 brought back near to normal i.e., 70-80%.

Here the social protection speaks louder and clearer that only a mishap or crucial event pushes the middle class into poverty line and alleviates the already vulnerable, more vulnerable. The current pandemic situation triggered three stringent tests; (a) Strive for food and necessities (b) Meeting the norms of society and (c) Avoid family system disturbances

Government helped the vulnerable through charity. However, the above-mentioned dip in collection of school fee highlights how a weak social protection system shattered for two months and dues were not to be paid. As soon as life came back to routine, societal norms were happily exercised.

One viewpoint is that if such a crisis happened two or three decades ago when we were stronger economically, due to less cultural disparity; the second and third stringent tests could be healed easily. Social norms in close-knitted societies help protect people’s societal rights, but sadly those norms have been replaced by money race in every element of society.

Social protection is a phrase commonly used by various schools of thought and socio-economic sectors. Most of the time, policy designers and decision makers focus only on those who fall under the poverty line and can survive with smaller donations. However, those who live above the poverty line are so susceptible that even one salary delay, or halt of business operation can push them towards poverty line, and hazardous society norms pull them back; as they are stuck mid-air and bear crisis miserably. A humble suggestion to policy and decision makers; please look down and see for yourself. It will help you in exercising social protection with solid rationale.

Considering normal and abnormal business routines, it seems unreal to understand and believe how we forget laws of nature while doing business Profit and Loss. I don’t want to make the 99.9% recovery claim doubtful but would like to insist on the social impact of donated microenterprises by treating them especially in vulnerable conditions that they face and deal with. Our focus as a social enterprise should facilitate the support of the vulnerable and motivate them to pursue microbusiness, addressing their real time challenges for sustainable growth and progress. 99.9% recovery may be a big hurry, but not an impactful achievement.