Breaking new ground at BOP

BREAKING NEW GROUND AT THE BoP BoP World Convention & Expo Edition 1

www.bopworldconvention.org Supported by:

BREAKING NEW GROUND AT THE BoP BoP World Convention & Expo

Edition 1

This booklet will serve as the first edition of a series of post-BoP World Convention & Expo publication by BoP HUB. It is within BoP HUB’s initiative to map all the best social entrepreneurship model from around the world so that their experiences and lessons can be shared. If you’d like to nominate a social enterprise for future editions of this booklet, contact us at info@bophub.org The 2015 BoP World Convention & Expo will be a regional event with a focus on South America and it will be hosted in Mexico City, Mexico on December 1-3, 2015. For more information and to register, check out www.bopworldconvention.com.

Breaking New Ground At The BoP BoP World Convention & Expo Edition 1

BoP Hub Publication Series Date of Publication: June 2015 Disclaimer: All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise without prior permission. Please contact us at info@bop-hub.org for re-printing and references.

We are grateful to Rockefeller Foundation for supporting the production of this booklet.

Concept and Theme: BoP Hub under the leadership of Jack Sim Research, Writing, Editing and Production: Sattva (www.sattva.co.in), a social impact strategy and execution firm.

Design and Illustrations: By Two Design Photography Credit: Agastya Foundation, Gramalaya, MicroGraam, Bima Mobile, Kopernik, Dimagi, Sanishop, Getty Images, Flickr Creative Commons Licensed images (Generali)

BREAKING NEW GROUND AT THE BoP BoP World Convention & Expo

Edition 1 Supported by

Knowledge Partner:

CONTENTS

FOREWORD

03

15

27

Agastya: The

Micrograam:

Guardian-

‘Ah’, ‘Aha’, ‘Haha’

Opening the doors

Gramalaya:

Approach To A

to india’s rural

Champions of the

Creative India

micro-enterprise

toilet

41

53

63

Kopernik: Taking

Bima: Leveraging

Dimagi:

affordable,

mobile technology

Transforming public

transformative

to insure the

healthcare delivery

technologies to rural

unbanked

through mobile

communities

technology

75

87

95

Sanishop: Making

Future Generaali:

Akshayapatra:

home toilets

Rural micro-

Inside the kitchens

desirable in

insurance that

of the largest non-

cambodia

meets community

profit meal program

needs

in the world

FOREWORD The BoP HUB was established in 2011 with a vision to design business to end poverty. A Singapore-based accelerator platform, our mission is to catalyze and strengthen cross-sector collaboration and participation in social entrepreneurship. To that end, BoP HUB serves as a gateway for business ventures, technologists, and manufacturers to access BoP markets.

W

e work to bundle and weave products with their distribution, logistics, economies of scale, public policy, design, and technology in order to complete the supply chain and more effectively deliver much needed goods and services to consumers at the base of the pyramid (BoP).

BoP HUB’s strategy is to aggregate and scale up the best models across sectors and industries, negotiating collaborative interwoven approaches and cutting wastage in the supply chain. With this approach, BoP HUB seeks to optimize efficiency and extract hidden value by reducing costs and offering better solutions. BoP HUB’s value proposition is to make products and services for BoP markets ‘cheaper, faster, easier and better’, improving lives and empowering 4 billion consumers, producers, employees, and entrepreneurs at the base of the pyramid.

In August 2014, BoP HUB hosted the inaugural BoP World Convention & Expo, convening leaders and social entrepreneurs from every sector to advance business solutions to end global poverty. Themed ‘A Brave New Marketplace: Unleashing Opportunities at the Base of the Pyramid’, the event was a unique forum that encouraged key stakeholders from multiple sectors and industries to share knowledge, address challenges, and explore partnerships to foster sustainable and affordable solutions that could impact millions of lives. In conjunction, the expo was held to showcase top social enterprises that are currently operating in the base of the pyramid market.

This booklet serves as a post-event publication that highlights some of the best social entrepreneurship models from around Asia. These social enterprises provide key insights on how to unlock the potential of the BoP market through business and entrepreneurship. Their experiences can teach the social impact community to build on these best practices and scale them around the world.

BoP HUB would like to thank Rockefeller Foundation for supporting the 2014 BoP World Convention & Expo and the publication of this booklet. Rockefeller Foundation has shown true dedication in improving the well-being of humanity around the world. We’d also like to thank SATTVA for helping publish this booklet with us. And lastly, we’d like to thank all the social enterprises that are highlighted in this booklet—thank you for sitting down with us to share your experiences.

Foreword | 02

THE ‘AH’, ‘AHA’, ‘HAHA’ APPROACH TO A CREATIVE INDIA Social entrepreneur Ramji Raghavan and his team believe 2 things – one, that curiosity is the source of all learning, and two, that science education needs to come out of costly labs and reach the doorstep of the underserved. Agastya International Foundation today has reached hands-on science education to nearly 6 million disadvantaged children in 15 States in rural India through pioneering innovations like labsin-boxes, mobile vans, children teaching children, science fairs, night schools and a 170-acre sprawling dream ’school for schools’.

I

n 2012, Jyotsna and Bhargavi, 13-year-old girls from remote Settipalli village of Andhra Pradesh, boarded a plane that would take them halfway across the world. This was no ordinary trip - the two high school students who had never ventured outside their district, were special delegates at the prestigious International Intel Science Competition in Pittsburgh, USA. Their project, ‘Growing Oxygen on Highways’ which studied and identified the trees best suited for road dividers on Indian highways, had won them the Broadcomm Masters International Delegate Award. The competition provided the girls a chance to rub shoulders with student scientists from across the globe, overcome their fear of public speaking, and master English enough to explain their project to others. So, what has sparked the scientific temperament in these teenagers in a country where the public education system has become synonymous with chronically poor learning outcomes and science education is near absent?

The Challenge: India enrols millions in school, but few are learning well India’s education system churns out millions of graduates each year - this manpower advantage underpins India’s economic advances since liberalization, but masks deep-seated problems within its education system. While India’s ‘demographic dividend’ is seen as its comparative advantage across the world, it has not succeeded much in reforming its heavily regulated education system to equip its promising youngsters.

“The guarantee of education is meaningless without satisfactory learning. There are serious implications for India’s equity and growth if basic learning outcomes do not improve soon,” states ASER 2014, the 10th Annual Status of Indian Education Report, the country’s most comprehensive rural education study. ASER profiled rural schools in 577 districts across the country showing that only half of the children in Grade V in rural schools can read a Grade II text fluently while only 26% are able to solve division sums.

With the Right to Education Act, 2008, that makes free and compulsory education for children between 6 and 14 years a fundamental right, enrolment rates have increased significantly (96% of all children in India enroll in schools) in the last decade.

Yet, the public education system is one that is largely based on rote learning, strict teacher student hierarchies, and a strong focus on examinations where a child’s worth is determined by his/her marks in the exam. Creativity, critical thinking, and exploring the unknown are subdued while uniformity, discipline and control are stressed. Traditional pedagogic methods give rise to “learned helplessness” as they increase dependence on the teacher instead of using play,

The ‘Ah’, ‘Aha’, ‘Haha’ Approach to a Creative India | 03

art, music and drama - activities that children are naturally good at. Large class sizes and poor teacher student ratios also mean that children do not receive any individual attention. Most rural schools face infrastructural constraints resulting in a lack of any hands-on or experiential learning.

Teachers are the other half of the problem – they are poorly trained, unmotivated and fall shortly greatly in numbers. Data from of the Human Resource Development Ministry of India shows that India’s schools fell short of 0.59 million primary-level teachers and 0.3 million upper primary level teachers in 2014.

A single mobile lab makes repeated visits to reach over 10,000 children in a year.

Agastya: Sparking Creativity in Rural India When NRI banker Ramji Raghavan returned to India from London in 1999, he was seized with a desire to promote quality rural education in the country. Conversations with P.K. Iyengar, the former head of the Indian Atomic Energy Commission, KV Raghavan and S. Balasundaram, Principal of Rishi Valley school, made Raghavan aware of the failure of India’s education system to produce individuals with a scientific temper and a creative bent of mind; Raghavan initially had a vision to set up a separate ‘a school for creative leaders from the grassroots’, similar to the unfettered environment he studied in at an alternative school.

Agastya started off with a sprawling 172-acre creativity campus in Kuppam, Andhra Pradesh, featuring innovative hands-on, experiential science labs that could light the spark among thousands of government school children.

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The learning center at Kuppam is a massive multi-crore science facility featuring over 13 innovative laboratories providing science education, a workshop to fabricate low-cost equipment for demonstrating scientific experiments and a Creative Centre for Teaching which houses a math, computer and robotics labs among others. A 15,000 sq.ft two-storied Discovery Centre houses larger-than-life sized interactive models demonstrating a variety of scientific principles and concepts. Adjoining the Discovery Centre are illusion rooms, biology and media labs, an Art Centre, and an interactive museum explaining concepts like Newton’s laws, the seasons, eclipses, pressure or acoustics. The campus itself is lush and verdant, a biodiversity hotspot where over 300 species of flora and more than 15,000 medicinal plants thrive.

The center sees over 500 children from government schools in neighboring villages visiting and spending the entire day studying and experimenting with science. Children use lab equipment, conduct live experiments, and receive individual attention from the Centre’s trained teacherinstructors.

Agastya realized early on that their center was larger-than-life, yet it was very centralized and costly to scale. For truly transformational impact, the team knew they had to take science to the doorstep of millions of children and not expect children to come to them – with 85% of children in the country studying in public schools, that meant working with the Government. Secondly, the product had to be adaptable and easy to use by the local community while being cost-effective and efficient with infrastructure, a challenging proposition for science labs.

Thirdly, the organization had to find a way to successfully build capacity and last mile talent among the local community if their ideas had to be replicable and self-sustained.

Over the last decade, Agastya has been slowly sculpting an engine that can deliver science education to the doorstep. Their integrated learning program today starts with a ‘motorbike’ of experiments that travels every week to remotely located schools and ends with an annual Science Fair that draws thousands of children from across States in India.

Delivering hands-on science learning at the doorstep Keeping the Creativity Lab, often called the ‘school for schools’, as the central hub, Agastya proliferates its learning through mobile labs, portable labs-in-boxes and local science centers that replicate the main hub further in rural districts. In addition, night schools are set up for adults and dropouts. Here’s how the various pieces work: Mobile Science Vans: The Mobile Van is a large, well-fitted van with lab equipment and models (including a solar system model, LCD, DVD player, and UPS for power-scarce areas) that travels with a driver and two instructors to government run schools in remote areas. Agastya instructors build on children’s innate curiosity through models made from easily available, reusable material. For smaller localities, a limited number of experiments are taken by threewheeler ‘rickshaws’. A single mobile lab makes repeated visits to reach over 10,000 children in a year.

Mini-Science Centres: Housed in existing Government offices or schools and managed by Agastya instructors, mini-science centres act as local hubs for the mobile vans. Every day over 100 children from government schools in the immediate vicinity visit each center that also double up as resource centres and teacher training hubs, facilitating students’ project assignments and summer science camps.

The ‘Ah’, ‘Aha’, ‘Haha’ Approach to a Creative India | 05

Lab in a Box (LIB): In order to instill the spirit of enquiry without the fear of being wrong, the Lab in a Box (LIB) program empowers teachers to design and adopt creative, hands-on teaching methodologies with ease. Trained on the know-how to create different models, the teachers use the boxes as aids to suit their own teaching styles. About a 100 sets of 10 boxes containing experiments and books on Physics, Chemistry, Biology, and Math comprise the LIB. Each box is designed around a particular theme or concept that exists already in government school syllabus so that it can integrate well. A rotation scheme is followed for circulating the boxes among government schools ensuring that students are exposed to materials for longer periods of time compared to mobile vans.

LIB has been found to have other positive effects - greater initiative and ownership among teachers to design their own lessons and a reduced dependency on Agastya’s resources and staff as real educational transformation, originating from within the school, starts to take place.

Rural fairs: The love for learning spreads further through science workshops and fairs in the villages, each catering to more than 10000 community members. The mobile vans make regular night-time visits to village communities, introducing parents and local communities to simple everyday science topics and personal hygiene. The vans also subtly encourage them to send their children to school. In addition, there are 45 community centres in selected villages. The latter offer after-school remedial education to children.

Jignyasa, Anveshana and IRIS: Growing from learning to enabling solution creation are innovative programmes including ‘Jignyasa’, a science fair where children and teachers make their own models to address social problems they face.

The Initiative for Research and Innovation in Science (IRIS) program makes it possible for quick learners to access global opportunities for mentorship and resources through showcasing their ideas at international science fairs. Agastya routinely has rural children winning big awards in International science fairs.

Each lab-in-box is designed around a particular theme or concept that exists already in the government school syllabus.

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For truly transformational impact, the team knew they had to take science to the doorstep of millions of children and not expect children to come to them – with 85% of children in the country studying in public schools, that meant working with the Government.

Ah, Aha and Haha!

‘Ah, Aha, Haha’, the 3-fold principle, ensures effective

begin to wonder why this happened; they touch the top,

learning among children while unleashing creativity and

twirl it around and try to recreate the action they saw. This

sparking curiosity. When children see a spinning top flip

phase of exploration is called the ‘Aha’ moment. The final

over, they are wonderstruck. They experience the ‘Ah’

and most important step to learning is that children have

moment when their curiosity has been stirred. They then

fun while doing so. This, is the ‘Haha’ moment.

The Method: Treating children as tinkerers, explorers and innovators What makes one creative? Is it possible to learn how to be creative? These are just some of the questions Ramji Raghavan tackles as he seeks to improve India’s education system from within.

“We examined creativity by breaking it down into its component parts - observation, awareness, assimilation, association, and application and then began to understand if each skill can be learnt.”

Adapting to local contexts: Agastya focuses on enabling holistic development by tapping into a children’s natural intelligence, building motor skills, and allowing them to touch, feel, and work with objects they usually only read about. The aim is to build local leadership, hone their problem solving skills, raise productivity and entrepreneurial thinking.

The biggest emphasis is on the ‘local’ - goals, processes, and outcomes are connected to children’s natural, social and built environments, translating to projects children take up. From citrus peel mosquito repellents and organic detergents using locally grown fruit to low cost fire extinguishers and efficient cowdung cakes, children find solutions to problems they face everyday.

See, touch, feel: Teaching at Agastya is designed to transform learning attitudes from ‘yes’ to ‘why,’ ‘looking’ to ‘observing,’ ‘passiveness’ to ‘exploring,’ and ‘textbook-bound’ to ‘handson.’ This explains the organization’s focus on labs where students can operate, rearrange, and interact with models. Classes, called ‘Factories for Ideas’, are informal, friendly, and egalitarian spaces where diversity is encouraged. Given the freedom to go anywhere in the lab, see anything, and ask anything of the instructor, the children become confident and bloom.

Peer-to-peer learning: Peer-to-peer learning has found great favor across the world as a winning method to help children cope in an atmosphere of trust. The peer-to-peer teaching Young Instructor Leader (YIL) model is one of the cornerstones of Agastya’s scale and impact. The YIL programme selects bright students in classes 6-10 from government schools for an intensive two month long training aimed to transform them into mentors capable of guiding and mentoring other children in their class. Agastya also organized regular ‘children-teaching-children’ programs in government schools.

If learning is fun, interesting, and relevant, children are naturally immersed in it and attend-

The ‘Ah’, ‘Aha’, ‘Haha’ Approach to a Creative India | 07

ance rates improve. Such pedagogy respects and values children’s knowledge and skills, makes children a part of their own and others’ educational growth. As children feel responsible for their own learning, they develop leadership qualities, making them agents of positive social change in their communities. Agastya also influences parents through night community visits and fairs - this is a critical element of ensuring that children get empathy and support for education and the demand for Agastya type education is sustained and grows.

The Agastya Science Centre is a 172-acre campus in Andhra Pradesh, featuring hands-on, experiential science laboratories that provide exposure to thousands of government school children in India’s rural hinterland.

Key enablers for Scale Integrating with the Public Education System Agastya’s education dissemination models are based on scientific evidence that the human brain retains no more than 5% of a lecture but over 80% of what is personally experienced or taught to others. In order to prevent conflict with the formal school program, • Agastya’s program is designed in a way that complements formal school lessons.

• The syllabus, by design, addresses essential science concepts, offering a space for children to transfer their textbook learning to hands-on learning and exploration.

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Of lecture 5%

10%

50%

70%

80%

Of what we read Of what we see and hear Of what is discussed with others Of what we experience

95% Of what we teach

Lab-in-a-Box has been found to have several positive effects that bring scale - greater initiative and ownership among teachers to design their own lessons and more significantly, a reduced dependency on Agastya’s resources and staff as real educational transformation, originating from within the school, starts to take place.

Instructors drawn from the community One of the ways Agastya builds a self-sustaining model is through instructors: all of Agastya’s teachers are hired from the local communities thanks to their knowledge of local language, culture, and conditions, but also because of their personal stake in improving the welfare of the community. Mobile lab instructors come from among youth who are enthusiastic, with moderate education levels, but permeated with a sense of mission and a drive to innovate and engage with children in new and creative ways. Similarly, through the YIL programme, gifted learners are trained and ploughed back into the system as instructors. “Getting the right people, infusing them with the feeling of being part of a greater purpose gives them a meaning in life and keeps them energetic and innovative and that is very crucial for scale at Agastya”, says Raghavan.

Cross-sectoral partnerships Ramji Raghavan attributes Agastya’s success to a wide range of cross sectoral partnerships with governments, private investors, and corporations. From its genesis, Agastya had the intellectual backing of doyens of Indian science, Indian scientists, from P.K. Iyengar to Dr. APJ Abdul Kalam, people with big, out-of-the-box ideas, experienced at addressing problems at scale. The organization is also regularly mentored by faculty from various Indian universities and insti-

The ‘Ah’, ‘Aha’, ‘Haha’ Approach to a Creative India | 09

How Agastya has scaled to bring science education to the rural doorstep PRODUCTS LAUNCHED

Teacher training project

Mobile Labs engage 49000

make the classroom more

starts.

children and 6000 teachers

effective and enriching by

1999

and adults from five Indian

blending basic computer

Agastya was founded and

states - Maharashtra,

skills in Science curriculum.

first mobile lab started.

Gujarat, Himachal Pradesh, New Delhi and Rajasthan.

Digibuzz launched.

2011 Lab in a box launched.

Jignyasa, an annual Science Partnership with the 2006

Karnataka Govt. to take

District Science centres

Agastya to 6 districts in

launched

North Karnataka.

Mobile lab program starts.

First ‘Eco’ mobile lab

Night community visit

launched.

launched

Expo, launched in North Karnataka

AWARDS 2012 i-Mobile lab launched Lab on a Bike Launched

2008 2007 The Young Instructor Leader (peer learning and recognition) program

Art on Wheels program

2008

launched.

Agastya Young Instructors

Operation Vasantha for integrating dropouts

– Miss Rani Jhansi and Miss 2013

Roja – were among 24 (out

Lab on a tab launched.

of 1000) to win Special Awards at IRIS – 2008,

launched.

India’s largest National Science Competition.

2014 Wins the World Bank’s DM

2009

(Development Marketplace)

Indian Science Yatra Traveling over 6200 Kms

Launched an online course

2014 award for a mini eco-

in six weeks (November –

for teachers to design

system in Meghalaya

December, 2009) Agastya

digital projects that will

10 | BoP World Convention & Expo Edition 1

AREAS REACHED

Delhi & NCR

Uttarakhand

Rajasthan

Bihar

Gujarat

Meghalaya

Maharashtra

Chattisgarh

Kerala

Odisha

SCALE OF REACH

Andhra Pradesh

3,09,664

Karnataka Tamil Nadu

51,58,768

3,72,086 1,18,528

1,07,647 6,17,936 2007

25,658 2014

Children

2014

2007

2008

2012

2014

Community

2007

172-Acre

27

Mobile Labs

2014

Teacher

105

2007

2007

21,680

2014

Creativity Lab Campus In Andhra Pradesh

2014

45 Science Centres 250 Night

Village Schools

2014

2014

108 Lab in Boxes 4500 Young

Instructor Leaders

The ‘Ah’, ‘Aha’, ‘Haha’ Approach to a Creative India | 11

Children use lab equipment, conduct live experiments, and receive individual attention from the Centre’s 35 teacher-instructors who are trained to impart practical education.

tutes of higher learning. Environmentalist Dr. Yellappa Reddy designed and implemented a strategy to transform the campus wasteland into a medicinal park.

Once Agastya had successfully conceptualized a self-sustaining eco-system for science education, it becomes easy to gain financial support from social investors like in the case of Rakesh Jhunjhunwala who committed 50 crores in the beginning to help Agastya move from pilot to scale. Agastya has since leveraged donations and sponsorships from multinational corporations and Foundations like IBM, Agilent, Axis Bank, MSN, Infosys Foundation, the Deshpande foundation, BHEL, NTPC, Synopsis, SBI, L&T etc.

One of the important reasons for Agastya’s rapid success and reach has been its strategic partnership with the Government of Karnataka, the organiztation’s home State. A partnership with the Karnataka Government’s own education program, Sarva Shiksha Abhiyan, brought Agastya the funding it needed to meet costs of operations and infrastructure necessary for scaling up its program to the state’s 24 districts.

Innovation at Scale: Faster, Wider and Stronger At Agastya, the innovation never quite stops. In 2013, supported by the Google Impact Award, Agastya created ‘TechLaBike’ – a motorbike with an Agastya rider who can reach the most interior of schools, equipped with just a LIB and an Internet enabled laptop. As of 2014, the organisation had about 5 TechLaBikes operating across 12 states. With the help of Dell, Agastya launched the i-mobile Lab in Noida, Bangalore, and Coimbatore to help children gain computer literacy through a blend of hands-on and digital approaches to computer literacy.

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The Mobile Van is a large, well-fitted van with lab equipment and models to conduct dozens of experiments, manned by a driver and two instructors, travelling to government run schools in remote areas.

‘Digibuzz’, a bus with Internet connectivity donated by Google Inc. (India) in 2014, aims to takes online resources to rural schools to complement the hands-on learning.

Volunteers from colleges are trained to conduct community outreach activities like night classes on health, sanitation, hygiene and the importance of education. Under Operation Vijay, school dropouts are trained to become mobile lab instructors.

“We are often at our innovative best when we find ourselves in challenging situations or when faced with constraints”, says Ramji, describing how innovation at Agastya is more of a necessity than a choice. In adapting to difficulties or extricating oneself from a sticky situation, one sometimes has the best, most unique ideas, he adds, illustrating how the Young Leader Instructor program was born out of a sudden withdrawal of trained teachers from Agastya’s science fair.

In a nation where a largely didactic, rote based education system increases risk of dropout, poor attendance, low learning levels, and skill deficiency, the Agastya eco-system has stood out as an example of a successful, scalable, and replicable model of innovative science education at the grassroots.

“We are obsessed with innovation,” says Raghavan, of the lifeblood of the organization. It makes the next goalpost - impacting the lives of 50 million children and 1 million teachers by 2020 – simply a few more years of tinkering, exploring and discovering fun.

The ‘Ah’, ‘Aha’, ‘Haha’ Approach to a Creative India | 13

MICROGRAAM: OPENING THE DOORS TO INDIA’S RURAL MICRO-ENTERPRISE Rangan Varadan’s innovative online micro-lending marketplace has helped rural borrowers transform their livelihoods by connecting with lenders from across the world in an open, transparent manner.

“The guy who sells a hot dog on the street is as much an entrepreneur as anyone else.

Getting his $50 loan to start could be as difficult as finding $50 million for someone else. All people are entrepreneurs.” – Mohammed Yunus

W

ith a majority of the 1.2 billion people in India lacking any kind of access to the formal banking system, financial inclusion has been at the centre of policymaking decisions in the last two decades. The Government of India and the Reserve Bank of India have put in an enormous effort to create an inclusive architecture for financial services delivery - from reforms in formal financial institutions to fresh branches in unbanked regions, no-frills accounts, promoting the network of Business Correspondents and stronger integration with existing networks of SHGs, Kisan cards, mobile banking and MFIs. At the core of the financial inclusion movement has been the explosive growth of the Microfinance (MFI) sector that reaches over 100 million today with institutions covering every corner of the country, offering ‘tiny loans’ to economically disenfranchised populations.

Microfinance companies in India usually borrow from mainstream banks and to a lesser extent, equity investors, and provide loans as small as INR 5000 to poor borrowers, mostly groups of women. The sector is seeing buoyant growth - the latest CRISIL report says that the industry’s loan assets will reach 35,000 Cr INR by March 2015 - as it makes a strong comeback from a crisis in 2011 that have led to several reforms and regulations in the sector in order to make it more responsible and inclusive.

An area that has gone unsupported by the financial inclusion machinery in the country, including MFIs, is the missing middle - micro-enterprise loans. Rural micro-entrepreneurs, typically in agriculture, dairy or sectors like craft, are often cash-starved and unable to avail of microloans as products are not customized to their needs, carry exorbitant interest rates and have rigid repayment schedules which do not take into account the vagaries of business or the seasonality of their cash flows.

The Challenge: Rural micro-entrepreneurs and access to finance According to the Small Industries Development Bank of India (SIDBI), MSMEs in India have a vast network of 44 million units, create employment for 105 million and manufacture over 6000 products, contributing to over 40% of India’s manufacturing output. Yet only 4.7% of small entrepreneurs have any access to institutional credit; the rest of them rely on the informal sec-

Micrograam: Opening the Doors to India’s Rural Micro-Enterprise | 15

Nagamma in North Karnataka was a 40-yearold sole earning member of the family who worked hard to support her 2 daughters and a nephew.

She borrowed a starter loan of INR 50,000 from Micrograam and started the only flour mill in her village. She now manages to save around INR 6,000 every month.

tor for finance. Mainstream commercial banks refrain from expanding their portfolio of rural products to micro-enterprises as the debt repayment instalments are often lesser than the cost of pursuing the money. Even though MFIs offer the largest amount of lending in the rural sector, the challenge of group loans, inelastic repayment structures, use of outdated technology, limited input and output markets and inadequate infrastructure hinder micro-enterprises from accessing finance through traditional MFIs. Co-founder of Micrograam, Rangan Varadan, witnessed first-hand the challenges faced by rural entrepreneurs on a visit to Anantapur district in the South Indian State of Andhra Pradesh, hailed as the microfinance hub of India. He encountered a group of women farmers who wished to supplement their agricultural income by establishing a small dairy farm. Despite the viability of the venture and its proximity to the district headquarters, no financial institution was willing to come forward to support this group. Varadan dug into his own savings as a means of giving the farmers’ venture a fillip. On a visit three months later, he realized that besides an increase in monthly income, the earnings had led to an improvement in their children’s growth and health from better nutrition as well as a more respected status for the women farmers in society.

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It provided enough inspiration for Varadan to start a micro-lending platform that could nurture micro-entrepreneurship in small towns and villages across India and do this by solving the fundamental hurdles posed by traditional financial inclusion options.

“Access to low-cost credit with its multifold impact is the key to ensuring financial inclusion and improving the lives of millions of people” – Rangan Varadan Product Innovation: Micrograam - A transparent, affordable online financial marketplace for rural India Micrograam is a crowdsourcing micro-credit platform that leverages technology to empower entrepreneurs in India’s rural hinterland with access to loans. Borrowers are rural entrepreneurs who are typically looking for short term small loans to start or grow their enterprise. An investor could be anyone – individuals, corporations, funders or organizations - who would like to make a ‘social investment.’ Called ‘e-microlending’, the business model makes a significant departure from traditional microfinance where funds are generic, pooled together and lent only to women self-help groups, and are based on the MFI’s criteria.

Micrograam’s operations began in the more progressive and entrepreneurial Southern Indian States of Karnataka and Tamil Nadu which also have better access, but have since expanded to cover other states in Central, Eastern and NorthEastern India, comprising some of the country’s remotest regions, underserved, and unbanked populations. All three regions together account for 64% of all financially excluded farmer households in the country with overall indebtedness to formal sources of finance only 19.66% Statewise number of borrowers (Total: 6769)

West Bengal 3.81%

Assam 0.15%

Tamil Nadu 46.0%

Jharkhand 5.66%

Karnataka 43.97%

No. of borrowers state wise

Loan amounts

Assam

10

500,000.00

Jharkhand

383

5,745,000.00

Karnataka

2976

48,434,400.00

Maharashtra

25

1,500,000.00

Tamil Nadu

3117

39,897,600.00

West Bengal

258

5,160,000.00

Total

6769 101,237,000.00

Maharashtra 0.37%

Micrograam: Opening the Doors to India’s Rural Micro-Enterprise | 17

Sector

Sectorwise distribution of loans (Total: 6769)

Micro enterprises 1127

Other livestock 125

Agriculture and allied activities 1042

No. of loans

Amounts

1042

20,817,700.00

2982

4,363,800.00

and allied activities

472

14,160,000.00

Goat/sheep rearing

911

27,330,000.00

Micro enterprises

1127

29,865,500.00

Other livestock

125

2,500,00.00

handicrafts

110

2,200,000.00

Total

6769

101,237,000.00

Agriculture and allied activities Purchase of smokeless stoves Dairy farming

Goat/ sheep rearing 911

Education and

Dairy farming and allied activities 472

Purchase of smokeless stoves 2982

Sector wise loan amounts (in ‘000) 30,000 25,000 20,000 15,000 10,000 5,000 0 Agriculture and allied activities

Purchase of smokeless stoves

18 | BoP World Convention & Expo Edition 1

Dairy farming and allied activities

Goat/sheep rearing

Micro enterprises

Other livestock

A peer lending model that offers loans at 16.5% or lower Micrograam’s peer-to-peer model is India’s first and only auction and negotiation based marketplace for micro-credit, which with its bidding system, eliminates the need for intermediaries to fix interest rates. Instead, lenders and borrowers are accommodated on equal footing for online bargaining.

On the online portal www.micrograam.com, potential lenders have the flexibility to choose rural borrowers based on various criteria including their gender, sector, region, loan amount, and the reputation rank of the associated partner NGO that facilitates these loans for their community members. Micrograam conducts an audit and ranking of partner NGOs every six months and makes these scores available to potential investors. The reputation ranks reflect NGO strengths and borrowers’ credit worthiness and allow investors to make informed investments. Investors can choose a rate of return between zero and eight percent - all lending is done at 16.5% interest rate or lower and are repaid in full by the borrower within 12-18 months, much lower than MFIs that lend at 24-36%. (NGOs receive between 5% and 7% to cover their operational costs, and MicroGraam takes a 1.5% service fee.)

What Micrograam lends for Livelihood enhancement activities: 80%

Growing areas: Organic farming, Renewable energy, Craft

Educational Loans: 12%

and Artisan groups.

MSME sector: 8%

Since its inception, Micrograam has disbursed loans worth

Average loan size: INR 23,000

INR 10.12 crores across 6769 borrowers in six States.

Customized credit for rural borrowers MicroGraam’s borrowers are rural, underprivileged, wage workers who earn a daily income of about INR 100. Micrograam offers flexible and customized lending solutions for different borrower types. For example, those borrowing for agricultural or dairy purposes are required to repay only after the harvest; students receive a six-month grace period after gaining employment to begin repayments. In addition, MicroGraam has set up an interest rate negotiation process with complete transparency on all elements of the loan term: the amount, duration, intermediary fees, interest rate earned by the lender, and the maximum payable rate of the borrower.

Rates of interest for borrowers vary from 0% to the maximum level they are willing to pay with lenders selecting any interest they would like to get which is below the maximum payable rate of the borrower. The strategy of offering complete customization and flexibility has paid off - over the last two years, MicroGraam has maintained a 100% repayment rate, making it a safe business.

Ensuring risk coverage for lenders In order to mitigate the risk to investors and to provide them with some kind of security, Micrograam has created the Principal Guarantee Fund that covers 20% of all of Micrograam’s loans and is used to repay investors in case of default by borrowers. Known as the First Loss Guarantee Fund, 10% of the total credit provided to borrowers is retained by the NGO by starting a fixed deposit linked to MicroGraam or by raising funds from various activities. The interest accrues to the NGOs, but is left untouched unless a borrower defaults.

Micrograam: Opening the Doors to India’s Rural Micro-Enterprise | 19

“To us, the borrower as a customer is the same as the lender as a customer. Each one has the right to a fair rate” - Rangan Varadan

There is an additional 10% percent that MicroGraam raises by tapping into funds set aside by HNIs and other Foundations.

MicroVentures: Equity funding where debt falls short Equity based models provide solutions to a number of problems that loan-based programs have such as loan defaults due to decline in the business, stress of high rates of interest on clients and problems of cash flows faced by micro-entrepreneurs due to strictly structured loan repayment schedules. The role of a micro-venture capital provider is not limited to providing equity financing but can also extend to giving professional advice and mentoring to the micro-entrepreneur.

Where MicroGraam has achieved groundbreaking innovation is in providing an equity investment model for rural micro-entrepreneurs, the first of its kind in the country. The micro venture capitalist provides the full upfront cost to help start the business. The two parties agree upon how to share the profits (50-50, 60-40, etc.) and the period for which the micro venture capitalist will be involved. MicroGraam acts as the facilitator in the transaction and, through the partner NGO, helps entrepreneurs with their business model. MicroGraam has, till date, disbursed 1127 loans worth INR 2.98 crores for microenterprises.

The first MicroVenture was a dairy farm in Kolar district of Karnataka, set up and jointly managed by the members of a SHG. MicroGraam facilitated equity capital of INR 3,00,000 from six micro-venture capitalists in July 2010. The micro-venture capitalists hold 40% stake in the enterprise while 60% is held by the SHG. In two years, the micro-venture capitalists have been able to exit fully with an ROI of 11% p.a. Since then, it has grown to 30% of its loan portfolio.

MicroVentures has enabled Micrograam to go above simple livelihood enhancement to the deeper engagement of creating enterprises and ecosystems: by allowing pressing social problems to be addressed using business solutions that, by being beneficial to lender and borrower, are sustainable.

Micrograam offers customised lending solutions that take into account the nature of borrowers’ occupations and quantum and frequency of income.

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Over and above economic returns, the bigger impact of Micrograam’s work has been a significant improvement in life quality among rural populations.

Key Enablers for Scale At the heart of MicroGraam’s rural operations is its unique and scalable nodal NGO model enabling MicroGraam to reach millions of remote borrowers by leveraging the strength and network of community based organizations that know and understand them well. On the other hand, Micrograam has also built a robust funnel through a diverse base of social lenders – right from socially conscious individuals across the globe to corporations, HNIs and equity funds.

Building the last mile: Rural community based organizations MicroGraam forges partnerships with small and medium sized local grassroots level communitybased organizations and NGOs who reach out to extremely rural and financially excluded populations. Micrograam partners share the organization’s outlook of a strong, holistic development strategy with a focus on capacity building in areas like livelihood, financial inclusion, microcredit education, health and sanitation.

The partners helps Micrograam reach the last mile effectively by leveraging the strong community trustworthiness that they have built, offer the loan product as well as manage and audit repayment. Partners go beyond being local fund managers – they also maintain regular contact with borrowers through follow-up meetings to ensure appropriate loan usage and strengthen new micro-ventures to facilitate their profitability.

The relationship Micrograam shares with NGOs is a symbiotic one – NGOs are trained to execute Micrograam’s model on the ground. This in turn helps NGOs scale, expand their networks and their breadth of operations to reach a higher borrower base and offer loans, which also helps

Micrograam: Opening the Doors to India’s Rural Micro-Enterprise | 21

boost their reputation in the community. Working with NGO partners enables Micrograam to lower its expenses, which it is able to pass on to borrowers in the form of lower interest rates.

Lending operations begin only six months after an SHG is formed, giving members adequate time to develop bonds with each other while allowing the NGO time to study members’ financial needs, saving behavior and repayment capacity. “Once the loan is disbursed, we offer members every possible support to improve their ventures, including visits to expose them to innovations in the field, capacity building in SHG management, and entrepreneurial training through the Rural Self Employment Training Institutes ”, explains Channappa Naik, Loan Officer at Manuvikasa, one of Micrograam’s partners.

“At the heart of MicroGraam’s rural operations is its unique and scalable nodal-NGO model enabling MicroGraam to reach millions of borrowers by leveraging the network and trust of organizations that know them well.” says Varadan.

Newer models of funding: Wealth Advisory Firms As Micrograam scales and broadens its reach, access to newer channels of funding become essential as does the need to make socially conscious impact investing a mainstream activity.

Micrograam has tied up with two big wealth advisory firms that serve as channels of distribution by positioning micro-loans as a separate asset class to HNIs. So when investors go to their wealth advisors and express interest in social investments, they can choose to invest a portion of their portfolio in MicroGraam, which provides a principal guarantee and a reasonable return.

“This year alone, we are looking to raise about 5 crores from the HNI channel and hope to expand our portfolio and scale”, says Varadan. “We are also working with a major Indian bank on a product that will allow it to leverage our model and work with our borrowers to extend microloans to them rather than redesigning one itself.”

Going global with e-microlending: The Kiva partnership With Kiva’s global crowd funding platform, people all over the world can now invest in lowincome borrowers in India through MicroGraam’s NGO network. “We want to tap into capital from abroad. Also, as Indian markets mature, we would also like to get funds for borrowers from outside,” says Varadan. Kiva stands to gain through MicroGraam which allows it access to a large micro-credit market it would not have been otherwise able to, owing to India’s strict regulations around foreign financing. With a model similar to its own, partnering with Micrograam allows Kiva to expand its borrower base at low interest rates in India through its field partners.

Both entities have raised $250,000 from a pilot that started in March 2014. MicroGraam now expects over 15,000 borrowers in India to be crowd-funded by Kiva lenders over the course of this year, a fifteen-fold increase in Kiva’s reach in India from last year. Kiva has agreed to raise up to $2 million (INR 12 crore) as the first tranche over the next two years under this partnership.

The Way Forward Jayalakshmi Shet is a mother of four. Once her husband suffered a loss in his arecanut business, Jayalakshmi, with a monthly income of INR 1500, found herself the sole earning family member, burdened with the responsibility of running the household and supporting her children’s education. Jayalakshmi accessed a Micrograam loan of INR 45000 which she used to establish a store selling vegetables. Her monthly earnings have now gone up to INR 4000. Her family’s health

22 | BoP World Convention & Expo Edition 1

and nutrition have improved significantly as has her children’s schooling. Stories of increase in incomes, starting of new enterprises, support of micro-entrepreneurial activity and timely lending abound in Micrograam. “With a loan size of Rs. 25000-Rs.30000 and all other support, if we are able to raise a household’s income by at least 50%-70% of its current base income, then we consider ourselves successful,” says Varadan.

The bigger impact of Micrograam’s work has been an improvement in life quality among rural populations. Women’s lives have become less hazardous as they have moved from using woodfire stoves to gas stoves and smokeless chulhas. Many of them have initiated toilet construction in their homes and no longer have to travel long distances to relieve themselves due to new sanita-

Rural empowerment necessitates last-mile delivery of financial services through innovative strategies and business models that are able to depart from standardized credit-scoring models built on pure economies of scale, and instead offer customized, flexible and relevant financial options for the poor.

tion loans that Micrograam has started offering. Awareness of their basic rights too has gone up.

In order to achieve long term, substantive and inclusive development in rural India, the meaning of ‘credit’ must extend beyond traditional loans and savings, says Varadan. In the next three years, Micrograam plans to reach out to a population of about half a lakh borrowers. Despite Micrograam’s focus on making social investing a viable option to investors, it continues to grapple with being viewed as a ‘charity’ option. The organization has had some success leveraging technology and using social media and online marketing campaigns to strengthen its network and hopes to continue to reach out to more socially conscious individuals.

In the organization’s future are plans to expand the portfolio beyond education and livelihood to include micro-loans for affordable renewable energy, organic farming, health and sanitation.

There is also an effort to expand the geographical scope into largely neglected states of North East India, Chattisgarh and Orissa.

A research paper on ‘Lessons from the Andhra Pradesh microfinance experience’ emphasizes that rural empowerment necessitates last-mile delivery of financial services through innovative strategies and business models that are able to depart from standardized credit-scoring models built on pure economies of scale, and instead offer customized, flexible and relevant financial options for the poor.

Micrograam has done that and more by building an open, fair and flexible financial platform for rural populations which goes from traditional micro-credit models to equity based profit-sharing ventures. A more significant achievement has been an active building of a strong foundation for an ecosystem that can ably support these entrepreneurs to scale – from last mile community organizations that are building capacity to scale, to winning trust among the social investor community - right from individual socially conscious people to institutional investors and HNIs - to invest in India’s emerging rural entrepreneurs.

Micrograam: Opening the Doors to India’s Rural Micro-Enterprise | 23

How Micrograam Enables Affordable, Equitable Credit for The Rural Poor SYMBIOTIC AND SCALABLE PARTNERSHIPS

Partners

Micrograam

Capacity building for

Benefits from scalable

partners.

lending operations.

Help NGOs scale their

Lower operational costs,

networks and broaden

which means lower interest

their operations.

rates to borrowers.

EQUITY FOR MICROVENTURES

In Microventures, an

Equity investment also

investor and a micro-

brings valuable mentorship

entrepreneur can enter

and guidance to grow

into a revenue-sharing

ventures.

arrangement and create a micro to small enterprise (MSE). This is for microentrepreneurs who require larger loans for enterprise growth.

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Micrograam lends to rural borrowers across India who often earn an income of less than INR 100 a day.

AFFORDABLE LOANS AT 16.5% OR LESSER

MicroGraam is India’s first peer-to-peer auction-

Social Investor

Peer-to-peer lending platform

The Rural Borrower

based online micro-

www.micrograam.com

lending platform that eliminates the presence of middle-men. Rural

Criteria for lending: Gender,

borrowers hence get loans

Sector, Region

at 16.5% or lesser.

Reputation of NGO Choose an Interest Rate (between 0 & 8%) Choose loan period

DIVERSE ECOSYSTEM OF LENDERS WHOSE RISKS ARE MANAGED

Investors in MicroGraam comprise a broad spectrum - including socially

High Networth

Socially conscious

Partnership with

Individuals and Wealth

individuals in India

Kiva for global funds

Advisory firms

conscious individuals, HNIs, and corporations.

The Principal Guarantee Fund covers 20% of all MicroGraam’s loans and mitigates investor risk.

FLEXIBLE AND CUSTOMIZED LOANS THROUGH A TRANSPARENT PROCESS

Repayment schedule is

An investor

Micrograam works

Partners take care

Borrowers get

customized to different

gets 0-8% of his

through strong

of loan disbursal,

customized

borrower types – varying

investment back.

partner NGOs to

monitoring and

repayment

disburse loans to

timely repayments.

schedules and

rural borrowers.

They receive

flexible interest

Charges 1.5%

between 5-7% to

rates.

service fee per

cover operating

loan.

costs.

based on their occupations, and quantum and frequency of income.

0-8%

1.5%

5-7%

Micrograam: Opening the Doors to India’s Rural Micro-Enterprise | 25

GUARDIANGRAMALAYA: CHAMPIONS OF THE TOILET How GUARDIAN, the only Microfinance Institution in India and the world with an exclusive focus on water and sanitation loans for the poor, works in partnership with non-profit Gramalaya, to tackle the overwhelming problem of better sanitation through a three-pronged approach: emphasis on behavior, access to affordable technology and credit for toilets.

T

he office of GUARDIAN, located in a quiet neighborhood at Tirichurapalli in Southern Tamil Nadu, brims with activity on a Saturday – loan officers returning from the field with their daily reports, technologists working on computers to update the database, relationship managers addressing borrower concerns, loan officers poring over designs; all in all, a regular unremarkable day at any Microfinance Institution (MFI).

But GUARDIAN is not any Microfinance institution: it is the only MFI in the country and in the world that is solely dedicated to promoting affordable Water and Sanitation (Watsan).

Microfinance Institutions in India today reach over a 100 million people with financial credit and have created the first level of social innovation by establishing delivery channels for rural livelihoods. Yet, a lacuna that MFIs have only slowly started realizing is the need to address essential services: one of the important precursors to enhancing livelihoods and life quality is providing secure, equitable and sustainable access to essential services like water, sanitation, health and education that can enable poor populations to focus on income generation.

The Challenge: Why 600 million Indians still defecate in the open ‘More Indians have mobile phones than access to toilets’ is an oft-quoted and worrying statistic. India has a severe sanitation crisis: 600 million Indians practise open defecation and 67% of rural households have no toilets – which has serious implications on child malnutrition, health, economic losses due to setback in livelihoods and even violence against women.1 Clean sanitation and hygiene have always been national priorities - the current Indian Government is tackling the issue on a war footing through the Swacch Bharath Abhiyan (Clean India Mission) by Prime Minister Narendra Modi, an ambitious, all encompassing program that seeks to make India open defecation free by 2019 by constructing over 110 million rural toilets at a earmarked cost of INR 4260 crore. 2

1 Why India’s sanitation crisis needs more than just toilets: http://www.bbc.com/news/ world-asia-india-29502603 2 PM launches Swacch Bharath Abhiyan: http://pmindia.gov.in/en/news_updates/pmlaunches-swachh-bharat-abhiyaan/

Guardian-Gramalaya: Champions of the Toilet | 27

One of the important precursors to enhancing rural livelihoods and life quality is providing secure, equitable and sustainable access to essential services like water, sanitation, health and education.

84% of households surveyed in a particular rural State wanted a toilet for the purpose of convenience, privacy and safety, and 38% of these households had actually gone ahead and researched on options available in the market. Price considerations (most designs come for minimum INR 20,000 which is beyond the reach of rural consumers), lack of quality toilet options and the cost of obtaining a Government-subsidized toilet made it infeasible for this desire to convert to stated demand on the ground.

Yet it has been substantially proven that toilet construction alone does not result in better sanitation. The Government, through its Nirmal Bharat Abhiyan (NBA) scheme, has disbursed over INR 200 Bn since its inception in 1999 through subsidies for toilets in rural areas. However, less than 60% of these funds have been utilized, and a significant number of the toilets are either unused or non-existent.

Contrary to popular belief, people do want toilets in rural India—a 2014 Monitor-Deloitte report on rural sanitation highlights the huge untapped need for improved sanitation: 84% of households surveyed in a particular rural State wanted a toilet for the purpose of convenience, privacy and safety, and 38% of these households had actually gone ahead and researched on options available in the market. Price considerations (most designs come for minimum INR 20,000 which is beyond the reach of rural consumers), lack of quality toilet options and the cost of obtaining a Government-subsidized toilet made it infeasible for this desire to convert to stated demand on the ground.

Secondly, altering people’s existing sanitation behavior that is closely linked to social and cultural norms has a huge role to play in sustaining hygiene and sanitation.

The challenge therefore is both in demand creation and converting that demand to toilet purchase: from the Monitor-Deloitte research survey among poor households in a State in

28 | BoP World Convention & Expo Edition 1

West India, only 6%-8% of households are able to afford constructing a toilet at an investment of INR 7,000-10,000 without external help, 10% -12% of households can afford a toilet with external finance, and a further 40%-45% can afford a toilet with part subsidy. While it is clear that access to finance can help people go beyond the ‘need’ stage to actual toilet purchase and use, it is interesting that it could be a big motivator in making decisions among households that can afford toilets without a loan, but where sanitation features lower in the hierarchy of needs as compared to education, information and healthcare.

The Gramalaya-GUARDIAN alliance for better sanitation Water supply and sanitation infrastructure in India is financed largely by the public sector, and current investment levels are insufficient to achieve universal access. Water credits, by meeting basic needs, help families generate additional income by spending time for productive purposes that was previously spent fetching water or waiting at public toilets. Sanitation presents not only a business opportunity for MFIs—potentially INR 30,000-45,000 crore—but also helps them have significant social impact by delivering essential services.

The alliance between Gramalaya, a 20-year old sanitation and health-focused non-profit, and GUARDIAN MFI, a Gramalaya spin-off, is one that amalgamates the strong trusted local presence and community building of a non-profit with a market-led, highly scalable MFI social business arm. Built on strong learnings gathered from Gramalaya’s work on the ground over a period of almost 2 decades, the partnership follows a 3-pronged approach to total sanitation in the community – access to information that can educate people about the importance of health and change their sanitation behavior in a strongly entrenched culture where it is given lower priority, access to technology that can help build and maintain toilets that are socially, culturally and environmentally appropriate, and access to consumer finance that can push from demand to conversion.

Consumer finance could be a big motivator in making decisions among households that can afford toilets without a loan, but where sanitation features lower in the hierarchy of needs as compared to education, information or healthcare.

Guardian-Gramalaya: Champions of the Toilet | 29

Gramalaya: Building an enabling ecosystem for sustainable sanitation “Poverty is the main cause of poor sanitation”, believes S. Damodaran, founder and chairman of Gramalaya that has been working since 1987 in the Tiruchirappalli district of Tamil Nadu state with the aim of ending open defecation. With grant-based support from various different International and National funders like Arghyam, water.org and WaterAid, Gramalaya has been working extensively with the community to increase household awareness and motivation to invest in sanitation.

“Poverty is the main cause of poor sanitation”, believes S. Damodaran, founder and chairman of Gramalaya that has been working since 1987 in the Tiruchirappalli district of Tamil Nadu state with the aim of ending open defecation.

“People’s entitlement and participation in the implementation of development projects is crucial for their continued success.” - Damodaran, Founder and Chairman, Gramalaya

Rural sanitation needs quality toilet products: Very early in their work, Gramalaya realized that sanitation and hygiene awareness needed to go hand in hand with enabling affordable and culturally appropriate solutions for the community. The NGO has evolved over 20 pioneering low-cost individual toilet models – from polypropylene toilet pans that are lighter than regular ceramic models to Ecosan (Compostable dry toilets) toilets in arid areas and biogas-based toilet and water heater combinations - under their ‘SMART’ (Safe and Sustainable, Maintainable, Affordable, Recyclable and Technically Perfect) philosophy. These models have made it feasible to build a quality toilet at INR 10,000-12,000.

Except in the case of severe space constraints where community toilets are built and maintained, Gramalaya has always advocated the construction of individual household toilets that work with an appropriate waste disposal system – in urban areas, toilets are built leveraging

30 | BoP World Convention & Expo Edition 1

the existing underground drainage facilities or other eco-friendly models and the new SMART models are built in the rural areas.

Community ownership and maintenance: “People’s entitlement and participation in the implementation of development projects is crucial for their continued success”, says Mr. Damodaran. These core values are infused in Gramalaya’s attention to participatory construction, upkeep and ownership of toilet infrastructure through formation of rural and urban community-based organizations focused exclusively on sanitation and hygiene called AWASH - Association for Water, Sanitation and Hygiene, that are formed in each community and work towards slum or village improvement. AWASH members comprise representatives from Youth Groups, Self-help Groups, SHE (Sanitation and Hygiene Education) teams that work closely with Govt. elected representatives acting as advisors. Additionally, Federation motivates local communities to form the AWASH in every locality wherever appropriate.

Described as the backbone of Gramalaya, AWASHs are formed, trained and given capacity building through various training programs, exposure visits, hygiene education sessions, leadership training and other interactions conducted by the staff of Gramalaya.

Driving long-term behavioral change: The last mile distance in the journey towards ending open defecation, Gramalaya realized, is in the ‘mind’ - it was imperative to address not only the issue of inadequate sanitation facilities but also to change people’s attitudes towards toilet usage. Gramalaya utilizes the federations of women’s SHGs they have built over time as a platform for creating behavioral change. Knowing that children could serve as compelling hygiene ambassadors and influence families to observe better practices, the organization also runs awareness programs in schools. In addition, it employs a community-led total sanitation program involving a transect walk through villages and urban slums, during which hygiene songs are sung and open defecation sites are pointed out to create new social norms around hygiene culture and toilet use among residents of the community.

Described as the backbone of Gramalaya, AWASHs are formed, trained and given capacity building through various training programs, exposure visits, hygiene education sessions, leadership training and other interactions by the staff of Gramalaya.

Gramalaya, in its early years, promoted toilets and water connections using subsidies, which they realized was hard to procure and not uniformly available. In 2003, funded by Water.org, Gramalaya for the first time introduced a revolving loan model to finance household water connections in villages at a zero percent interest rate with recovery over a 10-month instalment period. When 100% of that money was recovered, Gramalaya realized that people are actually willing to pay for water and sanitation services, which is how GUARDIAN was started.

Guardian MFI: Providing consumer finance for better water and sanitation There is huge demand across the country for clean sanitation products”, explains Paul Sathianathan, CEO of GUARDIAN, “yet, finance is a major obstacle. Most households prioritize their expenses towards necessities such as healthcare, communication and education, with water and

Guardian-Gramalaya: Champions of the Toilet | 31

An acute issue in sanitation is that the trigger towards positive hygiene and health practices is felt most by women yet the decision on making all purchases is taken by men. GUARDIAN addresses this by providing loans to married women between 18 and 60 through Joint Liability Groups (JLGs) of 5 members each that GUARDIAN and its partner Gramalaya help to form among individuals interested in taking up sanitation loans.

The last mile distance in the journey towards ending open defecation, Gramalaya realized, was in the ‘mind’ - it was imperative to address not only the issue of inadequate sanitation facilities but also to change people’s attitudes towards toilet usage.

sanitation coming up right at the end. At GUARDIAN, we have discovered that with the right combination of cost-affordable toilet designs and effective financial assistance, families are more than willing to adopt toilets in their households.”

GUARDIAN extends credit to poor urban and rural households (after extensive interactions on the ground to estimate their repayment capacity) for the construction or renovation of toilets, plumbing installations, construction of rainwater harvesting and other water recharge structures and installation of biogas plants.

An acute issue in sanitation is that the trigger towards positive hygiene and health practices is felt most by women yet the decision on making all purchases is taken by men. GUARDIAN addresses this by providing loans to married women between 18 and 60 through Joint Liability Groups (JLGs) of 5 members each that GUARDIAN and its partner Gramalaya help to form among individuals interested in taking up sanitation loans. The tenure of all loan products is a uniform 18 months with an annually reducing interest rate of 21%, a 1% loan processing fee and INR 100 insurance fee for a 2-year period, which is low compared to any standard MFI. “INR 600-900 every month is not a major amount and it can easily be repaid by saving INR 30 per day,” says Paul Sathianathan of how GUARDIAN ensures a repayment rate of over 97%.

The client base of Guardian has grown at 7.4% CAGR during the last 7 years.

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The Gramalaya-GUARDIAN partnership leverages the robust ecosystem built by Gramalaya, comprising several SHGs, over 10,000 JLGs for sanitation and a set of highly trained personnel who could play the twin role of creating awareness in the community and implementing high quality toilets, to convert demand to purchase by offering affordable sanitation credit through an efficient, highly scalable MFI.

Loan Products Urban (Rs.) Rural (Rs.) New Water connection 10000 7000 New toilet construction 14000 14000 Water/Toilet renovation 5000 5000 Rainwater harvesting 5000 5000 Water purifier

5000

5000

Biogas Plant 10000 10000

Key enablers for delivery of Rural Sanitation The Gramalaya-GUARDIAN partnership leverages the robust ecosystem built by Gramalaya, comprising several SHGs, over 10,000 JLGs for sanitation and a set of highly trained personnel who could play the twin role of creating awareness in the community and implementing high quality toilets, to convert demand to purchase by offering affordable sanitation credit through an efficient, highly scalable MFI. Here are key ways in which the partnership has ensured the implementation of an effective and highly scalable model to deliver sanitation on the ground to the poor in rural and urban areas: Loans catering to community needs: GUARDIAN has several product and process innovations that ensure its effectiveness as a sanitation-focused MFI. Knowing that timely repayment is completely dependent upon construction of the toilet, income patterns of members and other location conditions, GUARDIAN leverages the on-ground presence of Gramalaya to conduct extensive socio-economic surveys of the area followed by assessment of communities for their living conditions and intent to repay and then recommends loan products through a comprehensive ‘Village Summary’ Report.

Firm foundation through Joint Liability Groups (JLG): A Joint Liability Group (JLG) of 5 is first formed exclusively for the purpose of availing sanitation loans. JLGs are trained through several meetings held between GUARDIAN loan officers, on-ground Gramalaya staff and the JLGs. Repayment terms are affordable and tuned to the cash flow patterns of the particular JLG.

Guardian-Gramalaya: Champions of the Toilet | 33

A Sustainable Ecosystem for Sanitation:

The Gramalaya – GUARDIAN approach THE CORE PHILOSOPHY

STRIVE FOR LONG TERM BEHAVIORAL CHANGE

TOILETS MUST BECOME ASPIRATIONAL PRODUCTS

COMMUNITY INVOLVEMENT ENSURES SUSTAINABILITY

Ongoing education and awareness

High quality appropriate toilets make

The long-term sustainability of

helps change mindset towards

sanitation a desired investment.

sanitation practices can be ensured

sanitation.

only in a community-led and community-supported ecosystem.

SCALE OF REACH

10270 JLGs 500 AWASH Committees 277.93

6 districts 1111

villages in Tamil Nadu

million disbursed in sanitation loans

98.8% repayment rate

50146 borrowers

More Than toilets constructed since 1987

34 | BoP World Convention & Expo Edition 1

100,000

AWASH (Associations for Water,

CHILD HEALTH AMBASSADORS

Sanitation and Hygiene)

School health programs

comprising youth, women

on personal hygiene and

SHGs, SHE teams set up

sanitation

to promote sanitation and monitor toilet usage.

STRIVE FOR LONG TERM BEHAVIORAL CHANGE Health and hygiene awareness through community engagement

THE APPROACH

ACCESS TO CONSUMER FINANCES

QUALITY TOILET PRODUCTS

Pioneering affordable toilet models that are socially, environmentally and

One-time sanitation loans for new

culturally relevant

construction, toilet maintenance, water management and biogas plants lent only to JLGs. Converts demand to purchase

SMART TOILETS Innovate in creating local

CONSTRUCTION ECOSYSTEM

toilet products that are

Link communities with

LENDING THROUGH JOINT LIABILITY GROUPS

ONGOING MONITORING

safe, sustainable, easy

trusted ring and cement

Form groups of 4-5

in monitoring ensures

to maintain, affordable,

suppliers, trained local

individuals who are

loans are used only for

recyclable, and technically

masons and plumbers

interested in taking

sanitation, repayments are

sound.

and supervise construction

sanitation loans. Detailed

on time and defaulters are

to ensure high quality,

socio-economic surveys

a minimum.

durable, toilets.

to assess demand and

Community involvement

repayment capacity and indepth training done.

Guardian-Gramalaya: Champions of the Toilet | 35

JLG members act as local champions – besides providing basic hygiene education, they possess the know-how to test the local water, design and build appropriate infrastructure and also the know-how to organize, manage, and govern themselves to avail financial credit and build linkages.

JLG members act as local champions – besides providing basic hygiene education, they possess the know-how to test the local water, design and build appropriate infrastructure and also the know-how to organize, manage, and govern themselves to avail financial credit and build linkages. A model of lending one-time loans exclusively to JLGs ensures that loans are strictly used for sanitation, toilets are maintained through community ownership and that the repayment is guaranteed even in the absence of any other formal credit borrowing history among members.

JLG units are also highly replicable – Gramalaya has over 10250 JLGs formed for the purpose of sanitation loans.

Building the toilet: There are several reasons why toilet constructions have failed despite heavy Government funding and execution by contractors – from the use of inferior construction materials to toilets not being suited for local climate and water conditions, contractors who build with a pure profit motive and local municipalities that do not hold a stake in maintenance. Gramalaya has turned this system on its head by pioneering over 20 low-cost toilet technology models that take into account the water, sanitation and geographical conditions of the region. In addition, the organization has built a successful ecosystem for fast and replicable construction of toilets, through building linkages with local contractors for raw materials like cement, training local masons and bringing about high community involvement in monitoring and quality checking by coupling it to toilet loan disbursement. Gramalaya’s emphasis on getting the community closely involved in the actual building of the toilet further leads to reduction in planning time and eventually the costs. It immediately translates to demand for more loans, proper utilization, faster recovery periods and zero defaults for GUARDIAN. Strong organizational leadership: One of the cornerstones of GUARDIAN’s rapid reach and effective functioning as a profitable MFI is its team. The organization has a strong second line of senior leadership comprising members from the financial and development sector who have over 2 decades of experience in working on the ground, have been with Gramalaya from its inception and are invested in the wellbeing of the local community. GUARDIAN’s field officers go through extensive training and capacity building in renowned MFIs like Grameen Koota,

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BASIX and Bandhan as well as in IT processes and delivery with organizations like water.org.

Technical competency coupled with the deep trust and respect the loan officers have built in the community has accelerated the entire cycle of loan disbursal to toilet building and repayments in addition to enabling several local innovations in toilet construction and delivery.

Standardization and data-led backend for delivery: Standardization of processes is deeply integrated in the functioning of both Gramalaya and GUARDIAN. Working with a community that comes with little credit information, illiteracy, inaccessibility and a society resistant to change has meant that every single process – the role of loan officers, finding solutions to water issues, the process of onboarding communities, the assessment of areas, the IT backend for efficient loan delivery, follow-ups for repayments, people management – are all very well documented, automated where possible and followed assiduously. Standardization is one of the key enablers to the sanitation delivery model being highly replicable; with training and documentation in place, implementing the model in another locality takes place in less than half the time.

Working with a community that comes with little credit information, illiteracy, inaccessibility and a society resistant to change has meant that every single process – the role of loan officers, finding solutions to water issues, the process of onboarding communities, the assessment of areas, the IT backend for efficient loan delivery, follow-ups for repayments, people management – are all very well documented, automated where possible and followed assiduously.

Impact and Way Forward In its first 20 years, Gramalaya built 1 lakh toilets, but under the NGO-MFI model, GUARDIAN has enabled 65,000 direct loans, adding up to INR 54 crores in just 7 years without relying on subsidies. In 90% of the cases, toilets have been built and maintained, with the rate of loan repayment averaging at around 97.6 % as of December 2014.

For its efforts in creating India’s first 100% open defecation free slum, Gramalaya received the National Urban Water Awards in 2009. It has also been instrumental in making Tiruchirapalli the 6th cleanest city in India, besides facilitating the eradication of the dehumanizing practice of manual scavenging in Tiruchirapalli. Its pioneering initiatives have paved the way thus far for 287 rural villages and 179 urban slums to be declared as Open Defecation Free (ODF) zones. In line with India’s total sanitation goals, GUARDIAN plans to accelerate its growth, enabling the construction of 1 million toilets over the next 4 years, covering 3 southern Indian states and 10 underserved states of North India.

More than anything, however, the success of GUARDIAN has proved that despite initial reluctance, even the poorest individuals and communities are willing to pay for affordable water and sanitation facilities though it is not directly an income generating investment.

For women, water and sanitation are entry points into a much larger transformation. Besides financial empowerment from accessing and managing loans, collective ownership over community assets has strengthened women’s status as decision makers within the household and as

Guardian-Gramalaya: Champions of the Toilet | 37

Credit for water and sanitation has never been a priority among banking institutions in India, however, in the last decade, different stakeholders have come in to support GUARDIAN by mobilizing capital, including social investors, commercial banks, national banks, NGOs and aid organisations.

For its efforts in creating India’s first 100% open defecation free slum, Gramalaya received the National Urban Water Awards in 2009. It has also been instrumental in making Tiruchirapalli the 6th cleanest city in India.

leaders when dealing with local government officials. Improved self-confidence and acuity with financial management have given rise to an entrepreneurial spirit among women. Women now have access to a social space to come together and discuss issues of personal hygiene, leading to better sanitation practices in the entire family.

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The individual and community toilet models of Gramalaya have also been replicated in other parts of the world such as Kenya and are an example of how a deep-seated problem like sanitation can be resolved with a partnership between sensitive city authorities, communities, NGOs, and MFIs working together to create affordable and culturally acceptable solutions.

Credit for water and sanitation has never been a priority among banking institutions in India, however, in the last decade, different stakeholders have come in to support GUARDIAN by mobilizing capital, including social investors, commercial banks, national banks, NGOs and aid organizations.

Over the years, several other social organizations have approached Gramalaya and GUARDIAN for technical support and training, widening the span of their impact beyond their operational zone in Tamil Nadu state. The individual and community toilet models of Gramalaya have also been replicated in other parts of the world such as Kenya and are an example of how a deep-seated problem like sanitation can be resolved with a partnership between sensitive city authorities, communities, NGOs, and MFIs working together to create affordable and culturally acceptable solutions.

Guardian-Gramalaya: Champions of the Toilet | 39

KOPERNIK: TAKING AFFORDABLE, TRANSFORMATIVE TECHNOLOGIES TO RURAL COMMUNITIES Through an online marketplace, scalable partnerships with civil society, corporates and governments, and an innovative distribution model, Kopernik, an Indonesian non-profit, is comprehensively solving the ‘last mile’ distribution challenge by bringing much-needed technologies to BoP communities across the world.

Energy and agricultural technologies have the power to change economic and livelihood opportunities for the poor for the better, yet the barriers to accessing these solutions are often impossibly high for those located in remote, farflung areas.

L

ife in East Flores is a struggle to escape the vicious cycle of poverty. Most families rely on subsistence agriculture, but drought, disease and pests often cause crops to fail; roads are in varying states of disrepair leading to villages being isolated; access to electricity ranges from unreliable to non-existent. The region has one of the lowest rates of access to improved water sources, and one of the highest rates of child stunting in all Indonesia. To escape grinding poverty, men often leave East Flores to earn a living through migrant work, particularly in the Malaysian region of Sabah, leaving women alone to take charge of an impoverished household. Kopernik has been working in East Flores since 2012, in partnership with pekka, an Indonesian organization, to support women who are the heads of their households. They have introduced solar lights, water filters and fuel-efficient cookstoves to pekka women, who have enthusiastically embraced these simple technologies and are now turning into first generation micro-entrepreneurs who are actively promoting the use of better technologies among their community.

Kopernik: Taking Affordable, Transformative Technologies to Rural Communities | 41

Simple, trustworthy and affordable technologies can bring about transformative change in the lives of the poor, yet they are inaccessible to most. Energy and agricultural technologies in particular have the power to change economic and livelihood opportunities for the poor for the better, yet the barriers to accessing these solutions are often impossibly high for those located in remote, far-flung areas.

The Product: Building a sustainable ‘last-mile’ distribution chain After over a decade of working in poor communities with the United Nations, development practitioners Ewa Wojkowska and Toshi Nakamura started Kopernik to be a ‘last-mile distribution’ organization that can solve the problem of access for underserved communities.

Headquartered in Indonesia, Kopernik delivers simple, low-cost technologies from producers around the world to BOP consumers in developing countries.

At the front end, Kopernik has developed an online marketplace that raises funds through crowdfunding to support the upfront cost of bringing technologies to remote rural communities which are often not served by standard supply chains. At the other end, Kopernik works as an effective distributor, marketer and strategic partner in bridging the gap between simple technologies and underserved communities by working with technology manufacturers who may lack the infrastructure and resources to service the needs of these populations on their own.

Kopernik began its work in Indonesia, a vast archipelago of over 17000 islands with a population of 250 million including over 28 million people living below the poverty line and another 68 million who live on the brink of poverty. Despite making considerable strides in reducing absolute poverty over the last few decades, economic inequality between rural and urban areas and across provinces has increased in Indonesia in recent years, countering the benefits of the country’s economic growth and hampering social cohesion.

Kopernik connects last mile communities with life-changing technologies in 4 ways Empowering women

Helping children and mothers

• Kopernik trains women to be micro-entrepreneurs within

• Kopernik technologies like the Clean Birth Kit and the

the community, selling essential technologies to last mile

water filters are distrbuted with a focus on improving

families.

maternal and child health.

• Increased income allows women to expand their busi-

• Much of Kopernik’s product awareness and distribution is

nesses, contribute to household savings, and enjoy an

done through schools and clinincs to allow better access to

elevated status in the community.

its target group.

Serving last mile communities

Help during emergencies

• In order to raise the standards of living of remote rural

• In times of a natural disaster, Kopernik provides simple

populations, Kopernik partners with a range of local organ-

technolgies like solar lights and water filters to evacua-

izations, corporates, donors, and technology producers to

tion centres and relief camps to help the affcted rebuild

reach life-changing technology products to them.

their lives.

• Kopernik’s distribution network spans 21 countries across Asia-Pacific, Africa, and Latin America.

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For technology to be truly revolutionary, it is of utmost importance that it is designed to be suitable to the needs of local communities and relevant to their contexts.

Selecting affordable, durable and simple-to-use technologies Kopernik looks out for products that are specifically designed to suit the requirements of BOP populations based on three principles: the products must be affordable, durable and simple to use. Kopernik’s technology range covers energy and environment, water and sanitation, education, information technology, health and agricultural issues. With the understanding that the utility of most products is subjective and varies across regions according to geographic and weather conditions as well as with differences in people’s cultural practices, behavior and habits, Kopernik distributes products that are relevant to the local contexts. For example, the salty sea air of coastal fishing villages may cause metal to corrode quickly while technologies like the bicycle powered corn sheller might not be too popular in communities where bicycle use is limited. Fuel-efficient cookstoves, solar lanterns and chargers, water purifiers, educational toys, self-adjustable spectacles, hearing aids, transportable water containers, and clean birthing kits are among the diverse range of products distributed by Kopernik.

Procuring the latest technologies from emerging companies While the Kopernik team is always on the lookout for new and interesting products, their scale today has ensured that an equal number of companies are approaching Kopernik with their latest technology offerings. A stringent process of vetting potential technology partners and products is followed by Kopernik and only those products which are easy to use and maintain, tested to withstand tough conditions in remote places, and have strong warranty policies are selected. The selected products are made available on Kopernik’s curated online technology marketplace (www.kopernik.ngo).

Crowdfunding to lower financial barriers to products Kopernik uses a combination of crowdfunding, corporate and individual philanthropy, and social

Kopernik: Taking Affordable, Transformative Technologies to Rural Communities | 43

investing, to subsidize the cost of sourcing and introducing new and innovative technology products. Corporates like Japan Airlines and Daiwa Securities and Foundations such as ExxonMobil Foundation fund Kopernik’s operational costs and technology projects to reach more people.

Patient funding from social investors and philanthropic donors allows Kopernik to absorb the cost of partner selection, promotion, and training and make its products available at price points that can be afforded to even the poorest households without hurdle of financial returns.

Reach: Delivering at the last mile through a trusted local network Community partners are Kopernik’s gateway to scale and effective delivery of products at the last mile. The organization partners with local NGOs, non-profits, co-operatives, small businesses, rural grocery stores and women’s savings and loan groups to distribute products.

Community partners have already established trust and reach within the community and help Kopernik quickly establish a distribution chain without starting from scratch.

Activating tech seekers: Partners help identify the need in their communities for products, choose the technology most suited to the community need and approach Kopernik with a project idea along with details of goals and operations strategy. Once an organization receives Kopernik’s approval, it becomes an official partner or ‘tech seeker’, its project details are posted on the Kopernik website and it becomes accessible to donors who wish to support it. Only when a project gets completely funded on the site does Kopernik place an order with the technology provider and ship the items to the partner, covering risks on inventory from both sides. Kopernik tries to move away from models that distribute products for free, instead urging partners to design a sustainable, profitable distribution mechanism that sells products at reasonable prices.

Increasing trust and adoption in local communities: In spite of a strong distribution mechanism and lowered costs, technology adoption takes time and effort; Kopernik pushes a number of smart awareness generation methods to promote community uptake of its technologies.

Kopernik conducts technology fairs in villages where a dedicated Kopernik team demonstrate about 10-15 products in front of community members who can touch, feel, test them out, ask questions about the benefits of using them, and collectively make decisions about product adoption. The fairs also serve as a space where Kopernik receives feedback about previously distributed products that can then be shared with product manufacturers. As a way to engage more deeply with communities, especially women and children, Kopernik organizes campaigns and demos in schools to raise awareness of its products and their value among the students, staff, and parents.

Demos and kiosks: “People find it hard to see the immediate connect between impure water and diarrhea and so Kopernik conducts water quality testing to show how water appearing clean may not be safe to drink. We help communities do the math of purchasing clean water and convert it into annual expenditure. Then they see how much cheaper and easier it is to adopt a water filter and have clean water in their homes every day”, explains Toshi Nakamura, co-founder of Kopernik. The latest addition to Kopernik’s community education strategies is its flagship ‘Tech Kiosk’ in Bali. Serving as a multi-purpose showroom and store, the Tech Kiosk houses all of Kopernik’s latest technology, inviting people from neighboring towns and villages to touch, feel, learn about, and get a hands-on experience of various products before choosing to buy them.

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Patient funding from social investors and philanthropic donors allows Kopernik to absorb the cost of partner selection, promotion, and training and make its products available at price points that can be afforded to even the poorest households without hurdle of financial returns.

Kopernik also works with local schools and communities to raise awareness about the need for better water and sanitation, the benefits of solar products and more.

Incentivizing community partners: Local partners go beyond mere distribution to relaying valuable information to product manufacturers to improve their products as well as to donors on the impact of their contribution. Kopernik employs a market-driven sales mechanism that incentivizes its local partner distribution network to push the products to their communities.

Besides financial incentives where partners retain the margins from the sales they achieve, Kopernik has recently introduced additional incentives like t-shirts, caps and travel opportunities. The Kopernik team works with partners to develop pricing schemes that can fulfill the twin aims: the social mission of taking life-changing technology to the very poor while ensuring financial profitability of its partners through reasonable margins.

Last mile talent: Developing local entrepreneurs The Wonder Women of Indonesia: Kopernik’s vision extends beyond just being a provider of transformative technologies for the poor - the organization has a strong focus on creating sustainable impact by building local talent and tapping their entrepreneurial potential towards livelihood opportunities. Tech fairs, besides introducing communities to new technologies, allow participants to integrate with Kopernik’s last mile supply chain. Women, after trying out products like water purifiers and energy efficient cookstoves at tech fairs in Indonesia, have formed groups that sell these products within the village and in neighboring communities.

These “Wonder Women of Indonesia” as the clean energy micro-entrepreneurs are called, receive training in sales, marketing, and basic accounting, along with the know-how on quick fixes, product maintenance, and warranties. The Wonder Women initiative is making clean energy technologies available to people in remote Indonesian villages, where access to electricity and affordable cooking fuel is extremely limited. At the same time, it empowers women to

Kopernik: Taking Affordable, Transformative Technologies to Rural Communities | 45

In case of products like water filters, where the perceived need among communities is low, Kopernik educates the community by talking about tangible benefits.

The Kopernik team works with partners to develop pricing schemes that can fulfill the twin aims: the social mission of taking life-changing technology to the very poor while ensuring financial profitability for its partners through reasonable margins boost their income through selling solar lanterns, water filters and clean cookstoves in their communities. Ongoing mentoring helps them to overcome challenges and grow their businesses.

Involving local communities in the sale of the technologies creates a self-sustaining ecosystem with huge potential for social impact: through boosting incomes, raising living standards and inspiring others in the community. As technology users themselves, the women not only understand the need for the products and their benefits, but they are also able to better answer customer queries, gather feedback, and resolve issues.

Kiosks for distribution: The wonder women initiative allows micro-entrepreneurs to stock their shops with its latest technology products, making buying a solar lantern or water filter as easy as buying a packet of biscuits or a bar of soap. In this case, the clean energy micro-entrepreneurs can order a consignment of Kopernik’s technologies, earn a commission for technologies sold, return the cost of inventory to Kopernik, and order more of the technologies most in demand. Bundling a number of small orders from shop owners in a particular region enables Kopernik to reduce transport and shipping costs, keeping final product prices low and affordable even in remote areas.

The sustainability model: Finance to enable supply chain development Kopernik’s financing model is an attempt to balance business, community, and philanthropy.

Social investment in value chains: The model is designed to be sustainable in the long term when economies of scale in the more mature parts of the technology uptake cycle reduce its

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dependence on subsidies. On Kopernik’s website, donors can contribute between $5 and $250 to fund part of a particular project or corporations can fund an entire project, choosing from Kopernik’s ongoing projects or suggesting a project they would like to initiate for an available technology. The ‘Tipping Point Monthly Donations’ Program allows individuals to make regular monthly contributions ranging from $25 to $200 to accelerate projects that are closest to reaching full funding. Kopernik also offers a gift certificate option that recipients can use to fund projects.

While crowdfunding usually funds not more than 8% of a project, Kopernik sees it as a good way for people around the world to participate in making a real difference to last mile communities. Kopernik provides regular information about project progress and funding by publishing budget breakdowns and project reports on its website to help technology producers refine product design and pricing. It also updates donors with details of where their contribution is going and the impact it has made on beneficiaries.

Instead of attempting to enter communities as complete strangers, Kopernik partners with NGOs, nonprofits, cooperatives, small businesses, rural grocery stores and women’s savings and loan groups to distribute products to the last mile.

Last mile consulting: As experts with tremendous strategic and implementation experience in building affordable rural supply chains, Kopernik offers professional consulting services to technology producers, corporations, aid agencies, and foundations. The revenue earned from its advisory services is ploughed back into funding and reaching new technology to beneficiaries. Consulting services include conducting market assessments and needs analyses that provide a deep look at market opportunities and demand for technology products at the BOP that will help producers design effective market entry strategies. It also offers assistance with technology testing and impact assessment by arranging field visits and extended product trials with potential users. Kopernik also partners with corporates, using its specialized advisory services, to design CSR projects and strategies that support new product development or help scale the impact of social and technological innovations in the last mile. Governments and social enterprises seek Kopernik’s advisory services to formulate programs to empower women and micro-entrepreneurs, train project partners, design educational material and implementation techniques.

Kopernik: Taking Affordable, Transformative Technologies to Rural Communities | 47

Since 2011, Kopernik has worked with more than 300 wonder women micro-entrepreneurs, who have sold almost 10,000 clean energy technologies to date. These technologies have reduced C02 emissions by more than 5,000 tonnes.

Kopernik has learned that, despite the general theory of technology adoption, no two communities are the same, and in the expansion for scale, driving successful technology adoption and changing behavioral practices is key to ensuring sustainability.

Through its advisory and knowledge services, Kopernik’s innovation in building financially sustainable supply chains can be further replicated and scaled up to the benefit of technology producers, distributors and last-mile consumers alike.

In case of products like water filters, where the perceived need among communities is low, Kopernik educates the community Instead of attempting to enter communities as complete strangers, Kopernik partners with NGOs, nonprofits, cooperatives, small businesses, rural grocery stores and women’s savings and loan groups to distribute products to the last mile. by talking about tangible benefits.

Fast Facts • 55,000 technologies distributed

• 148 projects funded

• Over 72 unique technologies identified from over

• Products distributed across 6 sectors - Energy and

42 producers

environment, education, agriculture, health, water and

• 24 countries reached in Africa, the Latin America, and the Asia-Pacific region • 271,455 people served

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sanitation, and information technology.

• More than 300 women trained to introduce and sell essential technologies to remote rural households in Indonesia.

Country wise people served

80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 0 Ghana

Burkina Faso

Indonesia

India

Japan

Kenya

Nigeria

Philippines Timor-Leste

Technology wise people served

180,000 160,000 140,000 120,000 100,000 80,000 60,000 40,000 20,000 0 Biomass cookstoves

Solar lanterns

Water filters

Impact And Way Forward The reported benefits of Kopernik’s projects across the world include better health with fewer instances of illness, better quality of life accruing from uninterrupted power supply, reduced pollution from kerosene lanterns and cookstoves, and less time spent collecting firewood and fetching water from community taps. A universally reported consequence of accessing Kopernik’s technologies is an increase in time available for income generation. This has been especially predominant among women who are able to leverage the opportunities for microentrepreneurship created by the initiative. Many of the women report gaining economic empowerment stemming from being able to run their households, supporting children’s education, contributing to savings, and enjoying higher respect within the community. The business skills and financial literacy allow them to improve their employment prospects and serve as an inspiration for others like them in the community.

Kopernik: Taking Affordable, Transformative Technologies to Rural Communities | 49

How Kopernik serves transformative technologies to last mile communities SOURCING

CURATING PRODUCTS

DETERMINING DEMAND

VALIDATION

KOPERNIK

Kopernik sources technology products

Last mile communities discover

Kopernik does its due diligence and

for the BOP populations that are

Kopernik’s products through its tech

opens up the project for funding on

affordable, durable and easy to use

fairs, the website and other local

its website.

in areas like energy and environment,

events. Local partner organizations

water and sanitation, education,

determine which products are most

information technology, health, and

relevant to their communities and

agriculture.

submit proposals.

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CONNECTING

CROWDFUNDING

FINALIZING THE PROJECT

REACHING THE LAST MILE

Donors, venture philanthropists,

Once a project is fully funded,

Last mile communities buy the

corporations, social investors and

Kopernik orders the technologies and

technology at affordable rates from

governments offer funds to subsidize

ships to the partners.

the local partners by paying upfront

the costs of reaching and introducing

or in installments.

the technologies to last mile BOP communities.

RE-INVESTING

PARTNER INCENTIVES

IMPACT

PRODUCT FEEDBACK

Partners get financial incentives from

Kopernik works with local partners to

Feedback about the usage of

the sales of their products. Kopernik

assess the impact of the technology

technologies is gathered by the

re-invests the revenues into more

and shares reports of progress with

community and shared with the

technologies.

investors and the community.

manufacturers to make more relevant products for the BOP.

Adapted from Kopernik’s information platform Kopernik: Taking Affordable, Transformative Technologies to Rural Communities | 51

BIMA – LEVERAGING MOBILE TECHNOLOGY TO INSURE THE UNBANKED Bima’s innovation in harnessing the mobile revolution to create radically affordable microinsurance products is placing a safety net within the reach of millions of low-income consumers in developing economies, most of them for the very first time.

F

or low-income families in emerging markets, an illness or the loss of a loved one can bring about crippling financial shock with long-term effects spreading to the entire family. Yet, only about 2.9% of the people in developing markets have access to any kind of insurance cover, an alarming figure compared to the global average of 7.5%.

The Lloyd report on ‘Insurance in Developing Countries’ estimates that the potential insurance market in developing economies is anything between 1.5 to 3 billion policies, with a significant demand for health and life cover, agricultural cover and property insurance. Despite the current low levels of reach, the report says that there are enabling factors that can shape the future of micro-insurance including economic growth, increasing urbanization, changing weather events, the rapid pace of product and logistics innovation, and the increasing penetration of communication and information technology (mobile phones, Internet). Microinsurance has potential to reach low-income populations, the report outlines, if the products and processes are simple, the premiums are affordable, and it can reach the doorstep.

The potential insurance market in developing economies is anything between 1.5 to 3 billion policies, with a significant demand for health and life cover, agricultural cover and property insurance.

A whopping 360 million people without traditional bank accounts use mobile money, presenting mobile operators with a great opportunity to serve the unbanked.

Pic: CIFOR via Flickr CC license.

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In contrast to the global under-penetration of insurance is the soaring mobile usage in developing countries, indicated by the fact that more than 77% of the world’s mobile phone subscribers live in emerging economies. Mobile payment and mobile banking is also seeing rapid growth, enabling large numbers of unbanked populations to be included in the economic mainstream. Research by McKinsey & Co across 147 countries reveals that a whopping 360 million people without traditional bank accounts use mobile money, presenting mobile operators with a great opportunity to serve the unbanked.

The Opportunity: Delivering insurance through innovative technology Strong economic growth in emerging markets underpins a new, unparalleled opportunity for financial providers. Savings accounts, insurance, loans, payments, and similar offerings—where they do exist—penetrate unevenly and often reach only higher-income populations. As a result, the enormous potential of mass-market consumers to drive economic growth in emerging countries has barely been tapped.

Mobile phones provide a radical affordability for underserved BOP consumers who were previously excluded from the insurance market.

Pic: IICD via CC license.

The fast paced growth of microfinance in developing economies demonstrates that people with low incomes can be effective users of financial services if appropriate, affordable, trusted products are made accessible to them together with the right knowledge needed to avail of them.

The global microinsurance market is estimated at 4 billion individuals, yet the cost of selling and administering low-value policies has made microinsurance prohibitive for many traditional providers. The ubiquitous reach of mobile phones has the potential to radically reduce costs associated with enrolling and collecting payments from low-income customers who have previously been excluded from the insurance market.

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Research by McKinsey & Co across 147 countries reveals that a whopping 360 million people without traditional bank accounts use mobile money, presenting mobile operators with a great opportunity to serve the unbanked.

Bima: Building an end-to-end mobile microinsurance platform Observing the immense opportunity in providing insurance as a service to mitigate risk among low income populations, Bima – an independent Swedish company set up in 2010 with the capabilities to build the technology that would link end users, the mobile network operators and the insurance product – partnered with Millicom, an international telecommunications and media company, to build a new insurance product.

The partnership targeted Ghana, a country in which Tigo (Millicom trade name in Ghana) was the second largest mobile network provider in the country. Furthermore, Ghanaian culture, like other African countries, placed strong importance in providing a proper funeral for deceased family members. The life insurance product hence created aligned strongly with consumer needs, yet, there was a reasonable amount of education required to sensitize a population that was unfamiliar with the concept of ‘saving up for later’.

The Product Bima designs radically simple products for BOP markets that come with highly affordable premiums, minimal exclusions, rapid claims verification, and a streamlined enrolment process through mobile, which supports the rapid pace of adoption. The company has a dedicated sales force that work as roving agents or within outbound call centers to ensure customer education and sales quality. Strategic partnerships with mobile microinsurance specialists and investors contribute expertise and accelerate go-to-market activities. The brand also leverages community agents to reach a mass market unfamiliar with or distrustful of insurance.

Mobile technology is simply a part of the solution; Bima plays a comprehensive role in managing project partnerships and helping insurance go-to-market in emerging economies.

Bima’s products break down the most important barriers that prevent the poor from securing insurance: •Affordability: Traditional insurance is too expensive for BOP populations •Education: BOP consumers are new to insurance and are usually unfamiliar with the intricacies of a typical product: benefits, exclusions or lapse rules. Enrolment processes are document heavy and serve as a deterrent to adoption •Access: Few consumers in emerging markets are able to get insurance at their doorstep •Trust: Traditionally, people mistrust insurance companies and have low conviction that their claims will be honored. However, in emerging markets where mobile usage is high, people’s confidence in mobile network operators is higher.

Here are key aspects of the product that has helped Bima scale widely in emerging economies: 1. Instant registration for insurance Signing on to Bima products is extremely simple and paperless: customers sign up via their

Bima – Leveraging Mobile Technology to Insure the Unbanked | 55

mobile handsets through an e-signon form or avail the assistance of dedicated Bima field agents. The instant registration process means that clients automatically receive cover for any subsequent months when they again consume the amount of airtime required for free coverage.

2. Simple, non-punitive premium and customized pricing Bima’s pricing strategies are innovative and flexible. They are markedly different from the regular premiums model of traditional insurance, and cater to the low and often irregular income patterns of the target population. Basic benefits are always offered for free and additional coverage is offered through a freemium or a paid model. The freemium model in different countries makes it possible for customers to increase their cover or add products to their plan. In other countries, mobile phone usage is incentivized to provide additional coverage. The significant part of the pricing is that it is non-punitive – the cover doesn’t completely lapse if the customer forgets to pay his premiums.

3. Product customization for end operators Bima offers full flexibility on its product design which helps the network operators and insurance partners quickly adapt to the market’s needs. Customization includes which insurance type (life, health or savings), payment model (airtime usage, airtime deduction or mobile money deduction) and distribution model (handset or agent network).

4. A robust technology based backend platform At the core of Bima’s initiative to connect BOP clients to backend insurance systems is its sophisticated and seamless Mobile Insurance PlatformTM, a proprietary technology that allows Bima to integrate with mobile partner networks and automate the end-to-end delivery of insurance effectively to clients without any manual effort from its partners.

Here are examples of how the flexible pricing works in different countries and products: Tigo Kiray (Senegal)

Flat pricing and benefits

Dialog Accident cover

Flat pricing & benefits (premium of INR 30 a month for 1 million rupees of Personal

(Sri Lanka)

Accident cover)

Tigo Hospital Support

Flat pricing & benefits with a premium of 1.40 Ghanian Cedi (1 Cedi = 0.23 USD) a month

plan (Ghana)

for stay and hospitalization

Family Life Insurance

Flat pricing & benefits with a premium of 3.60 - 10.80 kina (1 Kina – 0.37 USD) a month, for

(Papua New Guinea)

life insurance benefit of 4,000 - 12,000 kina

Bima Life Insurance

Customers earn an increment of 4000 - 8000 taka (1000 taka is 12.87 USD) in life insurance

(Bangladesh)

cover each month, up to a maximum of 50,000 taka of life insurance cover

Reach: Building a roving sales force to reach the last mile Dedicated agents ensure high quality engagement Knowing that customer education is central to adoption of insurance, Bima manages a sales force, called ‘mobile agents’, who educate and register potential subscribers. Bima’s sales model is unique in a few respects:

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Bima offers full flexibility on its product design which helps the network operators and insurance partners quickly adapt to the market’s needs.

• Mobile agents are paid a fixed salary, rather than a commission. Bima believes this compensation scheme has three main benefits. First, a fixed salary offers greater financial security and increases personal investment in the job, allowing agents to take their customer education role seriously and spend as much time with the customer as necessary. Second, it reduces the risk of agents mis-selling or pressure-selling the product, which helps to protect brand in the market and builds public trust. Third, fixed compensation reduces turnover and allows Bima to invest more in training.

• Bima invests heavily in training. Every new mobile agent goes through a three-hour training session and a one-week apprenticeship with a team leader with regular follow-up training sessions.

Bima’s sales agents connect with potential customers on a regular basis through public markets and in the customer service centers of the mobile network operator.

High-potential subscribers are targeted through an outbound call centre In certain countries, Bima manages an outbound call center that serves as a secondary sales channel focusing on high potential insurance customers - existing mobile subscribers who have already shown loyalty to the network. The mobile operator provides Bima with calling lists for the outbound campaign. The call center has proven to be a very productive sales channel and Bima’s data demonstrates that customers registered through the call center have also generated higher lifetime value than those registered through other channels; not surprising, since they are high Average Revenue Per User (ARPU) subscribers.

Sales quality is meticulously monitored The Bima model stresses the importance of sales quality, not just quantity. Sales quality is critical for a variety of reasons. First, customers who do not fully understand the product are unlikely to upgrade to the paid version of the service and, if they do, are more likely to let the subscription lapse. Second, any negative interaction can further reduce trust in the product and the operator. Bima follows a rigorous follow-up process where dedicated quality control staff follow-up with new subscribers to check the work of each sales agent. Data is collected from each customer about how much they know about the product including its features, premium structure and pricing, based on which sales agents are given scores. Consistent low scores means that the agents are relieved from the program.

Mass education campaigns widen reach and build brand To complement its network of channels for product distribution, Bima works in a few countries along with its partners to mount mass marketing and consumer education campaigns. SMS messages have been the primary point of contact for reaching clients eligible for accessing the free model. Throughout a given month, as clients use airtime, they receive SMS notifications to inform them of the option of receiving insurance coverage. Although they are more expensive, television and radio advertisements have also been used at various points during the product’s history. However, the most effective form of marketing and consumer education remains faceto-face interaction between agents and clients.

Knowing that customer education is central to adoption of insurance, Bima manages a sales force, ‘mobile agents’, who educate and register potential subscribers.

Bima – Leveraging Mobile Technology to Insure the Unbanked | 57

Continents

Countries reached as of March 2015

Asia

Bangladesh, Cambodia, Indonesia, Papua New Guinea, Philippines, Sri Lanka

Africa

Ghana, Senegal, Tanzania, Uganda

Latin America

Honduras, Paraguay

Caribbean

Haiti

Effective Partnerships: Integrating insurance with mobile networks and technology Leveraging the reach and trust of mobile network providers Bima enters markets in partnership with established mobile network operators, a strategy that offers the social enterprise multifarious benefits: it gives Bima a large customer base, saving the time and effort required to establish a presence in a new market. Bima is then able to provide services to the poorest communities in remote, rural regions where mobile penetration is pervasive but all other infrastructure is rudimentary.

The mobile network operator’s infrastructure supports the delivery of insurance in several ways: data of clients’ monthly mobile usage helps determine their insurance eligibility, customer service centers serve as points of enrolment and service for policy-holders, the mobile billing systems, including mobile money, act as effective and convenient channels of payment of monthly premiums, freeing Bima the high capital cost of creating hard infrastructure for delivery.

Building mobile service provider loyalty: As microinsurance cover grows based on monthly mobile spend and more products are offered at attractive top-up rates, customers are incentivized to gradually shift their spending from multiple SIM cards to one in order to maximize the insurance coverage for themselves and their family. Mobile network operators who partner with Bima are able to show a demonstrable increase in customer loyalty and reduce churn rates when they roll out the insurance products, besides being able to enter the vastly growing market of mobile money and mobile financial services.

Untapped opportunity for financial services investment: For impact investors in developing countries, Bima offers the chance to lead a second wave through mobile financial services, the first wave being a cascade of mobile money and mobile payments. Bima was launched in 2010 when it was backed by Kinnevik, a leading emerging markets investor; in 2013, LeapFrog Investments, the world’s largest investor in insurance for emerging economies invested over USD 4.25 million in Bima. The partnership with leading insurance investors also helps Bima gain world-leading expertise in product design and distribution, besides providing access to a trusted portfolio of growing insurance companies, thus helping it scale in current markets and roll out in new ones.

Expanding insurance provider markets: Bima offers a way for insurance companies to access new market segments that they have not tapped and brings them new and diversified business.

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As of March 2015, Bima has 15 million customers in 13 countries in Asia, Africa, and Latin America, making it the world’s leading provider of microinsurance products such as life, accident, and hospitalization cover for low-income markets.

Impact and way forward As of March 2015, Bima has 15 million customers in 13 countries in Asia, Africa, and Latin America, making it the world’s leading provider of microinsurance products such as life, accident and hospitalization cover for low-income markets. Bima’s customer base is growing rapidly at a rate of 500,000 new customers a month, an indication of the large unmet need for insurance in emerging markets. With financial support from Kinnevik, LeapFrog Investments, and most recently Digicel, Bima has been able to make forays into more geographically challenged areas like the Caribbean nation of Haiti, Papua New Guinea and more.

Over and above numbers that indicate increase in BOP consumer access to insurance, Bima measures its impact on the BOP using the Grameen Foundation’s Progress out of Poverty Index (PPI), the World Bank’s CGAP as well as by conducting an annual survey of clients on improvement in their life quality and other parameters. The data is fed back into Bima’s own insurance management strategies as well as shared with partners to refine existing products and guide new product development. A recent PPI survey of Bima products in Bangladesh that reaches over 4.5 million people indicated that 72% of Bima Life Insurance customers are living below the USD 2.50 per day poverty line. 78% of customers were not insured in any way prior to taking up Bima Life Insurance, which shows the potential for microinsurance scale in emerging economies given the right product.

Bima’s plans for scale include expanding its footprint within existing areas of operation with new product launches and distribution opportunities as well as reaching out to untapped markets in South Asian and African countries.

Bima – Leveraging Mobile Technology to Insure the Unbanked | 59

How Bima is transforming the delivery of insurance at the BOP HOW THE MODEL WORKS

DISTRIBUTION

+

MOBILE INSURANCE PLATFORM PRODUCT

INSURANCE

DEVELOPMENT

ADMINISTRATION

MOBILE OPERATOR

PRODUCT DEVELOPMENT

MOBILE INSURANCE PROVIDER

MOBILE NETWORK OPERATOR

BACKEND TECHNOLOGY PLATFORM

INSURANCE PROVIDER

REACH

A proprietary platform

Bima conducts on-ground

built by Bima integrates

Insurance is distributed

with the infrastructure

with the help of ‘mobile

and systems of the mobile

agents’ who educate and

network operator to enable

register subscribers by

studies to understand

Bima integrates tightly with

all insurance processes

operating from network

its target population

a mobile network provider

through mobile, from

provider service centers,

in the new market and

who offers an existing large

instant registration to

public markets and special

customizes the offering.

base of customers.

mobile billing and payment.

events.

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THE BIMA PRODUCT: MAKING INSURANCE SIMPLE, AFFORDABLE AND ACCESSIBLE Enrolment process: Instant registration by mobile with the assistance of sales agents with no paperwork. E-sign of customer on the phone itself.

Product complexity: Simple with very little exclusions or bands. Terms conveyed over SMS. Pricing: Basic plans have flat pricing and benefit for customers. Mobile talk-time incentivization, freemium and premium models offer additional coverage and benefits at affordable costs.

Premium collection: In case of paid models, a small balance is regularly deducted over airtime account.

Claims: Claims are processed in a very short

3

duration of time – ranging from 48 hours to 3 days of submitting required documentation.

Premium payment: Nonpunitive and customized to the non-regular incomes of BOP customers. Ability to ‘catch-up’ over missed payments.

QUICK FACTS

15 million customers

13 countries in Asia, Africa and Latin America

500,000

Growing at customers per day

Bima – Leveraging Mobile Technology to Insure the Unbanked | 61

DIMAGI: TRANSFORMING PUBLIC HEALTHCARE DELIVERY THROUGH MOBILE TECHNOLOGY Through an open, innovative and highly extensible technology platform, Dimagi is unlocking the tremendous potential in last mile healthcare delivery for poor communities in India through a ubiquitous device: the mobile phone.

I

ndia’s healthcare shortfalls are well documented – just 1% of the Gross Domestic Product being spent on healthcare, unaffordability of health access for a vast majority, high disease burden rates among the poor, chronic lack of access to clean water and sanitation that compounds the problem, a lack of awareness of preventive measures, all of which trap many in a cycle of debilitating malnutrition and disease. Rural Healthcare in particular operates through a funnel of awareness and promotion, prevention, diagnosis, treatment and compliance. Trained and incentivized human resources are required across this entire funnel to ensure effective delivery yet the ratio of practising doctors, healthcare professionals and nurses to the population has fallen to 1.4 per 1,000 in India, far below the World Health Organization (WHO) norm of 2.5.

Healthcare systems are viewed as the “iron triangle” of access, quality and cost. Improving access or quality requires increased investment; any lowering of costs will either affect quality or access.

Juxtaposed with the challenge of providing healthcare access to all in India and the chronic inadequacy of personnel is the presence of over 900 million mobile phone users. Ubiquitous mobile phone penetration and rapidly growing smartphone adoption can provide a huge opportunity for mobile technology to step in and transform the way healthcare is accessed by the rural and urban poor.

In India, mobile health can serve as a disruptive technology that can sever the iron triangle by increasing access, improving quality and lowering costs across segments.

The Opportunity: Empowering Frontline Workers through adaptable technology There is demonstrated evidence from around the world that mobile health technologies can improve linkages and retention in care, adherence to better health behavior, and faster reporting and treatment of medical issues. In addition, they can lead to increased worker motivation and efficiency, outreach to a larger number of people, and higher quality of care in every beneficiary interaction.

One of the areas that technology can play a pivotal role in is in supporting community healthcare workers who are part of the Indian government’s National Rural Health Mission (NRHM) that was set up in 2005 to provide affordable, accessible and quality rural healthcare.

In the resource-strapped public health department, community health workers easily form the

Dimagi: Transforming Public Healthcare Delivery through Mobile Technology | 63

lifelines of service delivery—women workers between the ages of 25 and 45, typically semi-literate, multi-taskers between home, work and health volunteering—to provide life-saving services in areas that traditional medical providers struggle to reach.

India has a 3-tier cadre of trained Community Health Workers (CHW)s: • The Anganwadi Workers - Honorary female frontline workers trained in health, nutrition and child development.

• Auxiliary Nurse Midwives (ANMs) – They perform multifarious activities including health education, treating minor ailments, maternal and child health and record keeping.

• Associated Social Health Activists (ASHAs) who are voluntary workers and serve as the interface between 1000 community members and the state healthcare machinery and provide a range of services like promoting use of health facilities, providing knowledge on healthy behaviors and dispensing basic health products to their community.

Since 2005, India has trained and deployed over 900,000 ASHA workers who are often the first points of contact of citizens in rural areas with the healthcare system.

Since 2005, India has trained and deployed over 900,000 ASHA workers who are often the first points of contact of citizens in rural areas with the healthcare system. With the growing importance and influence of ASHA workers in India, however, comes persistent challenges: lack of a supporting ecosystem for better realization of their role within the community and amongst themselves, the limited set of services offered which makes it difficult for ASHAs to position themselves as holistic healthcare providers, lack of opportunities to convert all the awareness created to action as well as a mistaken perception of being ‘health activists’ and not community healthcare providers.

The Product: CommCare for health workers Here is where Dimagi’s global innovation in mobile healthcare comes in to provide mHealth tools and support that can play a vital role in transforming the relationship, effectiveness and value of interactions between Front Line Workers and beneficiaries.

When Dimagi’s Chief Strategic Advisor Neal Lesh encountered a health worker visiting clients, weighed down by her bulky health manual, the seeds for CommCare - a mobile based health care delivery tool were sown.

Dimagi was founded in 2002 with a vision to bridge the gap among countries in access to food, health, and other essential services. Dimagi designs mobile technology for underserved populations and its products are optimized to overcome inherent constraints in rural areas: places with limited electricity, poor mobile connectivity, low penetration of smartphones and so on.

CommCare is a job aid for FLWs that captures extensive amounts of data in an electronic repository that otherwise sits in thousands of paper notebooks. It comprises a mobile phone

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app and web interface which allows health programs to store and access beneficiary information and perform case management for at-risk beneficiaries.

CommCare offers: • A multilingual mobile phone-based healthcare application to store and access beneficiary information and monitor beneficiaries through online reports • An open-source mobile software platform that can be built on and developed and customized further locally • Facility to send out registration forms, SMS reminders and multimedia.

A scalable and open tech platform to build context-specific apps Commcare goes beyond just being another mobile application for the poor - it is a highly extensible and adaptable Free and Open Source Software (FOSS) application with mobile and cloud infrastructure that allows users with no technological capacity to develop simple mobile apps on devices ranging from basic feature phones to smartphones. With over 12,500 registered mobile users in 35+ countries that are part of active mobile projects, CommCare is one of the most widely adopted and technically advanced mobile platforms for frontline workers.

Commcare comprises a mobile phone app and web interface which allows health programs to store and access beneficiary information and perform case management for at-risk beneficiaries.

Being a highly adaptable tool is at the core of achieving scale at very affordable costs. The open platform makes it easy to customize the app to specific organizational needs within weeks.

“Our product is like Lego”, says Fiorenzo Conte, Field Manager at Dimagi. “There are different pieces that users can pick based on relevance and tweak them to suit their specific contexts, thus constructing the building ground‐up themselves.” After years of evolution, the application currently spans several maternal and newborn health benchmarks including early registration of pregnancies, postpartum and newborn care, and immunization information for children under two years of age.

Dimagi arrived in India in 2010 with seed funding from USAID under Stage 1 of its Development Innovation Ventures (DIV) for CommCare. In India, Dimagi found a big opportunity in enabling the vast network of over 900,000 Community Health Workers who face multi-

Dimagi: Transforming Public Healthcare Delivery through Mobile Technology | 65

ple issues that hamper their delivery and effectiveness and impact of their work: tedious paper trails, too much information to be memorized and transmitted to beneficiaries, and low literacy rates that prevented them from capturing health data effectively.

Dimagi modified its standard CommCare product itself in order to suit the local conditions in India: Dimagi added multimedia capability to support its usage by health workers, about 40%

Dimagi modified its standard CommCare product itself in order to suit the local conditions in India: Dimagi added multimedia capability to support its usage by health workers, about 40% of whom are illiterate or semi-literate, a factor that has driven large scale in adoption among FLWs in India.

CommCare for India’s ASHA workers

of whom are illiterate or semi-literate, a factor that has driven large scale in adoption among FLWs in India.

People-first approach to technology Dimagi’s approach of ‘Designing Under The Mango Tree’ supports a collaborative, user centric design which dictates that the content and usability of the app on the field be given top priority.

Thus, once a customized prototype app is designed, designers and Dimagi field staff spend few weeks in the field with frontline workers, reviewing it and making sure it is relevant and helpful to their workflow and changing it if it’s not.

As a result of adding the multimedia capacity in India, more health workers are able to use the product because of its audio enabled interface. Users can ask questions, listen to answers in multiple languages, translate material into different languages and upload images and videos on the app. Health workers are also able to visit more beneficiaries and collect more detailed health information. Dimagi found that among users, respect in the community went up as they were seen using phones and had greater mobility.

Mobile technology also offers great value to Community Based Organizations employing a large and distributed workforce in remote areas, by allowing visibility into the activities of frontline workers.

Reach: Driving adoption through community organizations Dimagi partners with Community Based Organizations (CBOs) like NGOs and nonprofits that are implementing independent healthcare, educational or agricultural initiatives or facilitating government programs across different locations in the country. This not only gives Dimagi a chance to help build their capacity through technology but also gives Dimagi scale right from the start through access to a vast network of frontline workers and a large pool of beneficiaries.The entire process of solution deployment at Dimagi is sensitized and customized to the local area. Dimagi starts with understanding the partner’s work, the number of FLWs employed, and the project staff CHWs are accountable to. Dimagi’s field staff visit the coverage areas of the

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Dimagi: Current global market penetration • 39 active countries

• 973,000 active cases

• 7 active sectors including agriculture, financial

• 500,000 plus forms filled out in February 2015

services to BOP, and gender equality.

• 492 projects to date • 170 active projects • 14,000 active users

partner organization and shadow FLWs for a day to understand their workflow. Partners supply the content necessary for building the app based on the questions they are interested in asking beneficiaries, the data they wish to monitor over time, the counselling CHWs are to provide etc.

Rollout of the customized product is followed by field visits to train frontline workers. The partner organization is responsible for providing all the logistical support during this exercise - bringing CHWs to central locations in anticipation of the training, procuring phones, SIM cards, data plans, and installing the CommCare app on the phones.

In order to ensure that CommCare deployment is sustainable, Dimagi focuses on building partners’ internal capacity to understand the tool, the data it produces and adapt it to their own needs and use cases going forward. Partners are also required to assign a technology point of contact - a staff member with technology knowledge who Dimagi trains about the workflow of the app, troubleshooting of basic issues, and adapting it to suit specific organizational needs.

Effective Partnerships: Empowering last-mile organizations with tech Seeing itself firmly as a technology provider and enabler, Dimagi assists implementing organizations in increasing efficiency of their operations and scaling their impact by deploying the CommCare app. Dimagi provides support in 2 ways: a). Program-focused capacity services are provided with an aim to bridge gaps in program implementation that hinder scale and impact. They may include gaps in existing processes or enhancing staff capacity to optimize the value of mobile technology. Some examples of these services are training partners on better monitoring of worker performance, training on how to independently modify CommCare applications, and teaching trainers to train partners on Dimagi’s tools. b). Technology-focused capacity services are preferred by organizations with a strong knowledge of the benefits technology can bring to their workflow. Technology Capacity Services introduce new technologies to strengthen or automate existing processes, such as using excel sheets to monitor programmatic indicators based on data collected or integration of SMS reminders.

“We are witnessing a growing demand for our product as knowledge of it grows”, says

Dimagi: Transforming Public Healthcare Delivery through Mobile Technology | 67

How Dimagi is strengthening healthcare delivery at the last mile through mobile technology CommCare is a mobile-based job aid for health workers that allows storing and accessing patient information for awareness creation, management and follow-ups.

HOW IT WORKS

1. CUSTOMIZING THE SOLUTION

2. TECH CAPACITY BUILDING

3. FIELD WORKER TRAINING

CBO capacity building

CHWs are trained to

Customized

and technology

use the application

CommCare app is

training is done

to collect data, shoot

built in collaboration

to adapt app to

multimedia like audio

with partner

organization’s flows

and pictures and

organizations

and processes.

track patient data.

following detailed onground observations to make it relevant to local context.

4. DATA COLLECTION

5. ANALYSIS AND MONITORING

CHWs make daily

6. SUSTAINABLE SCALE Organizations build capacity internally

visits to households

Partner organizations monitor CHW

to customize and scale the solution in

and collect extensive

worker performance, patient health

their blocks and reach new users.

data, schedule

outcomes and more through the

follow-ups etc.

centralized database.

11

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OUTCOMES OF THE DIMAGI HEALTHCARE DELIVERY MODEL

CBO PARTNERS COMMUNITY HEALTH WORKERS

Partnering with Dimagi enables CBOs to strengthen the service delivery

HOUSEHOLDS

of their CHWs and scale-up their programs rapidly. CBOs can employ a larger workforce and scale their operations across geographies due to CommCare.

Overcome barriers of language, literacy, low retention of health information, and tedious paper work using CommCare. Are able

Receive more targeted counselling

to deliver health care with much

and health inputs specific to their

greater frequency and higher

contexts and behavior. Are more

quality. Techology plays a vital role

aware of danger signs, positive health

in transforming the relationship,

practices, and access health services

effectiveness and value of interactions

regularly, finally reducing maternal

between beneficiaries and FLWs.

and new-born fatalities.

THE COMMCARE APP SUPPORTS:

11 Comprehensive health tracker data collection

Health checkup reminders for pregnant mothers and at-risk patients Pictures and audio on positive practices like pregnancy spacing, maternal diet, early iron and folic acid Key health messages and questions

supplementation, immunization and

played as audio files in regional

appropriate infant and young child

languages

feeding (IYCF) practices

Dimagi: Transforming Public Healthcare Delivery through Mobile Technology | 69

Lilian Olson, India field manager, throwing light on Dimagi’s evolving business model in India.

The Maturity Model is a recently developed framework that gives Dimagi a more active role in selecting and working with partners. The model lays down five stages of maturity across six areas (including program design, technical support, scale, training and implementation, sustainability and strategic management) that allows Dimagi to assess organizational needs and tailor a program that meets them. With the model, Dimagi and partner organizations work together to lay the foundation for deployment of CommCare and develop ways to nurture and facilitate scale using mobile services.

Designing for sustainability

Once a customized prototype is designed, designers and Dimagi field staff spend few weeks in the field with frontline workers, reviewing it and making sure it is relevant and helpful.

Dimagi’s revenue model is closely tied to the scale and capacity of the partner organizations.

Organizations with less than 50 frontline workers can avail the use of CommCare free of charge with a cost of $1 per additional mobile user.

Larger organizations choose from 5 software plans priced between $100 a month to over $1000 a month. Basic services like multimedia support, CommCare application builder, data privacy, analytical tools like data export and standard reporting are available to all subscribers while premium subscribers can avail of additional features like API access, custom branding, access to custom reports, outbound messaging etc.

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“Though the ASHA fills up the form in the distant village, I am able to check the form, as well as monitor her activity, sitting here in my office and thus support them whenever needed” - Amrita Puranik, Project Staff, Lata Medical Research Foundation, Nagpur, India

Additionally, Dimagi earns from the implementation service support provided to partners based on their current capabilities. The 3 service packages are: • Off-the-shelf: CommCare Basic that is available free of cost to organizations doing a proof-ofconcept evaluation or that have significant IT capabilities within their organization.

• Deployment package: $25000 a year package to organizations who have staff they can dedicate to utilizing CommCare in a deployment setting but do not have the IT capabilities to design and build the application.

•Premium package: $100,000 for a year is meant for organizations who are doing a full scale deployment of CommCare and want Dimagi to take an active role in managing and improving the performance of the program.

An additional revenue source is the business-to-business channel where Dimagi works with partners’ clients to implement a package of 6-12 months with Dimagi providing specific solutions and on-site training.

“In terms of our revenue target, we focus not on increasing our prices but exponentially growing our customer base. Low price creates high volume; this is where the idea of a turnkey product comes from. It’s a win-win formula for us and our customers”, says Fiorenzo Conte.

Lessons in localization Dimagi has tried several innovations to drive large-scale adoption in the Indian healthcare system both in design and delivery of the final product.

Free infrastructure support: Dimagi utilizes the funding received from USAID to provide each new partner adopting CommCare with 10 free mobile phones and free technical support to facilitate the pilot phase, thus lowering the main barriers and risks associated with signing up a new technology and provider.

Broadening the scope to violence, education and agriculture: Traditionally focused on public healthcare, Dimagi has broadened its approach to include sectors that are new to the enterprise, using the proof of concept model. The sectors include gender based violence, education, and agriculture.

Partnering with the Government: In a country the size of India, direct collaboration with the government is a factor crucial to the attainment of nationwide impact and scale. At present, Dimagi is implementing one of its largest projects in the state of Jharkhand in direct collaboration with the state’s rural health mission to raise maternal and child health outcomes without the support of an implementing partner. Dimagi has directly trained 240 health workers (called

Dimagi: Transforming Public Healthcare Delivery through Mobile Technology | 71

sahiyas) and local government officials in using the CommCare application designed specially for the Jharkhand context.

Impact and way forward The way ‘scale’ is defined at Dimagi varies based on what it means to partner organizations. For some, it means scaling the number of frontline workers using the app, while to others, it signifies having a larger part of their workflow covered by the app after initial deployment of the technology, and still others, measure scale by the ability to enter new sectors using the technology. Currently CommCare has over 14,000 active users and 973,000 active cases. 500,000 plus forms were filled out in February 2015 alone.

Impact assessment reports from CommCare deployment with various partner organizations across India indicate a substantial increase in frequency and quality of healthcare offered by FLWs who use the tool. The number of visits undertaken by FLWs have almost doubled in some cases, women’s knowledge of pregnancy danger signs have risen significantly, there is evidence of improved frequency and quality of counselling as well as 2-3X increase in antenatal care received by women.

Currently CommCare has over 14,000 active users and 973,000 active cases.

500,000 plus forms were filled out in February 2015 alone.

To date, CommCare is actively being in over 39 countries, with partners that have worked closely with Dimagi staff to design, develop, and implement a CommCare project. The resulting CommCare applications support programs across numerous sectors, including maternal and child health, financial inclusion, nutrition, energy, family planning, detection and care of tuberculosis and HIV/AIDS.

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With increased focus in India, the enterprise is demonstrating that its technology and service innovations can create value at scale across frontline programs in areas where it is as critical and as much a challenge as healthcare: education, gender-based violence, and education.

Data from Dimagi’s Stage 1 work indicate that the total cost of ownership for the CommCare deployment was $86 per community health worker per year. To contextualize this, the Government of India is currently running management programs that alone, according to some estimates, may amount to over $1,000 per frontline worker per year, hence illustrating the financial viability of CommCare to strengthen this system.

Central to Dimagi’s mission and growth is a focus on scaling what works while continuously innovating on customizing and adding blocks to the solution. After demonstrating that its technology aids improvements in the quality of healthcare delivery by close monitoring and evaluating of frontline workers, the enterprise’s emphasis in now on developing performance enhancements to support the rapid increase in products and deployments. Dimagi is also in the process of analyzing its field data from the first few years of operation to determine its effect on success factors in effective system use and will modify its offerings accordingly.

With increased focus in India, the enterprise is demonstrating that its technology and service innovations can create value at scale across frontline programs in areas where it is as critical and as much a challenge as healthcare: education, gender-based violence, and education.

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SANISHOP MAKING HOME TOILETS DESIRABLE IN CAMBODIA In a country where 72% of the population defecates in the open and sanitation programs run heavily on inadequate donor and government funding models, Sanishop is pioneering a marketmodel approach that empowers local people to strive for their own sustainable sanitation solution.

2

014 was a significant year for Cambodia – the country emerged as one of the best performers in poverty reduction targets worldwide, according to a World Bank Poverty Assessment Report in the same year, halving its number of poor from 53% (2004) to 20.5% (2011). Today, approximately two out of 10 Cambodians are poor, compared with five out of 10 in 2004. From increased grain prices and increased rice production to better access to markets for farmers, access to market information through mobile phones, improved irrigation and a liberal undistorted agricultural market, agricultural development has greatly contributed to Cambodia climbing out of poverty. Yet, the same report also cautions that this ascent is fragile - the loss of just 1,200 riel (about $0.30) per day in income would throw an estimated three million Cambodians back into poverty, doubling the poverty rate to 40%. One of the most important needs is to reduce vulnerability for the long term by developing infrastructure, with the most important of them being in the area of health and sanitation.

Decades of conflict have damaged and destroyed much of Cambodia’s water and sanitation infrastructure, leaving about 33% of its population without access to safe water and 67% with no access to adequate sanitation.Only 8% of rural Cambodia (where 80% of its people live) has any sanitation facilities making it the second lowest in the world outside of Africa. The dire sanitation and hygiene situation in Cambodia is reflected in its health statistics where about 10% of Cambodian children die before they are even a year old making the Infant Mortality Rate (IMR) the highest in the region. Many of these deaths are due to preventable, waterborne diseases or mosquito-driven ailments spawned by the nation’s poor sanitation facilities. At current rates of progress, the sanitation Millenium Development Goals will not be met for another 30 years. In addition, the World Bank estimates that economic losses due to inadequate sanitation in Cambodia are to the tune of US$448 million per year – the equivalent of 7.2% of its GDP.

The Challenge: Ensuring better sanitation practices in Cambodia The 2007 Cambodia Socio-Economic Survey noted a large urban-rural disparity in toilet facilities, with over 90% of households in the capital city Phnom Penh having access to piped water supply and sanitary solutions, leaving a majority of the 10 million people in rural areas to exist in sub-standard conditions. 82% of Cambodia’s rural population still practices open defecation, resulting in the faecal contamination of surface waters such as rivers and ponds, and shallow groundwater, causing waterborne infectious disease and preventable deaths.

Surprisingly, there is significant awareness around sanitation related health issues among the populations in Cambodia – the gap is in converting that awareness to demand for toilets. A barrier to increased sanitation coverage is a reported preference for high-end technologies and con-

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Surprisingly, there is significant awareness around sanitation related health issues among the populations in Cambodia – the gap is in converting that awareness to demand for toilets. straints on both supply and demand sides for affordable, appropriate solutions. Private sector participation in the Cambodian rural WASH (Water, Sanitation and Hygiene) sector is limited, with barriers to private participation being identified as lack of access to institutional credit, a perceived risk in investment for a low demand product, lack of business skills, competition from subsidized latrine programs introduced in a few districts and a weak regulatory system.

Latrines are not ready-to-use products available off-the-shelf, but are often constructed on-site by families or masons with material supplied by a number of businesses and service providers.

Toilet construction and related activity is a generic offshoot of regular construction activity in rural areas, leading to a huge lacuna in demand generation – suppliers are scarcely interested in the end use of their merchandise, leading to proliferation of low-quality toilets. Furthermore, the options made available by the private sector are not affordable. The infrastructure required to support a market model for sanitation in rural areas is entirely missing, leaving no incentive for private businesses to enable affordable access to toilets.

Among Government and donor programs, there is a huge lack of finance to improve WASH coverage in both rural and urban areas with estimated financing needs of $US470M required to achieve MDG water and sanitation targets.Adding to the financial gap are regulations that prevent ministries and provincial governments from borrowing for capital works, and a lack of investment in capital infrastructure in the national budget.

Analysis by the World Bank’s Water and Sanitation Program shows that while most poor households are aware of the benefits of household latrines, toilet construction is hampered by the inability to afford the construction and lack of time and labour to build a toilet. Interestingly, among low-income families, it was found that one of the biggest obstacles to building toilets was an aspirational one. Low income families, dissatisfied for several reasons with the affordable dry-pit latrine, often deferred toilet construction until they were able to afford a more expensive and ‘ideal’ pour flush model.

Sanishop: creating a market-based solution to the sanitation problem in rural cambodia SaniShop is a first of its kind market-based rural sanitation model pioneered by the World Toilet Organisation (WTO). The SaniShop model was born in 2008 out of WTO founder Jack Sim’s belief in ‘using an entrepreneurial approach to create social dividend.’ With the view that the charity based model of toilet donation employed by international development agencies in underserved countries is unsustainable, Sim identified a lucrative business opportunity in marketing toilets to 2.6 million households in these markets. He says of this unrealized market potential, “Where there is a problem, there is a marketplace.”

The initial pilot phase of SaniShop in Cambodia, built between 2010 and 2012, employed a franchisee model across 7 of the nation’s provinces where innovative, low-cost latrines were built by trained local masons using moulds provided by SaniShop. Trainers hired and paid by SaniShop were responsible for mason training and the subsequent three-month follow-up to

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ensure quality compliance with WTO standards. Raising community awareness on hygiene, generating demand for latrines and product sales and delivery were done by a sales force of community council members. The degree of coordination across the supply chain and monitoring of sales agents and masons proved too challenging to sustain and scale this model and it was discontinued in 2012.

A new approach was introduced in five districts of Cambodia’s Kampong Chhnang province in April 2013 with a strong focus on organizing the supply chain of home-toilet construction with centralized, in-house production of all toilet components and distribution at a cost that is atleast 30% cheaper than commercially available alternatives.

The SaniShop model was born in 2008 out of WTO founder Jack Sim’s belief in ‘using an entrepreneurial approach to create social dividend.’

The Product: Sanishop’s affordable high-quality toilet models Despite having the money to spend on sanitation and a pit latrine costing approximately $50, households in Kampong Chhnang prefer to spend it on status and convenience purchases like televisions and jewellery with toilets featuring low on the list of spending priorities. Moreover, villagers often have a preconceived notion of ‘an ideal latrine’ as one that has a shiny white ceramic pan and a sturdy superstructure with solid walks and a roof, costing $500. Many poor households put off toilet construction to a later date when they are able to afford ‘ideal’ toilet products that serve as status symbols for the family. WTO addresses this problem in two ways.

One, by designing toilet products that are suited to local conditions and most closely approximate people’s notions of an ‘ideal’ latrine while ensuring its affordability and availability. Simultaneously, WTO promotes toilets as aspirational products that will raise a family’s quality of life and status within the society leading them to prioritize household spending on toilet purchase.

SaniShop follows a hub-and-spoke model of toilet production, sales, installation, and maintenance. In order to ensure fast and widespread adoption of its model, Sanishop has pioneered the following innovations: Guarantee of a fast, affordable, high quality toilet product In collaboration with international organizations like the World Bank, SaniShop has created and introduced toilet technology that is suited to the Cambodian context, to people’s needs, is easy to adapt to without requiring major shifts in behavior and whose proliferation is facilitated by strong design, sturdy quality, and low need for maintenance. It has developed an innovative and affordable latrine option at a pricing structure that enables all supply chain actors to make money while keeping the product affordable for its intended customers.

A centralized production facility for quick turnarounds In order to maintain greater control over the quality of production and the cost of the final product as well as reduce costs of training and follow-up for masons, SaniShop has built its own production facility where all the basic building blocks for toilets are produced - slabs, lid covers, chamber boxes and shelters, all using raw material sourced from local producers. The production centre in Kampong Chhnang has the capacity to produce 300 toilets a month, for an area comprising about 80,000 households. A Production Manager oversees all the activities at the production centre including product innovation and oversees the delivery of slabs, lid

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covers and chamber boxes to masons who are responsible for assembling and distributing the final product.

Last-mile entrepreneurs to support toilet construction and distribution SaniShop supplies construction blocks to registered local masons who add components like rings and then distribute the finished products to the final customers. Distributing masons are selected based on their entrepreneurial spirit and reputation in the local community. SaniShop pays distributing masons anywhere between $6.25 – $ 7 for every 1 metre diameter cement ring produced, which includes the cost of transport and delivery to the end user.

A centralized facility producing toilet slabs, lid covers, shelters, and chamber boxes allows SaniShop to maintain control over the quality and price of the final product.

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Local masons are trained to assemble the toilets and install them in the community, creating an effective network of last mile entrepreneurs for quicker proliferation of the product.

Customizable and affordable pricing models for BOP consumers As a for-profit social enterprise SaniShop’s challenge is to keep prices low enough to be able to attract new customers while also ensuring profitability to local entrepreneurs. Its marketing and sales activities are restricted to the average and under-average households owning assets like agricultural land, a house, a boat etc. and who possess some disposable income for toilet purchase. An impact study conducted in 2013 revealed that SaniShop’s target demographic earns about $2.50 a day with 50% of them earning less than $2 a day.

SaniShop’s all-inclusive basic toilet model with home delivery costs $50 which is more cost effective than the $56 at which toilets are available in a fragmented manner in the existing marketplace. In order to encourage households to adopt toilets without compromising on the ideal design, WTO offers customers flexible payment options. For example, those with seasonal or variable income streams are given a period of three weeks to complete payments towards their new toilet purchase. Incremental improvements to the toilets including the external cement shelter can be made depending on customers’ cash flow and with the use of unskilled local labour to save the expenditure of skilled masons.

SaniShop not only gives customers an 11% saving on their investment but also saves them the productive time they would have had to invest on coordination. In the SaniShop model, customers are responsible only for the final installation of the toilet which they do with the help of local masons at a cost of $ 10 to 15.

Of the $50 that customers pay for a toilet, 8% goes towards sales commission ($3 to Sales Agents per toilet sold, $1 to District Managers per toilet sold) and masons earn a profit of 11%-12% or $5 for every three rings sold. SaniShop earns 4% or $2 commission on each sale. The remaining goes towards production and delivery costs.

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Of the $50 that customers pay for a toilet, 8% goes towards sales commission ($3 to Sales Agents per toilet sold, $1 to District Managers per toilet sold) and masons earn a profit of 11%-12% or $5 for every three rings sold. SaniShop earns 4% or $2 commission on each sale.

Sanishop Cambodia toilet costing model (in USD) 60 50 40 30 20 10 0 Production Costs (slab, lid, box)

Labour (slab, lid, box)

Delivery cost

Sales commissions

Sanishop margin

Production/ delivery cost

Ring producer’s margin

End price

Outreach: Generating demand for toilets One of the key challenges that Sanishop solves is demand creation through an elegant network of country managers, sales and marketing managers, district managers and sales agents whose task it is to identify non-toilet households and bring them into the fray through various activities. Sanishop reaches out to its consumers through the following channels, actors and activities: Community mobilizers: Sanishop has district managers who are selected from the local community for their strong oratory skills, community connect and entrepreneurial spirit. They work closely with community leaders, village chieftains and health volunteers to communicate the importance of sanitation and conduct sales events. They are also responsible for training local sales agents in their districts and monitoring the sales in their geographical zones. Each district manager earns a fixed salary of $110 and an additional incentive of $1 per toilet he sells.

Sales agents: Sales agents are members of the local community who are recruited based on their interest in helping the community, their ability to conduct hygiene awareness programs before the community, basic literacy in Khmer, and a good reputation and trust in the community.

These agents, currently 40 in number in Kampong Chhnang, are given a three month training by SaniShop before they enter the community. They are trained on the best ways to promote sanitation behavior, how to effectively market and sell toilets etc. using a variety of methods like role plays.

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Sales events: SaniShop’s main community outreach vehicle is the sales event that is regularly conducted at the village level with the help and support of the provincial government and the village heads. SaniShop’s sales force work closely with village chiefs who identify 15-30 non- toilet households and motivate them to attend the event.

At the event, sales agents use educational aids to sensitize villagers on the importance of general hygiene, health, water and sanitation practices (including hand washing, safe drinking water etc.). This is followed by discussing the benefits of household toilets and the convenience, privacy, safety, dignity, savings on health and medication, and increased income ensuing from toilet purchase. Several villagers who already have household toilets are also invited to attend the event and give testimonies to their neighbors to encourage them to stop practising open defecation.

SaniShop’s sales events, organized in close co-ordination with village chiefs, are an important channel for creating hygiene awareness and promoting toilets.

At the end of the sales event, SaniShop’s low cost toilet products are displayed and demonstrated to the villagers. Awareness and sales brochures are distributed to them to take home to discuss purchase plans with their families. The first level of community interaction at the sales event is followed up with door-to-door visits to further spread WASH awareness and secure more sales. Sales agents usually work an average of half a day per week and cover an average of 5-7 villages, but SaniShop is looking at ways to increase their productivity to be able to cover 8-10 villages in a day. The less active sales agents (50%) tend to sell about 2-3 latrines per month, whereas more active sales agents can sell between 5 and 10. Sales agents’ earnings are based on commissions($3 per toilet and $5 per shed sold). In addition, a sales assistant monitors actual sales volumes and after-sales service.

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Sanitation as a sustainable business - SaniShop SaniShop is a market-based sustainable approach to creating access to sanitation for communities that would otherwise defecate in the open. In the process of building an ecosystem for sanitation, SaniShop improves the livelihood prospects of communities through the introduction of jobs like masons, production managers, sales manager and agents. The products are made using materials that are locally available – keeping the money in the local economy.

QUICK FACTS Sanishop in Kampong Chhnang, Cambodia has:

SaniShop sold

Reached out to

Trained over

toilets

households

sales agents

13,830

THE SANISHOP ADVANTAGE

75,000 1

Install in one day

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500 2

Build with any shelter you want

Achieved a sales conversion rate of

13-15% 3

Delivered to your home for free

HOW THE SANISHOP MODEL WORKS IN CAMBODIA

in the community are:

Affordable toilets and no

Social Marketing

A newly created services ecosystem

middle-men

Support of influential leaders, village

Community sales events and door-

In-house production facility and local

chiefs and the local government

to-door approach give customers

sourcing of materials ensures quick

in awareness events increases the

access to good & affordable products,

turnaround of low cost toilets.

success of adoption.

information and local mason contacts.

The key to SaniShop’s proliferation

Sanishop goes straight to the suppliers

Sales agents provides after-sales

and buys in bulk to get good prices,

services which is critical for uptake of

thus cutting out middle-men.

new products.

+

Last mile entrepreneurs

Training local talent

Simple buying process

Local masons work to assemble

Training local masons for the

Toilets are installed in one day and

and distribute Sanishop toilets and

production of toilets, training of

delivered for free, saving customers

also provide maintenance service.

sales agents in sanitation awareness

time, cost and the hassle of shopping

They get incentivized for every toilet

and conducting sales events has

around for different components.

installed thus establishing a scalable

motivated behavioral change.

local and trusted network for toilet distribution.

Local micro-entrepreneurs/ district managers are trained in business skills, managing and motivating staff, driving and tracking sales.

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How the Sanishop market-based model is working in Cambodia WTO employs a comprehensive approach with demand-side and supply-side interventions to create a shift in people’s sanitation behavior towards an ‘aspirational’ solution that is convenient, is of high-quality and most importantly, an affordable luxury. On the supply side, there is strong focus on building the capacities of local entrepreneurs in the process of creating a sustainable sanitation ecosystem while keeping costs low through the production facility. How the value proposition works: Creating demand for toilets by marketing them as desirable consumer items WTO employs a range of on-ground education strategies and door-to-door visits to create long term behavior change in potential customers. WTO also employs a range of market-making efforts to position toilets as aspirational products that everybody would like to own.

Creating a high-quality supply chain for toilets The production facility ensures that toilet construction is of high quality. Local masons are trained to assemble and distribute these latrines among populations that are underserved thereby guaranteeing them markets. They are also trained to provide reliable hygiene information and offer maintenance and repair services at reasonable costs, ensuring a sustainable hygiene ecosystem and repeat business. The SaniShop model, by making use of local masons, has put in place a simple model that is easily adaptable, replicable, scalable, and contextualized to local traditions.

Building a sustainable sanitation business ecosystem A charity model of giving away fully installed toilets to BoP populations is accompanied by high costs of raw material, construction and installation making the model unsustainable in the long run. The WTO approach on the other hand looks at solutions that are sustainable, empowering, and local and that look at rural households as something more than regular customers. Through the business approach, every actor in the sanitation ecosystem is incentivized – masons, sales agents, district managers, raw material suppliers, as well as Sanishop itself. The

An on-ground sales agent makes door-to-door visits and registers toilet sales.

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Number of jobs created in Kampong Chhnang province by SaniShop Year

No. of masons

No. of sales

No. of toilet

Total jobs

agents

installers

created

2010-2011

45

65

0

110

2012

45

61

4

110

2013

43

45

0

88

success of each player is also determined by the amount of outreach and conversion which in turn leads to a model that can scale and benefit the community at higher volumes.

SaniShop has been successful in boosting the local economy by creating jobs and raising income levels of people in the community.

Strategic partnerships across all levels A number of effective partnerships at the government and community level enable SaniShop to scale its reach and impact in Kampong Chhnang. A favorable relationship with the district government and recognition by it is essential to ensure the trust, support, and participation by village leaders and community chiefs in SaniShop’s sales agents and in its sanitation awareness programmes at the village level. Government representatives also attend SaniShop’s awareness meetings and help the enterprise promote sanitation education on the ground.

Through its awareness generation strategies and sales events, SaniShop has reached an estimated 75,500 households since it began in 2010 and has achieved a sale rate of 13-15% as of 2015.

Impact and way forward Between 2010 and 2015, SaniShop sold 13,830 toilets and trained over 500 sales agents in Cambodia, mostly in the Kampong Chhnang province.

SaniShop has reached out to 10% of Kampong Chhnang’s population with toilets and still has a long way to go to make the province open defecation free. Through its awareness generation strategies and sales events, SaniShop has reached an estimated 75,500 households since it began in 2010 and has achieved a sale rate of 13-15% as of 2015.

SaniShop has also expanded its operations to other geographies like India where it has constructed 3889 household toilets and trained 51 sales entrepreneurs in the districts of Odisha and Maharashtra (as of April 2015) in collaboration with NGOs and private businesses. From 2014-2017, SaniShop Mozambique will be developed in the peri-urban areas of Maputo City.

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FUTURE GENERAALI: RURAL MICROINSURANCE THAT MEETS COMMUNITY NEEDS Reaching out to over 1 million rural people in 10 States in India, Future Generali is the largest corporate rural insurance player in India for the BOP market. We meet the leadership team to understand the intricacies of building and scaling completely customized products.

In the last decade, microinsurance has taken the global stage as a key risk mitigation and management tool for the low-income market. The global micro-insurance market has grown from 78 million lives covered in 2005 to over 2632 million lives in 2013.

I

ndia, with less than 9% of its population covered by any insurance has a huge potential market for microinsurance. A recent UNDP study found that India has lower insurance penetration of 4.7% (ratio of premium to GDP) and insurance density of USD 46.6 (ratio of premium to population) compared to the world average of 7.5% percent and USD 607.7 respectively. However, within South Asia, India has experienced a positive and faster change in insurance density in recent years due to a surge of development programs and schemes offering insurance for low income markets.

One of the key drivers for the provision of microinsurance in India is a directive from the Indian insurance regulator IRDA (Insurance Regulatory and Development Authority), stipulating mainstream insurers in the country to come up with their of microinsurance products. The IRDA requires insurers to ensure a percentage of their portfolio from the rural and low income markets. Government departments also contact private insurers to manage state or central government subsidized schemes, including health and agriculture insurance.

While microinsurance might be considered as an extension of regular insurance, targeting the socio-economically backward segments requires significant innovation in product design and delivery models to take into account poor infrastructure, lack of awareness among people, low interest in uptake of insurance products and high costs of penetration. Despite the increasing growth of microinsurance through a variety of insurance providers and channels, one of the key challenges in creating a scalable model has always been the product development process which is complex and resource intensive.

Looking to tap the vastly under-penetrated rural microinsurance sector, Future Generali India Insurance Company, a Joint Venture between Italian insurance provider Generali and India’s Future Group, started its Future Sampoorna Suraksha Program in 2012.

The Generali Group is one of the most significant players in the global insurance and financial products market. Characterized from the very outset by a strong international outlook and now present in more than 60 countries, Generali has consolidated its position among the world’s leading insurance operators, with significant market shares in western Europe - its main area of activity - and Germany, France, Austria, Spain, Switzerland and Central and East-

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ern Europe. The Group has - over the last decade - set up offices in the main markets of the Far East, particularly India and China; in China, just after a few years of operation, it has become the leader among the insurance companies with foreign equity interests.

To address the micro-insurance market in India, Future Generali took a very innovative approach and built entirely customized insurance products based on the needs of the local community. Together with Altis, a data-warehousing and business intelligence specialist, Future Generali worked on customized insurance product designs that have today reaped a total 120.84 crores in premium against the required obligation of 63.22 crores. In 2013-14, Future Generaali reached over 0.3 million farmers through tie-ups with Microfinance Institutions, Non-Governnmental Organizations and other institutions in the rural domain to reach its products to remote corners of the country. Future Generali India Insurance has tie-ups with e-Governance bodies through the IRDA to enable technology based insurance distribution services in rural areas.

Below are edited excerpts from an interview with Dr. Ajay Verma, Head of Rural, Weather and Microinsurance Business at Future Generali India Insurance on innovating in insurance for BOP markets: Why did you enter the micro-insurance space for the poor and what was the opportunity you saw?

Dr Verma: We found an overwhelming need for financial security in the BoP (Bottom of Pyra-

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mid) market. A lot of the existing providers are focused on life insurance and offer which is offered as a loan rather than providing it as individual security.

Rather than designing a product, we took time to understand the market and consumer needs.

We approached MFIs and NGOs and conducted extensive research on product requirement and servicing by meeting people, collecting and analyzing data. We realized very quickly that one product wouldn’t fit every need - even ticket sizes are different for different groups of people. We then decided to work with our partners to develop insurance products that are best fitted for the community’s needs.

Insurance is a volume product. How does customization for communities work?

Dr Verma: We worked with organizations and the community to understand their needs, risks and what they are most concerned about. We tried different approaches such as surveys, interviews and focus group discussions that sometimes lasted upto six months to try and understand needs and demands. We spoke to doctors and people administering the schemes.

Rather than designing a product, we took time to understand the market and consumer needs. We approached MFIs and NGOs and conducted extensive research on product requirement and servicing by meeting people, collecting and analyzing data. We realized very quickly that one product wouldn’t fit every need There is a period of exploration before we decide on a product. Based on the feedback, we customize the product, make adjustment to usual policies and simplify the product. For instance, some communities probably want a larger cover and willing to pay a larger premium. In health insurance, someone might want maternity products, while others may want cover for critical illnesses only. Standard insurance does not fully power these kind of structures.

We worked with MFIs to understand what communities perceive as risk. Ensuring the buyin of our partners is critical as it decides the success of distribution and adoption. We realize that our partners might not want to be involved in the product definition as they are worried about their own products. So, we worked through them with community to make distribution possible .

How do the on-ground partnerships work?

Dr Verma: During our research we found that there are several channels we could approach apart from MFIs and NGOs. We wanted to market these insurance products through channels which aren’t only financial institutions. We sought mainstream companies with large networks (because insurance is based on large numbers) and BoP interests.

While choosing partners, we looked at different players that were addressing same target segment – we simply wanted other entities serving the same communities and could share our vision. We need large numbers in the insurance business, so it’s important to know partners’ reach or potential reach. One key criterion was that the brands needed to be trusted with good reputation and reach, especially after all the challenges faced by the MFI sector in India.

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Were big companies reluctant to engage with you on the product?

Dr Verma: Yes, our partner companies needed some convincing in terms of how it adds value to them. We were able to convince them about the positive values that come from social action and how it adds to their brand image.

Even in the conventional market, only when it’s useful will a product sell, survive and scale.

Just as the end-user benefits from affordable insurance, the distributor or partner organization must also have value from it, be it social impact, brand image or scale of their reach in the market and it should also fetch some revenue for them too. Even for Future Generali, after fulfilling its social responsibility, the organization should earn some revenue and the venture remains sustainable. The end-users, the partner organizations and Future Generali – all 3 of us should benefit equally from this product.

How did you raise awareness among customers about the product?

Dr Verma: We worked mainly through the partners and funded awareness drives and campaigns. We absorbed inputs from our partners on the most effective methods of reaching people. For example, one of our partners called Swabhiman targeted auto drivers and domestic help. Hence, they would put up desks or kiosks outside large housing complexes in Gurgaon, Delhi. Another partner organization used gatherings and social programs featuring songs and plays to create awareness about the product.

What were some of the key factors that led to the success of the microinsurance product?

Dr. Verma: From day 1, we wanted to (a) design an affordable and innovative product according to the need of the BoP market (b) have a simple product that was not complicated and easy even for our field workers to explain (c) have good servicing, sometimes even at the doorstep as this crucial in BoP markets.

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Also, when you have customers living in far flung areas, you need to have technology as well as on-ground service.

The right price point and value proposition are important for it to be taken up by the community. Our products cost very little - you can get death only cover of about a lakh for an expense of INR 40-50 a year. When claims were paid out, we saw that uptake went up tremendously.

At the same time the programs were open and flexible. Customers can go anywhere, get reimbursement, get cashless treatment. Compared to other insurance products, it’s much more flexible and attractive to the population.

Customization is key. We customized the products which will suit all kinds of income patterns and we cover many assets, right from a cycle to the house.

What were the key factors that contributed to scaling adoption?

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Dr Verma: One of the most important things is trust. The moment they start to see the product’s value, trust goes up and the word of mouth creates demand. It takes time to see results, you can’t just expect them overnight. The success of Future Generali has been in this segment, as we are willing to wait it out and then eventually see benefits coming in.

As a private insurance company we have a much faster turnaround time than the public sector where it takes a significantly longer period to follow up and get treatment. We were paying out within a matter of days and weeks which has significant positive impact on the lives of the rural population.

Most products work well as they are developed after sufficient feedback. The personal accident product has a very strong intake. People would themselves come and pay the premium in the branch and didn’t require agents to go to them to seek payments. Word of mouth publicity is by far the most successful method we have seen.

How do you perceive and measure the impact of the insurance solution?

Dr Verma: We look at number of policies sold, people impacted, the range of issues we have been able to address. We see the change in coverage, premiums paid from 2009 to present.

For example, we did shop insurance in Uttarakhand. During the floods and landslides, many people lost everything, including those with shops. But those with shop insurance had some security. Health insurance is widely appreciated in many cases, as people have the power of choice in terms of the hospital they can go to.

What is the way forward?

Dr Verma: We look at number of policies sold, people impacted, the range of issues we have been able to address. We see the change in coverage, premiums paid from 2009 to present.

For example, we did shop insurance in Uttarakhand. During the floods and landslides, many people lost everything, including those with shops. But those with shop insurance had some security. Health insurance is widely appreciated in many cases, as people have the power of choice in terms of the hospital they can go to.

Future Generali’s rural insurance products Product

Coverage

About Planned & Incurred Amount

THE FUTURE SAMPOORNA SURAKSHA POLICY

Covers hospital cash benefit, personal accident cover, building and furniture, robbery and burglary, farm produce, agricultural pump sets, cart protection and liability and pedal cycle

This is a micro insurance product tailored specifically for the rural and semi rural sector, designed to provide valuable protection to the insured and their business under a range of covers conveniently brought into one packaged policy.

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Amount insured: Building and contents is based on market value or reinstatement value.

Robbery and burglary is for sum incurred.

Agricultural pump sets is based on reinstatement value.

Product

Coverage

About Planned & Incurred Amount

CATTLE & LIVESTOCK INSURANCE

Covers herd animals such as milch cows, milch buffaloes, stud bulls, bullocks, calves, heifers, sheep and goats for death and permanent disabilities

Sum insured is based on market value

OTHER ANIMAL INSURANCE

Camels, dogs, elephant and horse

It provides financial protection against the death of animals by disease or accident. A valuable additional cover that can be opted for is financial protection against Permanent Total Disability of the animal, which results in that animal no longer being able to fulfill the purpose for which it was intended.

FARMER’S PACKAGE INSURANCE

Building and Contents, Robbery & Burglary, Farm Produce, Agricultural Pump Set, Poultry, Cart Protection &Liability, Tractors, Pedal cycle, Personal accident, Baggage

It provides a package of product in a policy to farmers for loss to their lives and their assets.

POULTRY INSURANCE

Covers birds reared for eggs, broiler birds and hatchery birds

This policy protects against financial loss due to the untimely death arising out of disease or accident to the birds.

AGRICULTURE PUMPSET INSURANCE

Loss or damage to pump sets

The functioning of key equipment and availability of resources are critical for a farmer’s success and this policy is intended to provide for the same.

FUTURE HEALTH SURAKSHA

Basic Plan which is targeted at rural areas as well as smaller towns and is also priced accordingly

Protection from financial loss occurred due to hospitalization arising out of illness or accident.

WEATHER INDEX BASED INSURANCE

Coverage given to Agricultural farmers for protecting from Financial losses due to weather perils

Weather Index Based Insurance products are designed to pay out when an independent measure of a loss such as rainfall, temperature, wind speed, and relative humidity play out.

Future Generaali: Rural Micro-Insurance that Meets Community Needs | 93

INSIDE THE KITCHENS OF THE LARGEST NONPROFIT MEAL PROGRAM IN THE WORLD Looking out of a window one day in Mayapur, a village near Calcutta, his Divine Grace A.C. Bhakti Vedanta Swami Prabhupada saw a group of children fighting with street dogs over scraps of food. From this simple, yet heart-breaking incident, came the determination that no one within a 10-mile radius of the ISKCON (International Society of Krishna Consciousness) Center should go hungry. That is how Akshaya Patra was born in 2000.

Today 1,413,794 students are served nutritious meals in 10,770 schools in 23 locations and 10 states in India, making Akshayapatra the largest not-for-profit mid-day meal provider in the world. (as of June 2015)

City

State

Students

Schools

Vishakhapatnam

Andhra Pradesh

5,249

7

Guwahati (ISO)

Assam

53,649

592

Bhilai (ISO)

Chattisgarh

23,674

160

Ahmedabad

Gujarat

121,508

666

Vadodara (ISO)

Gujarat

113,593

616

Surat

Gujarat

165,057

371

Bangalore - HK Hill (ISO)

Karnataka

85,204

487

Bangalore-Vasanthapura (ISO)

Karnataka

99,326

568

Bellary (ISO)

Karnataka

115,945

575

Hubli (ISO)

Karnataka

126,693

789

Mangalore

Karnataka

22,679

147

Mysore

Karnataka

13,835

63

Cuttack

Odisha

4,000

28

Puri

Odisha

55,835

648

Nayagarh

Odisha

24,580

352

Rourkela

Odisha

40,827

433

Jaipur (ISO)

Rajasthan

92,763

1,081

Jodhpur

Rajasthan

6,417

148

Nathdwara (ISO)

Rajasthan

25,274

435

Baran

Rajasthan

11,456

166

Chennai

Tamil Nadu

718

1

Hyderabad

Telangana

54,849

454

Vrindavan (ISO)

Uttar Pradesh

139,262

1,874

Inside The Kitchens of the Largest Non-Profit Meal Program in the World | 95

Akshayapatra: Bringing nutritious meals to hungry school children: From the vegetable market to the plate Akshayapatra has engineered pioneering innovations in its kitchens that allow over 185,000 meals to be prepared in less than five hours at an extremely low cost. Here’s how it works.

PROCUREMENT To ensure fresh food is supplied, efficiency concepts such as Kaizen, 5S and Six Sigma are adopted at the kitchens. Food items like grains and spices are sourced through central procurement teams, while perishable

Each kitchen does its own sourcing,

Akshaya Patra sources its vegetables,

food items like vegetables, fruits

which helps drive down costs and

dairy products and other food stocks

and dairy products are sourced

increase operational efficiencies.

from local markets. This reduces the

locally. The raw materials that are

costs associated with transportation

procured are of the best quality and

and spoilage. Local sourcing helps

to ensure this robust Supplier Quality

to strengthen the economy in the

Management System (SQMS) is

communities TAPF works in.

implemented.

There are moves toward building

A masala preparation unit has been

Akashaya Patra has mapped the

strong vendor relationships and

assembled that pre-mixes masala

location, season, and prices of the

maximizing centralized procurement

spice and distributes it to kitchens

best spices, such as turmeric from

wherever possible for equipment and

every two days.

Rajasthan and chilli from Uttar

raw material.

Pradesh, to ensure freshness and save cost.

96 | BoP World Convention & Expo Edition 1

CLEANING, SORTING, PROCESSING In order to ensure all the raw materials are fresh, all the kitchens follow the FIFO (First In First Out) and FEFO (First Expiry First Out) methods while issuing the raw material for production.

Vegetables are cleaned with potable

Cold storage is used to store ready-

water and sanitized before the cutting

to-cook cut vegetables to retain

process.

freshness. Rice is machine-cleaned and washed thoroughly.

Each staff member follows a routine

All cauldrons, trolleys, rice chutes, dal/

All vessels used in the kitchens are

personal hygiene practice chart

sambar tanks, cutting boards, knives

made of food-safe stainless steel of

before the cooking begins.

and other instruments in kitchen

304 Grade which retains temperature

units are sanitized before usage every

for long intervals.

single day.

CENTRALIZED GRAVITY-FLOW KITCHENS The hallmark of Akshaya Patra’s

These kitchens utilize gravity flow

used in chocolate processing for

program is its centralized kitchen

mechanisms to minimize human

pumping liquid chocolate) from the

facilities, which have been designed

handling of food. Conveyor belts help

United Kingdom is used to pump out

and engineered to optimize quality

in easy transportation of food and

excess water while cooking rice.

and minimize cost, time and labor.

materials. A Blagdon pump (typically

1 hr

Specially designed vegetable cutting machines process

100 kg of vegetables.

2 hr

Specially designed roti-making machines that make

40,000 rotis

(flat whole wheat bread).

Large stainless steel cauldrons with easytilt mechanisms cook

1,200 liters

5 hr

These fully automated kitchens can prepare

185,000 meals.

of lentils.

Inside The Kitchens of the Largest Non-Profit Meal Program in the World | 97

GRAVITY FLOW 3-TIERS The force of gravity is used to transfer

increased productivity, savings on

SECOND FLOOR is used for pre

ingredients from floor to floor at

manpower, machines, materials and

preparation activities such as

different stages of the cooking

less wastage.

cleaning of rice/pulses/vegetables,

process and this process results in

and cutting of vegetables. These are then dropped through a number of

SECOND FLOOR

stainless steel chutes to vessels on the first floor where the cooking is done. The floor of the 2nd storey is lined with two neat rows of lids. Each one covers a chute that leads directly to the cauldrons. One row is reserved Cleaning

specifically for the rice cauldrons the

Cutting

other set for the dal, vegetables and masala used to make sambar.

Pulses

Spices

Rice

An open passage connects the two floors, allowing staff to communicate

FIRST FLOOR

and coordinate their efforts. As the cooking in each cauldron is completed, a signal from the 1st floor, given either verbally or through a walkie-talkie, alerts the team upstairs to pour rice, dal or any other required ingredients down the chutes to corresponding cauldrons.

FIRST FLOOR is used for the cooking.

On the 1st floor, as each cauldron of rice has finished cooking, a team will be ready with trolleys into which the GROUND FLOOR

steaming rice is emptied. These then take the rice to the large open chute that connects the 2nd floor to the ground floor. Each sambar cauldron has a connecting pipe flowing into a main duct that also leads to the ground floor.

GROUND FLOOR is where the cooked food is dropped, where a team of members, ready with the requirements for each school, carefully pack food into steel containers to meet the corresponding route supervisor’s request. Conveyor belts running the length of the At present, Akshaya Patra has three such gravity kitchens

packing area lead to the waiting food

— one each in Bangalore, Hubli and Bellary.

vans outside.

98 | BoP World Convention & Expo Edition 1

DELIVERING TO THE SCHOOL

9 am

Van innovations

11 am 90°

60° All delivery trucks are insulated to

Honeycomb racks keep distribution

ensure that the food arrives hot.

vessels upright and prevent spilling and contamination.

The 6-sigma standard adhered to by the TAPF kitchens means the food gets packed at a specific temperature (not less than 90 degrees Celsius) and is delivered to the children while it is still hot (not less than 60 degrees Celsius). Food is packed and ready

GPS tracking in each vehicle ensures

Route simulation software in

by 9 am in the morning and reaches

that the most efficient routes are

vans is an effort to minimize fuel

schools by 11 am.

taken to ensure on-time delivery of

consumption and cost by reducing

meals.

number of routes.

6 hr

The packaging in the containers

Attendance is collected automatically

Vans are supported through

ensures the food stays warm up to

from the schools using IVRS hand-

monetization via exterior branding

six hours, so that the children get a

held devices, to measure the number

opportunities for companies.

hot meal.

of meals consumed.

DECENTRALIZED KITCHENS IN RURAL AREAS Large centralized kitchens, however, have a limitation: They are not suitable for feeding schoolchildren in rural and other outlying areas. To remedy that, Akshaya Patra has also adopted decentralized kitchens.

The program identifies self-help

Akshaya Patra provides these groups

groups of women in villages who cook

with the ingredients and the required

and distribute Akshaya Patra meals in

set-up by way of place, fuel and

small quantities.

vessels. It also provides them with training in cooking, nutrition, hygiene and bookkeeping, and monitors them regularly.

Inside The Kitchens of the Largest Non-Profit Meal Program in the World | 99

GREEN PRACTICES Smokeless stoves are being piloted.

6 out of 21 kitchen locations use briquette run boilers, fueled by groundnut husk or rice bran instead of diesel.

A mini-fan, powered by rechargeable batteries and

Rain water is harvested

controlled by a regulator,

and re-routed into a pond,

blows air to fan the flames.

recharging bore-wells and

This has helped to reduce

reducing dependency on

fuel cost by 50%

corporation water.

EXTENSION SERVICES

SUSTAINABILITY MODEL

OVERSEAS FUNDRAISING

Public Private Partnerships:

Government attains

TAPF runs many

Akshaya Patra serves as a

its MDG goals of

Akshaya Patra’s state

community services

role model of sustainable

universalization of

government funding

through its vast distribution

programming due to its

education and elimination

accounts for about half

network:

emphasis on public-private

of hunger.

of meal costs. Akshaya

1. Adult feeding

partnerships with State

2. Medical camps

governments to run the

TAPF is assured of long

from institutions such

3. Skill development

mid-day meal program in

term funding.

as ISKCON, its trustees,

through forming SHGs

the State.

where women are employed as cooks

Patra raises the rest

corporations and individual Akshaya Patra is the most

donors. Funding companies

State governments

cost effective mid-day meal

and Foundations are given

contribute 45-50% of the

provider at INR 750 per

an extensive PR package by

costs in the form of grain

year per child.

TAPF that directly reaches

and cash subsidies.

100 | BoP World Convention & Expo Edition 1

at least 150,000 individuals.

AKSHAYAPATRA’S JOURNEY THROUGH THE YEARS

August 2005

First quarter of 2010

August 2012

Began services in the

With 1.1 million children

Akshaya Patra served its

region of Baran, located

being fed daily (from

billionth meal.

in east Rajasthan, in

Monday to Saturday) in

2000

response to the number

17 cities across 7 states

August 2014

H.K Hill is the first kitchen

of starvation deaths in the

in India, Akshayapatra

The country’s largest

of Akshaya Patra with

area. An extension services

became the largest, non-

3-storey kitchen was

feeding capacity of

was started in Jaipur,

governmental, mid-day

inaugurated in Ahmedabad,

85,204 children each day.

Rajasthan to provide meals

meal program in the world.

fully equipped to cook 2

It is an ISO 22000:2005

to rickshaw drivers and

lakh meals in less than 5

certified centralized kitchen

other informal workers. For

hours. The kitchen, which is

unit. The cooked meals are

five rupees, the workers

no less than a food-factory,

delivered via 35 custom

received unlimited food

features an indigenously

designed meal distribution

at four set locations from

designed roti-making

vehicles.

7:00–8:00 p.m. every

machine which rolls out

evening.

60,000 rotis in just 1 hour.

5 August 2003

May 2006

2010

Kitchen opened in the holy

A new gravity flow kitchen

TAPF uses owned or rented

city of Vrindavan, Uttar

was established in

vehicles to deliver meals to

Pradesh.

Bangalore with the capacity

the schools attached to the

to serve 200,000 children.

centralized kitchens. These

July 2004

vehicles are not uniform in

Hubli is the second kitchen

size (ranging from a small

of Akshaya Patra in

pickup truck to a large van)

April 2015

because they were added

Akshaya Patra opened

children each day. It is an

January 2007

to the fleet as demand

its first Food Safety and

ISO 22000:2005 certified

Decentralized operations

increased. Even some of

Quality Control Laboratory

centralized kitchen unit.

in Baran served 79 villages,

the rented vehicles vary as

(FSQC Lab) in Ahmedabad,

40 customized meal

feeding 15,000 children

they are rented from local

Gujarat. Aimed to evaluate

distribution vehicles deliver

per day.

businesses. Each vehicle is

food from farm to plate,

Karnataka feeding 1,26,693

assigned to run a specific

the lab has been fitted with

to the beneficiary schools.

November 2008

route predefined by a

state-of-the-art equipment,

This kitchen has also taken

U.S. President Barack

delivery supervisor.

and high-precision testing

up initiatives like setting up

Obama noted that in

lush green kitchen gardens

just a few years, Akshaya

along with eco-friendly

Patra had become the

initiatives like an effluent

single largest feeding

treatment plant, rain water

program in the world. “Your

harvesting pond, and

example of using advanced

vermicomposting.

technologies in central

the cooked mid-day meal

instruments.

kitchens … is an imaginative approach that has the potential to serve as a model for other countries,” he wrote.

Inside The Kitchens of the Largest Non-Profit Meal Program in the World | 101

INNOVATIVE MID-DAY MEAL FUNDING CAMPAIGNS

1

Tweet2Health is a mobile app with

GOOD FOOD FOR GOOD, a Toronto

PriceBurp.com, a coupon based

genuine reviews about doctors and

based social enterprise partnered

website in India partnered with

hospitals. Every activity on the app is

with Akshaya Patra to donate a meal

Akshaya Patra where people

rewarded with points and once 500

for every sale made, in the fight

shopped online, made qualifying

points are accumulated, user can

against world hunger.

sales using PriceBurp coupons and

donate them towards a mid-day-meal

donated a mid-day meal to the many

for beneficiaries.

underprivileged school children across India.

+1

CashKaro.com, India’s No.1 Cashback

Jackfruit365: An initiative to make

Vasudev Adiga’s ‘+1 Campaign’:

and Coupon site, gave cashbacks on

Jackfruit available to the public 365

Every item on the Vasudev Adiga’s

more than 500 brands as funding to

days of the year with three main

menu was increased by Re 1, and the

Akshaya Patra.

objectives – bring down the wastage

proceeds were donated to Akshaya

of the highly nutritious fruit from its

Patra.

current level of 80% ; provide a native solution to increase the fibre content of an average professional’s diet; and create a vehicle to support mid-day meal programs. For every pack sold, the JackFruit365 team donated a sponsorship fee for 5 mid-day meals; requested their partners (restaurants and corporate cafeterias) to donate a meal for every meal served with JackFruit365 and requested all their well-wishers to donate generously to Akshaya Patra.

102 | BoP World Convention & Expo Edition 1

This booklet will serve as the first edition of a series of post-BoP World Convention & Expo publication by BoP HUB. It is within BoP HUB’s initiative to map all the best social entrepreneurship model from around the world so that their experiences and lessons can be shared. If you’d like to nominate a social enterprise for future editions of this booklet, contact us at info@bophub.org The 2015 BoP World Convention & Expo will be a regional event with a focus on South America and it will be hosted in Mexico City, Mexico on December 1-3, 2015. For more information and to register, check out www.bopworldconvention.com.

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