Note on Lakshya to IFMR v1.

The Rural Cash-flow Game: Lakshya

Every year, millions of Indians, living in lakhs of villages juggle with multiple options to achieve a positive cash-flow to keep their families afloat. Here is your chance to experience some of that in a simulation world of board game

Empowering Rural Women & Youth Rajgurunagar, pune

Concept & design: kalpana pant & anupama pain

1|Page

Note on Lakshya to IFMR v1.0

Background
Chaitanya decided to conduct an action research in 2008-09, to understand the complexities of the causes of the agrarian distress in the Vidarbha area of Maharashtra and find feasible and effective intervention strategies. Twenty-three partner NGOs participated in this cash-flow analysis of Vidarbha households which was supported by Sir Dorabji Tata Trust. The cash flow action research revealed some significant facts and brought out some very intriguing inter-linkages between different variables that helped in developing perceptive understanding of the issue of agrarian distress. Following are very briefly the major research findings: More than 55% of the population is in the income category of less than Rs. 3,000 per month, of which more than 32% have less than Rs. 1,500 per month in all the six districts combined. 68% households earn less than Rs. 4,500 monthly. On an average families are spending Rs. 66,000 annually whereas we see that nearly 56% of the families are earning less than Rs. 50,000. Nearly 65% of families income is less than the expenditure. Despite negative skew of income - expenditure pattern all the households are saving amounts between Rs. 22,000 to Rs. 33,000 annually. Net savings is very low though. Households depending only on agriculture are very vulnerable to debt trap; on the flip side, higher is the income from other sources, better is the cash flow position. There are hardly any other avenues for employment available to the farmers. 22.5% of population faces food insecurity mostly for two months between April and June in a year. ST population is most vulnerable with 34% having reported food shortage. Despite facing food shortage only 9% of the people migrate. The communities most vulnerable to distress spend less on health and education and more on social religious functions. The maximum loans have been accessed from cooperative banks by the participants included in the study followed by loans from nationalized banks. Money lender constitutes the third most important source of loans with 10% of the loans given by moneylender, followed by 7.5% of loans given through SHGs. Most of the loans taken from the banks (nationalised, cooperative and private) as well as credit societies are taken for agricultural purposes. However, loans taken from saving groups, money lenders and relatives/friends are utilised more for personal and health reasons.

2|Page

Note on Lakshya to IFMR v1.0 Short-term migration is the overwhelming pattern yet seasonal unemployment is rampant. Poor implementation of NEREGA has been reported. The income gained from migration is very less and migration acts only as a shift of poverty but not as increase in income. Majority of agriculturalist class in Vidarbha have lower net earnings for several reasons like high cost of inputs, un-remunerative process of produce, poor crop performance or crop failure etc as has been highlighted in various researches (TISS (March 2005), IGIDR (January 2006), Planning Commission (March 2008), M.S. Swaminathan Committee (October 2005). This makes farmers the most indebted class and the most vulnerable. The research findings categorically bring out the fact that skewed income - expenditure ratio is pushing a great majority of farmers to indebtedness which when prolonged is becoming the reason for complete hopelessness. This situation is aggravated by absence of alternative livelihoods and/or better approaches to existing livelihood practices. The research shows that income from a diversity of sources (besides agriculture) leads to better cash flow position of households. When we look at the relation between livelihood and the tendency to take loan we find that those engaged in agriculture have the largest loan requirement of nearly Rs. 39,000 as against those with petty business or families with mixed source of livelihood. However, minimalist credit approach which pays limited attention to the financial education of the farmers has in fact done much disservice to the cause of addressing agrarian problem in Vidarbha. Availability of credit is not a major issue; otherwise indebtedness would not have been one of the factors leading to suicides. What are most critical are the price and the quantum of credit necessary to be able to break the cycle of indebtedness. Against this backdrop, in 2011, the Chaitanya team decided to work across 10 locations in as many blocks of 6 of the most badly hit agrarian distress districts of Vidarbha. Through the SHG Cluster Federation framework, the cash-flow program was conceptualized which would: 1. Start with a household level periodic cash-flow data collection and analysis by a team of trained community resource persons called Jankars 2. Facilitate household level financial and livelihood micro planning 3. Aggregate the cash-flow data and household level plans at the cluster level and through a participatory approach arrive at a village level livelihood and credit plan 4. As per the cluster plan, accessing better financial and livelihood opportunities through the institution of the federations and convergence with other government and non-government initiatives This program is called Lakshya. The crux of the program is thus the understanding by the rural households of their own cash-flows. Recognizing patterns within, shortfalls and strengths of their cash-flow profiles, being able to study historical patterns and anticipate future course and finally to be able to relate to various initiatives that will help achieve a desired cash-flow. The team thus realised the need of a very comprehensive and yet simplistic participatory cash-flow toolkit to be used across the various stages of the program.

3|Page

Note on Lakshya to IFMR v1.0

Inception of the Idea At the onset, the objective was to drive the concept of cash-flow home. While financial planning was not new to the community, being the spotlight of a lot of developmental activities in the past decade; we realized how important it is to remove the apprehension there exists regarding the complexity of any process even remotely financial. Interestingly the hesitance was seen not just in the community but also within trained microfinance staff, interns and development studies students alike. We looked at existing tools being used to simplify cash-flow especially in the rural context and came across a lot of innovative practises. Naranpur Express originally developed by Institute of Rural Management, Anand; does it to a good extent, although it also covers a broader perspective of rural social dynamics. PRA tools to collectively arrive at seasonal trends in cash-flow have always generally been used across. However it was clear that to make the understanding of ones cash-flow we had to: Design it to be portable, easily replicable, highly simplified Devoid of the necessity of a skilled facilitator since that will restrict its outreach

4|Page

Note on Lakshya to IFMR v1.0

Can be used by both the community to understand their own cash-flow and others like staff, interns, development studies students or anyone interested in understanding rural cash-flow in general Can be a stand-alone entity to be used across. Also, it should fit completely in the context of the Lakshya program so that it will facilitate the understanding of the next steps of the program like analysis and micro planning Post the usage of the tool, the learning and insights about ones own existing cash-flow and analysis of it can be quickly summarized Since early years, a lot of our concepts come from playing various board games across different themes. Games like Monopoly, explain tricky concepts like buying and selling transactions, paying taxes and rents, evaluating one asset against another, in a way that they get imprinted in our minds forever. We realized that for simplifying cash-flow, something similar will be good and thus the idea of the Cash-flow Game: Lakshya germinated.

The Rural Cash-flow Game: Lakshya 1] Players: It is played by 12 players at a time. Following are the various roles assumed by the players: 1 big farmer 2 medium farmers 1 small farmer 2 landless
5|Page
Playing Coins of 8 Players

Note on Lakshya to IFMR v1.0

1 cattle-rearer 1 widow 1 trader 1 banker cum government agent 1 fortune card reader 1 score and time keeper

The big, medium and small farmers along with landless, cattle-rearer and widow actually play on the board and the others support. 2] Game Cards: To start with, every player chooses a playing coin and based on it is handed a fixed number of family members as well as assets and liabilities cards which represents their household. Each card has certain transaction rules written on its back side. The game cards can be transacted amongst the players as per rules throughout the game. Each player will have a starting value assessment done based on his initial game card holding.

6|Page

Note on Lakshya to IFMR v1.0

3] The Board: Represents 6 blocks, each representing duration of 2 months and thus the entire game is a simulation of a year. In each are written instructions for all players to comply by in order to cross it.

7|Page

Note on Lakshya to IFMR v1.0

4] The Chance: The game starts with all players on the starting line. The fortune card reader picks the card numbered corresponding to the block number and reads it for all players. Each card comprises of 2 conditions. The fortune cards are designed so as to stimulate players to think of strategies like building assets, diversifying income, insuring assets, investing on working assets etc. Each player has to abide by it and also do the required transactions with other 7 players on the board. They may also do transactions with the bank (saving, credit and insurance related) and the trader (buying and selling of game cards). The objective for each player is to take their game cards to the next level. Failing which those cards that they could not save need to be surrendered and the player proceeds to the next block without them. At any block, if the player exceeds a credit limit of Rs. 50,000, then he/she will have to quit the game right there and retire to the dock.

8|Page

Note on Lakshya to IFMR v1.0

5] The Record Sheet: Helps each player to keep track of what transactions they do and how their asset - liability holding change at the end of each block. The banker also maintains his own record sheet which has the statuses of the players saving, credit and insurance behavi ours throughout the game.

6] To Win: The player with the maximum gain in his value assessment done at the end of the line after finishing the one year traverse wins!!! Experiences So Far After a significant number of testing on the field with community and staff, the balance between simplifying without distorting the rural realities as well as capturing the concepts we wish to convey was arrived at. The game has been played repeatedly and here are some interesting facts related to it: Every individual plays the game as per their own backgrounds and experiences of life. While an urban development studies student will look at it more like a puzzle to crack, often
9|Page

Note on Lakshya to IFMR v1.0

selling assets like land and gold without reconsideration, as long as the mathematics are right; a community resource person from Vidarbha will play it as per her values of repaying loans before saving or holding on to assets as long as possible. It is a good idea to have players from different socio-economic profiles playing of the same community participating. However mixing players with urban and rural backgrounds could create confusions and should be avoided While predominantly cash-flow centric, the game also gives a peek at the social scenario of the community. How the players handle expenses like education and healthcare, their understanding of social standing and the priority order of various assets and liabilities, their interaction amongst themselves and agents and agencies outside like banks, often even superstitions get highlighted For first timers, the game could overwhelm them with the computations and they could feel a bit caught between reality and simulation. While staff and students may be habituated to the concepts of simulation gaming, it could get daunting for the rural community. Hence the background and support material for the game is to be prepared well. This could be aided by a thorough rule sheet, record sheets to easily keep track of transactions, money lender, banker who are quick at calculations etc. There is no right or wrong way to play the game. Either case, one learns a lot of lessons and that increase many folds when they observe other players strategies as well. It is a good idea to have one or more observers who can record the proceeding and summarize it later on for the team. The record sheets of each player can come handy here The focus of the game is the various strategies that emerge from amongst the players. This could sometimes be lost in the computations, handling of props or even too many onlookers. This needs to b taken care of. Also the game should be played periodically inspiring the players to think differently and evolving better livelihood and financial strategies in the process

10 | P a g e

Note on Lakshya to IFMR v1.0

Going Forward Chaitanya has played the game predominantly with its staff and community in the Vidarbha region. Hence the flavour of the situation on the ground there has not escaped us in the strategies adopted by the various participants. We now wish to expand its reach to our other federation areas in Maharashtra and then through other agencies in other parts of the country. The modular nature of the game makes its dissemination much easier. We are currently discussing prospects of making the simulation game in an online version which will help increase its reach amongst i) development practitioners ii) development students or anyone beginning to work in the sector iii) anyone interested in getting a better understanding of rural households cash-flow. Also, the game is an inherent part of the Lakshya program now. The entire toolkit for the program is woven around it complete with collection, planning, analysis and decision making components. Thus, at field it propagates alongside the program. Outside the program, it can be used as a stand-alone tool in a range of contexts a financial literacy tool, a tool to do household level livelihood and finance micro-planning, a tool for village entry as a PRA tool for understanding the community, identifying common interest groups based on strategies adopted in the game. The possibilities with the Rural Cash-flow Game: Lakshya are as numerous as we can use it to be.

11 | P a g e