Heartlines -(Aug 2021) - Dr Lata Rajagopalan

40

AUG 2021

BUSINESS MANDATE

fountainhead of excellence

H

eartlines refers to emotional

Kumar

This story talks about business

equity in connecting with

commenced her speech with a quote of

goals, social impact and feedback

people at the grassroots

John F Kennedy, “If a free society

mechanism. The emphasis was on

level. Social entrepreneurship is all

cannot help the many who are poor, it

serving the poor and keeping them

about impacting and changing the lives

cannot save the few who are rich.” She

happy while filling the coffers. This is

of the under­served—not undeserved

narrated the story of an ancient king of

the essence of social entrepreneurship:

—consumers,

the

Asia whose kingdom flourished in trade.

targeting the poor and deserving yet

Heartlines; making good business

The king imposed three rules on these

making a business model out of it. It

decisions and capturing the ‘Headlines’;

merchants in his kingdom:

involves keeping the ears on the ground

and turning the ventures profitable and

•

They can sell the products at any

to know what people (customers) want

price provided they sell their

and accordingly serving them.

thus

targeting

Dr

generating healthy Bottomlines.

A smile on the face of a farmer or

price.

•

needs. It is also a sign that alongside wealth creation there is a commitment

Rajagopalan

products to poor people at a lower

bangle­seller is the first sign that corporate goals are meeting human

Lata

A portion of the profit must be deposited with the royal treasury.

•

Excerpts from the talk: Underserved segment includes

The traders must engage with the

urban and other neglected groups, but

to improving the quality of life of the

people and bring back valuable

a majority lives in rural India—places

underserved. And, it is a sign of

information about their needs and

where there is iniquity in demand and

changing times.

well­being to the king.

supply; places which have inadequate

BUSINESS MANDATE

fountainhead of excellence

41 AUG 2021

largest electronic repository in the world. And did you even know that India

And did you even know that India had digital transactions

had digital transactions of over 25

of over 25 billion real‐time online transactions in 2020,

billion real­time online transactions in

beating China which was at 15 billion?

2020, beating China which was at 15 billion? Digitization has overcome many of the structural challenges and equities

infrastructure and technology; places

transformed marginally, disappeared or

where there are traditional asymmetries

completely adapted themselves. They

in

are:

accessing

information

and

affordability. With all these issues, can you even believe that the size of this market was estimated at hundreds of billions of US Dollars according to a Nielsen report of 2018? That is about several lakhs of crores of rupees.

The Four Vectors How's that even possible? Over the years, there have been many noticeable developments in these markets. Four important vectors have either changed, 42

AUG 2021

and created new opportunities.

Bill Drayton is widely credited for coining

the

term

social

•

Intermediary

entrepreneurship in the early 80s. He

•

Distance

founded Ashoka, a global association of

•

Time

social innovators. Ashoka identifies

•

Information

mentors

All these happened because of the

entrepreneurs across the world. They try

disruption in technology, the most

to learn from the patterns in their

significant

innovation and mobilize a global

change

transformation

in

being the

in

the

mode

of

and

supports

social

community of change­makers.

commerce. It has leapfrogged from cash to credit and digital. Digitization has empowered

rural

India.

‘Touch and Tech’ Change‐Makers

Between

I am sure all of you have read about

Aadhaar and Jan Dhan, India has the

the people here in India who created

BUSINESS MANDATE

fountainhead of excellence

headlines with social impact business ideas. Social media is exhausted with information. Still, we talk about a few

Social media is exhausted with information. Still, we talk

innovators who have made significant

about a few innovators who have made significant impact

impact using market principles and

using market principles and technology for change and

technology for change and adding

adding purpose to profits.

purpose to profits. I call it Touch and Tech. Let me go through two or three

company, giving access to credit and

provide preschool education to 35

categories which have made an impact.

livelihood

micro

million children, most of these lack basic

entrepreneurs. In India, the company

infrastructure facilities and have severe

works with communities to create more

manpower issues with the result that

inclusive

growth

only 31 percent of the children attend

opportunities for the underserved. Arth

the centres regularly. That's not very

gives affordable credit loans through a

good.

Fintech: Finance with Technology Fintech has empowered and made capital available for small businesses in small places. In fact, World Bank has published that financial inclusion is a fastest way to reduce poverty and boost prosperity. India has about 150,000 bank branches and 210,000 ATMs as of December 2019. It is probably more but still access to commercial cash remains a challenge in rural and semi­rural areas. Borrowing at very high rates has ruined families; it has made doing business unsustainable over the long run.

The Story of ARTH I would like to talk about Seema, a mother of two in UP. She lost her husband in 2018 and her world fell apart. She had no savings for livelihood or access to microloans. ARTH, founded

by Shweta Aprameya, stepped in and transformed her life.

Shweta is an alumnus of Sloan, MIT, with long years of experience in Fintech. Arth is a social impact finance

services

and

to

sustainable

deep branch network that is supported

Private, preschool segments are

by user­friendly digital processes. It is

largely unaffordable for low­income

very important to be user­friendly.

communities. According to the 2007

The impact has been a footprint of

Annual Status of Education report

a phenomenal 18,000 pincodes, 25,000

(ASER) on Rural India, 86 percent of

self­employed women, 2 lakh micro

students in the 14 to 18 age group are

businesses and 350 crore microcredit

still within the formal, education

disbursement. These are just not

system, yet poor education quality and

numbers. Each is a story with a name

teaching

behind it. This is the power of

infrastructure and facilities has kept the

transformational finance. It has given

rural areas lagging behind.

techniques

and

lack

of

social and economic independence to micro entrepreneurs, especially women.

LearnFatafat LearnFatafat

The Edutech Sector We

look

at

is

an

edutech

company that converts educational another

sector.

content into videos. The startup was

Education with technology is one of the

founded by Pankaj Chhajed in a small

biggest sectors in India where startups

town called Bhusawal which gave him a

can emerge and create an impact.

better understanding of what the

According to India's 2011 census report,

students needed. It was a challenge to

there are approximately 99 million

arrange amenities and to find suitable

children in the 3 to 6 age group. While

regional content. It had to be affordable

the government runs anganwadis to

and accessible. LearnFatafat was able to

BUSINESS MANDATE

fountainhead of excellence

43 AUG 2021

the gap in demand and supply in India.

Nearly 70% of the rural population The basis of social entrepreneurship is about having

(about 850 million people) is served by

empathy for the less fortunate, underprivileged and the

less than 30% of the country’s combined

underserved.

medical services. There is one doctor per several thousand people on an average.

Many families simply have no access to

cover nearly a hundred percent of the

impact. KLC runs around 300 primary

good health. In rural communities, this

syllabus into affordable videos.

school centres with 700 teachers. In

is further complicated by long distances,

Karnataka alone, it benefits over 11,000

lack of infrastructure, lack of education

children

and poverty.

So students could easily access the information and study without books and importantly, without internet which is very significant. The impact was self­ study through anytime, any­place videos

and

500

communities,

transforming early years education in

Around 12 years ago, iKure started

rural Karnataka. This is sort of a viable

providing

low­cost model.

health care in rural and semi­rural

comprehensive

primary

and this has reduced the dropout rates

Our own Chennai­based startup

areas. iKure was started in 2008 in

in these places. It has enhanced learning

Classle has a mission is to bridge the gap

Kolkata by Sujay Santra. It operates

and reached places where school,

between

educators;

through a hub­and­spoke model, which

infrastructure

teaching

employers and skilled people. It was

is very interesting. It has a hub or centre

support were inadequate. Over 7,000

started by V Vaidya Nathan, ex­global

where the core medical team sits. This

videos cater to 50,000 students.

innovator at Cognizant. Classle has a

centre is equipped with modern

two­faced

has

procedures and equipment. The centres

individual students and users, while the

are stationed in certain vantage points.

other side has customers who are

They train community workers and

potential employers of these students.

health workers from the villages, after

and

other

HLC and Classle Then we have the Bengaluru­based Hippocampus Learning Centres (HLC).

This was founded by Umesh Malhotra in 2010 with the idea of opening preschools in rural areas. The startup recruits, trains and manages a network of teachers in rented village centres and charges an affordable, monthly fee for quality education services. They are now looking at online solutions.

learners

model.

and

One

side

Classle is an online social learning platform and has included mobile services for students in rural parts of India. It has attracted funding by Chennai Angels. Due to their impact, currently Classle has 2 lakh registered

multiple

investors

for

the

community­based kindergarten in rural

44

In

addition

to

this,

patient

which in turn projects the course of Meditech: iKure’s Hub‐and‐Spoke

treatment, if needed. After a couple of

Model

months

where technology has just begun to fill

AUG 2021

provide healthcare.

be viewed at the hub by the expert team,

opportunities in these areas. Look at the

creating

from the hub. On site, they are able to

other partners in their network.

Yet another category is health care,

while

These peripheral clinics are farther away

information is also uploaded and it can

employment

India

peripheral clinics on a regular basis.

users and over 100 partner colleges and

HLC has raised a total of 21 million from

which the trained workers are sent to

BUSINESS MANDATE

fountainhead of excellence

in

the

program,

these

community health workers become self­ sufficient

and

self­sustaining

entrepreneurs. They generate their

key takeaway from the study was that

income by selling and promoting

within a given region and time frame,

products from iKure supply chain.

development

from

penetration

of

•

They have been able to attract and groom quality professionals.

•

They have achieved their business

The impact of this project was that

products like two wheelers and cell

goals, created wealth and improved

iKure has touched 10 million lives in

phones was higher than that from

quality of life at the grassroots level.

eight states in India. With 10 hubs and

UNDP programmes which were ongoing

160 touch points, 2.5 million have so far

at that time in West Bengal.

been treated in 6000 villages. They use the help of community workers and local self­help groups along with their several tech partners.

As an aside to this, I have personally been involved in a research project that studied the impact of product penetration on quality of life in West Bengal. The categories were two wheelers and cell phones. The study used the indicators defined by the human development index (HDI) to measure the quality of life.

The

results

were

boringly

the bottom line.

A

key

metric

for

social

entrepreneurs is how they impact the

Enterprises?

quality of lives. The basis of social

The commonalities in all the social

entrepreneurship

is

about

having

enterprises that we have discussed are

empathy

as below:

underprivileged and the underserved.

•

They were started by professionals

The key difference between a social

with empathy and conviction.

entrepreneur and a normal business

They have localised their models

entrepreneur is that the objective of

and used local resources.

social entrepreneur is to serve the needy

They have come up with great ideas

people and make an impact on their

and innovation.

lives. The rise of social entrepreneurship

The products are affordable and

shows that most solutions to global

accessible.

problems do not necessarily depend on

• • • • •

education, employment, healthcare and leisure. Leisure is a legitimate measure

They have added social impact to

What is Common in Social

predictable. The ability to communicate and commute naturally meant improved

•

•

They

offer

technology

based

for

the

less

fortunate,

charity or government aid. They come

solutions.

from individuals from any background.

They have run successful, profitable

If people like us can touch hearts and

businesses.

change lives without giving up our

They have attracted investors.

dreams, we must indeed do that. 

of quality of life according to HDI. One

BUSINESS MANDATE

fountainhead of excellence

45 AUG 2021