It's this line of thinking that distinguishes people like Solomon from other entrepreneurs who work in social sectors. 'Social entrepreneurs', they may be called, but they keep a clear focus on both the causes they serve, and the competition they need to fight in the marketplace. The area where Maya Organic is located itself exemplifies this philosophy—it stands rubbing shoulders with multinational IT firms and behemoth shopping malls on Bangalore's upmarket Banerghatta Road.
Maya Organic is a 'livelihood development initiative' that aims to create wealth and build capacities for artisans in the informal sector. It promotes worker-owned enterprises in three main areas—lacware toys, wooden furniture and natural fibre garments—and partners with design schools in Switzerland, France and Germany. What began as an NGO working in the domain of child labour grew into a company that now sells goods under the brand name MO. "We don't look for grants, but investments. We tell our artisans that you are not competing with the neighbouring village but with China," says Solomon. Maya Organic has both professional and social investors who are guaranteed a flat 8 per cent annual return. One of the firm's recent initiatives is Labournet, a unique database of its skilled construction workers. With details of 30,000-odd labourers, it's used to maintain the demand-supply equilibrium. They plan to scale the database up to one lakh by 2009.
The desire to integrate the entrepreneurial heart and head is the new awakening across India. An indicator is the number of applications received by the Ashoka, one of the earliest organisations to fund and nurture social entrepreneurship. Says Ashoka's Pritha Sen: "It has shot up in recent years. And the term 'social entrepreneurship' is being interpreted in multiple ways." Most people who turn out to be successful social entrepreneurs have no history of having run businesses. Their driving force is their passion and a more-than-alive conscience. Besides this, a big, pragmatic idea that would sustain the vagaries of the marketplace is mandatory.
Take, for instance, the case of P. Mukundan, who was 60 years old in 2002 and had innovated on a stove-burner. He thought it was 30 per cent more efficient, and wanted somebody to invest in his idea. He found a partner in Vineet Rai and a micro-venture capital fund called Aavishkaar—they invested Rs 8 lakh for a 49 per cent stake. The company struggled for a couple of years, but today has a million-dollar annual turnover. It is now poised at an interesting breakthrough—it may soon introduce pure plant oil stoves in the market.
Fascinatingly, Aavishkaar took shape due to Vineet's desire to fund small businesses that would have a palpable social impact. "What we realised was there were venture capital funds that invested upwards of Rs 5 crore and then there were micro-credit facilities that offered an average of, say, Rs 6,000. But, for a person who wanted to set up 10 vegetable stalls, Rs 5 crore would be too much and Rs 6,000 too less. We decided to address this gap," explains Vineet. Currently, Aavishkaar is registered with SEBI and has a committed capital of Rs 6.1 million as of August 29, '07. It is expected to reach Rs 15 million by the year-end. It has invested in 14 ventures, and hopes to add another 40-50 in the near future.
Now, on to Maharashtra. The stamina that a social entrepreneur embodies can be perceived in Chetna Gala Sinha, who promoted the Mann Deshi Mahila Sahakari Bank (MDMSB), a rural bank owned by poor women in Mhaswad in Satara district. A Gandhian, Chetna was part of Jayaprakash Narain's political movement during the Emergency. She married a farmer and their farming experiments pushed them into deep debt. That was her moment of realisation. Chetna proposed to start a wholly owned womens' bank but the RBI rejected it in 1997 as the promoters were illiterate. Later, they got a special concession. Today, the bank has 58,610 clients with a gross loan portfolio of over Rs 7 crore.
Chetna’s bank, owned by poor women, is a big success
The success of the bank led MDMSB to launch a business school, Mann Desi Udyogini, in December 2006 with
HSBC. Chetna says it isn't an MBA school. "It is a school that will help poor women gain financial, marketing and electronic literacy to start their own businesses. The course material is in Marathi and the learners get a diploma at the end of it." Lately, considering that many women can't easily leave their homes, MDMSB plans to start a mobile business school—with the Gururaj 'Desh' Deshpande Foundation in Karnataka. The mobile school will conduct two-day courses on several topics like, say, marketing yoghurt or how to increase the quality of milk.
A business school, a rural bank, an artisans' collective are straightforward ideas, but there are many who have spun a revenue model around a seeming abstraction. Sample the case of Delhi-based Ashok Bharti who is building power cooperatives in slums. His complaint is that services like power and health are designed for the rich and middle classes—people at the bottom are left out. "We are trying to get slum-dwellers to pay up for the services they use. We have been telling electricity companies that we will guarantee them returns provided they regularise the connections. But surprisingly they aren't willing to do so." Maybe the internal economics of power utilities has something to do with this.
Solomon is for quality, not customer sympathy
Ashok's Peoples' Electricity Cooperative works from Shalimar Bagh in the national capital. But he wants to target the 180 slums in the city. The electricity firms are offering franchisees to it; initially Ashok was reluctant to accept the terms because it meant keeping security deposits with the electricity firms. But now he has accepted it and plans to convert it into a cooperative model later. "We were against the franchisee system because we were only helping the companies make profits," says Ashok, who himself grew up in slums.
Similar to Ashok's initiative is that of Rahul Nainwal who runs iVolunteer, which runs volunteer centres where anybody can walk in and enrol themselves for a few hours of voluntary service. Programmes are conducted for college students during summer holidays, and for professionals like doctors, teachers and agro-management specialists who would typically take a sabbatical and go overseas. "The non-profit sector can never afford professionals...and people who want to volunteer don't know where to seek opportunities. We wanted to bridge this gap," says Rahul. PRIA founder-president Rajesh Tandon, who trains communities for better project implementation, stresses, "The voluntary sector can make an impact with limited resources only by being more organised."
Many social entrepreneurs have used ingenuity to tackle the vagaries of nature. In the Northeast, N.H. Ravindranath has developed an early warning network to predict flash floods. He has set up a committee with a core team and nearly 6,000 volunteers. He has identified 40 points on the banks of the Brahmaputra and its five tributaries in two districts where volunteers travel by boat to take regular readings of the water levels—each one of them with a mobile or walkie-talkie, a rain gauge, a water level gauge, a torch and, sometimes, a bicycle. Their inputs help the core team determine which villages may be hit by floods in the next few hours or days.
Ved Arya, an alumnus of iit Kanpur and IIM Ahmedabad, also has an unconventional pursuit like Ravindranath's. When the ex-tcs employee jumped into the social sector, Ved helped Bhils in south Rajasthan and cotton farmers in Wardha to set up irrigation systems. Later, in '97, he set up Srijan (Self-Reliant Initiatives through Joint Action) to partner with governments to implement development programmes, particularly helping communities revive traditional water bodies like tanks and canals. To ensure community participation, Ved has worked out a model where locals have to bear 30 per cent of the project costs.
At present, Srijan's work at the Samrat Ashok Sagar Dam in Vidisha district of Madhya Pradesh is being evaluated by the Institute of Rural Management. The project cost was around Rs 1.5 crore and it benefited 275 farmers while irrigating 1,000 hectares. Srijan works in nine districts across three states. Of late, it has partnered with corporates like ITC. "As a social entrepreneur," says Ved, "I am able to do something close to what I desire. And also realise the ability to do more..."
By Sugata Srinivasaraju with Lola Nayar
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