BackA little while ago, I wrote about the power of Exponents in transforming a linear growth curve to an exponential one, faster. In Societal Thinking parlance, Exponents are like Lego bricks of different shapes, sizes or colours. As Lego says, “With a child’s imagination, Lego could be anything in the world – over and over again. The imagination is the limit.” — it can be an aeroplane one day and a train the other. In the same way, Exponents, when reassembled, can solve a completely new problem in a completely new context. All this at a low cost and higher speed than building a new solution from scratch.
As I looked at the journeys of many of the missions in our ecosystem, I noticed a certain kind of Exponent that accelerated their impact by helping them reach the first mile faster. This exponent is made up of people, their relationships and the trust between them. It is the Network Exponent.
In one of our conversations about the Network Effects layer of the Societal Model, Priya Naik, the founder of Samhita, shared her experience of tapping into another’s network and how that accelerated the journey of REVIVE.
REVIVE Alliance, was set up in 2021 as a USD 20 million blended finance facility and livelihood accelerator to help informal workers and micro-entrepreneurs in India recover from the COVID pandemic and thrive. Persistent lockdowns and COVID scare had severely stalled their livelihoods and depleted their savings. Traditionally, this segment had been left out of formal finance systems and so they were now forced to access riskier forms of support such as moneylenders and slide into the ‘debt trap’. REVIVE Alliance was set up to plug this gap around timely, affordable and accessible capital and ‘revive’ over 550,000 informal workers and nano/micro-entrepreneurs.
Time was of the essence and so was trust. How would REVIVE find these microentrepreneurs going through a crisis and needing access to financial products? Why would these entrepreneurs trust them? How could they ensure dignity, agency and choice in this process of vetting, granting and recovery of Returnable Grants?
In Avanti Finance, they found a network that could help them find, reach, create awareness, and do digital onboarding of the entrepreneurs who they could trust and who could trust them. Through Avanti, they connected with many micro-networks, like SEWA’s Initiative RUDI – Rural Distribution Initiative, a production company owned and managed by small-scale women farmers. RUDI ran many initiatives to help connect these women entrepreneurs with the markets. One of them was Kamala, a food joint providing nutritious dishes to its customers using millets and fresh produce. As the pandemic soared, the sales at both RUDI and Kamala fell sharply. The only way to revive the situation was by providing working capital to the entities to pivot the business operations.
REVIVE helped SEWA set up the ‘Livelihood Recovery and Resilience Fund’: a returnable grant of INR 2.5 Million to support the end-to-end production process of RUDI and Kamala. This meant supporting the recovery of 191 women entrepreneurs part of RUDI and Kamala in Ahmedabad, Kheda/Anand, Surendranagar districts of Gujarat. The grant has revolved six times in RUDI and Kamla with a 100% repayment rate. The grant aided in providing much-needed working capital aid during the COVID pandemic times when interest rates were unbearable and the shareholders of RUDI who were informal sector entrepreneurs and workers had low margins and sales. Now in the post-pandemic world, the grant will continue to revolve around the objective to expose new-to-credit or new-to-income participants/enterprises to help them strengthen their books and build a pathway to formal credit.
As Priya says, finding a network with the right synergy can give you a sudden spurt of energy. “With Avanti, we didn’t have to look for fifty partners, one Avanti gave us access to many micro-networks.” What REVIVE did with Avanti proved to be a good way to accelerate REVIVE’s journey and soon they were working with 7-8 different partners who allowed them to reach their target audience with speed.
To make the Network Exponents work for you, she believes there are 2 big factors to align on –
- One needs to be fully aligned with the partner’s objective, solve for their key interest, protect them from risk and ensure that you have their back.
- One needs to align with the customers that partners serve. The partner would have built a trusted relationship with their audience over many years. If you don’t deliver on your promise, you don’t just break the promise, you break the trust of the entire system.
What are Network Exponents at play in your world?
Read more on the idea of Societal Exponents (What are Societal Exponents | Technology Exponent | Knowledge Exponent)
