The World Bank’s Development Marketplace grants programme selects social enterprises delivering development solutions across different geographies for funding in India each year. This year’s winners will be announced later this week in Guwahati. Country director Onno Ruhl discussed the programme, and the World Bank’s engagement with the new government, with Yamini Lohia. Excerpts:
Do you expect the World Bank’s engagement with the government, now that a new dispensation is in power, to change at all?
We have a strategy that coincides with the mandate to the new government, which is to concentrate on the World Bank’s global goals — poverty and shared prosperity — which in India translates to inclusive growth. We’ve looked at the manifesto of the party in power and frankly, you don’t see a different focus in terms of the overall goal. So that’s an important starting point of awareness. Second, with a strong mandate, one can expect a government to want to do business and we’ve tried to find the financing to meet India’s aspiration. What for the World Bank might be a high level of lending, for India is probably small but still significant — this current fiscal year, our lending to India will be in the ballpark of $5.2 billion. You have a new government, and a strategy that is uncontroversial, and also the new government will be keen to show that it is delivering. We are happy to help with that. There is no controversy there and we are far past the ideological discussions between Washington and New Delhi.
The India-specific Development Marketplace (DM) is a relatively new initiative. Why fund social enterprises?
At some point we realised that innovation shouldn’t have to come from inside the World Bank, that there were tremendous possibilities to innovate by simply reaching out. In the beginning, it was more linked to our projects, activities and portfolio. But we realised that even that is an artificial constraint to innovation. India has always been an important user and beneficiary of the development marketplace because it is seen as a source of innovation on so many things. We have increasingly targeted the development marketplace to match our strategy for India and globally.
If you look at what we try to do when we work with government, which is our mandate, then it’s actually difficult. We finance large projects like railroads, etc, which are not conceptually difficult. But in many areas, particularly social sectors like healthcare and education but also livelihoods, here we are sitting in Delhi, working with governments, often in Delhi (sometimes state governments), and we’re thinking about how to get education to backward caste girls in eastern UP, and the easiest way to describe it is if you think of the problem as a disease that you need to eliminate with medication. So you buy the medication, you bring it to some kind of point of distribution, but you’re still a mile away from your beneficiary. The question, then, is how, from Delhi, the state capital and then the implementing agency, do you push that last mile? It’s where both governments and organisations like ours claim to have solutions in principle but the execution is difficult.
Beneficiaries are often mobilised through NGOs or self-mobilised in NGOs or some kind of group or just people working together. They have the opposite problem. They may want to eradicate the disease and they probably know that medication is coming to some point far away, but their problem is getting it delivered. So they come from the bottom up. In a way that symbolic store is the meeting point. Bureaucrats, and I use that word to mean both us and the government, are not so comfortable working with civil society organisations, because it means you have to give up the notion that, as a bureaucrat, I can solve all problems. That’s not something people like to admit. So we’ve crossed that step, and said, actually, if you want to look at ways to deliver a last-mile solution, the best way is to ask people who are affected how they might do it, and then see what ideas are good.
Isn’t there a danger of funds to new social enterprises being diverted to new organisation-building, because they’re startups, as opposed to problem-solving?
Yes, that danger is always there, and that’s why the budget is part of the assessment. Second, there’s the financial management part, which actually allows us to track whether resources go to the purpose intended; and third, probably most importantly, there’s the continued involvement of sector teams, which have both Indian and global knowledge. The selection process helps and most of these people are actually motivated to solve a problem. They aren’t high-overhead-type people. They are close to the problem, different from the bureaucracies of the world, which sometimes I conceptually struggle with a little bit.
Is scalability something the World Bank considers when awarding these grants?
My only interest is to award scaleable projects. Because we work with the government on large projects and the challenge in India is, how do you get to a billion people, in anything you do. And that’s a very difficult problem. It’s also important to recognise that it’s not entirely predictable what’s scaleable, and scaleable also depends on the environment. Take Sanjoy Hazarika, one of our first awardees. His boat clinic covers 35 per cent of the island population in Assam. That’s enough scale for me. You have to be realistic about how much an NGO can take on. In terms of the lives changed and the sustainability, the ability to access sustainable funding, that’s great scale. Our best example of scalability is Operation ASHA. They’ve won awards twice or three times and are now too big for the DM. They run tuberculosis camps and cover a large swathe of India, while also being active and successful in Laos and Uganda. That’s the dream result you can get from a DM.
It’s important to realise, first, that this is venture capital. Anybody who works in the private sector will tell you that nine out of 10 ventures fail. That’s the hit rate you expect. So we can’t expect a better hit rate. A much smaller number become Infosys or Microsoft but Operation ASHA is actually almost in that space. The fact that we got one, I think, is really good. From last year’s crop there are a few that could achieve the scale of Sanjoy’s outfit. The one I’m most excited about takes illiterate women who can’t leave the house and trains them to do BPO work from inside the house. There’s also WaterLife, which is cutting through the ideological debate of whether people should pay for water or not and just providing a local solution that works. The Jharkhand government is interested in their model for scale-up. So we’re getting state-level scale-up in a few cases.