Heartlines refers to emotional equity in connecting with people at the grassroots level. Social entrepreneurship is all about impacting and changing the lives of the under-served—not undeserved—consumers, thus targeting the Heartlines; making good business decisions and capturing the ‘Headlines’; and turning the ventures profitable and generating healthy Bottomlines.
A smile on the face of a farmer or bangle-seller is the first sign that corporate goals are meeting human needs. It is also a sign that alongside wealth creation there is a commitment to improving the quality of life of the underserved. And, it is a sign of changing times.
Dr Lata Rajagopalan Kumar commenced her speech with a quote of John F Kennedy, “If a free society cannot help the many who are poor, it cannot save the few who are rich.” She narrated the story of an ancient king of Asia whose kingdom flourished in trade. The king imposed three rules on these merchants in his kingdom:
They can sell the products at any price provided they sell their products to poor people at a lower price.
A portion of the profit must be deposited with the royal treasury.
The traders must engage with the people and bring back valuable information about their needs and well-being to the king.
This story talks about business goals, social impact and feedback mechanism. The emphasis was on serving the poor and keeping them happy while filling the coffers. This is the essence of social entrepreneurship: targeting the poor and deserving yet making a business model out of it. It involves keeping the ears on the ground to know what people (customers) want and accordingly serving them.
Excerpts from the talk:
Underserved segment includes urban and other neglected groups, but a majority lives in rural India—places where there is iniquity in demand and supply; places which have inadequate infrastructure and technology; places where there are traditional asymmetries in 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.
And did you even know that India had digital transactions of over 25 billion real-time online transactions in 2020, beating China which was at 15 billion?
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, transformed marginally, disappeared or completely adapted themselves. They are:
All these happened because of the disruption in technology, the most significant change being in the transformation in the mode of commerce. It has leapfrogged from cash to credit and digital. Digitization has empowered rural India. Between Aadhaar and Jan Dhan, India has the largest electronic repository in the world. And did you even know that India had digital transactions of over 25 billion real-time online transactions in 2020, beating China which was at 15 billion? Digitization has overcome many of the structural challenges and equities and created new opportunities.
Bill Drayton is widely credited for coining the term social entrepreneurship in the early 80s. He founded Ashoka, a global association of social innovators. Ashoka identifies mentors and supports social entrepreneurs across the world. They try to learn from the patterns in their innovation and mobilize a global community of change-makers.
‘Touch and Tech’ Change-Makers
I am sure all of you have read about the people here in India who created headlines with social impact business ideas. Social media is exhausted with information. Still, we talk about a few innovators who have made significant impact using market principles and technology for change and adding purpose to profits. I call it Touch and Tech. Let me go through two or three categories which have made an impact.
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 semi-rural 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 company, giving access to credit and livelihood services to micro entrepreneurs. In India, the company works with communities to create more inclusive and sustainable growth opportunities for the underserved. Arth gives affordable credit loans through a deep branch network that is supported by user-friendly digital processes. It is very important to be user-friendly.
The impact has been a footprint of a phenomenal 18,000 pincodes, 25,000 self-employed women, 2 lakh micro businesses and 350 crore microcredit disbursement. These are just not numbers. Each is a story with a name behind it. This is the power of transformational finance. It has given social and economic independence to micro entrepreneurs, especially women.
The Edutech Sector
We look at another sector. Education with technology is one of the biggest sectors in India where startups can emerge and create an impact. According to India’s 2011 census report, there are approximately 99 million children in the 3 to 6 age group. While the government runs anganwadis to provide preschool education to 35 million children, most of these lack basic infrastructure facilities and have severe manpower issues with the result that only 31 percent of the children attend the centres regularly. That’s not very good.
Private, preschool segments are largely unaffordable for low-income communities. According to the 2007 Annual Status of Education report (ASER) on Rural India, 86 percent of students in the 14 to 18 age group are still within the formal, education system, yet poor education quality and teaching techniques and lack of infrastructure and facilities has kept the rural areas lagging behind.
LearnFatafat is an edutech company that converts educational content into videos. The startup was founded by Pankaj Chhajed in a small town called Bhusawal which gave him a better understanding of what the students needed. It was a challenge to arrange amenities and to find suitable regional content. It had to be affordable and accessible. LearnFatafat was able to cover nearly a hundred percent of the syllabus into affordable videos.
The basis of social entrepreneurship is about having empathy for the less fortunate, underprivileged and the underserved.
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, any-place videos and this has reduced the dropout rates in these places. It has enhanced learning and reached places where school, infrastructure and other teaching support were inadequate. Over 7,000 videos cater to 50,000 students.
HLC and Classle
Then we have the Bengaluru-based 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.
HLC has raised a total of 21 million from multiple investors for the community-based kindergarten in rural India while creating employment opportunities in these areas. Look at the impact. KLC runs around 300 primary school centres with 700 teachers. In Karnataka alone, it benefits over 11,000 children and 500 communities, transforming early years education in rural Karnataka. This is sort of a viable low-cost model.
Our own Chennai-based startup Classle has a mission is to bridge the gap between learners and educators; employers and skilled people. It was started by V Vaidya Nathan, ex-global innovator at Cognizant. Classle has a two-faced model. One side has individual students and users, while the other side has customers who are potential employers of these students.
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 users and over 100 partner colleges and other partners in their network.
Meditech: iKure’s Hub-and-Spoke Model
Yet another category is health care, where technology has just begun to fill the gap in demand and supply in India. Nearly 70% of the rural population (about 850 million people) is served by less than 30% of the country’s combined medical services. There is one doctor per several thousand people on an average. Many families simply have no access to good health. In rural communities, this is further complicated by long distances, lack of infrastructure, lack of education and poverty.
Around 12 years ago, iKure started providing comprehensive primary health care in rural and semi-rural areas. iKure was started in 2008 in Kolkata by Sujay Santra. It operates through a hub-and-spoke model, which is very interesting. It has a hub or centre where the core medical team sits. This centre is equipped with modern procedures and equipment. The centres are stationed in certain vantage points. They train community workers and health workers from the villages, after which the trained workers are sent to peripheral clinics on a regular basis. These peripheral clinics are farther away from the hub. On site, they are able to provide healthcare.
In addition to this, patient information is also uploaded and it can be viewed at the hub by the expert team, which in turn projects the course of treatment, if needed. After a couple of months in the program, these community health workers become self-sufficient and self-sustaining entrepreneurs. They generate their income by selling and promoting products from iKure supply chain.
The impact of this project was that iKure has touched 10 million lives in eight states in India. With 10 hubs and 160 touch points, 2.5 million have so far been treated in 6000 villages. They use the help of community workers and local self-help 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 predictable. The ability to communicate and commute naturally meant improved education, employment, healthcare and leisure. Leisure is a legitimate measure of quality of life according to HDI. One key takeaway from the study was that within a given region and time frame, development from penetration of products like two wheelers and cell phones was higher than that from UNDP programmes which were ongoing at that time in West Bengal.
What is Common in Social Enterprises?
The commonalities in all the social enterprises that we have discussed are as below:
They were started by professionals with empathy and conviction.
They have localised their models and used local resources.
They have come up with great ideas and innovation.
The products are affordable and accessible.
They offer technology based solutions.
They have run successful, profitable businesses.
They have attracted investors.
They have been able to attract and groom quality professionals.
They have achieved their business goals, created wealth and improved quality of life at the grassroots level.
They have added social impact to the bottom line.
A key metric for social entrepreneurs is how they impact the quality of lives. The basis of social entrepreneurship is about having empathy for the less fortunate, underprivileged and the underserved. The key difference between a social entrepreneur and a normal business entrepreneur is that the objective of social entrepreneur is to serve the needy people and make an impact on their lives. The rise of social entrepreneurship shows that most solutions to global problems do not necessarily depend on charity or government aid. They come from individuals from any background. If people like us can touch hearts and change lives without giving up our dreams, we must indeed do that.
Dr Lata Rajagopalan Kumar, Consultant – Communication for Development, Member – IAICS