The World Bank India Digital Financial Inclusion of Informal Sector Project Information Document/ Identification/Concept Stage (PID) Public Disclosure Copy Concept Stage | Date Prepared/Updated: 08-Oct-2018 | Report No: PIDC161650 Oct 09, 2018 Page 1 of 15 The World Bank India Digital Financial Inclusion of Informal Sector BASIC INFORMATION A. Basic Project Data Environmental Project ID Parent Project ID (if any) Project Name Assessment Category B - Partial Assessment India Digital Financial P167886 (B) Inclusion of Informal Sector Region Country Date PID Prepared Estimated Date of Approval SOUTH ASIA India 08-Oct-2018 Initiation Note Review Financing Instrument Borrower(s) Implementing Agency Decision SELF EMPLYED Investment Project Self Employed Women's The review did authorize the Public Disclosure Copy WOMEN'S Financing Association (SEWA) preparation to continue ASSOCIATION PROJECT FINANCING DATA (US$, Millions) SUMMARY -NewFin1 Total Project Cost 2.73 Total Financing 2.73 Financing Gap 0.00 DETAILS -NewFinEnh1 Non-World Bank Group Financing Trust Funds 2.73 Japan Social Development Fund 2.73 B. Introduction and Context Country Context 1. India is the fastest growing major economy in the world, with a GDP growth rate of 7.1 percent in 2016-17. Growth has been accompanied by an impressive reduction in poverty. Between 2004 and 2011, the proportion of population below the international poverty line ($1.9 PPP/day) declined from 38.9 percent to 21.2 percent. However, disparities remain. India's income inequality, as measured by the Gini coefficient, rose from 45 in 1990 to 51 in 2013 (IMF, 2016). In absolute terms, India still has the highest number of poor in the world. Approximately 270 million Indians - one in every five Indians Oct 09, 2018 Page 2 of 15 The World Bank India Digital Financial Inclusion of Informal Sector - are below the poverty line (World Bank). India ranked 131 out of 188 countries in the UN Human Development Index, 2016, and ranked 125 out of 188 countries in the Gender Inequality index. 2. An estimated 80 percent of India's labor force works in the informal sector. Majority of these workers are caught in a low productivity trap, lacking employment security and the tools and means to invest in themselves and their growth. This is exacerbated by low-income levels, low asset ownership, and indebtedness to informal moneylenders, excluding households from accessing resources they need to improve their lives, and leaving them in a poverty trap. This is especially sphere for the rural population, which is approximately 70 percent of India's population estimated at 1.34 billion (2017). Financial inclusion is a key enabler in reducing poverty and promoting shared prosperity. Financial inclusion is an enabler for 7 of the 17 Sustainable Development Goals. Access to formal financial services is critical for households to invest in health, education, skills, productivity and income generation prospects. The Public Disclosure Copy government of India (GoI) has identified financial inclusion as one of its key priorities to sustain India's economic growth on a high trajectory and ensure equitable growth. To ensure universal access to formal banking services, GoI has embarked on several initiatives, particularly since 2014. Digital finance has been identified as a key focus area to expand the reach of banking services to excluded communities and households. Sectoral and Institutional Context India has made significant strides in advancing financial inclusion over the past few years. The GoI launched a new program, dubbed the Prime Minister’s Jan Dhan Yojana (PMJDY), in August 2014. This program led to the opening of 307 million accounts in just over two years[1]. Bank account ownership has grown strongly in recent years to cover almost all Indian households. From 35 percent of households with an account at a bank or another type of financial institutions in 2011 to 80 percent in 2017 (2017 Global Findex Database). The number of deposit accounts with commercial banks rose by 85 percent from 934.46 per 1000 adults in 2011 to 1731.27 per 1000 adults in 2016[2]. Debit card ownership has increased from 22 percent in 2011 to 33 percent in 2017. Slow increase in banking penetration in terms of bank branches. The increase in banking penetration in terms of bank branches has been less dramatic as compared to the growth of bank accounts. The number of bank branches per 100,000 adults has grown from 10.51 in 2011 to 14.06 in 2016[3]. Since higher demographic penetration (i.e. bank branches normalized by population) indicates easier access, the trend indicates less than proportionate growth in ease of access to banking services. The number of ATMs per 100,000 adults has grown faster from 8.85 in 2011 to 21.24 in 2016. However, the ATM density in India is still significantly lower as compared to other middle-income countries. Strong government focus on mobile banking and digital finance to improve banking penetration. Mobile based technologies and channels hold significant potential to improve the delivery of financial services and drive financial inclusion for multiple reasons. First, India's wireless subscriber base has grown rapidly over the Oct 09, 2018 Page 3 of 15 The World Bank India Digital Financial Inclusion of Informal Sector past few years, particularly in the rural space. Between 2011[4] and 2017[5], the overall wireless subscriber base grew by a CAGR of 6.3 percent from 811.59 million subscribers to 1170.18 million subscribers, with the teledensity increasing from 70.89 percent to 91.08 percent. The rural wireless subscriber base in the same period grew by a CAGR of 10.5 percent from 273.54 million subscribers to 497.76 million subscribers, with the teledensity increasing from 33.79 percent to 56.47 percent. This trend is set to continue due to high demand in the rural space coupled with falling usage costs due to increased competition in the telecom sector in the recent years. Estimates indicate that 88 percent of households in India today have a mobile phone[6]. Second, promoting financial inclusion through mobile banking incurs significantly lower costs than in a branch-led expansion that is unviable in regions with population below a certain threshold, and is often impossible in regions with difficult topography. At the same time, mobile banking results in substantially lower transaction costs for the user, particularly in rural areas where the nearest bank branch may be several kilometers away. Third, mobile connectivity is near-ubiquitous, even in many remote regions. Public Disclosure Copy By the end of April 2016, Aadhaar, which is a biometric unique identifier, had been issued to over 1 billion residents and now covers over 93 percent of adults in the country. Under the 126,000 banking correspondents (agents) have been appointed to provide cash-in and cash-out facilities in underserved regions. The programme is now aiming to provide access to credit, insurance and pension facilities in addition to the basic deposit services currently available. It also aims to channel all government benefits into recipients’ accounts. By end-April 2016, the direct transfer of benefits had been implemented in 56 government schemes in which around INR 60 billion (US$ 900 million) are transferred every month to about 300 million people. The percentage of operational bank accounts increased significantly from around just 30 percent in January 2015 to around 72 percent in February 2016. The use is limited to the withdrawal of direct transfer of subsidies in most cases, but gradually more and more people are expected to start using these accounts for savings and other services. Although the agency banking network is growing very fast, it needs to be strengthened to improve the quality of services while making it financially viable for the agents serving its customer base. With a large G2P programme and the entry of payment banks, digital financial services are expected to register strong growth. Despite these achievement in advancing financial inclusion significant gender gaps exist. There is a significant gender gap in financial inclusion. According to 2017 Global Findex Database, 83 percent of males over 15 years in India held accounts at a financial institution in 2017 compared to only 77 percent of females. This gender gap of 6 percent has since narrowed from 20 percent in 2014 mainly after the launch and implementation of PMJDY. A World Bank study[7] reports a 10 percent gender gap in opening accounts under PMJDY - with 73 percent of men applying for accounts against 63 percent of women in 2014. This has since narrowed to 5 percent in 2017. Debit card ownership by males over 15 years is 43 percent relative to 22 percent of females. This gender gap has grown from 8 percent in 2011 to 20 percent in 2017. A similar trend can be observed in savings and credit parameters as well. Savings by males over 15 years has increased from 18 to 22 percent between 2014 and 2017 while that of females over 15 years increased from 10 to 17 percent, with the gender gap declining. As more women gain access to transaction accounts, they will face Oct 09, 2018 Page 4 of 15 The World Bank India Digital Financial Inclusion of Informal Sector knowledge gaps in their usage. There is need for proactive efforts to incentivize and facilitate women financial access. Gender gap in mobile phone ownership and usage. A considerable gender gap exists in mobile phone ownership and usage patterns. A study by GSM Association[8] found that women in low and middle-income countries across the world are on an average 10 percent less likely to own a mobile phone than men. This gender gap is as high as 23 percent in the case of India. Among the men and women who own mobile phones, the study found that while 26 percent of male mobile owners use mobile internet, only 8 percent of female mobile owners use mobile internet, which means women are 68 percent less likely to use mobile internet as compared to men. Furthermore, the gender gap in mobile ownership and usage widens in rural areas. The gender gap in ownership is 27 percent in rural India as against 14 percent in urban India. The gender gap in use of mobile internet is 72 percent in rural India as against 63 percent in urban India. Public Disclosure Copy While there has been progress in bridging the rural-urban gap in account ownership, substantial rural- urban divide persists. This is attributed primarily to PMJDY, under which 180 million accounts were in rural and semi-urban areas[9]. The number of branches per 100,000 of population in rural and semi-urban areas is less than half of that in urban and metropolitan areas[10]. This gap persists despite a significant increase in number of rural/semi-urban branches after deregulation of opening branches and ATMs and the introduction of Business Facilitators (BFs) and Business Correspondents (BCs). Eastern, North-eastern and Central regions lag in banking penetration. Banking penetration varies from region to region, with states in the eastern, north-eastern and central regions less penetrated in terms of number of branches normalized by population. Bihar, Jharkhand, Uttar Pradesh, Madhya Pradesh, Odisha, Chhattisgarh, West Bengal, Rajasthan and all North-eastern states except Sikkim have lesser number of branches per 100,000 adults as compared to the national average[11]. The penetration of deposit services is high across most of the country. However, the penetration of credit and insurance services is low, with states in the eastern, north-eastern and central India showing low or below average penetration (CRISIL Inclusix, 2018). Long way to go despite strong growth in volume of digital / mobile transactions. Digital transactions have shown strong growth over the past three years. Total volume of digital transactions (including various payment channels and mechanisms such as RTGS, NEFT, IMPS, mobile banking, debit cards, credit cards, prepaid instruments, mobile wallets and others) grew by CAGR of 30% from 1142 million in April 2015 to 1928 in April 2017. The growth in volume of mobile based transactions was much higher, albeit on a small base. Mobile banking transactions grew more than five times from 19.75 million in April 2015 to 106.18 million in April 2017. Mobile wallet transactions exhibited a similar trend, growing from 11.96 million transactions in April 2015 to 74.42 million transactions in April 2017[12]. The overall volume of transactions continues to be low compared to other countries. As per IMF Financial Access Survey 2017, the number of mobile money transactions per 1000 adults in India was 635.22 in 2016. The equivalent number in Pakistan and Bangladesh were 3,803.67 and 12,696.84 respectively. Kenya, which has made strong progress in promoting mobile payments, saw 53,272.67 mobile money transactions per Oct 09, 2018 Page 5 of 15 The World Bank India Digital Financial Inclusion of Informal Sector 1000 adults. According to Global Findex 2017 data, only 2% of adults over the age of 15 in India hold mobile money accounts as compared to 4.2% in South Asia and 72.9% in Kenya. Furthermore, while there has been strong growth in volume and value of UPI transactions, the volume of USSD transactions has reduced from a post-demonetization peak of 0.31 million transactions in January 2017 to 0.17 million transactions in January, 2018[13]. This indicates low adoption of mobile banking among people with feature phones, which is a substantial segment of the population. Financial technology, or Fintech, is a dominant force behind the big advances in the Financial inclusion. GoI has demonstrated a strong push to mobile banking and digital finance over the past few years. Through the JAM trinity (Jan Dhan Yojana - Aadhaar - Mobile phones), GoI envisions bringing all Indians into a common financial, economic and digital space, and has been working towards the 'Triple billion' milestone with the objective of linking 1 billion unique Aadhaar numbers with 1 billion bank accounts and 1 billion mobile phones[14]. As of August, 2017, 524 million unique Aadhaar numbers have been linked to 736.2 million bank Public Disclosure Copy accounts in India. Advancing knowledge, innovations and solutions that promote sustainable and inclusive financial markets will improve the lives of the poor. Mobile financial services provide several benefits that can increase women’s use of formal financial services. Some of these benefits are convenience, safety, privacy, and access to more sophisticated services. But to realize these opportunities, women need to be connected to these products and services and trained on how to effectively utilize them. Relationship to CPF The outcomes of this proposed project are aligned with the key priorities of the SCD and CPF focusing on enhancing inclusiveness both for poverty reduction and as a key element to sustaining high rates of economic growth by generating more quality jobs and facilitating improvement in livelihoods and investment in human capital. The project will enhance improved livelihoods and better jobs by supporting adoption and increased usage of digital financial products and services to enhance productive economic activities. The project aims to link the project beneficiaries with the formal financial systems and its attendant benefits. C. Project Development Objective(s) Proposed Development Objective(s) The Project Development Objective (PDO) is to foster increased use of digital financial services by informal sector women in low-income households in selected States. The project will reach at least 500,000 women from low income and marginalized households in six states namely Bihar, Uttar Pradesh, Rajasthan, Meghalaya, Assam and Gujarat. The project will enhance financial literacy and proficiency in using mobile technology among target groups, and catalyze adoption of digital financial services so that these households can access formal financial instruments for improved livelihoods. Oct 09, 2018 Page 6 of 15 The World Bank India Digital Financial Inclusion of Informal Sector Key Results The progress toward realizing the PDO will be measured by the following indicators: Indicator # of women (in the target group) accessing digital financial services Baseline 0 Target 500,000 # of new digital products/services offered to women (in target group) Baseline 0 Target 5 % increase of women using digital financial transactions (in target group) Baseline 0 Target 50% D. Preliminary Description Public Disclosure Copy Activities/Components 1. The project client is Self-Employed Women’s Association (SEWA). The project envisages empowering low-income households, particularly women who are members of SEWA to help them build sustainable livelihoods by improving their financial literacy, making them proficient in mobile technology and strengthening their access to digital financial products / services. 2. The project's approach incorporates lessons and best practices from successful WBG initiatives in the region. Financial inclusion projects in the region such as the WBG initiative in Bangladesh aimed at leveraging Mobile Financial Services to accelerate women's financial inclusion have shown promise in reducing gender gap in access to financial services. 3. The project leverages the lessons and delivery systems developed as part of the previous SEWA- JSDF partnerships. The first SEWA-JSDF project resulted in the establishment of SEWA Manager's School (SMSc) that has shown success in developing a range of learning modules across skill / knowledge areas in partnership with expert institutions and training grassroots women at scale. The project trained 823,746 women across a number of training areas spanning technical, managerial and leadership skills, resulting in increased household income (77% of beneficiaries) and increased employability (84% of beneficiaries). The second project facilitated the creation of decentralized and sustainable Community Learning and Business Resource Institutions (CLBRCs) to provide business support to grassroots women entrepreneurs. 524,566 members were linked to services provided by these CLBRCs. 192,889 members were trained in various programs including technical skills, green livelihood areas and ICT skills. 85,000 women were linked to livelihood opportunities and 16,375 women were linked to markets, trade inputs and micro-credit. The second project also piloted several ICT initiatives that successfully demonstrated the process of demystifying technology for marginalized women and expanding their use in livelihood activities. The proposed project focuses specifically on the relatively new field of digital financial services which has made rapid strides in recent years and has shown great potential to promote financial inclusion. The project aims to increase awareness, literacy and usage of digital finance applications and technologies among women from low income and marginalized households by leveraging systems and building on experiences from the earlier SEWA-JSDF projects. Oct 09, 2018 Page 7 of 15 The World Bank India Digital Financial Inclusion of Informal Sector 4. The project will focus on demonstrating innovative approaches that can be scaled up in other World Bank supported interventions in the region. This will include mapping and customizing products / technologies for underserved target segments; piloting open online learning platforms and scalable training approaches for marginalized, rural women; innovatively leveraging existing networks and member-to-member transactions to catalyze Fintech adoption; and supporting innovative ICT and MIS projects that promote Fintech adoption and strengthen monitoring and evaluation. 5. Multiple rounds of consultations have been carried out with target beneficiaries of the project, SEWA grassroots leaders and SEWA managers. Consultations included field visits to SEWA CLBRCs, visits to SEWA social enterprises as well as small-group discussions with all stakeholders. These consultations have been instrumental in shaping the project design, and identifying activities based on constraints, aspirations and explicit demands of target beneficiaries and grassroots leaders. Activities are expected to be community-driven, with the involvement of women from marginalized and excluded communities in all stages of implementation. Public Disclosure Copy 6. Project Components: Component A: Needs assessment and technology mapping (US$ 0.26 million): This component will support foundational activities such as orientation workshops at the central, district / block and community level, detailed needs assessment of target beneficiaries, other assessments to understand footprint of ongoing digital financial services / schemes on the ground, product / technology identification and mapping, and partnerships with multiple categories of external institutions. Subcomponents include: a. Orientation: The component will support a series of orientation workshops for SEWA management, district / state leadership, state implementation partners, ICT team at central / district / block levels, SEWA Bank and other sister SEWA institutions, partners and external stakeholders, as well as target beneficiaries of the project. These workshops will outline project objectives, share and seek feedback on implementation strategy and action plan, and develop a strong foundation for launch of subsequent activities. b. Needs assessment: The component will carry out a detailed assessment of target beneficiaries to understand their socioeconomic status, access to digital devices such as smartphones, livelihood activities, financial needs, level of digital literacy, level of financial literacy, the gaps, concerns and issues with adopting technology, and other related aspects. The assessment will study the lifecycle needs of the livelihood activities undertaken by marginalized women and vulnerable communities to identify points / areas where adoption of Fintech can increase productivity, sustainability and incomes. The assessment will similarly identify the needs and possible Fintech intervention points in SEWA's various ongoing activities / programs including organizing activities, agriculture support program, green livelihood initiatives, SEWA's agro-produce Rural Distribution Network (RUDI), artisan support programs, microenterprise support programs, new-age initiatives such as rural homestays with Airbnb, e-commerce partnership with Amazon, and other initiatives. The component will support surveys to identify how banks including payment banks and other prepaid instruments market their services to customers. The component will strengthen understanding banks' initiatives towards fostering financial literacy and onboarding women through surveying their financial literacy centers. Oct 09, 2018 Page 8 of 15 The World Bank India Digital Financial Inclusion of Informal Sector The status of Government of India's Digidhan Abhiyan's initiatives in improving awareness of digital payments in the target states will be assessed as well. c. Partnerships and technology mapping: Based on assessments, the component will identify technology products most suitable for the needs and aspirations of target beneficiaries and their livelihood activities. This may include applications / digital products for banking, mobile wallets, utility payments, money transfer / remittances, applying for small loans, micro-savings, mutual fund investments and others. Technology mapping will be undertaken for multiple digital mediums including smartphones, feature phones and computers. Shortlisted technology products / services will be pilot tested with a sample set of beneficiaries to seek feedback and ascertain suitability. The project will establish partnerships with various technology providers including telecom companies such as Vodafone, Airtel, Reliance Jio, Idea; financial institutions such as State Bank of India (SBI), ICICI Bank, Axis Bank, HDFC Bank, Bank of India and Bank of Baroda; credit card services such as Mastercard; payments / remittance service providers such as Paytm, Mobikwik, Eko; unsecured small Public Disclosure Copy loan providers / marketplaces such as Capital Float, Suvidhaa; Fintech think tanks such as iSpirit; other financial service providers and including young organizations offering innovative financial services leveraging the India Stack architecture. These partnerships will focus on making digital products / applications available to beneficiaries in a manner that takes into account their literacy levels and level of familiarity with technology. This can mean easy-to-use workflows, simplified interfaces and multi-lingual forms. Wherever possible, the project will work with partners to suitably customize the applications for beneficiaries. The project will also explore building customized applications to digitize workflows for activities undertaken by SEWA members if a suitable off-the-shelf solution is not available in the market. The component will support roundtable discussions, brainstorming workshops with these partners, external experts and other stakeholders to facilitate establishment of these partnerships. These discussions / workshops will be led by a Digital Finance Advisor. Component B: Strengthening SEWA's delivery system for improving financial and technology awareness (US$ 0.95 million): This component will focus on strengthening SEWA's institutional capacity to generate digital and financial awareness at the grassroots, train grassroots members in digital finance applications and effect large scale Fintech transformation in the target states. Subcomponents include: a. Strengthening SEWA Management School (SMSc) by developing modules and digital learning platform: The component will develop interactive and innovative classroom, digital and mobile-based training modules to train members in using digital finance to perform key financial functions such as accessing bank accounts, conducting transactions, conducting payments, savings, accessing credit and other areas identified in Component A. In addition, it will focus on developing training modules to disseminate basics of finance, basic mobile functions, mobile applications, internet banking, and a range of other related areas. SEWA will partner with financial institutions, management schools, research institutions and other relevant organizations and leverage GoI's Digidhan Abhiyan initiative and ongoing WBG initiatives in the region (e.g. Bangladesh) to adapt / customize existing modules as well as develop new learning modules. The component will also invest in developing an open online learning platform tailored to the needs, capacities and aspirations of informal sector beneficiaries. Oct 09, 2018 Page 9 of 15 The World Bank India Digital Financial Inclusion of Informal Sector This platform will host interactive audio-visual based learning modules in digital financial services, as well as modules in other areas (that may be developed independently by SEWA) b. Building grassroots training capacity – training of master trainers: The component will create a cadre of grassroots master trainers or local resource persons proficient in using digital finance technologies and applications identified in Component A. These master trainers will drive the training, capacity building and awareness generation at the grassroots. They will be drawn from the pool of SEWA aagewans or grassroots leaders, 'Internet Saathis' trained under an ongoing SEWA initiative with Tata Trust, resource persons trained by other civil society or private sector institutions in the target areas, and other motivated youth from target communities who have demonstrated interest and aptitude for ICT. Trainers trained under MeitY programs will be co-opted as well, as per need and relevance. All trainers will be selected from local communities so that they are readily accessible at the village / block level and continue to educate and train rural households beyond the project period. c. Strengthening and expanding SEWA centers / touch points: SEWA takes its programs to its vast base Public Disclosure Copy of rural members through a network of CLBRCs and Community Learning Centers (CLCs). The component will focus on (a) Strengthening existing CLBRCs and CLCs by creating the necessary additional facilities within these centers to facilitate interventions under this project. This will include improving ICT facilities and communication mediums (such as video conferencing, social media platforms, whatsapp groups etc.). This will also include onboarding centers onto SIDBI's Udyami Mitra portal, and training SEWA members and other motivated youth from the larger community as credit counselors in each center. (b) Increasing outreach by establishing additional centers, particularly in states other than Gujarat, where SEWA may not have a strong network of centers. The component will support the onboarding and capacity building of at least one ICT officer for each center. d. Strengthening SEWA’s digital team: The component will also support the onboarding and capacity building of a strong digital team at the central level to oversee the various digital activities of the project and achieve key development objectives. The team will be led by a Chief Technology Officer and will comprise of a Digital Financial Services Officer and a Mobile Technology / Services Officer. Component C: Catalyzing Fintech adoption at the grassroots (US$ 1.27 million): This component will drive large-scale awareness building, capacity building and Fintech adoption at the grassroots in the target states. Subcomponents include: 1. Rollout of trainings: The component will support large-scale rollout of Fintech training and capacity building activities in the target states through trained master trainers via SEWA's network of rural centers (CLCs / CLBRCs), with regular monitoring and direction from SMSc and the project management team. Master trainers will undergo refresher trainings once a year to consolidate skills and incorporate new developments in the Fintech space. The rollout plan will take into account the cultural and socioeconomic differences in target states as well as livelihood-specific needs of members. Systems developed and experience gained under past SEWA-JSDF projects will be leveraged, particularly SEWA's grassroots reach through its network of CLBRCs, the SMSc training infrastructure and lessons learnt from key ICT pilots for grassroots women. The project will target SEWA members as early adopters by leveraging their trust and familiarity with SEWA programs. SEWA members will in turn be the progressive drivers to encourage others to adopt new technologies. Oct 09, 2018 Page 10 of 15 The World Bank India Digital Financial Inclusion of Informal Sector Focusing on youth is a key part of the strategy. Experience in WBG projects and earlier SEWA-JSDF initiatives has shown that younger members adopt technology faster and later drive adoption among their families and friends. 2. Digitization of key SEWA activities: The component will foster large scale Fintech adoption by supporting the introduction of digital transactions in ongoing SEWA economic activities that are operating at scale. Key SEWA activities that have been identified for digitization are savings / credit activities, annual membership fee collection, social enterprises such RUDI, SEWA Trade Facilitation Center (STFC) as well as other economic activities undertaken by SEWA members in the target states. Majority of the transactions in these activities are currently cash-based. The component will support transition of cash-based transactions to digital payments in each of these identified activities by training members in the relevant technologies, facilitating access and encouraging regular use. In addition, the component will support the upgradation of existing SEWA web and mobile-based applications such as mBachat and RUDI apps (developed under an earlier SEWA-JSDF project) to Public Disclosure Copy enable digital financial transactions. The component will also support integration of various SEWA MIS and ICT systems to produce better data / intelligence for improved M&E and stronger project impact. Furthermore, the component will explore leveraging of new-age technologies to digitize key SEWA activities and improve digital literacy of SEWA members. This includes use of blockchain technology to digitize SEWA’s electoral process, use of Artificial Intelligence (AI) / Bigdata to generate business intelligence that can strengthen and expand SEWA’s social enterprises. 3. Promotional material and events: The component will promote digital technologies / products through a mixture of classroom sessions, events, village meetings, community radio broadcasts, narrowcasts, videos, street plays, radio advertisements, whatsapp broadcasts and other channels available to SEWA. Partnerships with technology/telecom firms will be leveraged in order to change the mindset of the rural customer towards adoption and address their key concerns regarding the technology providers. Advocacy programs arranged in partnership with technology firms will boost the trust building process and speed up adoption. 4. Grievance Redressal Mechanism (GSM): The component will support the set up of a Grievance Redressal Cell to receive, record and address grievances of intended beneficiaries and SEWA members at large. A complaint registration window will be opened in designated SEWA centers (CLBRCs / CLCs) in a manner that ensures easy access to beneficiaries across all project states. This will be supplemented by a toll-free phone number as well as an online complaint submission form on SEWA's website. An MIS will be created to record complaints and track progress in resolution of these complaints. Operators will be trained to handle complaints registered over the toll-free phone number. Majority of these operators will be women, with proportionate representation for native languages of all project districts. The project manager will undertake regular review of the Cell's logs to ensure timely resolution of all complaints. Component D: Project Management and Administration, Monitoring and Evaluation, and Knowledge Dissemination (US$ 0.25 million): This component will support incremental project management and administration expenses, monitoring and evaluation activities and knowledge dissemination activities. Subcomponents include: Oct 09, 2018 Page 11 of 15 The World Bank India Digital Financial Inclusion of Informal Sector 1. Project Management and administration: The component will support a small project management / administration unit dedicated to managing the implementation of the project, including a full time Project Manager, Procurement Specialist and Financial Management Specialist. The unit will be responsible for implementing the grant, including hiring and supervising of implementing partners, facilitating contacts with key partners, facilitating partnerships, organization trainings, preparation of TORs for consultants, organizing consultations / workshops and overseeing other aspects of project implementation. The component will also support incremental administrative and operational costs of the project at SEWA, including key activities during the project lifecycle such as project launch, annual audits and other fiduciary aspects. 2. Monitoring and Evaluation: The component will support key M&E activities including baseline survey, midline survey, endline survey, impact assessment and development of ICM report. Baseline / midline / endline / impact assessment studies will be undertaken by independent agencies onboarded through a competitive process. M&E activities will be led by an M&E specialist, who will closely Public Disclosure Copy monitor PDO and intermediate indicators and track progress towards Project Development Objective. Besides managing independent survey / impact assessment agencies, and tracking progress, the M&E specialist will oversee regular assimilation of data through SEWA's MIS systems, and complement this with participative approaches such as Participative Rural Appraisals, Focus Group Discussions and case studies. M&E data will be regularly shared with project beneficiaries, and their feedback / inputs will be recorded and incorporated in project implementation activities, to ensure ownership and sustainability. 3. Knowledge dissemination: The component will support activities to disseminate the lessons and experiences from the project with government agencies, civil society institutions, donor agencies, academic and research institutions, financial institutions and other relevant stakeholders. The component will support two knowledge dissemination workshops at the national level, as well as the publication of a book detailing project impacts, key lessons as well as case studies of beneficiaries. 1. The financial and mobile literacy programs organized under the project will include not just the program participants but the larger community. The resources created under the program such as literacy material, mobile phone applications, and technology-based delivery models will be open for the use of the community, and will be widely disseminated with other institutions through knowledge-sharing workshops. Moreover, the resource persons trained at the village level will be a valuable addition to the local rural financial eco-system. The innovative model of the community’s partnership with corporate payment providers and financial institutions will have a demonstration effect for other developmental programs. The lessons thereof and the final impact assessment are expected to provide practical lessons for financial inclusion programs, especially to reach women, tribal communities and other vulnerable sections of the society. 2. Monitoring & Evaluation process will be systematic and participative. The implementing agency will monitor the results of project interventions continuously and systematically by gathering data using appropriate MIS, prepare reports and consulting with the World Bank on a periodic basis, as and when necessary. An independent impact assessment exercise will be undertaken to evaluate project results by an external agency identified based on World Bank guidelines. Monitoring and Evaluation will include participatory approaches. M&E by SEWA and independent impact assessments will be Oct 09, 2018 Page 12 of 15 The World Bank India Digital Financial Inclusion of Informal Sector complemented by beneficiary assessments through Participatory Rural Appraisals, Focus Group Discussions, Interviews, and Case studies. M&E data will be shared with project beneficiaries and other stakeholders on a regular basis, qualitative observations of beneficiaries and other stakeholders will be recorded, and discussions on actions to be taken will be conducted. 3. Beneficiary selection will be undertaken through a participative process, and rigorously monitored through MIS systems to ensure target beneficiaries from marginalized households and excluded communities are covered by project activities. The project's capacity building / training programs and learning modules will be open to all beneficiaries - SEWA members as well as individuals from the larger community. Risks associated with targeting / selection of beneficiaries are expected to be low as SEWA is a reputed community-based organization that is known to work for poor, informal sector women regardless of caste, creed or religion. SEWA members include a significant number of women from minorities, SCs and STs (indigenous communities). The project will mitigate risks through regular community consultations as well as strong feedback mechanisms that will allow project activities to Public Disclosure Copy be community-driven and relevant to the needs and aspirations of intended beneficiaries. 4. Key project activities are expected to be sustainable after grant closure. Experience has shown that sustainability can best be achieved through integrating projects with local institutions' management and activities. Key activities such as promoting literacy / capacity building and catalyzing Fintech adoption will be integrated / aligned with ongoing activities of SEWA institutions and social enterprises. The project's decentralized approach focuses on creation of local resources (through Training of Trainer or TOT model) and public goods for sustainability of activities and results at local level. The project will focus will be on identifying sustainable technologies / products that will stay relevant beyond the project period. The project will also develop linkages with GoI's Digidhan Abhiyan. Earlier JSDF grants to SEWA demonstrated significant success in turning many of SEWA's CLBRCs into sustainable business units. The training and facilitation activities planned under the project at the CLBRC level will adopt appropriate revenue models to ensure continued sustainability of the centers. 5. The DEA request for the activity was received on April 19, 2018. The relevant Government Departments for digital financial inclusion (i.e. DFS - Department of Financial Services, Ministry of Finance and MeitY) will be consulted regularly during project implementation. Initial discussions have already been held to explore synergies, particularly in using training material and trainers trained under MeitY programs. 6. Collaboration with IFC: The team has been collaborating with the IFC team who are supporting SEWA’s transformation program (360 Strategic Business Review) and will explore the synergy between the two engagements with SEWA. The project time-period is four years given the behavioral change targeted at women members of SEWA. Literature indicates that increased financial knowledge is the first step in the causal chain towards changes in financial decisions. Oct 09, 2018 Page 13 of 15 The World Bank India Digital Financial Inclusion of Informal Sector SAFEGUARDS E. Safeguard Policies that Might Apply Safeguard Policies Triggered by the Yes No TBD Project Environmental Assessment OP/BP 4.01 X Natural Habitats OP/BP 4.04 X Forests OP/BP 4.36 X Pest Management OP 4.09 X Physical Cultural Resources OP/BP 4.11 X Indigenous Peoples OP/BP 4.10 X Public Disclosure Copy Involuntary Resettlement OP/BP 4.12 X Safety of Dams OP/BP 4.37 X Projects on International Waterways X OP/BP 7.50 Projects in Disputed Areas OP/BP 7.60 X CONTACT POINT World Bank Contact : Varsha Marathe Dayal Title : Sr Financial Sector Spec. Telephone No : 5785+79436 Email : Contact : Ciliaka Millicent Wanjiru Gitau Title : Economist Telephone No : 458-2139 Email : Borrower/Client/Recipient Borrower : Self Employed Women's Association (SEWA) Contact : Ms. Reemaben Nanavaty Title : Head Telephone No : 917925506444 Email : reemananavaty@sewa.org Implementing Agencies Implementing SELF EMPLYED WOMEN'S ASSOCIATION Agency : Contact : REEMA BEN NANAVATY Title : HEAD Oct 09, 2018 Page 14 of 15 The World Bank India Digital Financial Inclusion of Informal Sector Telephone No : 917925506444 Email : reemananavaty@sewa.org FOR MORE INFORMATION CONTACT The World Bank 1818 H Street, NW Washington, D.C. 20433 Telephone: (202) 473-1000 Web: http://www.worldbank.org/projects Public Disclosure Copy Oct 09, 2018 Page 15 of 15