Early Stage Impact Investing – Filling the Funding GapEntrepreneurship | May 9, 2012
More than 90% of rural India is living on less...
Throughout history, social entrepreneurs have addressed society’s most pressing social problems and created positive change for villages, societies, and governments alike. Some well-known social entrepreneurs in history include:
India’s social entrepreneurship program extends far beyond Bhave’s Land Gift Movement. The National Innovation Foundation, which provides institutional support for innovators, manages a database of roughly 140,000 innovations, mostly from uneducated innovators. Many of these innovations benefit people, as well as making a profit.
In fact, the innovations of our social entrepreneurs are changing the stereotypical perceptions of life in rural India. Where rural India was once viewed as a place of poverty and degradation, today it is increasingly seen as a land of opportunity, thanks to the visions of many individuals. For instance, programs established to train women as solar entrepreneurs, illuminate rural communities, and empower rickshaw pullers are all driving big change in some of our most rural communities.
An initiative to train the women of the Sunderbans as entrepreneurs in solar power is opening new doors on Mousuni, an island with 4,500 to 5,000 households and 20,000 voters. The pilot program offers women training and capacity building on several techno-commercial aspects of solar power. The project—which has thus far helped six women become solar entrepreneurs—enables them to take solar PV-based services to remote and interior villages and to repair and maintain existing products and systems. Their activities vary, and include everything from renting/charging solar lanterns daily to designing/assembling small electronic items and repairing home solar systems.
This program is about more than the women it trains—it empowers entire communities. Shopkeepers can stay open longer with solar systems that make operation about 20 percent cheaper than diesel. Doctors can offer more comprehensive service to villagers by keeping their practices open past dark. Coaching centers run at night on solar power, increasing the number of people who can obtain education and improving profits due to energy savings. Solar-operated video parlors are providing affordable entertainment.
Expect this and other programs like it to expand to other rural communities, employing women in skilled fields and offering a more affordable energy source to individuals and communities that sorely need it.
Where some people see waste, Gyanesh Pandey sees light. In Tamkuha, a dusty hamlet in rural Bihar, Pandey oversees a project that uses rice husks to power a village. In rural India, 56 percent of households lack access to electricity. In India’s poorest states—including Bihar, Orissa, and Uttar Pradesh—that number soars to 80 to 90 percent. Villagers in these areas often rely on kerosene lanterns and diesel generators to power their households, farms, and businesses—often at great expense to them and the environment.
Husk Power Systems was founded in 2007 to target villages deemed “out of reach” by the Indian government. The company takes rice husks—agricultural waste that would otherwise be left to rot—and converts them to gas that powers an off-the-shelf turbine to generate electricity. The company uses further innovation, such as running insulated wires along bamboo poles to subscribers, to keep costs low.
There are currently 60 operational HPS plants serving 250 villages. That’s more than 150,000 people who are now empowered to pursue activities beyond daylight hours, which further promotes economic development and microenterprise. It improves health by reducing indoor air pollution, education by increasing the amount of time children can spend studying, and gender equity by reducing the amount of time women spend collecting firewood. Environmental conditions are also improved by reducing emissions.
By 2014, HPS plans to deploy 2,000 plants across the rice belt, positively impacting the lives of 5 million people who would otherwise be left in the dark and creating 7,000 local jobs.
Over the last five years, Naveen Krishna has spent 10 hours a day, every day, with rickshaw pullers in six states across the country trying to help them to do better, bigger, and more effective business. In April 2010, Krishna founded SMV Wheels Pvt Ltd, an organization dedicated to that purpose. SMV Wheels provides well-designed rickshaws to pullers in groups of three to five pullers, who form “garages” in different parts of the city to repair rickshaws, update business records, and collect repayments.
Traditionally, the estimated over 10 million rickshaw pullers in India are faced with exorbitant daily rentals, as well as a mafia that controls their businesses and will not allow them to own their rickshaws. SMV offers a plan for rickshaw pullers to own their own rickshaw within a year. Participants have access to high-quality rickshaws, fair interest rates, and a logical weekly repayment plan that includes the cost of the rickshaw, accidental insurance premiums, licenses, uniforms, operating costs, and post-sales service.
SMV Wheels is careful to keep the rates reasonable. “We don’t want to push the puller more in debt and pile interest on that debt—that’s why we concentrate on other sources of revenue that can be earned from the rickshaw itself,” explained Krishna in an interview that recently appeared at thebetterindia.com. The main source of revenue is sales of advertisement space on the rickshaw. And once the puller achieves ownership, SMV Wheels shares 60 percent of that revenue with the puller.
Over the next five years, SMV Wheels hopes to benefit 100,000 rickshaw pullers in Uttar Pradesh, Bihar, Madhya Pradesh, Punjab, and Delhi.
So where do we go from here? The sky is truly the limit when the people of India use innovation to create change. Not only will innovation and entrepreneurship transform rural India, it will transform our society as a whole. Even the smallest innovation, the most minor adjustment, can lead to ground-breaking change. It’s critical that we as a society and as a government—and Mahindra, as a business—continue to enable innovation, explore change, and empower individuals and businesses that develop solutions to problems.
Which innovations have changed the way you see things in India, or your home country? What social change would you pursue if money and time were not an issue? What is holding you back?