Social Entrepreneurship in India

Social Entrepreneurship in IndiaThe Complete Guide to Funding, Profitable Sectors [and more] News @nextbigwhat powered by #ChaiApp
CHECK OUT THE YOU EDITION OF NEXTBIGWHAT
SUBMIT YOUR STARTUP
ABOUT
SUBMIT YOUR STARTUP
ABOUT

SUBMIT YOUR STARTUP
ABOUT
Social Entrepreneurship in IndiaThe Complete Guide to

Funding, Profitable Sectors [and more]
Aug 20, 2010
Guest Author
11 Min Read
[We have covered Social Entrepreneurship in depth and here is a great article written by Aarti Shrivastava covering the various aspects of Social Business]
The major boost in social entrepreneurship was given by the Nobel Prize winner Dr. Mohammad Yunus when his brain-child Grameen bank became successful in helping people lift themselves out of poverty
in rural Bangladesh by providing them with credit without requiring collateral. Yunus developed his revolutionary micro-credit system with the belief that it would be a cost-effective and scalable weapon to
fight poverty. It was soon realized that profits can be made along with serving the society, provided you treat profits as a means and not the end result.
The impact of such enterprise largely depend on its successful implementation to those that need it the most, those at the Bottom of the Pyramid. And of course a discussion about the BOP wouldnt be
complete without mention of India; where hundreds of millions critically need a compelling movement in social entrepreneurship to improve their welfare. There is a natural predilection towards rural areas as
70% of the population lives in the hinterland. Recently, the rural scenario in the country has emerged as a lucrative option for the mainstream economy. Various organizations are viewing rural areas as
potential markets, resulting in a gamut of innovative solutions within the social entrepreneurship space that focuses on and emerges from rural areas.
The popularity of SE is growing at a very high pace in India even through the current economic downturn. In the last three years more and more youth are developing interest in this field including those from
prestigious Stanford, MIT and Oxford. This new evolving field has also got early venture capitalist interested in funding with many seeking out such enterprises that hold out huge potential. Earlier,
organizations solving social problems were often assumed to be idealistic, philanthropic and lacking business acumen or the ability to be entrepreneurial. However, as the social sector has been coming in
touch with the private sector, both have begun to realize that just one approach either pure philanthropic or pure capitalist is inadequate to build sustainable institutions.
http://news.nextbigwhat.com/social-entrepreneurship-in-india-funds-profitable-sectors-297/[7/24/2016 1:20:01 PM]
In recent years, not-for-profit has been pushed to the back partly because of responsible lenders and social enterprises are being run more like businesses today. The focus is on enterprising micro groups
which want to transform their own, and the communitys, circumstances but cant access any finance.
Fast company in their March 2010 listed top 10 by Industry. And four of the top 10 most innovative companies in India were standalone social enterprises or have socially entrepreneurial initiatives.
In India alone social entrepreneurship space has a countless mixture of models with a one billion thinking structure. One billion thinking requires cost-effective models involving the bottom of the pyramid.
The majority of these models are scalable and replicable.
Few for-profit Social Business Models

Company
Activities
Impact
Future Plan
VNL
Makes telecom equipment that helps mobile

operators reach rural markets profitably
70 station in Rajasthan
Replicating and scaling it worldwide
Narayan Hospital India
Delivering affordable healthcare to the masses

worldwide
5000 bed facility completed in phase 1
Health city with 30,000 bed facility by 2016
A little world
Empowering micro business through micro

banking
Customer base crosses 3 million
Touch a billion people through innovative

technologies
Barefoot College
solar energy, water, education, health care, rural

handicrafts, peoples action, communication,
womens empowerment and wasteland
development
1,000 Barefoot experts in 1,000 villages,

reaches 500,000 people with basic services
such as drinking water, health care, and
education
10,00,000 people by the end of 2016
Childline
Countrys first toll-free tele-helpline for street

children in distress
9.6 million calls, 3 million children, 73 cities,

10 years
600 + districts by 2013
BASIX India
Sustainable livelihoods to the rural poor and

women
Over a million and a half customer
CraftsBridge
A bridge between customers worldwide and

crafts persons, designers
N/A
To tap 6 million village people associated with the

handicrafts sector
Arvind Eye Hospital
Eliminating needless blindness by taking its

services to rural India
In last year alone 2.5 million patients were

treated and over 3 lakh surgeries were
performed
To replicate it in all states of India
COMAT
Empowering rural citizens by creating local

economies and enabling access to information
and services
Deliver Citizen records and Government

benefits to over 50,000 rural citizens every
day
75,000 by the end of 2011
D light
High quality solutions for families living

without reliable electricity
10 million
50 million by 2015
IDE India
Providing long-term solutions to poverty,

hunger and malnutrition
19 million
Ending poverty in the developing world
RangSutra
Sustainable livelihoods for artisans and farmers,

by creating top quality hand-made products
based on the principles of fair trade
Approximate 2500 artisans
Employ 5000 by 2015
Lijjat Papad
Women Empowerment
4600 women employed
Plans to employ 6000 by 2010
Selco Solar India
Sustainable energy solutions and services to

under-served households and businesses.
95,000 villages covered
Bring down the cost of solar equipment by 75% by

2012
Unltd India
Angel investor and incubator for social

entrepreneurs
Each of the projects has, on average, created

1.6 new jobs in the economy
World where individuals take action to bring about

positive social change
SKS Microfinance
Small loans without collaterals
5.3 Million Customers
Take Micro finance to every village
Suminter India Organics
Internationally certified organic agricultural

produce
Premium crop price to more than 7000

farmers
Scale this model nationally
Vortex Engineering
Rural Solar Powered ATMs
750 ATM
One ATM/ Village i.e 6,50,000 ATMs
The other notable change is the involvement of mainstream financial institutions in social entrepreneurship. Various venture capital firms are investing in for-profit entities with social objectives. Interestingly,
specialized social investors provide capital, networking, marketing and business expertise to such ventures.
This trend was kick-started in the area of microfinance when Sequoia Capital invested in SKS Microfinance.
Social venture funds measure their investments on social, environmental and the traditional financial returns. Acumen fund expects to make an impact on million people with every investment in a five-year
time frame. The fund measures returns in terms of financial, operational (internal processes and systems) and social impact (outcome and output). Output is number of people who are impacted and outcome is
how it has affected them. For example, if 1,000 people have had access to clean drinking water, the investors also check if the rate of diarrhea has come down. More heartening is the fact that the mainstream
venture capitalists are also recognizing this as a business opportunity. So far, VCs have invested $220 million in 77 social businesses in India. But there hasnt been a single exit. In conventional commercial
ventures, VCs work with a holding period of 3-5 years. In social businesses, the holding period is longer typically, 6-8 years.
Funds Currently Available

Acumen Fund : It supports sustainable enterprises providing the poor with critical goods and services at an affordable price. Primary focus on healthcare, housing, water, energy and agriculture Companies
invested in: 12 Fund size: $40 million (approx)
VenturEast: It builds profitable businesses that cater to under-served markets. Focuses on meeting Indias domestic needs (primarily rural and semi-urban markets) by backing early-stage / rapid-growth
businesses Companies invested in Over 50 (including 25 social enterprises) Fund size $250 million
Oasis Fund: It supports enterprises that develop innovative solutions that provide the poor with better access to critical goods and services. Invests mostly equity, with some debt. Investments generally range
between $1 million to $6 million Companies invested in 4 Fund size $30 million (still raising)
Song: It supports entrepreneurs in high-growth sectors like education and training, agriculture and food, healthcare, financial services, basic utilities (waste, water, rural telecom, affordable housing, etc) that
are aligned with inclusive growth Companies invested in None Fund size $17 million
Aavishkaar India Micro Venture Capital: It creates sustainable change by increasing economic activity at the bottom of the pyramid and boosting the entrepreneurial spirit. Investments to date have focused
heavily on the rural and agro technology sectors Companies invested in 17 Fund size Rs 60 crore (approx $14 million)
Gray Matters Capital: It invests in the information, communication and technology space to bridge the urban-rural digital gap Companies invested in 4 Fund size $12 million
Elevar Equity II: It creates market-based solutions for poverty eradication. Focuses on sectors like healthcare, education and information Companies invested in 1 (another two in micro-finance ventures)
Fund size $40 million (additional fund-raising on)
The above figures simply state that there is an estimated $100 million (Rs 400 crore) chasing deals in Indias social enterprise space.
But there is a divide between those that have access to mainstream and/or commercial funds and those that rely on personal connections and grants/donations to raise money. The ratio is about 50/50.
Foreign grants: 8%
Domestic grants: 8%
Debt (credit loans): 11%
Government Funding: 3%
Charitable Organization: 5%
Bank Loan: 13%
Loan from Family and friends: 21%
Equity Investors: 21 %
Others: 10%
As per Beyond Profit survey, Forty-five percent of respondents obtained funds from commercial sources whereas 21% of respondents source their funds from personal connections such as family members and
friends; another 21% rely on grants and donations from charitable organizations. Arranging finances for a social enterprise in India is still very difficult. And knowing in which sector to finance is even more
difficult. In bar diagram mentioned below is a mention of profitable sectors and a trend which clearly states areas to divert funds.
Social Entrepreneurship in India Profitable Sectors

Education: Sector with a track record of profit: The Education sector has shown a marked degree of financial stability and growth potential. There are two key elements. First, the sector represents the highest
number of profit-making enterprises (38%) among others, and also has one of the lowest numbers of loss-making entities (24%). Second, the observation says that there is a good growth potential; 38% of
education enterprises are breaking even which means the number of profit-making enterprises in this sector could increase in the coming years.
Health: Sector with large growth potential: Although the sector currently produces a very small number of profit-making entities, it has the lowest percentage (13%) of loss-making enterprises. Most
importantly, at 73%, the Health sector has the largest segment of break-even businesses. If/when these enterprises begin to turn a profit, the Health sector could sustain a multitude of successful, profit-making
enterprises.
Rural Development: Sector to watch out for future growth: Despite the fact that the largest number of social enterprises are in this field, it is the biggest loss-making sector at the moment. However, Rural
Development demonstrated the largest revenue increases last year, so there could be more surprises in store.
There are more enterprises that are loss-making (34%) than those earning a profit (25%). And 41% percent of enterprises are currently breaking even. If you look at the profitability by measure of years in
operation, you can clearly see that making profit through social enterprise is no easy task.
It is true that the percentage of loss-making enterprises steadily goes down as the companies get older. But there is virtually no disparity in the number of profit-making entities across age categories. Many
enterprises stop making losses as they grow older but do not begin to turn a profit; they merely start breaking even. Surprisingly, even after 11 years or more of operations, the percentage of profit-making
enterprises is only 27%.
Social entrepreneurship in India is emerging primarily because of what the government has not been able to do. The government is very keen on promoting social entrepreneurship not necessarily by funding
it or by advising on it or enabling it. What they do do, is not disable it.
For example, in Mumbai alone, non-profit organizations educate more than 250,000 children on a daily basis. The government has not told these organizations not to do it. Whereas in some countries, when
someone takes it into their own hands to start a facility for education or healthcare or empowerment, the government often puts in place barriers to prevent this from happening.
Our country does not have a homogenous people or geography, so the impact largely remains regional. With the current economic climate, it is very likely that social needs will increase and, consequently, the
number of people committed to addressing them will increase. Definition of social entrepreneurship has changed over time. From corporate philanthropy to non-profit and now to self-sustainability, Social
Entrepreneurship has evolved and will keep evolving with time and needs of the world.
[Reproduced from Aartis blog]
Recommended Read: Social Entrepreneurship Interview with DesiCrew [Rural BPO] Founder | Interview with RangDe Founder (on Business Model, Startup Journey..and more)
You may also like
TECH
STARTUPS
Cyanogen fires OS
development arm, India
office is being gutted
As e-commerce sites lose,

discount sites rake up
millions in India
Jul 23, 2016
Jul 23, 2016
10 Comments
Click here to post a comment
Subscribe To Our Daily Newsletter
Get News, Insights and more in your inbox every day by 10 am for free
* indicates required
Email Address
First Name
Subscribe
Terms and Conditions

Terms of Service
PR
Copyright NextBigWhat.com

Social Entrepreneurship in India

Загружено:

Сведения о документе

Авторское право

Доступные форматы

Поделиться этим документом

Поделиться или встроить документ

Параметры публикации

Этот документ был вам полезен?

Это неприемлемый материал?

Авторское право:

Доступные форматы

Social Entrepreneurship in India

Загружено:

Авторское право:

Доступные форматы

Social Entrepreneurship in IndiaThe Complete Guide to Funding, Profitable Sectors [and more] News @nextbigwhat powered by #ChaiApp

CHECK OUT THE YOU EDITION OF NEXTBIGWHAT

CHECK OUT THE YOU EDITION OF NEXTBIGWHAT

SUBMIT YOUR STARTUP

SUBMIT YOUR STARTUP

CHECK OUT THE YOU EDITION OF NEXTBIGWHAT

Social Entrepreneurship in IndiaThe Complete Guide to

http://news.nextbigwhat.com/social-entrepreneurship-in-india-funds-profitable-sectors-297/[7/24/2016 1:20:01 PM]

Few for-profit Social Business Models

Makes telecom equipment that helps mobile

Replicating and scaling it worldwide

Narayan Hospital India

Delivering affordable healthcare to the masses

5000 bed facility completed in phase 1

Health city with 30,000 bed facility by 2016

Empowering micro business through micro

Customer base crosses 3 million

Touch a billion people through innovative

solar energy, water, education, health care, rural

1,000 Barefoot experts in 1,000 villages,

10,00,000 people by the end of 2016

Countrys first toll-free tele-helpline for street

9.6 million calls, 3 million children, 73 cities,

600 + districts by 2013

Sustainable livelihoods to the rural poor and

Over a million and a half customer

A bridge between customers worldwide and

To tap 6 million village people associated with the

Arvind Eye Hospital

Eliminating needless blindness by taking its

In last year alone 2.5 million patients were

To replicate it in all states of India

Empowering rural citizens by creating local

Deliver Citizen records and Government

75,000 by the end of 2011

High quality solutions for families living

Providing long-term solutions to poverty,

Ending poverty in the developing world

Sustainable livelihoods for artisans and farmers,

Approximate 2500 artisans

Employ 5000 by 2015

4600 women employed

Plans to employ 6000 by 2010

Selco Solar India

Sustainable energy solutions and services to

95,000 villages covered

Bring down the cost of solar equipment by 75% by

http://news.nextbigwhat.com/social-entrepreneurship-in-india-funds-profitable-sectors-297/[7/24/2016 1:20:01 PM]

Angel investor and incubator for social

Each of the projects has, on average, created

World where individuals take action to bring about

Small loans without collaterals

5.3 Million Customers

Take Micro finance to every village

Suminter India Organics

Internationally certified organic agricultural

Premium crop price to more than 7000

Scale this model nationally

Rural Solar Powered ATMs

One ATM/ Village i.e 6,50,000 ATMs

Funds Currently Available

Social Entrepreneurship in India Profitable Sectors

http://news.nextbigwhat.com/social-entrepreneurship-in-india-funds-profitable-sectors-297/[7/24/2016 1:20:01 PM]

You may also like