Curious capitalists: how young minds venture into rural India to change lives
Young entrepreneurs, driven home by the global economic downturn and encouraged by increased funding for developing areas, are launching for-profit ventures in rural India, transforming towns and villages and changing lives. Humaira Ansari writes.business Updated: Aug 18, 2013 09:44 IST
Last month, a group of 35 people — young brides, wrinkled silvers, homemakers and farmers — braved the searing heat of the Belgaum summer to make their way to a mango tree in the centre of Ashok Nagar, a village of 200 farmer families in north-west Karnataka.
Seeking refuge in the shade, they sat staring at a small grey-and-black stove.
“It consumes less wood and is less smoky,” said Prakash Tirakappanaver, 34, a volunteer with Greenway Grameen Infra (GGI), an 18-month-old company that designs and sells biomass stoves across rural India.
As the demonstration continued, Madhavi Huloli, 35, a cleaner at a government hospital, was surprised to see rice cook in 15 minutes. “My mud stove takes half an hour,” she said.
At the session’s end, when she learnt that a local microfinance agency, part of Greenway Grameen’s distribution network, was offering the Rs. 1,299 stove in exchange for 25 installments of Rs. 70 per week, she immediately signed up, as did 20 other women from the village.
Huloli has had her ‘stove of happiness’, as she calls it, for three weeks. “It has halved my cooking time,” she says. “I’m never late for work anymore.”
Launched in December 2011, after a year of testing and a pilot project that sought feedback from rural women, the GGI stove emits 70% less smoke and needs minimal adjustment of wood, cow dung or other biofuel.
As a result, Huloli finds cooking less time-consuming and less tiring and now even finds time to watch TV or chat with old friends. “Earlier, all I wanted to do after cooking was rest,” she says. “My eyes would burn from the smoke. I couldn’t stop coughing.”
Huloli’s husband Ram, a sugarcane farmer, is happy to shell out the weekly installments. “These days, I feel less guilty when I eat,” he says.
Two 27-year-old engineers, Neha Juneja and Ankit Mathur, are the brains behind GGI. Fresh out of college, the duo set up a consultancy and worked with companies setting up rural electrification projects.
They then set up Greenway Grameen Infra, eager to explore the business opportunities they had spotted in rural India — home to 83.3 crore Indians, nearly 75% of the country’s population, according to the latest census figures.
Why stoves? “We realised that many aspects of rural life — mobile phone connectivity, TV, education — had progressed, but cooking remained unchanged and archaic,” says Juneja, the company’s CEO.
“Clean cooking solutions do not require high-tech interventions but simple, consumer-centric engineering. We took that as a challenge and decided to cater to this growing market.”
The GGI stove is their first product; more are in the pipeline.
This sort of ‘conscious capitalism’ — seeking venture capital to fund a for-profit company that seeks to fill a gap in the growing rural consumer market — is catching on among home-bred and home-from-abroad entrepreneurs eager to cater to India’s ‘under-served’ rural markets.
Aiding them in this mission is the fact that capital, in the form of grants, microfinance and equity, is now more easily available for ventures that focus on developing areas.
Thus the reverse brain drain caused by the global economic downturn is boosting this growing sector, aided by the fact that international funding agencies such as Development Marketplace (DM; run by the World Bank) and Intern-ational Finance Corporation are shifting focus from urban centres to underdeveloped, low-income states in India.
In May, for instance, DM awarded a total of $2 million (about Rs. 11 crore) to 20 entrepreneurs based in the low-income states of Madhya Pradesh, Jharkhand and Chhattisgarh.
“This new set of entrepreneurs is evolving their ideas from a ‘business for good’ paradigm and not a ‘development of poor’ paradigm,” says Parvathi Menon, managing director of Innovation Alchemy, a Bangalore-based collaboration-consulting firm involved in the scaling up of high-impact business models, especially in rural India.
“With greater exposure today, under-served and poor families are also seeking out water, electricity, education and health and are willing to pay for them rather than wait for the government. This marks the emergence of a new market.”
* A localised white revolution
Location: Puri, Orissa
Milk mantra: Sources milk from local farmers, processes it and sells it pasteurised or packaged as paneer
Founded by: Srikumar Misra, 36, former London-based director of mergers and acquisitions for Tata Tea & Tetley Group
Launched in: October 2011
A clutch of lungi-clad, barefoot farmers tread dusty, cracked roads in the harsh May sun. Dented aluminum buckets dangle from their sturdy arms, as they queue outside one of Milk Mantra’s 160 collection points, this one attached to the only kirana store in Jamadharma, a village of 200 farmer families in Orissa’s Puri district.
The 18-month-old dairy start-up sources milk from local farmers, processes it, and then sells it pasteurised or packaged as paneer, under the brand name Milky Moo.
Thrice a month, Milk Mantra tallies the litres brought in by each farmer and pays them, at the rate of Rs. 18 or Rs. 20 per litre, depending on the quality of the milk.
This is, on average, about Rs. 6 more per litre than the rate paid by local dairies and the state milk cooperative.
In all, Milk Mantra buys about 35,000 litres of milk a month from 10,000 farmers across 250 villages in Puri and Jagatsinghpur.
Sarbswar Senapati and his wife Biswajeet are regular suppliers, earning about Rs. 4,200 a month for 7 litres a day. “We are old, alone and tired from decades of physical labour,” says Senapati, 68.
“My land, which I am too old and ailing to till, one cow and this one-room mud house are all we have. The additional income from the milk is a huge relief to us in our old age.”
“I have always felt that Orissa is under-marketed. So when the corporate ennui got to me, I decided to return home. I think today’s India is offering the kind of entrepreneurial opportunities that America did 30 years ago.”
-Srikumar Misra (right), CEO and MD of Milk Mantra
“In some ways, the collective model of Milk Mantra seems like a small cousin of the Amul experiment.”
-Abhay Pethe, professor of economics at University of Mumbai
* A wave of change, one drop at a time
Location: Hyderabad, Andhra Pradesh
Water life: Sets up water purification systems and sells treated water across 10 states, at the rate of Rs. 5 per 20 litres
Founded by: Sudesh Menon, 45, a management graduate and former country head for General Electric in Malaysia
Launched in: January 2009
For more than a decade, 35,000 villagers of Mandavgan Farata village in Pune district had no access to clean drinking water.
Their only source was the river Bhima, where the water was contaminated by industrial waste and residue from several sugarcane factories in the neighbourhood.
“The dirty water made even our food smell,” says former sarpanch Seema Datta, 33.
Eighteen years ago, when Datta married and moved here, the situation wasn’t so bad. Over the years, however, it worsened with residue from sugarcane factories and pollutants from a nearby industrial area.
Water sourced and supplied from a neighbouring village by the gram panchayat was only slightly better. So in April 2010, when Water Life proposed a community water purification plant, the villagers decided to give it a shot.
Two years on, the plant sees 300 villagers queue every day to buy clear, purified water. “The water is crystal clear, like mineral water,” says villager and kirana store owner, Hemant Upadhyay.
The village’s Primary Health Centre’s medical officer, Manjusri Satpute, says two years ago she would treat 15 patients a month for water-borne diseases like hepatitis, cholera, diarrhoea and kidney stones. Of these, at least 10 were children. Today, she says, she sees only about three such cases every month.
“We are at a great inflection point in India, with educated and enterprising youngsters seeking challenges to embrace.
-Parvathi Menon, managing director of collaboration and consultancy firm Innovation Alchemy
“Our metros are bursting at the seams. We need to make India’s villages self-sufficient in order to stem migration. That’s how we can make an inclusive country.”
-Sudesh Menon (right), 45, founder of Water Life
* Wings on wheels
Location: Varansasi, Uttar Pradesh
SMV Wheels: Sells cycle rickshaws to rickshaw pullers, allowing them to pay in installments of Rs. 300 per week
Founded by: Naveen Krishna, 30, former regional centre executive at CAPART, a nodal agency catalysing partnerships between NGOs and the government for sustainable rural development
Launched in: April 2010
Pulling his rickshaw through Shivpur’s serpentine lanes, Dharmendra Giri, 28, wears a smile and a sense of pride. Till a year ago, these were rare emotions in his day of drudgery.
Giri’s happiness stems from the ownership of his only source of income — a cycle rickshaw.
Inscribed on it are the initials SMV, stamped by the company that sold him the rickshaw at 52 installments of Rs. 300 per week.
In May 2010, a month after the company’s launch, Seth learned of it from a fellow rickshaw puller. Tired of paying a daily rent of Rs. 30, he applied. By May 2011, he had his own vehicle.
“Today, I am a proud owner, my own boss,” he says, laughing.
A lot has changed for the Giris since then. Till last year, they lived in a rundown house with a leaking roof. Recently, thanks to an endorsement by SMV, the Giris got free accommodation in a state-sponsored housing complex, Kashiram Awas.
“Today, we eat wholesome meals and even occasionally treat our two daughters to desserts like kheer and jalebi,” says Giri’s wife Reeta.