Author Archives: Nelson Moses

K.C Mishra: transforming India through the use of ICT and eKutir

KC Mishra (KC) is a veteran social innovator and Ashoka fellow, who has 30 years of leadership experience in areas like rural banking, microfinance, agriculture development, education and technology services. An Ashoka Fellow, KC has many certification and accolades under his belt. He is certified in “Innovative Organizational Model of Farmers” from Graduate Institute of Co-operative Leadership (GICL), University of Missouri, is an honorary trustee to Global Knowledge Partnership Foundation (GKPF), and an Advisor to BoP (Base of Pyramid) Hub.

In 2009, KC founded eKutir (eKutir Rural Management Services Private Limited), a socially focused venture engaged in innovating new products, services, and sustainable models of development at the BoP market. While eKutir is inspired by the Hubli Sandbox model philosophy, and is part of Action For India’s (AFI) Vision 2020 project whose goal is to create 20 Hubli type sandboxes by the 2020, it is different, because all its initiatives are for-profit.

Currently operating out of Odisha. It works in three areas: agriculture (Krishi Vikas), sanitation (Svadha), and social finance (One Acre Venture). It also operates a e-commerce venture called VeggieKart. Broadly, eKutir acts as an incubator that validates ideas, tests them in the field, iterates if necessary, and after validation, packages and releases them into BoP markets.

KC decided to choose the Hubli Sandbox model, because he believes that the Sandbox as a concept is a good initiative, that brings together young talent and ideas, where their ideas can be accepted, and they receive the required guidance. Since the Hubli Sandbox has demonstrated success in scaling, he believes, that following the model was a good idea. “Orissa needs good initiatives to create social impact. Lots of youngsters, have ideas, but need a forum to experiment, and need the help of experts take it to field. When AFI wanted to popularise the Sandbox model, I said yes,” says KC. KC has been busy popularizing the eKutir idea in among individuals who have ideas to solve problems of society.

One of the key things that eKutir offers is the strong mentoring, provided by a network of partners including: AFI, BOP Hubs (Singapore), Ashoka group and Headstart.
They have already incubated two ventures. “Svadha was formed when Garima Sahai resigned her job and wanted to do something in social entrepreneurship. Ekutir had a bunch of ideas. We incubated Svadha together and it is doing exceedingly well now,” adds KC. Svadha is a subsidiary of eKutir that works in the area of water, sanitation and hygiene (WASH).

The idea to form VeggieKart came from linking farmers to consumers. They adopted a new design and co-designed innovations, these designs and ideas in terms of product portfolio, price, packaging and last mile delivery solutions were validated in the last mile lab. It is doing really well, KC wants to replicate in India across the globe: already different organizations in Africa and even US have shown interest.

Through Krishi Vikas Initiative, eKutir offers ICT enabled tools to farmers for soil nutrient analysis, seed selection and farmer portfolio management. In addition, they support local farmers by setting up franchises and local hubs, and provide training to local entrepreneurs on agricultural advice and trade information.

The role of partners is very important at eKutir. They have 32 partners including foundations, think tanks, universities and corporates. Some of them include Unilever, National Bank for Agriculture and Rural Development (NABARD), Intel, Ashoka, BoP Connect, BoP Hub, Grameen, Institute of Rural Management Anand (IRMA) and Yunus Social Business.

The impact so far has been encouraging. “With agriculture, we are working with 1000 farmers, and by linking farmers to cities, we are encouraging more than 100 micro-entrepreneurs to sell directly to consumers. In sanitation, we are engaged with 126 entrepreneurs and have built 10,000 toilets so far, that impacts close to 50,000 people: We have touched 20,000 individuals through information and communication technology (ICT) for which we won a Facebook innovation award,” says KC.

eKutir is currently welcoming social entrepreneurs and offers full infrastructure support, human resources, legal advice, mentoring, supply chain support and investment help.

Please contact +91 674 255 5550 (http://www.ekutirsb.com) for more.

This article first appeared on the Facebook page of Action for India.

So you want to be a social entrepreneur? Consider this before that big leap

Image courtesy: http://www.udaipurblog.com

You have been bitten by the social entrepreneurship bug and are itching to save the world and are ready to give up a well-paying corporate job without batting an eyelid.  This maybe a good starting point. But before you embark on that journey, be prepared for what’s ahead. For its very easy to end up doing the wrong thing with the spirit of wanting to do something good. Here’s a checklist that you might want to consider before you take that big leap.

Doing it for the right reasons:

About giving back to society and saving the world. Here’s a piece of advice. Don’t. The world doesn’t need another misinformed savior who thinks its his or her job to save the world. Altruism is good if you making a donation, running a marathon for a cause or volunteering for cause. Being a social entrepreneur requires different motivations and desires, and ideally it should be because you have identified a serious problem that needs solving, and have chanced upon the solution.

Most social entrepreneurs jump headlong into social entrepreneurship because they have an itch to scratch that has been bothering them for a long time. Their decision is not a swift one based an emotion, some new passion a quarter-life or mid-life crisis. They have usually have given it a lot of thought, understand the problem they want to solve and perhaps even have a viable solution in their mind.

Assess all risks:

Now that you have made up your mind, its time to assess the risks involved, at least the known ones, because nobody can be fully prepared for the long winding road of entrepreneurship. The risks are many: reduced finances, lack of support from family and friends, reputation at stake, start-up failure, inability to solve the problem effectively and so on.

Since social entrepreneurship won’t make you a millionaire overnight or a after a few grueling years, your finances are going to take a hit, be prepared for that. Have a contingency plan, and make sure that you have kept your loved ones in the loop, their support will play a key role between success and failure. You maybe convinced of the venture, but letting friends and family see the vision is also important, because they maybe the ones who are your first investors and biggest cheerleaders. Also, be ready for the social enterprise failing, if that happens, don’t consider this as a personal failure, its just a lesson learned. Assessing all risks will reduce nasty surprises en-route.

Make sure you have entrepreneurial chops:

Having the passion, insight and the ability to nail down the problem maybe enough. Most social entrepreneurs are usually first-time entrepreneurs and may not have completely assessed their ability to execute on their grand vision. You may have the heart for the venture, but with having the head and entrepreneurial chops, you might be going into a gunfight with a knife in your hand.

Remember that social entrepreneurship involves using commercial strategies to solve a social problem. That means having some kind of management acumen and the ability to plan and execute. If you don’t have the skills, fret not, many social business incubators in India and overseas will help you learn them. Just be aware of what you can and cannot do. That could make all the difference.

Be prepared to collaborate and build a team:

Here’s a theory. One of the biggest reasons many great non-profits did not fulfill their potential is because they were unable to do succession- planning, build second level management and inability to build a complete team. A lot of social enterprises begin with the vision of a single founder. Now this is great for a start, but to keep the engine running will require a complete team. Ideally a second or third co-founder and highly competent top level team. This leaves the founder or founders with task of focusing on strategy and revisiting the vision, if required.

Collaboration is another very important aspect that determines the success and survival instincts of a social enterprise. Leaning on others who are more competent in certain areas ensures that social enterprises don’t attempt at doing everything themselves or be absorbed in activities that involve reinventing the wheel. Collaboration is not giving up power, but tapping the strength of other individuals and institutions, helping realize the goals of the organization faster and more efficiently.

 Patience and the ability to stick around for the long-haul will make all the difference:

It is always darkest before dawn. In the world of social enterprise, the darkness before the dawn is a long period, the reason being that, unlike start-ups targeting traditional sectors the gestation period for social enterprises is longer. Most of them are strapped for resources, lack talent, are in need of funding and find it hard to balance social impact and commercial gain.

The key here is to understand that there is no overnight success with social entrepreneurs. You don’t build an app, grow an audience with a two-member team and then cut a deal with Google or Facebook for a billion dollars. Success with social enterprise takes long years, and even then it does not come with a billion dollar exit.


But for those who wait, saving the world, does not remain a pipe-dream, it is a step closer to sweet reality.

You are ready

Note: This is the second article in a social enterprise toolkit series that SocialStory is doing. It is designed to be useful for the  first-time social entrepreneur, or for anybody interested in this space. Here’s the first article.

This article is being republished with permission from SocialStory.

Wondering which legal structure to choose for your social enterprise? Read on…

Image courtesy: http://www.psdnetwork.com

Image courtesy: http://www.psdnetwork.com

One of the most important decisions to be made before launching a social enterprise is choosing a legal structure.

Why is this important? There are a number of reasons and implications as to why it is important to pay attention to legal structure. Some of them are: how the social enterprise gets funded, how the profits (if any) get distributed, governance structure, reporting responsibilities, tax liabilities, and ownership pattern.

India, unlike many other countries – like the US and the UK – does not have plenty of leeway in terms of legally structuring a social enterprise. In the US, for example, there are many options, which have been specially carved out keeping the needs of a social enterprise in mind. They are low-profit limited liability company (L3C), Benefit Corporations, Certified Benefit Corporations (B Corps) and Flexible Purpose Corporations.

India, on the other hand, has limited options in terms of legal structure. Broadly speaking, there are four types of legal structures that social enterprise can opt for. We give you a gist of each one of them, along with the pros and cons.

Non-profit or public charitable organization:

Non-profits can register as a Trust (under the Indian Trusts Act, 1882),  a Section 25 company (under of the Companies Act, 1956) or as a Society (pertaining to societies registration, of the concerned state). The biggest benefit of registering as a non-profit is the eligibility to get tax benefits under the Income Tax Act of 1961 and they can also accept foreign donations under the Foreign Contribution (Regulation) Act.

The non-profit model is best suited for start-ups that do not expect revenues from their activities or have a long gestation period before they start to accrue revenues. Examples of non-profits include Agastya Foundation, Teach for India, Digital Green and Akshaya Patra Foundation. They strive to achieve scale and replicate their work across many geographies using commercial strategies. Their way of sustaining themselves financially is through grants and donations. One of the problems with this model is that perhaps the inability to hire top-class talent or invest in latest technology and infrastructure.

Pros: Ability to focus solely on creating social impact without the pressure of financial return.

Cons: Constant need to raise funds.

The for-profit social enterprise:

In India there are many choices when it comes to setting up a for-profit social enterprise. Broadly, there are five different types of for-profits: sole proprietorship, partnership, limited liability partnership, private firm and co-operative.

This type of legal structure is perhaps best suited for social enterprises that are looking for growth and profitability. It comes as no surprise, according to a study by Intellecap , Indian social enterprises 80 per cent of those polled, structure themselves as for-profit private limited companies (PLCs). Examples of for profit social enterprises include Vaatsalya Healthcare, Ujjivan Microfinance and dLight. These social enterprises have usually cracked the market, and have a product or service that consumers have accepted, and are willing to pay money for.  Also, because of their for-profit structure, they have the ability to accepting funding from VCs and issue shares and go public.

Pros: Ability to attract funding from VCs, pay top dollar for good talent and invest in technology and infrastructure.

Cons: Sometimes focus on profits leads to mission drift that makes the original shareholders and stakeholders unhappy.

The hybrid model:

These type of social enterprises start off as a non-profit or for-profit and then launch an exact opposite twin. Some of the reasons are fairly straight-forward. As funds start to dry up for non-profits they are under pressure from their funders to focus on revenue generating activities. This leads to them launching a for-profit sister entity. Head Held High Foundation, for example is a non-profit that promotes rural entrepreneurship, under its fold are two for-profit organizations- Head Held High Services Pvt. Ltd and Magic Wand Empowerment. The Times of India wrote about the hybrid model in a November, 2013 article, highlighting companies like Fractal Foundation, Waste Wise Trust and Under The Mango Tree. When it comes to for-profit social enterprises, they launch a non-profit so that they can attract donations and grants, which can be used for activities like training, research or subsidizing a product or service.

Clearly this is a great model that ensures that social enterprises can both attract donations and grants, and still be able to have access to social venture funding.

Pros: This is the best of both worlds, allowing a social enterprise to separate the social and revenue generating activities.

Cons:
Focusing on both types of entities could be a problem and so the issue of building a common culture.

Disclaimer: Our aim is provide you with a broad understanding of legal structures, please consult with legal and tax experts before making a decision.

This article is being published with permission from SocialStory

India needs ‘business as unusual’ to solve its massive development problems

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Nobel Prize laureate, Amartya Sen, makes an interesting point in a recent New York Times article. While praising India for its economic progress, he chides it for the shortcomings in providing basic public services, and explains why India trails China. Sen believes that India catching up with China’s economic prowess, might remain a pipe-dream. He’s spot on.

After pursuing a mixed economy for most of its existence, India broke those shackles in 1991, and opened up its economy. Things improved. The country upped literacy, reduced poverty, fed more children under five, curtailed the infant mortality rate and India was tipped to become the world’s biggest economy by 2050.

Problems galore:
Even as our economic indicators went up, our social indicators have not shown the same improvement in key human development indices. According to 2010 World Bank estimates, India houses one third of the world’s poor, with more than 400 million living on less than $1.25 a day. That figure is up from 22 per cent in 1981. A shame considering, that its neighbor China, chopped its poverty rate from 43 percent in 1981 to 13 percent in 2010. Besides extreme poverty, India’s other litany of woes, include inadequate healthcare, illiteracy, malnutrition, high infant mortality rate, energy deficiencies and millions unemployed or underemployed. To address all of this, what’s needed perhaps is a business as unusual approach, which we shall get to later in this post.

India languishes at 136 out of 186 countries in the human development index (HDI) ranking. In 2012, India ranked 65th out of 79 countries, in the global hunger index (GHI), with 43.5 per cent of all children below 5 years remaining undernourished. Even as we fail our very young, the country, in the next few decades, is expecting to reap the dividends of its large young population. That is increasingly looking like a false hope. The young population is either uneducated, undereducated or lacks employable skills. The government has launched a massive scheme to skill 500 million individuals by 2022, this ambitious program might just prove to be, too little too late.

There is also a lack of jobs. The Planning Commission estimates that there will be an additional 183 million job seekers who will enter the market soon, and the manufacturing sector will need to provide 70 million of those jobs. Alarmingly, the opposite seems to be happening, after suffering jobless growth, even during the boom GDP years, there are predictions of jobless de-growth. Between 2005 and 2010 the country shockingly lost 5 million jobs in manufacturing and agriculture. Not addressing these problems could be a recipe for civil unrest.

Why hasn’t India been able to address these issues?

The government spends a lot of money to deal with these problems and the country boasts of the largest number of non-profits in the world, doing their bit to combat these issues. It also receives plenty of external assistance; the World Bank for example, approved $4.3 billion in aid in 2012.

But it isn’t enough.

Post economic liberalization in 1991, and the spectacular GDP growth of the 2000s, observers opined that the rising tide would magically lift all boats. The trickle-down economic theory that Indian policy makers preached have borne fruit that have mostly benefited the rich and the middle class with income inequality doubling in the past 20 years. The trickle-down theory states that with lower taxes and increased investment, the entire economy will grow, and benefit everybody, including those at the bottom. Not enough jobs have been created for the poor to take part in the growth story. Estimates suggest that there are 30 million unemployed currently. One reason could be that India has failed to transfer jobs from agriculture to the manufacturing sector while China has moved 150 million jobs in the last 10 years.

Besides manufacturing, agriculture, which has been shedding jobs consistently, but still accounts for 49 per cent all jobs, needs a reboot. The World Bank has a bunch of suggestions on how this can be done. They include investments to boost farm productivity, creation of improved livelihood projects, increased farm credit, better irrigation, agricultural insurance and improved market access for farmers.

Social enterprise- one of the possible solutions

India’s deep-seated and multi-faceted problems need more than the intervention of government, non-profits and international agencies. This is where social enterprises, with a dual promise of financial and social returns (sometimes includes environmental benefits) leveraging the power of market forces, could do some of the heavy-lifting in combating India’s crippling issues. Social enterprises provide innovative products and services at affordable price points, create livelihoods, and also engage the economically disadvantaged as producers and clients.

Note: Over the next few months we will be exploring life at the BoP, the enterprises serving these low-income populations, government’s role and the different approaches to solving these issues.

Photo courtesy: Nelson Vinod Moses.

This post was first published on www.chilasa.org

 

Why does the world needs more social Intrapreneurs?

ashoka-intrapreneurs
Source: Ashoka
In the last decade, a new breed of entrepreneurs began to appear, armed only with ideas and a big heart; they attacked the world’s toughest development problems. Dubbed social entrepreneurs, they cropped everywhere. Brazil, India, South Korea, US, UK and even places like Pakistan have seen the rise of social entrepreneurs. They have done a stellar job so far, combating problems related to energy, livelihoods, health and sanitation, healthcare and poverty. The governments of the world have joined in, lending a helping hand by introducing new policies, regulations and innovative financial instruments like social bonds. However, global developmental problems cannot be eliminated by just social entrepreneurs and supportive governments, they are going to need the support of large corporations because of the sheer money power that they wield.

According to Forbes, the largest 2000 corporations in the world accounted for $36 trillion in revenues and $149 trillion in assets in 2012. Other than their corporate social responsibility activities, private enterprises have largely been missing from the social entrepreneurship revolution.

Until now.

Say hello to the social intrapreneur. They have the same motivations as social entrepreneurs- to affect social and environmental change- but they do it within organizations. A 2008 report on social intrapreneurs by Echoing Green described them as “someone who works inside major corporations or organizations to develop and promote practical solutions to social or environmental challenges where progress is currently stalled by market failures.” While they may not have been called social intrapreneurs, they have been around for a long time. However, their role in the past five or six years has been formalized. Their motivation is not monetary gain, but to execute a vision, and have social and environmental impact.

The world is beginning to take notice. A new competition last year, organized by Ashoka and Accenture called League of Social Intrapreneurs Competition, was floated in 2012 to support and recognize this growing movement tried to lure these employees out of their cubicles and into the open. “More and more people inside big companies are identifying with the label, and now there are companies who want to roll out internal strategy programs to cultivate it,” says Alexa Clay, Ashoka’s director of social intrapreneurship.

Social intrapreneurs leveraging the nearly infinite corporate resources at their disposal can affect massive impact. Eventually, due to sheer size, intrapreneurs can have a more marked impact than social entrepreneurs. In an article in Devex, Robert Tomasko, who directs American University’s Social Enterprise Program, echoes this fact. “Starting a new venture or being a solo entrepreneur is great, but when you go into an existing organization and change it from inside, you can have a much bigger impact,” said Tomasko.

Indian examples:
S. Sivakumar may not have known that he was displaying social intrapreneurial instincts when he approached Yogesh Chander Deveshwar, chairman, ITC  in 2000 for an investment of Rs 50 lakh to test an idea in his agri-business unit. Deveshwar gave Sivakumar 20 times as much and sanctioned Rs 10 crore to test the idea of directly procuring farm produce from soya farmers in Madhya Pradesh, thereby eliminating middle-men and helping farmers make a better profit. Deveshwar granted him Rs 10 crore. Today e-Choupal’ services today reach out to over 4 million farmers growing a range of crops – soyabean, coffee, wheat, rice, pulses, shrimp – in over 40,000 villages through 6500 internet kiosks across 10 states. Sivakumar’s idea solves the problem of non-existent supply chains and also reduces the role of intermediaries.

Considering that India has been a hotbed for social entrepreneurs, and the fact that private enterprises in India have a bigger corporate social responsibility (CSR) role because of India’s inequality, the role of the social intrapreneur becomes all the more important. Vijay Sharma was celebrated as one of the social intrapreneurs driving change within his organization in EchoingGreen’s 2008 report on social intrapreneurs. The initiative that he headed up then (he has since moved on and is currently at GSK) is Hindustan Unillever’s Project Shakti, which spawns women entrepreneurs in villages. Shakti started in 2000, with 17 women in two states. Currently it touches the lives of 45,000 women in 15 Indian states across 100,000 villages and impacts over 3 million households every month.

Intuit’s Fasal is a superb example of how the vision of a single woman created an entire business that currently reaches out to a million farmers. Created by Deepa Fasal in 2009, Fasal is a free SMS-based service for farmers that passes on precious agriculture-related information. According the Intuit, Fasal registered users make an additional Rs 15,000 to Rs 30,000 a year.

Sydney Lai, sustainability manager at Standard Chartered recalls how an Indian employee came up with idea outsource low-skill, data-related tasks to disadvantaged communities. “We’ve been able to provide job opportunities in rural villages and to people with disabilities who might otherwise have a hard time leaving their homes to find work. It creates benefits for us as a company,” Lai said. ‘e-Ops,’ as the initiative is known has been in place for a year-and-a-half and has resulted in cost-savings and efficiency improvements for the bank.

Gathering steam:
Globally the last decade is witnessing a strong momentum in social intrapreneurship. Vodafone’s M-Pesa program, now a much celebrated case study was the idea of two employees, The project is revolutionary in its attempt to solve the problem of a lack of financial services in Africa, at present it serves millions of Kenyans with financial services via mobile phone and acts as a model for other mobile phone-based development initiatives. Gates called on corporations to “dedicate a percentage of their top innovators’ time to issues that could help people left out of the global economy. This kind of contribution is even more powerful than giving cash or offering employees time off to volunteer.”

Accenture, which supports Ashoka in its competition to recognize social intrapreneurs has long been a big supporter of individuals inspired to drive positive change from the inside. Gib Bulloch, in the early part of the 2000s cobbled up a plan to bring the company’s high-quality consulting services to non-profits and development organizations. Dubbed Accenture Development Partnerships, it has helped more than 120 international development organizations and completed 700 projects.

There are many such examples. Graham Simpson, from GSK, had an idea of developing cheap, yet commercial, diagnostics kits that could be used by often untrained health workers in rural villages. These kits are currently being developed with the help of John Hopkins University.Sacha Carina van Ginhoven, from TNT Express is using mobile phone technology to solve the problem of having no addresses for the poor. Her project is being tested in a slum in India.

Going forward it could be social intrapreneurship could be a great tool for corporations to position themselves as being more responsible, retain quality talent, impress customers and please the rest of their stakeholders.

“If you don’t have an entrepreneurial culture, you won’t be able to recruit and retain talented individuals,” said Clay. Since most of the growth is currently in emerging markets like India, Brazil and Africa promoting social intrapreneurship could be good for the bottom-line as well. What started at the periphery, due the vision and drive of a few employees, could soon become front and center of corporate business strategy globally.

Note: This blog was first published on http://india.ashoka.org/

Paul Basil: A true pioneer in the world of social entrepreneurship

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Pic courtesy: http://www.changemakers.com/

Paul Basil, founder of social enterprise incubator Villgro (previously called Rural Innovations Network or RIN), is a giant in the world of social entrepreneurship. Trained to be a mechanical engineer, Basil had his first taste of the hinterland when he went to the Indian Institute of Forest Management (IIFM), he joined the Kerala Horticulture Development Program thereafter, where he worked on several innovations. He launched a “farmers’ market”, kick-started a franchising system and introduced the sale of fruits and vegetables in supermarkets.

From his experience in rural areas Paul realized that there was plenty of innovation in rural areas but hadn’t been commercialized because of a lack support. This inspired him to found RIN, in 2001, a non-profit incubator focused on mentoring and funding rural innovations.

Basil’s career highlights include incubating 60 companies, launching the social enterprise conference Unconvention | L (UL), setting up the Centre for Social Innovation and Entrepreneurship at IIT-Madras and championing the India chapter of ANDE (Aspen Network for Development Entrepreneurs). He was made an Ashoka Fellow in 2002.

In a freewheeling interview, Basil spoke candidly about his origins, motivation, current state of the social entrepreneurship ecosystem in India, inspiring students and his future vision for Villgro.

Here are the edited excerpts.

What inspired you to start Villgro? What has kept you motivated all these years?
Very early on, I asked myself. If one is educated, makes enough money, and lets say not greedy, what should one be doing at a very high level? It was to take up causes, and make a big difference to the poor, but not by doing charity. Not because I didn’t like that, but I’m more kicked about models that are sustainable, economically. While it is about being market friendly, its not all about market forces, but also about innovation. If it were just about the market, then private enterprises would have served that purpose.

We need new solutions to century old problems of malnutrition, illiteracy and power. Villgro stresses a lot on innovation: what has been done in the past has not worked, its not just the idea or execution. Innovation is really required and Villgro is all about innovation. Younger entrepreneurs, their energy and enthusiasm are a source of constant inspiration.

Would you want to help create a billion dollar company or impact a million lives?
I am respectful of wealth creation. If Jerome Lemelson hadn’t created wealth, he wouldn’t have been able to fund these pressing problems, through his foundation. Somebody has to be rich to create a positive impact on a million people.

The question is how to create these companies. At our incubator, we incubate a lot of companies. Some will fail, and a few will become successful. This collective investing is exciting and has far more chances of survival as you de-risk your portfolio. The idea is not to stop with impacting a million lives.

When gunning for scale, how to manage investor aspirations and what’s good for the enterprise? The SKS Microfinance controversy showed us that going for scale doesn’t always end well, more recently, the founder of Rangsutra questioned the timing of Aavishkaar’s exit, which she claimed resulted in an increased valuation and thereby made it more expensive for their artisans to buy shares.

All of us are trying to crack one problem at a time, but a lot has been taken on. There are these dual or blended goals of for-profit, building scale and stakeholder interest. In the case of SKS Microfinance and Rangsutra clearly these goals were not aligned. Venture capital investing only works with certain entrepreneurs and business models. The question is whether Rangsutra was ready for venture capital and the VC model was good for them.

Compatibility between the companies and VCs may have not matured enough. But this is learning. There will be uncertainty and acrimony, before progress will be made. It will take some time, what’s needed is open communication without negative implications.

Larger networks like Global Impact Measurement Network (GIIN) GAIN and Ande (Aspen Network of Development Professionals), have the agenda to spread the message on impact metrics. The question is how fast can they reach the message.

What is the vision for Villgro?
I think there is large capital available like Aavishkaar, Grassroutes and Lok capital and it needs to be bigger because when companies become big mainstream funds wont cut it, social VCs need to invest at this point. Therefore we see impact investing has started seeing scalable business models, going forward, more funds will be required.

What’s needed is investment in the $100,000 to $200,000 (Rs 54 lakh to Rs 1.08 crore) range to prove new business models. We need to make economic sense of markets for poor. Most business models are about cost cutting or upping the quality of life, when we are working with the poor our concern is also how to improve incomes through livelihood creation, like Amul did. We need plenty of investments to enhance incomes.

If I had a pot of money, I would use 60-70 per cent to build scale and the rest of the 30-40 per cent should go into high-risk models.

We need investments in the early stage because funds are 10-12 year funds and they close in 3-4 years, so ventures need to grow so rapidly so that they are able to absorb $1 million.

Investment is important to incubate diverse business models that are innovative and different. If there is a lack of investment at this early stage in experimental ideas, there is a danger that the sector will run out of ideas even if there is more capital coming in the next few years:

What are Villgro’s future plans?
We dream of building a fleet of incubators that maybe Villgro branded that will be launched in India first, and then in other countries like Latin America and Africa.

Both in terms of quality and quantity, there are not enough incubators. We envision a network of incubators; we shall provide incubation services like capital, mentoring, and right talent.

Not exactly sure on how will it pan out; whether it will be giving them money, know-how, the challenge is the model. Currently our customers are entrepreneurs, as we enhance our scope, incubators will become our customers. We will be clear about the model by the end of next year.

The other piece is an entrepreneur-in-residence program for early stage budding entrepreneurs. The middle-class doesn’t understand villages, the needs and thereby lack customer insights. What we do is to take a bunch of younger entrepreneurs who are inspired to create change but not investment ready. This program may take sometime to launch, we are piloting something and have started seeing applicants.

How do we motivate more students to consider social entrepreneurship as a career?
In the world of student entrepreneurship, the culture is not supportive and parents are not encouraging.

Students are influenced by faculty, we should show people who have just graduated and have been successful in social enterprises. The problem is that faculty does not understand social entrepreneurship. Parents are also not convinced, as they don’t see it as a way to make money.

They need to nudge them in the direction of taking up a career in social enterprise. Changes are needed. Educational institutions need to support social entrepreneurship. There has been a start with business competitions like iDiya at ISB, the Global social venture competition (GSVC) and Eureka! at IIT Mumbai and also social entrepreneurship related courses at colleges like Loyola Institute of Business Administration (LIBA), IIT-Madras, Xavier Institute of Management- Bhubaneswar (XIM-B) and IIM-C. We have been doing our bit, the course we helped co-design at IIT- Madras in social innovation and entrepreneurship is one of the most sought after minors.

We need for these courses to spread, the faculty to understand what social entrepreneurship is about and engage in more research related activities. Currently consulting companies are doing research, this is the role of academics, whatever is being done currently is shallow, what’s needed is committed faculty focused on research. We are slowly engaging with faculty motivate them to do more research.

How is UL progressing?
There have been a few conferences; it has been helpful to all stakeholders. UL is a great brand, which is building the sector, but not everybody has the opportunity to make it and if they don’t then they have to wait for a full year. We felt that we needed smaller formats and thereby we had them at cities like Lucknow and Bhubaneswar. The focus is to create a deep platform on capacity building, creating awareness and interest among youngsters about what social entrepreneurship, and create a pipeline of new entrepreneurs.

This is a great opportunity, smaller towns are closer to the problems, we don’t need to sensitize entrepreneurs there are the problems, and they are more realistic and not very idealistic.

When we organized an UL in Bhubaneswar in association with TiE (The Indus Entrepreneurs) and National Entrepreneurship Network (NEN), 90 people turned up. We need to be patient, it takes time to become a platform, we can’t do it with brick and mortar, a tech platform would be apt. It needs to be scalable like a TED platform; UL could be the TedX of the social entrepreneurship world.

By the end of 2013-14, we hope to conduct 10 events, with 100 people attending each and discovering 20 such entrepreneurs.

Bangalore-based MSME lending company Kinara Capital raises $1 million Series A funding

kinara

Source: Kinara website

Bangalore-based micro, small, and medium enterprises (MSME) lending company Kinara Capital (Kinara), has raised about Rs 5.4 crore ($1million) in a series A round led by Sorenson Impact Foundation.

The other investors are John Ayliffe of 1to4 Foundation, Halloran Philanthropies and Kinara Capital Holdings, (a special purpose vehicle constituted in Singapore). Two of the investors, Halloran Philanthropies and John Ayliffe, were part of an earlier seed round of over Rs 2.7 crore ($500,000) that included the Unitus Impact Fund and private investors based in the US. “Majority of the capital raised will go towards funding small businesses; we also plan on building our operational resources and expanding our current team of four to 10 by the year end. This is a recognition of our model and the social impact we have created,” said Hardika Shah, Kinara’s founder-CEO. “

Kinara provides debt capital in the range of Rs1 lakh to Rs10 lakh with credit products such as short-term working capital loans and receivables discounting. Kinara plans on increasing its portfolio by 5x, from the current loan book of Rs 1.5 crore, to over Rs 5 crore by next year. “This will mean supporting the potential creation of at least 1000 new jobs and impacting 10,000 lives by funding 400-500 loans,” added Shah. Social impact metrics that Kinara tracks, and reports to its investors, include new jobs created, increase in business income and increase in entrepreneur income.

Typically, MSMEs find it difficult to procure debt from banks because sub-10 lakh loans are too little for them to lend. Micro-finance institutions shy away, because the Rs 1 lakh to 10 lakh amount, is too high an amount. Kinara’s loans are at 22 per cent to 26 per cent reducing interest per annum The company, so far, has supported 60 entrepreneurs, with zero defaults. To grow beyond Karnataka, Kinara has plans to open its first field office outside Karnataka. “Depending on the needs of the businesses and the thrust of our supply chain relationships, we might open a second field office next year, possibly in Coimbatore,” remarks Shah.

MSMEs background:
The Indian government has a specific agenda to develop MSMEs and has constituted a separate ministry to promote them. According to government website, there are over 26 million MSMEs, with 59.7 million employees. The sector accounts for about 45 per cent of the manufacturing output and around 40 per cent of the total exports.

Announcing Villgro’s annual fellowships for social entrepreneurs

fellowshipBG
Pic courtesy: Villgro website
Applications for the fifth installment of the annual Villgro Fellowships are now open. The fellowship provides professionals, with a one-year Leadership Development program, to get a taste of what it feels to work in the social entrepreneurship space. The program is a mix of classroom sessions, forums, field trips, hands-on mentoring and a close working relationship with a social entrepreneur. Its certainly a immersive, roll up your sleeves and get your hands dirty experience, that promises to give fellows a first-hand experience of what it takes to be a social entrepreneur. For the talent-starved socent industry, this is a great way to get access to world-class professional talent, in various areas like finance, marketing, HR and IT.

Since 2008 there have been Villgro 29 fellows, and a whopping 62 per cent of them have stayed back in the social enterprise (socent) sector. David Schafran, for example, was a fellow at rural BPO company Desicrew, and upon finishing his fellowship he went on to found his own social start-up

Want to know experiences of the 2012 Villgro Fellows? Follow all their experiences on the blog here

If you are convinced or just curious find more details on the Villgro fellowships here.

Other fellowships similar to Villgro’s include Acumen Global Fellows Program, Idex Accelerator Program, Dasra Fellows and Frontier Market Scouts.

Villgro background
Villgro (earlier known as Rural Innovations Network), was started by Paul Basil 11 years back, as a way to mentor and commercialize village innovations. Currently, they provide a variety of services, including mentoring, talent support, funding, marketing and access to socent networks. To date they have incubated around 64 companies and provided $40 million in seed funding. Villgro, also used to organize Unconvention, one of India’s largest socent conferences, till last year. It has partnered with Aavishkaar organized Sankalp, to form India’s largest socent summit, Sankalp Unconvention summit 2013. To support the ecosystem beyond Delhi, Bangalore and Mumbai, Villgro has launched Unconvention|L, which is targeted at uncovering socents in smaller cities and towns. The social incubator’s other initiatives include SEED, which gives unsuccessful social entrepreneurs a second shot at making it work, through a 8-month incubation that aims to sharpen the entrepreneur’s vision and raise first round of funding.

The fortune on top of the chimney.

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Source: Company website

In 2011, Vivek Nair was in his final year of college at Sastra University, conducting research on carbon nanotubes (CNTs) when the inability to purchase them for his research, because of the prohibitive cost of $50 per gram, got him thinking. Carbon emissions are plentiful, released from industrial chimneys and automobiles. What if they could be captured and converted into carbon nanostructures? While there have been some theories on the possibility of converting CO2 to CNTs, through a process called ‘re-carbonization’, nothing solid had materialized. Nair was onto something big. He may not have sniffed it out then, but CNTs is currently, a billion-dollar business opportunity.

He got cracking on a science project, with the help of a bunch of friends, and shortly after, they had a breakthrough. “We got the science right and proved that it could be done,” says Abhishek Modi, a core member of the team and currently marketing head of Damascus Fortune (DF), the company that was born out of the efforts to commercialize the research. After success at the lab, they are currently testing the research model by deploying a small prototype at a metallurgical company based in Gujarat, which has been showing a lot of promise. Nair’s technology, which is now patented, processes carbon emissions using a regenerative catalyst to make industry grade CNTs through a process called ‘carbon vapor deposition’. They have plenty of applications, ranging from building space elevators, curing cancer and bendable electronics.

Next up: build a fully functional prototype and deploy across multiple industrial locations. Help to reduce the cost and time to build the prototype has come from unusual quarters- from Tom Chi, experience lead, Google X- considered a rapid prototyping genius. Modi met Chi, onboard a ship, which is part of a program called Unreasonable at Sea. “Chi suggested that instead of building the whole prototype and then testing it, we could build a few features connected to our goal, and test only those. His inputs helped us reduce our costs by 4x,” remarks Modi, talking via Skype from the ship, enroute to South Africa. Damascus is part of 10 different companies that are part of this journey at sea that stops at 14 different destinations. Besides the opportunity to interact with mentors like Chi, the bigger incentive is to meet with local entrepreneurs and investors, who could be potential clients.

Realizing that the bigger opportunity lies in North America and the Asia-Pacific region, DF plans to go global, sometime this year or early next year. They are also planning to diversify, and go beyond CNTs, by manufacturing carbon composites. CNTs are approximately a $1 billion industry, carbon composites, on the other hand is a $24 billion opportunity. Nair, CEO of DF, is currently finishing his PhD at Nanyang Technological University. His vision for DF is clear. “I want to see DF’s technology converting carbon emissions from almost all industries and automobiles with maximum efficiency into carbon nanostructures,” says Nair.

Nair’s dream will be good for India’ environment. “To make one gram of carbon nanotubes, there is a reduction of 35-40 grams of carbon dioxide. We are thinking of dealing in carbon credits, but for that we need scale,” adds Modi.

To go global, build scale and set-up their own R&D unit for testing and purification DF will raise a Series A round of funding in the next 12 months.

Welcome to Sankalp-Unconvention 2013- the Davos of the social entrepreneurship world.

sankalp
Courtesy: Sankalp website

First they were two. Then they became one. Sankalp-Unconvention Summit 2013 (SUS2013), the union of two of India’s biggest social entrepreneurship conferences into one mega event, is two weeks away. It will be held from April 17-18, at Hotel Renaissance, Powai, Mumbai.

Sankalp and Unconvention were both started in 2009 and have blossomed into events that bring together social entrepreneurs, investors, academics, foundations and other stakeholders. Sankalp, touted as Asia’s largest social enterprise conference began in 2009. It is the brainchild of Intellecap, a Mumbai-based company that provides investment banking, business consulting and knowledge service solutions for social enterprises. Unconvention, which debuted in the same year as Sankalp, began with a similar agenda of bridging the world of entrepreneurs and investors. Villgro, one of the pioneers in the social enterprise is behind Unconvention.

The organizers of SUS2013 claim that it’s the largest social enterprise focused conference globally with over 1000 entrepreneurs, investors, donors, policy makers and other stakeholders expected over three days. Speakers this year include Bala Deshpande, senior managing director of New Enterprise Associates India (NEA), Jayant Sinha, managing director of Omidyar Network India Advisors, Watanan Petersk, director, Lien Centre for Social Innovation and chair, Ashoka Singapore Advisory Council, Afeefa Sayeed, senior advisor, US Agency for International Aid (USAID) and Jayesh Parekh, co-founder of Sony Entertainment Television.

The theme for this year is Looking Beyond Impact: Seeking Transformational Change.’ SUS2013 will dwell on the fact that while metrics for measuring impact are important, are they also, in some ways restrictive? Does the industry gun for scale and replication or does it pause to refine the strategies and tools that currently in operation? Have the lives of individuals at the bottom of the pyramid really been positively impacted? Difficult questions to be answered in just two days perhaps, but SUS2013 will open up a debate on how social entrepreneurship will play out in the next few years in India.

If you haven’t registered yet, do it here. You can catch all the updates on Facebook.