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Social Entrepreneur: Harish Hande (Part 5)

Posted on Monday, May 14th 2007

Here Harish provides us with a case study of his business model. This is just one example, and they have 80,000 installations, so you can appreciate the impact Selco has had.

SM: A lot of our readers likely have no idea what a very poor village in India looks like or what issues they deal with. Can you give us some examples of your intervention? HH: One of the best cases which provides a great visceral overview, occurred several years ago. In our company we have to think of ways to help the poor, not sympathize with them.

We had a group of tribals where 5-6 families live in a house and they just had candles for light. They were day laborers working in somebody else’s fields. They used to roll bidis in the night under small kerosene lights. [Bidi is an indigenous cigarette of sorts.]

They told us they did this rolling under kerosene light because it only gave good light for a small area, so it was all they could do. We asked them what they would do if they had more light, and they told us they were very good basket makers.

The problem was that they did not have the time during the day to make baskets, and there was not enough light at night to work then either. I asked them how much they sold the baskets for, and they told us 30 rupees, and that they could make two or three per night.

I asked them if they would be willing to give 5 rupees per basket to pay for the light, and they said absolutely. We connected them to somebody who was willing to wholesale the baskets made by these 98 homes. The clients paid 5 rupees per basket for the loan, and in four years they had paid off the loan for the lighting. If you consider it, this is 300 rupees per month for them, which is $7 per month for a light. That is what THEY paid, it was not subsidized by someone else.

The moral of the story is if you can create a product which matches their needs, it does not matter how poor they are. World Bank has always said that solar does not make sense for them because they were too poor, but here you can see if the need is matched, then it is a productive fit.

We have not done anything extraordinary, we have just been a catalyst between two resources. The idea came from them, and we had tools to link them to the market. Other than that, we did nothing else. There is enormous potential if you just look at the whole chain, find the weakest link and strengthen it. It may be a financial link, where they cannot afford the margin money so you work with the financial institution to get the margin money financed.

[to be continued]

[Part 4]
[Part 3]
[Part 2]
[Part 1]

This segment is part 5 in the series : Social Entrepreneur: Harish Hande
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Sramana Mitra on Strategy » Blog Archive » Social Entrepreneur : Harish Hande (Part 6) Tuesday, May 15, 2007 at 2:13 AM PT

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Sramana Mitra on Strategy » Blog Archive » Social Entrepreneur : Harish Hande (Part 9) Friday, May 18, 2007 at 2:30 AM PT