Recent updates on "The Edge"

I have posted thrice on Social Edge after my "Ekgaon" post. One was about the six-sigma rated Dabbawalas of Mumbai. The second is about ITC's inspiring e-Choupal initiative. The latest one is about the different Microinsurance models and my opinion about what might work.

These posts can be found at:

http://www.socialedge.org/blogs/sagar-gubbi

Ekgaon: Information systems for developing communities

My post on "The Edge" this week is about a technology known as "CAM Mobile Services Framework", which was designed by Mr. Tapan Parikh. Tapan aims to reduce paperwork and improve operational efficiency of organizations such as Microfinance Institutions, throug CAM. The CAM is being pilot-tested by a Delhi-based orgainzation called "Ekgaon", which was co-founded by Tapan. Here is the link to the post:
http://www.socialedge.org/blogs/sagar-gubbi/archive/2007/08/20/ekgaon

Blogging on "The Edge"

I have decided to start blogging on The Edge (http://www.socialedge.org/blogs/sagar-gubbi), which is a website run by the Skoll Foundation(www.skollfoundation.org) in the US. Of course I won't make an abrupt move from here to there. I will keep posting short summaries of my Social Edge blogs, here on Blogger.

Enjoy reading!

Mann Deshi Udyogini: A Business School for rural women

Can you imagine a Business School where most of the students are semi-literate? Well, that's exactly the profile of most of the women enrolled at Mann Deshi Udyogini (MDU), a Micro Business School for rural women.

MDU was started in December 2006 by the Mann Deshi Mahila Sahakari Bank (MDMSB), which is a co-operative society providing micro-credit to rural women entrepreneurs in Satara district of Maharashtra state in India. Chetna Gala Sinha, the founder-chairperson of MDU, is an Ashoka fellow and she started the MDMSB in 1998 in order to cater to the credit needs of rural women. According to Chetna, the idea of starting a business school came from an enthusiastic semi-literate woman, who kept pestering her for know-how about the wholesale vegetable business and other startegies to improve her own vegetable business. MDU was started in December 2006 with a Rs. 7 lakh (about $17500) grant from HSBC.

MDU does not have any pre-qualification criteria and the curriculum is entirely driven by the needs of rural women. It offers courses in goat rearing, screen printing, selling cellphone recharge couponsbag-making etc. The school also offers soft-skill development courses such as confidence building, financial literacy, spoken English and computer skills.

Chetna plans to introduce a course on hygiene management in rural areas in association with regional hospitals, in the near future. MDU has also received funding from an NRI to start a mobile micro-business school, which will be launched in Karnataka soon.

Chetna's efforts to bring about inclusive economic development in rural interior Maharashtra, through MDMSB and MDU, are amazingly inspiring. Here is the link to Chetna's interview that was published in Times of India recently:

http://timesofindia.indiatimes.com/Opinion/Editorial/QA_Most_women_in_our_B-school_are_semi-literate/rssarticleshow/2205650.cms

Here is the link to MDMSB's website: http://www.manndeshi.org/index.htm

Triple Value's Economic Impact Assessment Model

Multinational Companies are sometimes perceived as neo-imperialists, who extract profits out of the countries in which they operate and give very little in return. MNCs do use their Corporate Social Responsibility (CSR) initiatives to argue against such allegations but what can be a better argument is the extent of impact that the MNC has had on the local economy.

Triple Value Strategy Consulting, a well-known BoP Strategy Consulting firm, which is based in The Hague, The Netherlands, has devised an Economic Impact Assessment (EIA) model, which quantifies the economic impact of an MNC on the society in which it operates. This model was used to assess the economic impact that Heiniken, a Dutch brewing company, has had in the Sub-Saharan country of Sierra Leone, where the company operates through a controlling stake in the Sierra Leone Brewery Limited (SLBL). The assessment report, which begins with an interesting analogy of comparing the effects of an earthworm and an egg-plant on the soil to that of an MNC in an emerging economy, uses data points such as industrial production, incomes/taxes generated, jobs created and also takes into account the direct and indirect benefits, to arrive at the total economic impact.

The EIA, according to Triple Value, enables managements of MNCs to tune their decisions more towards enhancing the local economic impact. It also enables the local Government to understand the wider impact that the MNC has on the economy and tune policies to enhance the impact. It can also help NGOs to maximize development impact in cooperation with companies.

More information about the EIA and Triple Value can be found at:

http://www.triple-value.com/en/economic_impact_assessment

The complete presentation of the Heiniken EIA in Sierra Leone can be found at:

http://www.bidnetwork.org/download.php?id=42201.

DakNet: Providing Internet Connectivity to rural areas

DakNet is an initiative from FirstMile Solutions (FMS) which is based on an idea that won the MIT Entrepreneurship Competition in 2002. DakNet, which is a service offered by FMS's sister company, United Villages in India (which had to be created due to the various regulatory obligations in India), uses a store and forward technique through Wi-Fi, which the company describes as "Cached Wi-Fi Intelligence".

Here is how the service operates: United Villages has installed Mobile Access Points (MAPs) on existing vehicles such as buses and motorcycles which ply in rural areas. There are kiosks which have been installed in villages, which typically have a computer with a real-time wireless internet connection. United Villages sells pre-paid cards to village kiosk operators who in turn resell them to the villagers, who can use it to avail services such as sending e-mails, voicemails, SMSs, purchase railway tickets online, access matrimonial sites etc. Whenever an MAP is within the range of the wireless network, it picks up the stored data from the kiost computer and forwards it to the internet in cities.

FMS's service now covers more than 40,000 villages in five countries, including India and Cambodia. This is definitely an innovative and inspiring initiative but I believe it has to overcome some of its shortcomings such as usage of petrol/diesel-driven vehicles for MAPs, charging the villagers for services as simple as e-mail etc. The company has ambitious plans to connect all the 220,000 villages in India and it would be interesting to know about the strategies that it adopts. The company plans tie-ups with major telecom companies and ISPs in India in order to achieve profitability and I wish them All the best!

A few links which give more info about DakNet, United Villages and FMS are given here:

http://www.firstmilesolutions.com/index.php

http://www.unitedvillages.com/

E-Parisara: Managing e-waste in the IT hub

Bangalore, the city where I live and work, is an IT hub and has hundreds of technology companies operating from here. Some even call Bangalore as the "Silicon Valley of the East". While the IT boom has tremendously boosted the city's economy, it has also brought the hazards of e-waste (from discarded computers and other electronic equipment) with it. But wait, there is help available. It is from E-Parisara (Parisara is Kannada means "Environment"), a project to manage e-waste without causing ecological damage.

E-Parisara has been setup near Bangalore by Mr. P Parthasarathy, who is a post-graduate from IIT-Madras. The initiative not only manages e-waste but also attempts to convert it into raw materials that can be re-used, trying to achieve environmental and economic sustainability at the same time, which is why this post finds a place in this blog.

E-Parisara already has some of the big IT companies in Bangalore, such as IBM, Tata Elxsi, ABB and Philips, as its clients. Recently, on World Environment Day, my employer, Robert Bosch India, also joined this list (which is how I came to know about E-Parisara). Here is a link to an article about E-Parisara:

http://www.hindu.com/2006/04/03/stories/2006040321540400.htm

What is the future of low-cost airlines in India?

I know I took a sabbatical from blogging, but I am back nevertheless.

The extremely competitive but fast-growing Indian commercial aviation industry is the subject matter for this post. The so-called consolidation that is happening in the industry, through high-profile mergers, has been consistently hitting the headlines for the past few days. First, it was the now-off-now-on merger between the market-leader, Naresh Goyal's Jet Airways and Sahara Group's Air Sahara that finally came through, with Jet announcing that Air Sahara will be converted into the merged entity's low-cost, no-frills arm, known as Jet Lite, positioning it in direct competition with the pioneer in low-cost airlines in India, Air Deccan. But the bigger news was when Kingfisher Airlines, India's first luxury airline, owned by the uber-rich liquor baron Vijay Mallya, picked up a 26% stake in Air Deccan. Capt. Gopinath, an ex-armyman, the founder-chairman of Air Deccan, publicly snubbed Mr. Mallya's offer in the beginning, only to embrace it whole-heartedly within a fortnight.

Are you wondering why I am featuring this air-borne drama in a "Development through Enterprise" blog? The reason is that I have always been a fan of Air Deccan's philosophy of bringing air travel within the reach of the masses in India. The airline, which began operations in 2003, positioned itself as a common man's airline, even using R K Laxman's popular "common man" cartoon character in its marketing campaign. Air Deccan offered flight tickets at unbelievably low-prices, something that was unprecedented in the history of Indian aviation. The airline offered no service on board and expanded its customer base by connecting tier-2 and tier-3 cities. The strategy was to woo the customer base, which travels mostly by road or rail, into air. This was an extremely positive step towards achieving inclusive economic development in India since air connectivity naturally boosts economic activities in tier-2 and tier-3 cities and towns. More than anything else, Air Deccan provided the necessary spark to the ailing domestic aviation space in India, inspiring a series of low-cost start-ups such as Spicejet, Go Air and Indigo Airlines.

Unfortunately, Air Deccan failed to break even after 4 years in the market, with losses going up to Rs. 213 crore in the quarter ending in March 2007. It is perhaps this desperation that drove Capt. Gopinath to accept Mr. Mallya's offer. The ultra-rich Mr. Mallya, who is known for his luxurious lifestyle, had started Kingfisher Airlines in order to cater to the elite air traveller but was keen to use Air Deccan's reach and network. It is perhaps good for both the airlines since they can share India's scarce airport infrastructure and man power. But the deal has raised questions about Air Deccan's continued capability to offer ultra-low priced air tickets and also the future of low-cost airlines in India. Mr. Mallya, who takes over as the Vice Chairman of Air Deccan, with Capt Gopinath as its Executive Chairman, has already announced that the airline will have to increase the ticket prices to stay in business. Questions also remain about whether Air Deccan will continue growing its network by adding newer destinations.

As a follow-up to their successful acquisitons, Mr. Mallya and Jet's Mr. Naresh Goyal have launched a campaign to acquire stake in Spicejet, the other successful low-cost airline. All these recent developments have sparked a debate about the future of low-cost airlines in India.

Air Deccan was and still is a revolutionary experiment in India and I think the Indian Government should have done something to bail out the airline. Considering the economic impact that the airline has had in the country in such a short duration, the Government should have offered some help, which would have allowed the airline not to compromise on its philosophy. In any case, it would be interesting to see the future strategy of Air Deccan. I hope it won't change much!

"Takes Three to Tango" By Arun Maira

I know this is my second post about Mr. Arun Maira, but I simply can't stop admiring his knowledge of and concern for inclusive economic development in India. His article in today's (14th June 2007) Times of India, which is called "Takes Three to Tango" is excellent and provides a ready recipe for inclusive economic development in India. According to Mr Maira, inclusive development can be brought about only when the three stakeholders: the Government, the private sector and NGOs work together. Here is the link to the article:

http://timesofindia.indiatimes.com/Opinion/LEADER_ARTICLE_Takes_Three_To_Tango/articleshow/2121190.cms

I am also including a link to a brief profile of Mr. Maira here:

http://www.bcg.com/our_expertise/expertise_meet_background.jsp?id=147

Microinsurance initiatives in India

Microinsurance, which is based on the same principles as Microfinance and Development through enterprise, has become quite popular in India recently, with some of the big players in the Indian insurance space making a foray into this field.

The most inspiring one among these is the "Yeshasvini" initiative, which was pioneered by Dr. Devi Shetty, a heart surgeon, who is also the founder of "Narayana Hrudayalaya", an internationally acclaimed heart care hospital in Bangalore, India. "Yeshasvini", which was launched in 2003, insured 1.6 million in its first year, when the premium was as low as Rs. 60 per annum (about $1.5). The number insured rose to 2.2 million in its second year, but dropped to 1.45 million in the third year owing to an increased premium of Rs. 120 per annum (about $3). Nevertheless, Yehsasvini is a pioneering initiative in India and Dr. Devi Shetty's concern for the health of the rural poor is simply amazing. Dr. Shetty, who studied medicine in India and in the UK, was also Mother Teresa's personal doctor.

Yeshasvini's success is all the more special since it was not driven by any insurance company but was successful in mobilizing co-operative societies, with help from the Karnataka State Government's Department of Co-operation. The scheme has since been launched in other Indian states too. Here is the link to a case study of this scheme by ILO:

http://www.ilo.org/public/english/employment/finance/download/cstudy20.pdf

A personal profile of Dr. Shetty can be found here:

http://www.virtualbangalore.com/Ppl/PplDrDevi.php

The Microinsurance industry in India received a shot in the arm recently, when the state-owned Life Insurance Corporation of India (LIC) decided to enter this segment. LIC of India is one of the world's largest insurance companies, with more than 190 million customers. Almost everyone I know in India has a life insurance with LIC and I have literally seen people making a lucrative career out of being LIC agents. This foray into the Microinsurance sector will be benefitial not only to the poor by giving them access to quality health care but also to thousands of others by providing them employment as agents. Here is the link to a recent article about this initiative by LIC:

http://news.moneycontrol.com/mccode/news/article/news_article.php?autono=274827

Tata, one of the largest business houses in India, announced its foray into the Microinsurance sector last year, through its insurance joint venture, Tata AIG, which became the first insurance company in India to come up with a focused Microinsurance scheme. Tata has always been known for its concern for the community in which it operates and the economic development around its flagship Tata Steel factory in Jamshedpur in Eastern India is a living example. Tata Motors' efforts to come out with a Rs. 1 lakh ($2000) car is well known too. This initative by Tata AIG just re-iterates Tata's commitment to sustainable development in India. Details can be found here:

http://www.tata-aig-life.com/News/Pdfs/Rural_draft%20Press%20Release.pdf

German insurance company, Allianz AG, through its joint venture in India, Bajaj Allianz, also announced its Microinsurance foray last year, in collaboration with CARE International. The first products are expected to roll out this year. For further info, the following link can help:

http://www.allianz.com/en/allianz_group/press_center/news_dossiers/microfinance/news6.html

ABN Amro Bank's foray into Microfinance in India

ABN Amro bank made a foray into the Microfinance business in India as early as in 2003. The Netherlands-based bank was among the first mainstream multinational banks to enter Microfinance business in India. Other banks such as HSBC and Citibank followed suite. Private Indian banks such as ICICI, HDFC and more recently, the state-owned State Bank of India, have also been actively pursuing Microfinance.

ABN Amro delivers credit to rural women through Microfinance Institutions (MFIs). The bank hosted a workshop on "Electronic banking in microfinance" in April this year and plans to offer electronic banking (e-banking) services to rural customers in remote areas of India, soon. The bank has also been presenting "Microfinance Process Excellence Awards" since 2004, together with PlaNet Finance India. Details can be found at:

http://www.abnamro.co.in/ProductsnServices/MicroFinance/mf.html

It is heartening to see such intiatives from a foreign bank for sustainable development in India. Go ABN Amro!

Base of the Pyramid Learning Lab Network

Base of the pyramid Learning Laboratory Network is a global network of research laboratories which have some of the world's leading universities, NGOs, corporates and consulting firms as their members/partners.

All members/partners share a common goal which is to use business to address the needs of the poor. BoP Learning Laboratory Network is an initiative of the Centre for Sustainable Global Enterprise at the Johnson School, Cornell University, Ithaca, NY. It was founded and is currently headed by Prof. Stuart Hart, who co-authored the path-breaking 2002 article "Fortune at the Bottom of the Pyramid: Eradicating Poverty through Profits" (Prof. C K Prahalad of the Ross School of Business, University of Michigan was the other author).

BoP Learning Laboratory Network includes labs in the US (hosted by CSGE, The Johnson School ,Cornell University), Spain (hosted by the IESE Business School, Barcelona), The Netherlands/Benelux countries (hosted by Triple Value Strategy Consulting), Brazil (hosted by FGV-EAESP in Sao Paulo), Argentina, Mexico and South Africa. Currently, another lab is being setup in India, with help from the Indian School of Business, Hyderabad.

Further details can be found at: http://www.bopnetwork.org/front_page

Vikram Akula on NDTV "Walk the Talk"

I happened to see SKS Microfinance CEO, Vikram Akula's interview on NDTV's "Walk the Talk" today. It is always great to listen to people who are pioneers in their own field. Vikram might not have come up with the concept of Microfinance but he sure is among the first to implement it on a mass scale in India and make a career out it. He seems to have a deep insight into the microfinance business and his determination to make a difference in the rural hinterlands of India, is inspiring. Vikram was named among Time Magazine's 100 most influential people in the world recently and his SKS Microfinance has recently attracted a 2.5 million dollar investment from Vinod Khosla's Venture Capital fund.

SKS Microfinance has already disbursed more than $180 million as loans to the rural entrepreneurs and has more than 632,000 clients currently. It achieved 161% growth last year(whoa!) and has a 98% on-time loan repayment, which proves that the low-income market is not as risky as it was made out to be! SKS aims to have 5,000,000 clients by 2010. I just can't think of any other sector in India which is recording such high growth rates and which can dare to have such high targets for the coming years! Expect greater things from Vikram and SKS in the near future, people!

http://www.sksindia.com/background.htm

Arun Maira's article in The Economic Times

Mr. Arun Maira, Chairman, Boston Consulting Group India, has always written thought-provoking articles about economic development in India's national newspapers. His articles, be it the recent one about inclusive economic development in The Economic Times or the one about the different levels of Corporate Social Responsibility in The Economic Times in February, have been inspiring, to say the least. Here is the link to the recent one:

http://economictimes.indiatimes.com/Opinion/Editorial/Inclusion_the_way_to_market_growth/articleshow/2024405.cms

BoP Initiatives by MNCs

Base of the Pyramid is fast becoming popular among MNCs and this post aims to provide information about a few such initiatives. I am a technology professional, so don't be surprised to see most of the stuff here related to technology.

Vodafone's m-banking, balance transfer and other initiatives. Details can be found at:

http://www.vodafone.com/start/responsibility/publications_faqs.html

Intel's World Ahead Program to bridge the digital divide. Details at:

http://www.intel.com/intel/worldahead/

Microsoft's Unlimited Potential initiative:

http://www.microsoft.com/emerging/default.mspx

More will come up in my next post shortly.....

First post....

I finally decided to start a blog on one of my favourite topics: "Development through private enterprise" and "Fortune at the bottom of the pyramid". This blog will contain posts on BoP initiatives worldwide and also my own musings on the topic.