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Rickshaws Drive Entrepreneurship By JEREMY WAGSTAFF | SPECIAL TO THE WALL STREET JOURNAL Pradip Kumar Sarmah was nudged into action late one night, when he recalled a conversation earlier that day with a rickshaw driver. Like many Indians, Mr. Sarmah, a former veterinarian who in 2001 won an Ashoka fellowship for his work promoting small-scale animal husbandry in northeast India, routinely traveled in a rickshaw. There are an estimated eight million rickshaw pullers in the country, and Mr. Sarmah had used an occasion that day to learn what he could about these people's livelihoods. "Who owns your rickshaw?" Mr. Sarmah had asked. The driver gave a name -- clearly not his own. He said he had been working 16 years as a puller. "How much rent do you pay?" Mr. Sarmah asked. Twenty-five rupees a day -- about 65 U.S. cents -- came the answer. "By the moment I got down [out of the rickshaw], I forgot about it, but when I got home and had dinner and went to go to sleep, his words came back to me," he says. "So I got up and went to my calculator." A few sums indicated that the driver paid nearly half his earnings in rent -- and many times over had covered the approximate 6,500-rupee cost of a rickshaw. Mr. Sarmah decided to learn more, and the next day he prepared a questionnaire. He quickly learned that few rickshaw pullers intended to be one; they came to the city looking for work, and, without proper papers, this was all they could find. For the same reason, none was insured, or had a bank account. "It's a huge community," he says. "But there is no support system." Mr. Sarmah's answer -- this year's Asian Innovation Awards bronze winner -- was in part inspired by Muhammad Yunus, whose Grameen Bank had brought credit to rural Bangladesh: a Rickshaw Bank that gives pullers a good chance to own their own vehicles on decent terms. Under the program run by Assam-based Centre for Rural Development, pullers buy the rickshaw on credit, payable in daily installments. To do so, they must group together with at least four others who act as "social collateral." Defaulters are discouraged and repayment problems discussed within the group. They gather at a meeting point, usually a pharmacy or small shop, the owner of which is supported by a small loan himself and who is responsible for collecting the daily repayments. A coordinator collects these sums in the evening. Should one puller fall behind in his payments because of illness or other problem, the others must apply on his behalf for a "leave application," and the daily installments are suspended without penalty. "Each member has an undertaking for each other so they can create peer pressure for each other," says Mr. Sarmah, who is executive director of the development group. Mr. Sarmah's idea of a Rickshaw Bank was complemented by another key innovation: a new kind of rickshaw. Collaborating with the India Institute of Technology, he came up with a rickshaw with more room for passengers, a more

comfortable seat, a better center of gravity to make it easier to pedal, and enough space on the back for businesses to advertise prominently. Rickshaw drivers can expect to pay off the loan within 18 months. In Assam, where the project was launched in 2004, 350 of the 1,350 pullers who have taken out loans have paid off their loans. Copyright 2009 Dow Jones & Company, Inc. All Rights Reserved

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