Boond: Micro-franchising for Achieving Scale in Social Impact

In October 2009, when I was a speaker at the Micro-Finance India Summit, I was truly humbled and awed by the entrepreneurs I met, some fresh out of college, who shared their business plans (ventures in various stages of development) with me. One thing that was common to all was that they took on great risk (financial, social, time investment) with amazing optimism and a can-do attitude. One such entrepreneur is Rustam Sengupta who has founded a for-profit social enterprise "Boond" (which in Sanskrit means a drop). I was captivated by the ambition reflected in the vision & mission: “Reach 1 million individuals with light, clean water and pest control by 2012”. But even more so by the fact that scale was integrated into the strategy and operations from the get-go. "Boond’s mission is to bring development to the poor living in remote areas of India through the specially designed Boond Development Kit. The specially designed kit consist of a Solar lamp, a water filter and a mosquito net and is sold through local villagers with 3/6/9 month financing schemes to make it affordable for the BPL household."
The unique aspect of Boond is its strategy to reach its market - the prepackaged kit is sold through the Boond Officer: Boond has put together a micro-franchising solution: a kit, a reseller and financing.

Boond development kit customers live in remote places that are hard to reach and without proper market infrastructure. So meet Boond Officer Bikash: a native of Manipur who teaches young children in the local school and earns about Rs. 2600 (US$58) a month. He is a talented singer and dancer, immensely passionate about Boond products, and has set a target for selling 30 kits in a month. The village he targets has less than 10% electricity coverage and no running water.

Boond has created a very low-cost solution: with just $20 a financier can empower a villager to deploy the kit.

I believe that the biggest development challenge for India is reaching, enabling and developing the rural market in spite of development in the metros. Boond has created a solution. "In India, nearly 300 million people still live in complete darkness while WHO statistics highlight that a million every year die from water borne diseases. Boond believes that these are the two biggest development challenges we face and can be surmounted by a collective effort of ordinary individuals. Malaria, nearly eradicated from the Western world still kills nearly 300,000 people a year and we believe that this is unacceptable since it’s easily preventable for a low cost. Boond is also trying to change the peoples mindset through its website and campaigns (www.boond.net) and encourages collective action to fight the biggest challenges faced by India today – Light, Clean Water and Pest Control" says Rustam.

Microfinance to Mainstream?

Micro finance methods have captured our imagination, hearts, social conscience and even our technology innovation dollar, but, sadly, never the institutional support that ideas need to go from boutique to mainstream. Till now. Eric Bellman, Wall Street Journal July 6, 2009 headlines "Rural Demand Helps Indian Banks". Bless his WSJ heart, the byline says "once considered a burden, remote branches prosper on aid for farmers". Note: aid, not loans. Other than that quibble (though technically aid is correct, because there are some subsidies involved but given all the baggage associated with the word "aid" I would rather use "stimulus" or something else), the rest of the article is worth every bit of ink. India has been resilient to the global meltdown because of growth in rural India; technology to reach remote areas and as market is growing, traditional for-profit banks are moving in too- completing a virtuous cycle. Key points:

- rural banking growth - from 12% to 20% has offset decline in urban - from 28% to 19% which is more tied to the global economy

- technology helps - remote branches have a finger-print scanner and mobile phone for identification and processing (State Bank of India) - loans and deposits are small amounts

- the benefit is felt by the state owned banks, which were forced to maintain rural branches (at a loss), but as the "market" is growing, multinationals (e.g. HSBC) are entering the market -thus taking it mainstream

-because of low default rates etc. - interest rates are competitive (10%)

- customer profile- "No one in my family has ever had an account"

I generally highlight media coverage of business+technology+social impact - and coming from WSJ - I thought it was especially noteworthy. In fact it made me track down other noteworthy articles (one especially on cell phone growth in India) by the same author.

For emerging markets -if there is a killer app - it is banking - whether it is delivered through cell phones, kiosks or moving vans; think of the potential customer base! I hope this story is an indication that "microfinace" is moving to "finance" - its the kind of change the world needs.

Education- the gift that keeps on giving- isn't that called investment?

The following 2008 update letter is part of a package sent to investors. As financials are tough, I wish you all the best in making giving (investment) choices right for you.

Dear Friends,
“The greatest doer must also be a great dreamer.” -- Theodore Roosevelt
In December 2007, I stood on the grounds of the Rural Women’s College in the village of Gangapur, Varanasi and as I looked into the eyes of so many eager young faces, it felt like a dream come true. The aura of hope, excitement and vitality was so strong that all I have to do is close my eyes and I can still feel it today. In the students’ young faces, I see an India that is vibrant, compassionate and wise. I see an India that retains what is best in our ancient culture without the shackles of poverty and desperation.

Our story starts many years ago when my husband and I got a letter from Salt Lake City, in the mail, outlining a dream and also a plan which included the establishment of the “Foundation for Women’s Education in the Rural World” for a school for young women in rural India. We were so moved by the vision as well as the well thought out plan that we decided to give what little financial support we could provide, to keep in touch with Dr. N.P Singh but mostly to be cheerleaders for his grand vision and a most worthy cause. We had never heard of Dr. Singh but we figured when someone takes up such a major challenge, being cheerleaders was the least we could do.

Today, the school is very real and it is making a vast difference. The buildings are functional, grounds neat and kept clean by an assiduous staff. The environment feels safe and supportive. But what is most impressive is the attitude the students and staff bring to the picture – they are enthusiastic, hard working and energized.

Their individual stories are inspirational. During my visit, I noticed several young girls with “sindoor” in their hair and so when I asked I found that many of the students had already done a full days worth of house-work taking care of families even before taking the long ride to the school. And yet they projected no hint if tiredness or hardship. In fact they were proud of themselves, their school and their family for supporting their dreams.
They say that “a dream is just a dream until you write it down….then it becomes a plan”. We feel honored to be included in the planning of this dream and look forward to seeing it grow. There still remains much to be done, but believe me to share in this dream gives rewards far greater than any investment one makes. Please do plan to join in making dreams come true for a most deserving group – young rural women of India.

The Aravind Case: Business at its Best

It is worth studying the Aravind case - a business that does well by doing good. Aravind has overcome barriers of distance, poverty and ignorance to create a self-sustaining system; social entrepreneurship at its best with latest in technology, revenue generation for sustainability and a business model for scaling.

The Bill & Melinda Gates Foundation has selected the Aravind Eye Care System , to receive the 2008 Gates Award for Global Health.

But the contribution made by Aravind is broader than just healthcare - they validate and thrive on the concept of "doing well by doing good".

"Founded in 1976 in a rented house with only eleven beds, Aravind has grown into a thriving network of hospitals and satellite clinics that provide eye exams and surgeries, train healthcare professionals, conduct research, and manufacture eye-care products. In the past year, the Aravind network provided out-patient care to approximately 2.4 million patients and performed more than 280,000 surgeries. Thanks in part to its efforts, the estimated number of blind people in India fell from 8.9 million in 1990 to 6.7 million in 2002 -- a 25 percent decrease according to Philanthropy News."

What I hope this recognition will catalyse is growth in investment in social enterprises, like Aravind, early in their lifecycle so it does not take 30 years to scale.

Reuter Project Market Light launched in India

Reuters Digital Vision project called Market Light is an initiative to reach the rural community in India. The service provides information on crop prices, weather updates and other agri-related news via SMS. If effective in India, Reuters will extend this service to African countries. Mr Mehra, Managing Director claimed that Market Light has enabled the farmers to negotiate better prices - Mans http://economictimes.indiatimes.com/Reuters_to_extend_reach_to_rural_India/articleshow/2255086.cms