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INCLUSIVE BUSINESS MARKET STUDY

FOR INDIA AND SRI LANKA

DRAFT REPORT: ANNEXES

JULY 31, 2012

ADB Inclusive Business Market Study for India and Sri Lanka Draft Report: Annexes

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Contents

1 Inclusive businesses surveyed.......................................................................................................... 2

2 List of fund managers interviewed .................................................................................................. 6

3 List of donors interviewed ............................................................................................................... 7

4 Case studies of inclusive businesses ................................................................................................ 8

5 Deep dives on potential fund manager partners for ADB ............................................................. 24

6 Economic factsheet on low-income states .................................................................................... 27

7 Deep dives on priority sectors ....................................................................................................... 32

8 Government schemes relevant to ADB’s fund ............................................................................. 344


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1 INCLUSIVE BUSINESSES SURVEYED

Company name

Sector Presence in LIS/NES/Both

BOP Engagement model

C D E S

1 Apollo Hospitals (Reach division)

Healthcare

2 3S Shramik - Div. Saraplast Water & Sanitation

3 Aarusha Homes Pvt. Ltd. Real estate

4 Artisans Micro Finance Retail

5 Babajob.com Telecom, BPO & IT

6 Bodhicrew Services Pvt. Ltd. Education

7 Carzcare Retail

8 Champion Agro Limited Agri-business and agriculture

9 d.light Design Inc. Energy (incl. renewable)

10 Desicrew Solutions P Ltd., Telecom, BPO & IT

11 Desta Retail

12 Drishtee Development and Communication Ltd

Retail

13 Edubridge Learning Pvt. Ltd. Education

14 Ekgaon Telecom, BPO & IT

15 Eko India Financial Services Telecom, BPO & IT

16 Eram Scientific Solutions Water and sanitation

17 Excellent Renewable Pvt. Ltd. Renewable Energy

18 Does not wish to disclose BFSI

19 Forus Health Pvt. Ltd. Healthcare (non-pharma)

20 G. V. Meditech Ltd. Healthcare (non-pharma)

21 Global Easy Water Products Agri-business and agriculture (incl. seeds)


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Company name



C D E S

22 Glocal Healthcare Systems Healthcare (non-pharma)

23 Gram Tarang Employability Training Services Pvt. Ltd.

Education

24 Greenlight Planet Energy (incl. renewable)

25 Healthpoint Services India Healthcare (non-pharma)

26 Hippocampus Learning Centres Education

27 Hotel Saravana Bhavan Hospitality and leisure/tourism

28 Industree Crafts Pvt Ltd Textiles, garments and handicrafts

29 InI Farms Pvt. Ltd. Agri-business and agriculture (incl. seeds)

31 ITC Limited, Agri Business Division

Agri-business and agriculture (incl. seeds)

32 Jain Irrigation Systems Agri-business and agriculture (incl. seeds)

33 Jaipur Rugs Company Pvt. Textiles, garments and handicrafts

34 Jayashree Industries Healthcare (non-pharma)

35 Jk Paper Ltd, Plantation activities, Farm Forestry


36 Kanan Devan Hills Plantations Agri-business and agriculture (incl. seeds)

37 Lafarge India Real estate and construction (incl. housing)

38 Logistimo India Telecom, BPO & IT

39 Medplus Health Healthcare (non-pharma)

40 Milk Mantra Dairy Pvt Ltd Agri-business and agriculture (incl.


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Company name



C D E S

seeds)

41 Mobile Works Telecom, BPO & IT

42 Multi Commodity Exchange of India, Gramin Suvidha Kendra

Telecom, BPO & IT

43 Piramal Water Pvt. Ltd. (brand name: Sarvajal)

Water and sanitation

44 Projects and skill development department

Education

45 Prolific Systems & Technologies Pvt Ltd

Education

46 Promethean Power Systems Energy (incl. renewable)

47 Rangsutra Textiles, garments and handicrafts

48 Rural Off-grid market Energy (incl. renewable)

49 RuralShores Business Services Pvt. Ltd.

Telecom, BPO & IT

50 SAVE - Saline Area Vitalization Enterprise Limited


51 SELCO Solar Light Private Limited

Energy (incl. renewable)

52 Share

Banking & financial services (incl. insurance and microfinance)

53 Shree kamdhenu electronics Agri-business and agriculture (incl. seeds)

54 Shriram transport finance company limited

Banking & financial services (incl. insurance and microfinance)

55 Simpa Networks Energy (incl. renewable)

56 Source for Change, Piramal Foundation

Telecom, BPO & IT


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Company name



C D E S

57 Star Agri Agri-business and agriculture (incl. seeds)

58 Swabhimaan Distribution Services Pvt Ltd

Retail

59 Tata Swach Water and sanitation

60 Under the mango tree Agri-business and agriculture (incl. seeds)

61 Vaatsalya Healthcare Healthcare (non-pharma)

62 Vortex Engineering Telecom, BPO & IT

63 V-Shesh Access Services Private Limited

Education

64 WaterHealth India Water and sanitation

65 WaterHealth International Inc. Water and sanitation

66 Waterlife India Pvt Ltd Water and sanitation

67 Wonder Grass initiative Real estate and construction (incl. housing)

68 Zameen Organic Agri-business and agriculture (incl. seeds)

69 Ziqitza Health Care Limited Healthcare (non-pharma)

SOURCE: Results of survey conducted by Dalberg


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2 LIST OF FUND MANAGERS INTERVIEWED

Fund manager Interviewee Focus on IB?

1

Sector focus

Geographic focus

Stage of investment

1 Aavishkaar Vineet Rai Yes Agnostic India Early

2 Actis Ritu Kumar No Agnostic EM Growth

3 Acumen Fund (Has now left) Yes Agnostic EM Early

4 Aureos Capital Nissanka Weerasekara, Balaji Srinivas

No (SME) Agnostic EM Growth

5 Bamboo Finance Eric Berkowitz Yes Agnostic India Early

6 Elevar Equity Sandeep Farias Yes Agnostic India Growth

7 Gray Ghost Marc Clayton Hand Yes Agnostic EM Early

8 IIP Varun Sahni Yes Healthcare India Growth

9 Imprint Capital Laura Spiekermann2 Yes Agnostic EM Growth

10 Indo-US Rajesh Raju No IT/ITES India Early

11 Lok Capital Vishal Mehta Yes Agnostic India Early

12 LR Global Chanaka Wickramasuriya

No Agnostic Sri Lanka Growth

13 NEA Vamesh Chovatia No Agnostic India Growth

14 Nereus Capital Jonathan Winer No Energy India Growth

15 Pragati Narayan Shadagopan

No (SME) Agnostic LIS Growth

16 Rabo Equity Rajesh Srivastava Yes Agri. India Growth

17 Samriddh Fund Ananta P. Sarma No (SME) Agnostic LIS Early

18 SEAF Hemendra Mathur Yes Agri. India Growth

19 Song Advisors Has now left Yes Agnostic India Early

20 Zephyr Mukul Gulati No (SME) Agnostic India Growth

21 To be named Indika Hettiarachchi No Agnostic Sri Lanka Growth

SOURCE: Results of interviews conducted by Dalberg

1 Dalberg’s assessment of overlap between fund manager’s current portfolio and ADB’s target definition of

inclusive businesses, i.e., any business that engages the poor as consumer, supplier, distributor, or employee; All fund managers mentioned in the list have some exposure to inclusive businesses, but ones marked ‘No’ have a more indirect approach to targeting IBs. 2 Interview confirmed, to be conducted


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3 LIST OF DONORS INTERVIEWED

Donor Contact point

1 KfW Rukmini Parthasarathy, Marcus Baer, Florian Arneth

2 Omidyar Network Ashu Sikri

3 DFID Bala Balasubramanian

4 Catamaran Ventures Arjun Narayan

5 SIDA Christina Wedekull

6 SD Tata Trust Sanjiv Phansalkar

7 Swedfund A. K. Nehru

8 IFC Sri Lanka Ehsanul Azim

9 CDC Group Guy Alexander

- NABARD V. Tagat

- SIDBI K. G. Alai


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4 CASE STUDIES OF INCLUSIVE BUSINESSES

Our team has interviewed 15 businesses that would naturally fit with ADB’s mandate of investing in inclusive businesses. These businesses have delivered or are in a strong position to deliver both financial and social return.

These case studies present an overview of the business and some key data points around its finances (when disclosed) and impact achieved till date. More importantly, each case study highlights the salient features of a company’s model of engaging the poor, assesses its potential to create sustainable impact, and outlines its key challenges to scaling. The case study also reflects on the company’s need for financing, and its preference for a particular financial instrument, if any.

Our sample of case studies covers a breadth of sectors, geographies, and modes of engagement, and should present a collection of insights that could serve as a head start to developing a pipeline of potential inclusive business investments in India and Sri Lanka.


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Inclusive Business Case Study – Aarusha Homes

Affordable housing for migrants and low-income populations

Sector: Housing Location of operations: Urban centers in South India Year of establishment: 2007 Turnover: $650,000 Extent of BOP engagement: 700 BOP consumers; 95 BOP employees Background on Business Aarusha Homes was started to address the lack of affordable housing options in India’s urban areas. Each year, this problem affects millions of low-income migrants into the country’s major cities, often forcing them to live in unsafe and unsanitary conditions. Aarusha provides low-cost accommodation housing to these migrants and low-income individuals in Hyderabad and Bangalore. Aarusha charges rents starting at INR 2,000 ($40) per person per month. Mode of BOP Engagement BOP as Consumers Aarusha’s primary mode of engagement with the BOP is as consumers of its affordable housing services. The majority of Aarusha’s consumers are employees of “entry point jobs”, such as security guards and facilities management staff. On average, a typical security guard earns around Rs 30 ($0.60) per hour. BOP as Employees Aarusha Homes employs over 90 BOP individuals to work in its housing facilities. A portion of these employees also live in Aarusha’s facilities, so they are consumers of this service as well. Impact to date and future growth plans Aarusha has served over 700 consumers to date, and employs over 90 BOP individuals. With operations in two cities currently, Aarusha plans to begin operations in a third city (Chennai) this year. In addition to providing rooms, the company also plans to add low-cost apartments to its portfolio of products. This would capture some of the more upmarket value found in housing for newlywed couples or young families. Challenges A key challenge of working in the housing sector in India is the occurrence of corruption. Property developers often prefer for negotiations to happen “off the books” and for transactions to be made in cash. As Aarusha has refused from inception to work under these circumstances, there is a limited pool of professional developers with whom it could potentially partner. Aarusha has also faced similar problems with state governments. The company had initially partnered with the government, to provide housing to low-income public workers. They had to eventually stop the partnership when the government failed to pay them for this service. Aarusha is still communicating with state officials to receive its due payment, but as they refuse to pay a bribe, this process is consuming much of the team’s efforts. Source of financing to date and future needs Aarusha was started with equity from its promoters, and later received $40,000 in equity financing from Elevar Equity. To finance its working capital needs, however, Aarusha is looking to raise debt, preferably at concessionary rates.


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Inclusive Business Case Study – AISECT

Pan-India network of skills training centers for rural youth

Sector: Education (IT and vocational skills training) Location of operations: Pan-India Year of establishment: 19853 Turnover: Not disclosed Extent of BOP engagement: 10,000 BOP micro-entrepreneurs; 1,000,000 BOP students Background on Business AISECT is primarily engaged in the areas of skill development and training. Having developed the course content, AISECT operates a franchise model and leverages partnerships with universities, such as the Indira Gandhi National Open University (IGNOU), as well as central and state government skill-building organizations, such as the National Skill Development Corporation (NSDC). AISECT trains its trainers and presents degrees and certificates to students upon completion of their course. Mode of BOP Engagement BOP as Consumers ASIECT’s primary consumers are BOP students from semi-rural and rural areas. In fact, 6,000 of its 10,000 centers are located in villages. Interestingly, despite its franchise model, AISECT has adopted a flexible fee structure that takes agriculture seasons into account. Students may take a course at one of AISECT’s centers and pay the fee when their family has earned money from selling their harvested crop. BOP as Distributors AISECT has franchised its model and standardized processes. In addition to training its vast network of trainers, an internal team of 60-70 people conducts regular quality checks. The franchisee is responsible for marketing efforts, and retains 70-80% of the revenue generated.

Impact to date and future growth plans AISECT currently has 10,000 centers across 27 states and 3 union territories. The National Skill Development Corporation (NSDC) is aiming to reach 500 million individuals by 2022. As their largest partner, AISECT plans to grow rapidly through this partnership. Furthermore, the company plans to enter the higher education rural BPO sectors. Challenges Key challenges faced by AISECT include the lack of infrastructure in the states in which it operates, and an overall shortage of adequately skilled trainers. Source of financing to date and future needs AISECT’s major partner to date has been the NSDC, which has supported the company with soft loans (6-8% interest rates) to expand into other states, to meet staffing needs, and to develop content and improve processes. AISECT would consider accepting equity investments, however its current priorities are obtaining new partners and expanding to new geographies.

3 AISECT started as an NGO in 1985.


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Inclusive Business Case Study – Aitken Spence Hotels

Chain of inclusive hotels in India and Sri Lanka Sector: Tourism, Hospitality Location of operations: Pan-Asia Year of establishment: 2004 Turnover: $2 million Extent of BOP engagement: 7.2 million BOP consumers Background on Business A subsidiary of the Sri Lankan-based Aitken Spence conglomerate, Aitken Spence Hotels currently operates a chain of 24 hotels and resorts in Sri Lanka, the Maldives, India and Oman. Mode of BOP Engagement BOP as Suppliers Though it may be easier to supply inputs from larger suppliers, Aitken Spence purposefully partners with local farmers to supply its resorts with agricultural produce. In order to ensure certain quality standards of its inputs, Aitken Spence trains local farmers on optimal management and preservation of their produce. In addition, it provides them with the tools they may require, such as seeds, fertilizer and crates. BOP as Employees Aitken Spence directly employs more than 2,000 local BOP individuals to work in its resorts as facilities management staff, kitchen staff, and tour guides. The company absorbs local high school graduates into its hotels, guaranteeing them a career path and steady income. Impact to date and future growth plans Though it may be easier to engage with more established and standardized suppliers of agricultural produce, energy and other inputs that are crucial to the operation of hotels, Aitken Spence has purposefully chosen to engage the BOP communities in its areas of operation, thereby giving them the opportunity to benefit as much as possible from the resort’s presence. Challenges Like many other businesses in Sri Lanka, Aiken Spence is currently challenged with the high costs of capital, preventing it from growing faster. Though foreign investors have expressed an interest in the company, they prefer investment timelines that are not long enough to allow for returns (5 years as opposed to the 8-10 years required to experience returns on investment).

Furthermore, the Sri Lankan government has not been investing adequately in the infrastructure needed to accommodate the growing tourism industry. Source of financing to date and future needs As it is a subsidiary of one of Sri Lanka’s largest conglomerates, Aitken Spence has benefited from substantial internal reserves, and the ability to leverage its reputation to form joint ventures with international partners. The current cost of capital, however, is hindering Aitken Spence’s expansion plans, for which it would seek loans at concessionary rates (6-8%). Given that a typical 500-room hotel costs approximately $40 million to construct, Aitken Spence would look to receive investments between $10 to $20 million.


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Inclusive Business Case Study – Apollo REACH

Chain of super-specialty hospitals in rural and semi-urban areas

Sector: Healthcare Location of operations: Pan-India Year of establishment: 2008 Turnover: $2.4 million Extent of BOP engagement: 5,000+ BOP customers Background on Business Apollo Hospitals Group has owned and managed a network of hospitals and medical facilities in India since 1979. In 2008, the Group launched a network of smaller satellite facilities, called Apollo REACH Hospitals. Operating in underserved regions and offering super-specialty medical care at affordable rates to people living at the BOP, Apollo REACH now manages 3 hospitals in rural and semi-urban areas. Mode of BOP Engagement BOP as Consumers Apollo REACH, like most healthcare organisations, serves the BOP as consumers, increasing their access to healthcare services. These consumers currently have to travel to cities for specialty healthcare. Due to this additional step in the value chain, many patients remain untreated in the villages. Apollo REACH attempts to bridge this gap. Each hospital houses 150-200 beds, 40 intensive care unit beds, and 5 operation theatres. Each hospital also offers super-specialty medical services (e.g., cardiology, orthopedics, neurosurgery, etc). Impact to date and future growth plans Apollo REACH has developed a model for establishing hospitals in rural or semi-urban areas that is significantly more cost efficient than traditional urban hospitals. As a result, REACH hospitals can charge 20-30% less than other major hospitals. One of the biggest drivers of Apollo REACH’s geographic expansion is additionality, since they would not enter areas where there are other similar hospitals, or would offer services that other hospitals do not. Apollo REACH plans to expand to 25 facilities in the next 2-3 years. Apollo REACH plans to grow its revenues by over 20% annually. By leveraging a hub-and-spoke model, Apollo REACH has effectively countered the challenge of limited talent in rural areas. Apollo’s plans for geographic expansion will be centered around their established hospitals in major cities, to build in the flexibility of temporarily shifting doctors from the cities to the villages on a needs basis. Challenges Scalability is Apollo REACH’s major challenge. At the facility level, after reaching the saturation point in terms of revenues, an increase infrastructure is required, i.e., increasing the number of beds. At the chain or network level, the challenges are similar to those of other businesses – lack of skilled personnel, high CAPEX, and heavy burden of expensive debt. Source of financing to date and future needs Till date, Apollo REACH has been funded by equity from Apollo Hospitals and IFC. Each hospital costs approximately $5 million to establish, implying that the initiative will need close to $75 million in investment in the next 3 years. Of the total pool of investments coming in, Apollo REACH would prefer 60% as debt, 25% as grants, and the remainder as soft loans with a 15 year tenor.

Company logo


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Inclusive Business Case Study – CIC Agri

“Seed-to-shelf agricultural production company”

Sector: Agriculture Location of operations: Pan-Sri Lanka Year of establishment: 1993 Turnover: $67 million Extent of BOP engagement: Over 20,000 BOP farmers Background on Business A subsidiary of one of Sri Lanka’s largest conglomerates, CIC Holdings, CIC Agri is a large agricultural production company. It contributes to 6% of Sri Lanka’s overall agriculture-related GDP. Mode of BOP Engagement BOP as Suppliers CIC Agri engages over 20,000 BOP farmers as suppliers of several agricultural products. These are smallholder farmers, with less than 1 hectare of land. CIC Agri provides these suppliers with agricultural inputs (including seeds and fertilizer), and then buys the harvested product back from the farmers at fair prices. BOP as Employees CIC Agri directly employs approximately 2,500 BOP individuals in its factories, processing units and farms. Furthermore, it indirectly employs over 2,000 contracted employees. BOP as Consumers CIC Agri’s farmers are also consumers of its consultancy services, through which it advises its farmers on how to optimize their yields and productivity. Impact to date and future growth plans CIC Agri directly impacts the lives of over 20,000 farmers, by guaranteeing them the highest possible income for their crop. Farmers benefit from a guaranteed, fair income, and extension services on how to improve the quality of their crop. Currently contributing to 6% of Sri Lanka’s total agricultural production, CIC Agri’s impact on its supplier farmers is very significant and sustainable. It plans to grow by 20% every year.

Challenges Like many other businesses in Sri Lanka, CIC Agri is currently facing difficulties in obtaining affordable financing. Furthermore, Sri Lankan agriculture faces a productivity problem. The productivity of individual farmers is not optimal, and improving this requires a significant resources, to both educate farmers in optimal farm management, and to invest in the necessary technology (such as machinery, fertilizer, seeds, etc). Source of financing to date and future needs As a private subsidiary of a public holding company, CIC Agri has grown to date with its parent company’s internal reserves, loans from local banks and an equity investment by an Indian company Due to its relationship with its parent company, CIC Agri would consider an equity investment with caution. It would consider, however, commercial private equity investments from foreign investors.


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Inclusive Business Case Study – DesiCrew Solutions

Rural Business Process Outsourcing (BPOs)

Sector: Business Process Outsourcing (BPO), IT Location of operations: Pan-India Year of establishment: 2007 Turnover: $700,000 Extent of BOP engagement: 200 BOP employees Background on Business DesiCrew Solutions was started to bring white collar jobs to rural youth in India. As a Business Process Outsourcing (BPO) company with 4 centers across Karnataka and Tamil Nadu, DesiCrew creates attractive rural employment opportunities, thereby reducing the migration of educated youth to urban areas. DesiCrew’s headquarter office receives orders from its corporate clients, which are then assigned to one its 4 rural BPO centers, where the service is delivered. Desicrew’s clients include domestic and international clients. Their early supporters include Infosys and HDFC Life Insurance.

Mode of BOP Engagement BOP as Employees DesiCrew’s primary mode of engaging the BOP is as employees in its BPO centers. These employees are originally from the surrounding rural areas, and are university-educated. They would previously have had little choice but to migrate to nearby urban centers for skilled jobs offering a certain salary. With the presence of Desicrew, however, they are able to stay closer to home and support their families. Once hired, employees are trained in specific processes and IT skills. Impact to date and future growth plans Desicrew currently operates 4 BPO centers in Karnataka and Tamil Nadu, which altogether employ approximately 200 people. Given DesiCrew’s transparent career path, employees can stay close to home without having to sacrifice a fulfilling career. DesiCrew also has a positive impact on its employees’ sense of personal satisfaction. When asked what they enjoy about their job, employees point to the opportunity to manage small teams and directly engage with international clients.

At the community level, DesiCrew’s centers reduce the migration of educated and talented youth away from rural areas and into large cities. Challenges A key challenge faced by DesiCrew is the need to keep costs low and standardized across its 4 centers. This would not only lead to greater profitability, but it would allow any order to be assigned to any of its BPO centers. Keeping its costs low is critical for DesiCrew to remain competitive in the BPO market. Source of financing to date and future needs DesiCrew was incubated at the Rural Technology and Business Incubator (RTBI), associated with the Indian Institute of Technology in Madras (IITM). As a result, it received seed funding of $10,000, and then secured an interest-free loan from Villgro (another social incubator based in South India). DesiCrew has since raised equity funding from an Indian venture capital fund.

Though it is currently able to receive raise debt against receivables to finance its working capital needs, DesiCrew would look to raise equity in the future, to further scale its business.


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Inclusive Business Case Study – Global Easy Water Products

Affordable drip-irrigation technology for smallholder farmers Sector: Agriculture Location of operations: Pan-India Year of establishment: 2004 Turnover: $3.5 million Extent of BOP engagement: 41,000 BOP consumers Background on Business Started as a for-profit subsidiary of International Development Enterprises India (IDEI), Global Easy Water Products (GEWP), sells affordable drip irrigation technology to smallholder farmers across India. Mode of BOP Engagement BOP as Suppliers Though it may be easier to supply inputs from larger suppliers, Aitken Spence purposefully partners with local farmers to supply its resorts with agricultural produce. In order to ensure certain quality standards of its inputs, Aitken Spence trains local farmers on optimal management and preservation of their produce. In addition, it provides them with the tools they may require, such as seeds, fertilizer and crates. BOP as Employees Aitken Spence directly employs more than 2,000 local BOP individuals to work in its resorts as facilities management staff, kitchen staff, and tour guides. The company absorbs local high school graduates into its hotels, guaranteeing them a career path and steady income. Impact to date and future growth plans Though it may be easier to engage with more established and standardized suppliers of agricultural produce, energy and other inputs that are crucial to the operation of hotels, Aitken Spence has purposefully chosen to engage the BOP communities in its areas of operation, thereby giving them the opportunity to benefit as much as possible from the resort’s presence. Challenges Like many other businesses in Sri Lanka, Aiken Spence is currently challenged with the high costs of capital, preventing it from growing faster. Though foreign investors have expressed an interest in the company, they prefer investment timelines that are not long enough to allow for returns (5 years as opposed to the 8-10 years required to experience returns on investment).

Furthermore, the Sri Lankan government has not been investing adequately in the infrastructure needed to accommodate the growing tourism industry. Source of financing to date and future needs As it is a subsidiary of one of Sri Lanka’s largest conglomerates, Aitken Spence has benefited from substantial internal reserves, and the ability to leverage its reputation to form joint ventures with international partners. The current cost of capital, however, is hindering Aitken Spence’s expansion plans, for which it would seek loans at concessionary rates (6-8%). Given that a typical 500-room hotel costs approximately $40 million to construct, Aitken Spence would look to receive investments between $10 to $20 million.


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Inclusive Business Case Study – Greenlight Planet

Off-grid solar lighting products for rural consumers

Sector: Energy (renewable) Location of operations: Pan-India Year of establishment: 2008 Turnover: Not disclosed Extent of BOP engagement: 230 employees; 1,000 distributors; 1,000,000 consumers Background on Business Greenlight Planet sells affordable off-grid solar lighting products to BOP consumers in India and East Africa. Their products include an award-winning “Sun King” lamp, priced at $17 (Rs. 850), and a “Sun King Pro” for $32 (Rs. 1,600), the latter of which includes a mobile phone charger. Greenlight currently has operations in 4 states in India (Bihar, Maharashtra, Odisha, Uttar Pradesh) and in Kenya. Mode of BOP Engagement BOP as Distributors Partly due to the high costs associated with using existing distribution channels, Greenlight Planet has created an innovative, decentralized distribution network that directly serves BOP populations. Village-level entrepreneurs, “Sun King Saathis”, are recruited and trained by Greenlight district managers and team leaders. Distributors are responsible for educating consumers on the benefits of using solar lights.

Greenlight has found that successful distributors are not involved in any other entrepreneurial activities, which ensures that they are motivated by the sales commission to maximize sales. Further, they should be local, trusted and credit within the local community.

BOP as Employees Greenlight’s team leaders and district managers are village-based, and also belong to the BOP.

BOP as Consumers Greenlight’s target consumers are BOP, rural populations with no or limited access to grid electricity. Impact to date and future growth plans Greenlight Planet generates impact on multiple levels. Customers have access to a reliable source of clean energy, allowing them to be more productive during hours when there is no sunlight, and reducing the environmental, health and safety risks of being dependent on kerosene lamps. For its distributors and employees, Greenlight is generating increased income levels, and training them in very relevant and useful entrepreneurial skills. Greenlight plans to reach 10 million customers through 10,000 distributors by 2015. Challenges Greenlight Planet has been unable to access affordable, local working capital to finance its inventory. Source of financing to date and future needs Greenlight’s primary source of funding has been a $4 million Series A equity investment from its angel funder and Bamboo Finance, a venture capital fund. In addition, it has received $250,000 in debt funding from Deutsche Bank, the Lemelson Foundation and Ashoka. Greenlight Planet would need $5-10 million in future financing, the ideal composition of which would be 20% equity, 70% debt and 10% grant funding.


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Inclusive Business Case Study – Industree Crafts Pvt. Ltd.

Retailing handicrafts produced by rural artisans

Sector: Manufacture and retail Location of operations: Pan-India, Asia Year of establishment: 1996 Turnover: $3 million Extent of BOP engagement: 3,360 suppliers Background on Business Industree Crafts works with rural artisans and self-help groups (SHGs) to produce textiles, garments and other handicrafts, which it retails under the “Mother Earth” brand across India. Based in a desire to enable rural entrepreneurs, Industree creates new supply chains and retail channels, connecting rural artisans to urban consumers. Though this model is not as efficient or lucrative as sourcing products from factories, Industree prioritizes an improvement in livelihood opportunities for the rural BOP. Mode of BOP Engagement BOP as Suppliers Industree engages BOP suppliers as part of its core business operations. It assists in the formation of SHGs and organizes rural artisans into cooperatives and associations. Industree then provides collateral to these SHGs and acts as a guarantor for bank loans. Almost 100% of the fabric used in Industree’s products and 40% of all products made come from SHGs. As Industree expands, it also invests in supply chain infrastructure to facilitate collection of its products from remote areas. Through its Foundation, the company identifies and creates new "handicraft clusters”, and invests heavily in training for quality and consistency. The company supports the Foundation in financial and non-financial ways. Impact to date and future growth plans Industree currently works with 18 SHGs and 300 “handicraft clusters” across 9 states in India, representing over 3,300 rural suppliers in total. By turning traditional art into aspirational lifestyle products, Industree has improved the livelihood opportunities of thousands of rural individuals, and has promoted entrepreneurship among its BOP suppliers. Over the next three years, the company intends to work with 10,000 suppliers across the country. Industree has aggressive growth plans and has recently started exporting to European markets. Challenges Primary challenges faced by Industree include poor infrastructure in the states in which it operates, the low availability of adequately skilled labour, and an unsupportive regulatory framework for early stage companies in India. Source of financing to date and future needs In 2011, Industree received a $1 million equity investment from Grassroots Business Fund. The company has also received a $200,000 technical assistance grant to be used towards customer care training and brand building. For their next round of fundraising, Industree will look to raise a further $6-7 million, largely in the form of equity.


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Inclusive Business Case Study – Jaipur Rugs

Hand-knotted carpets made by rural artisan women

Sector: Handicrafts Location of operations: Pan-India Year of establishment: 1999 Turnover: $16.8 million Extent of BOP engagement: 40,000 suppliers (weavers), 200 employees Background on Business Based in Rajasthan, India, Jaipur Rugs is a manufacturer of hand-knotted carpets. Jaipur Rugs directly engages with a network of over 40,000 rural artisan weavers to make its carpets, which are then exported to countries around the world. Mode of BOP Engagement BOP as Suppliers Jaipur Rugs’ main mode of engaging the BOP is as suppliers. The company indirectly employs more than 40,000 rural artisans to make its hand-woven carpets, which are then exported to over 30 countries around the world. Raw materials to make the carpets are provided directly to the carpet weavers, along with design patterns and specifications. Carpet weavers make the carpets in their homes, where they have looms, and the finished product is delivered back to the company’s headquarters. Each weaver is paid per square foot of carpet made. BOP as Employees In addition, Jaipur Rugs employs more than 200 full-time employees, most of whom are also from low-income backgrounds. Though educated, these employees have been trained extensively to work with advanced technological tools and to develop a valuable design-related skillset. At Jaipur Rugs, these employees have been encouraged to take on more responsibility and to develop their professional skills much more than they would have experienced in a more traditional company. Impact to date and future growth plans Jaipur Rugs has reached a network of more than 40,000 rural artisans across 6 states. It expects this number to grow to 50,000 artisans within 3 years’ time. Its full-time employees will also grow, by 50% to a total of 300. In addition to providing these weavers with employment and a steady source of income, working with Jaipur Rugs gives women greater autonomy within the household. Challenges With its very extensive network of rural artisans, Jaipur Rugs’ model requires significant logistical organization to work efficiently. A continuous question asked by the company’s management is how to further increase its operations and efficiency. Furthermore, as significant resources are dedicated to skills training for the company’s weavers, a challenge has been to find the right partners that could develop literacy and entrepreneurial skills among its weavers. Source of financing to date and future needs Started with internal reserves, Jaipur Rugs received a $1 million investment from the Grassroots Business Fund. When considering future investors, Jaipur Rugs is conscious of partnering with investors who have similar social priorities.


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Inclusive Business Case Study – MAS Intimates

Innovative manufacturer of intimate apparel and sportswear

Sector: Apparel, Textiles Location of operations: Pan-Asia Year of establishment: 1986 Turnover: Not disclosed Extent of BOP engagement: 40,000 employees Background on Business Located in Sri Lanka, MAS Intimates is the region’s leading manufacturer of intimate wear and sportswear. It is the preferred supplier of apparel to global brands, such as Victoria’s Secret, Nike, Calvin Klein, Ann Taylor, Speedo and Gap. A subsidiary of MAS Holdings, MAS Intimates employs more than 50,000 youth from BOP backgrounds across Sri Lanka. Mode of BOP Engagement BOP as Employees MAS Intimates employs more than 50,000 individuals from BOP backgrounds, 80% of whom are women. The majority of employees are from rural and semi-urban areas. They are often recruited to work at MAS with minimal previous work experience and are trained in the skills required for their position. Impact to date and future growth plans MAS Holdings currently operates 34 facilities in Sri Lanka, and 1 in India. When the company started, it solely focused on manufacturing apparel for its clients. Since then, however, MAS has captured increasing value along the entire production chain. The company now also produces accessories, such as elastics, and lace, and manufactures textiles. Furthermore, it has also started its own lingerie brand, called Amante, whose products are currently sold exclusively in India.

MAS’ impact on its employees is multifold. In addition to the technical skills and steady source of income gained by employees at MAS, the company strongly encourages the development of general professional and “life” skills. Employees are encouraged to proactively think about their career paths within the organization, and to pursue their interests, whether or not they are related to MAS. To promote ownership and critical thinking among employees, small teams of workers have weekly meetings to discuss how any challenges faced along the production line can be mitigated. Challenges A continuous yet relatively trivial challenge faced by MAS Intimates is the attrition of its employees. Given Sri Lanka’s tight labour market and the presence of equally lucrative alternative job opportunities, MAS’ workers are sometimes attracted to a more “traditional” office job. Attrition is an issue for the apparel sector as a whole, however, and given MAS’ very strong reputation as a preferred employer, this problem is not very acute.

Another challenge is related to continuously maximizing efficiency. The pressure to minimize costs of production as much as possible has become especially acute, as Western economies contract. Source of financing to date and future needs From its start in 1986 with just a few sewing machines, MAS has grown into one of Sri Lanka’s largest conglomerates. It has grown with a combination of internal capital reserves, and several joint ventures with American and European companies.


20

Inclusive Business Case Study – Shree Kamdhenu

Electronics Pvt. Ltd.

Technological products and solutions for dairy collectives

Sector: Information Technology Location of operations: Pan-India, Asia Year of establishment: 1996 Turnover: $1.3 million Extent of BOP engagement: 40 BOP employees; 1.05 million BOP consumers Background on Business Started in Gujarat in 1996, Shree Kamdhenu’s product, Akashganga, addresses two core issues faced by rural dairy farmers: accurately measuring the quantity of milk supplied by farmers to dairy collectives; and determining the quality of milk supplied. Mode of BOP Engagement BOP as Consumers Shree Kamdhenu Electronics sells its microprocessor-based electronic measurement and quality testing products to dairy farmer collectives. These innovative tools allow each farmer’s milk to be measured for quantity and quality individually, making the entire process of milk collection transparent and efficient. Earlier, milk from all the farmers was first collected into one container, and then tested for quality. Farmers were therefore receiving a price for the quality of the collective’s milk, which offered no incentive for individual farmers to improve their own quality.

BOP as Employees Over 50% of all people employed by Shree Kamdhenu Electronics belong to the BOP population.

Impact to date and future growth plans With over 3,500 installations in 12 states across India, Akashganga has directly impacted over 1 million farmers and indirectly impacted over 4 million individuals to date. This product directly impacts the lives of dairy farmers by ensuring that they are paid accurately for the quantity and quality of milk they individually supply. Due to this and reduced wastage at the collection point, farmers are getting a higher price for their produce, and have an incentive to supply better quality of milk. The company plans to reach 1.2 million farmers and 100 BOP employees by 2015. Challenges A key challenge for Shree Kamdhenu Electronics has been raising debt, given the difficulties faced by small businesses in India in securing affordable bank loans. At an operational level, the company also faces the challenges of operating in states with poor infrastructure, the lack of an enabling business environment for early-stage companies, and at times, a low willingness from customers to pay for their product. Source of financing to date and future needs Shree Kamdhenu Electronics has raised $190,000 as an equity investment from Aavishkar and Grassroots Business Fund, $113,000 as debt, $95,000 in credit guarantees, and $10,000 as promoters’ equity. Ideal future financing would take the form of soft loans and would be utilized for launching new products for the dairy sector, building a factory and expanding sales across India.


21

Inclusive Business Case Study – StarAgri

Integrated post-harvest management solutions for smallholder farmers

Sector: Agri-business Location of operations: Pan-India Year of establishment: 2006 Turnover: 300 Million INR ($5.7 Million) Extent of BOP engagement: 500 BOP employees; 50,000 BOP farmers Background on Business StarAgri was started to address India’s vast, unorganized agricultural supply chain. It offers a host of integrated post-harvest management services, allowing BOP farmers to derive more value from their harvests. StarAgri directly engages with BOP farmers as well as corporates and processing companies. Mode of BOP Engagement BOP as Consumers StarAgri provides several services to BOP farmers, including warehousing, quality testing, and collateral management services. The company also partners with several banks, enabling small-holder farmers to receive low-cost loans. Upon storing their produce in StarAgri warehouses, farmers are provided with a receipt, which is recognized by a wide range of banks (established partners of StarAgri) as collateral. BOP as Suppliers Upon receiving orders for farm produce from Indian corporates, StarAgri procures this produce directly from thousands of rural farmers. By removing middlemen from the process, StarAgri’s farmers receive a higher price for their produce. Futhermore, StarAgri’s quality-based procurement allows farmers to receive higher prices for high-quality produce (as opposed to traditional auction systems, where all farmers receive the same price per crop, regardless of quality).

Impact to date and future growth plans With 750 warehouses spread across 10 states, Staragri has served more than 50,000 farmers to date, and currently employs more than 500 people. It plans to reach 2.5 million farmers in the next 5 years. StarAgri’s range of integrated services allows farmers to exercise greater ownership over value they earn from their produce. Previously, farmers had little choice but to accept the non-transparent prices offered to them by supply chain middlemen. With StarAgri, farmers are able to verify the quality of, and receive fair prices for, their produce. Furthermore, with its warehousing facilities, farmers can store and better manage their produce and sell it when the market is offering an optimal price. Challenges Initially, StarAgri had faced resistance from banks to recognise the warehouse receipts it would issue to farmers, in return for affordable loans. As the number of its farmers grew into the thousands, however, banks became interested. Another challenge is the need to educate farmers on the advantages of engaging with StartAgri to manage their produce, which requires significant company resources. Source of financing to date and future needs StarAgri’s launch was financed by its promoters’ equity totaling $2 million, and it has recently received an investment of $30 million from IDFC, one of India’s leading infrastructure financing companies. In terms of working capital, however, it would look to raise $10-20 million in debt.


22

Inclusive Business Case Study – Vortex Engineering

Low-power and solar-powered ATMs for rural populations

Sector: Manufacturing, Financial Services Location of operations: Pan-India, Asia, Africa Year of establishment: 2004 Turnover: $2 million Extent of BOP engagement: 7.2 million BOP consumers Background on Business Vortex has designed a “rugged ATM” specifically for rural areas, which are characterized by intermittent power supplies. Vortex’s innovative ATMs consume 90% less power than traditional ATMs, and can therefore be solar-powered. Due to the subsequent lower costs of operation, these ATMs can be financially viable with fewer transactions, and therefore are very suitable for deployment in rural areas.

Vortex sells its ATMs directly to banks, which can then extend their financial services to rural populations. Its clients include both public and private banks. Mode of BOP Engagement BOP as Consumers Though Vortex’s direct consumers are banks, the end beneficiaries of its ATMs are rural BOP populations, who gain increased access to formal financial services. The majority of rural populations in India live several kilometers away from the nearest bank branch, often requiring half a day of travel to conduct financial transactions. Impact to date and future growth plans To date, Vortex’s ATMs have increased access to financial services for approximately 7.2 million rural consumers across India, including its lowest income states. The presence of ATM machines in rural areas has a very significant impact on BOP consumers, including reduced time and money spent travelling to the nearest banking center. Furthermore, more accessible ATMs lead to an increase in rural savings. In addition to India, Vortex’s ATMs have been exported to other countries, including Nepal, Bangladesh and the United Arab Emirates. Over the next 3 years, the company aims to reach 50 million consumers. Challenges The key challenge faced by Vortex is the initial reluctance by banks to adopt this innovative ATM. Despite its design being very suitable for Indian rural areas, some banks view the product as too risky and continue purchasing the more expensive but less appropriate ATMs from larger manufacturers. Source of financing to date and future needs Vortex was incubated at the Rural Technology and Business Incubator (RTBI), associated with the Indian Institute of Technology, in Madras (IITM), where it received seed funding. Since then, Vortex has successfully raised more than $12 million from various investors, including the IFC, Bamboo Finance, Aavishkaar, Ventureast, and Tata Capital. To fund the expansion of its business, Vortex would look to raise an additional $5 to $10 million. If made available, it would devote technical assistance funds towards further research and development.


23

Inclusive Business Case Study – WaterHealth

Affordable housing for migrants and low-income populations

Sector: Water Location of operations: Andhra Pradesh Year of establishment: 2005 Turnover: Not disclosed Extent of BOP engagement: 5 million BOP consumers, 10 distributors, 600 employees Background on Business WaterHealth combines the use of decentralized purification centers in partnership with local communities to create a scalable and sustainable solution for processing healthy drinking water. Through its solution, WaterHealth provides each person with up to 20 litres of safe drinking water per person per day, at an investment of approximately $10 per person. Mode of BOP Engagement BOP as Consumers WaterHealth’s primary mode of engagement with the BOP is as consumers of its affordable safe drinking water solution. Beneficiaries of WaterHealth’s services would otherwise only boil water, which doesn’t remove any inorganic impurities. BOP as distributors WaterHealth engages village level entrepreneurs in a build-operate-transfer model, working closely with the community. In the ‘operate’ phase, the company engages locals – who are often a part of the BOP themselves – to run the plant on a daily basis. BOP as Employees WaterHealth builds plants sustainably, by engaging the local population as construction workers. Impact to date and future growth plans WaterHealth is currently focused on building its presence in Africa, with the intention of building 25-30 plants this year. Similarly, the company plans to expand to 300-400 plants in India. Within India, WaterHealth’s “corridor of interest” extends from Rajasthan, Gujarat, Chhattisgarh, Andhra Pradesh and Karnataka. WaterHealth’s expansion plans will remain in concentric circles, seen to be the most effective model of geographic expansion. Challenges A key challenge for WaterHealth is competition from subsidized sources of water, and resulting challenges with pricing. Government has adopted the approach of subsidizing water utilities. As a result, these utilities lose money and their quality progressively deteriorates. Generating awareness among consumers that have been spoiled by traditional water utilities – in case they exist – has also been a major challenge. Source of financing to date and future needs Tata capital, IFC, and other strategic investors have taken equity positions in WaterHealth. The company has a long line of credit from IFC at low rates of interest. Given WaterHealth’s ambitious expansion plans, it will need a large amount of investment. It would prefer most of its investments as grants, but is open to equity investment as well.


24

5 DEEP DIVES ON POTENTIAL FUND MANAGER PARTNERS FOR ADB

Figure 1: Fund manager snapshot – Pragati India Fund

Figure 2: Fund manager snapshot – Aavishkaar

Fund name Pragati India Fund I

Investors CDC, IFC

Vintage 2011

Total AUM $ 60 million

Avg. size of investment $ 6 – 10 million

Target IRR 25% +

Geographic focus Low-income states in India

Sector focus Sector agnostic

Social impact metrics employed

Pragati is a relatively recent financial-first, commercial fund and does not have explicit impact measurement systems. Since DFIs such as CDC and IFC are LPs of the fund, Pragati follows strong ESG-oriented metrics.

StrategyFund details

Pragati believes the market for financing small-medium sized enterprises in low-income states in India presents attractive financial opportunities for private equity. Pragati underwrites companies for being SMEs and not inclusive businesses, but it indirectly engages the poor by investing in businesses that exist in deprived regions, employ local populations, and invest in workforce development – thus having the potential for significant livelihood creation. Although finding such fundable opportunities remains a challenge in these geographies, Pragati believes being close to the ground will generate strong deal flow. To further address the risk of limited deal flow, Pragati chooses to remain sector agnostic. The fund expects their investees to be family run businesses, and look for strong corporate governance.

Key contact

N. Shadagopan

Sample investment

Jash EngineeringMfg. of equipment used in waste water treatment

SOURCE: Interview with fund; Dalberg research

Fund name Aavishkaar India Micro Venture Capital Fund

Investors CDC, IFC, FMO, KfW, NABARD, Rockefeller, others

Vintage 2005

Total AUM $ 120 million

Avg. size of investment $ 0.1 – 1 million

Target IRR 20-22%

Geographic focus Pan-India



Several DFIs such as IFC, CDC, FMO, and KfW have invested in Aavishkaar; they expect regular reporting on ESG issues and private sector development impact across its investments. However, Aavishkaar’s impact measurement systems are not based on GIIRS.


Aavishkaar was one of the first funds set up to provide equity finance to early-stage inclusive businesses. The fund diversifies its exposure across education, healthcare, agriculture, ICT, and energy. Although Aavishkaar does not focus exclusively on low-income states, it’s strategy of investing in rural areas where few other fund managers are willing to go, ensures that over 50% of its invested capital has a footprint on low-income states. Aavishkaar takes a venture-capital style approach to develop sectors and industries in nascent geographies. Aavishkaar has so far made 33 investments in pre-revenue companies, underwriting risks of limited experience of entrepreneurs and lack of local enabling institutions, and has still delivered strong financial returns.

Key contact

Vineet Rai

Sample investment

Vortex EngineeringDeveloper and mfg. of low-cost ATMs

SOURCE: Interview with fund; Dalberg research; ImpactBase


25

Figure 3: Fund manager snapshot – Aureos

Figure 4: Fund manager snapshot – LR Global

Fund name Aureos South Asia Fund

Investors CDC, ADB, Norfund, FMO

Vintage 2004

Total AUM $ 100 million (70% for India)


Target IRR ~25%

Geographic focus India, Sri Lanka, Bangladesh



Aureos has a proprietary impact measurements framework, the Aureos Sustainability Index. Beyond this, Aureos also follows IFC perfor mance standards and is a signatory of UNPRI.


Aureos is a global investment firm with a portfolio of emerging markets focused private equity funds. Aureos qualifies itself as a financial-first fund manager, and focuses on SMEs across sectors. It is one of the few fund managers currently focusing on Sri Lanka, and has a strong track record of investing across South Asia. Although sector agnostic, the fund plans to target infrastructure oriented sectors such as manufacturing, transportation / logistics, pharmaceutical, and healthcare in the short-medium term. Aureos follows ESG criteria closely, and often uses such parameters as screening criteria, in conjunction with capital intensity and level of regulation. Globally, Aureos has completed over 270 transactions to date, and its exits have realized IRRs of 30%.

Key contact

Balaji Srinivas (India), Nissanka Weerasekara (Sri Lanka)

Sample investment

Asiri HospitalsChain of low-cost hospitals in Sri Lanka


Fund name LR Global

Investors CDC, ADB, Norfund, FMO

Vintage 2012

Total AUM $ 30 million +

Avg. size of investment $ 0.5 – 4 million

Target IRR 20-25%

Geographic focus Sri Lanka



ESG is an important part of LR Global’s investment strategy, especially given that they are targeting DFIs as their primary LPs. The fund manager does not currently employ any other impact metrics.


Key contact

Chanaka Wickramasuriya

Sample investment

N/A


LR Global, the first formal institutional PE fund to be set up in Sri Lanka in the current post-conflict environment, was spun out of the Rockefeller office by former Aureos investment professionals, when IFC provided an anchor investment of $10 million. LR Global plans to invest in SMEs, where they believe exit strategies will be easier to place, and will source deals in-house, as opposed to secondary transactions. The focus on SMEs is not narrowed by an exclusive focus on IB. However, many opportunities in LR’s deal pipeline could qualify as IBs by ADB’s definition. Agriculture, tourism, and infrastructure are priority sectors for LR Global, while they remain sector agnostic. Further, LR Global will focus on investing in value chains of sectors where larger players operate.


26

Figure 5: Fund manager snapshot – SEAF

Figure 6: Fund manager snapshot – SIDBI-VC

Fund name India Agribusiness Fund

Investors LIC, Omidyar, SIDBI, UBI

Vintage 2010



Target IRR 20-25%

Geographic focus Pan-India

Sector focus Agribusiness value chain


SEAF tracks IRIS compatible metrics such as employment, wages, benefits, training, suppliers, customers, taxes, community development, formalization and corporate governance. SEAF’s development impact reports are available online.


Key contact

Hemendra Mathur

Sample investment

Abhay CotexCotton seed processing company

SOURCE: Interview with fund; Dalberg research; ImpactBase

To create the India Agribusiness Fund (IAF), SEAF brought its global expertise of investing in agribusinesses (40% of global portfolio in the sector) and experience of investing in India through professionals with 6 years of investment experience at Kotak. IAF is one of the country’s few IB-focused sector-specific funds, and invests in SMEs that operate in the Agribusiness value chain, except upstream players. Typical opportunities that the fund considers are B2B businesses in sub-sectors such as agricultural processing, implements, logistics, and other post-harvest industries. SEAF’s investment professionals recognize the nascence of PE to this sector, and hence spend more than 50% of their time on the ground, sourcing and monitoring deals. Given a chance, SEAF would deploy TA for public or shared goods.

Fund name Samriddh Fund

Investors DFID

Vintage 2012



Target IRR 15-16%

Geographic focus Low-income states in India



DFID is currently training SIDBI-VC investment professionals on impact measurement, while the fund currently tracks employment. Given already high transaction and deal management costs, SIDBI prefers simple metrics that investees can easily track.


Key contact

Ananta P. Sarma

Sample investment

FabIndiaRetailer of products handmade by rural craftspeople


SIDBI is a government owned financial institution providing debt and equity to micro, small, and medium-scale enterprises in India. SIDBI VC is a wholly owned subsidiary, which has set up the Samriddh Fund with DFID. The fund’s sector agnostic investment strategy focuses on SMEs in low-income states in India with potential to increase incomes of low-income populations. SIDBI believes that an exclusive LIS focus ensures that their SME investees are also IBs. The fund does not focus on Northeastern states, however, due to a lack of enabling infrastructure in those regions currently. SIDBI intends to encourage its investees to enter LIS markets, and further help them by leveraging

its network within the government, if needed. Any returns over 14% that the fund generates are returned to their current investor, DFID.


27

6 ECONOMIC FACTSHEET ON LOW-INCOME STATES

Figure 7: Summary of key statistics on low-income states in India

66

GDP growth rates of low-income states in India

SOURCE: Dalberg Analysis, UNDP, India Competitiveness Report-2011, IBEF, UNIDO

GDP growth rate%

Odisha

Rajasthan

Uttar Pradesh

West Bengal

Arunachal Pradesh

Assam

Manipur

Meghalaya

Mizoram

Nagaland

Tripura

Bihar

7.2%

5.4%

6.3%

7.1%

3.7%

8.4%

6.2%

9.5%

14.7%

3.9%

8.9%

Chhattisgarh

Jharkhand

13.1%

10.8%

India average = 6.5%

6.6%

Madhya Pradesh 12.0%

Per capita income$ (PPP)

1,885

2,967

3,068

2,797

India average = 3,694

2,708

1,865

3,408

3,033

1,707

2,377

2,717

1,804

1,824

2,673

1,272

82

39

7

19

84

82

38

198

340

251

67

48

194

862

504

Number of clusters


28

Summary of key facts on low-income states in India:

State, competitive-ness ranking

Key facts Major industries Major clusters

Bihar 17 / 29 5 / 15 in LIS/NES

• Bihar recorded the second highest GDP growth among all the states

• DFIs like IFC, DFID, Kfw, CDC & SIDBI have Bihar as one of their focus states

• Bihar government is proactively giving policy incentives for Industries & Investors

• Agriculture: Tea, Rubber, Sugarcane, Tobacco, Dairy, Paper

• Industries: Plastics, Transport equipment, Chemicals, Textiles, Mines, Minerals

• Manufacturing • Textile • sericulture • Sugarcane • Agro-based

industries

Chhatisgarh 12 / 29 1 / 15 in LIS/NES

• Chhattisgarh accounts for about 16 per cent of the nation’s coal reserves and is rich in other mineral resources such as Limestone, Iron-ore, Copper, Bauxite.,

• Chhattisgarh is presently one of the few states that has surplus power

• The state offers a wide range of fiscal and policy incentives for businesses and stands first among LIS & NES in the competitiveness rankings

• DFIs like IFC, DFID, Kfw,CDC & SIDBI have Chhatisgarh as one of their focus states

• Agriculture: Food processing

• Industries: Mining, Minerals, Iron & Steel, Cement, Power, IT& ITes, Biotechnology, Gems & Jewellery

• Iron & steel ancillary units

• Castings & metal fabrication

• Gems & Jewellery • Textiles • Aluminum

Jharkhand 21 / 29 9 / 15 in LIS/NES

• Jharkhand has around 40 per cent of the country’s mineral wealth

• DFIs like IFC, DFID, Kfw,CDC & SIDBI have Chhatisgarh as one of their focus states

• Location Advantage: Closer to the ports of Kolkata, Haldia and Paradip and has easy access to raw materials.

• Agriculture: Rubber, Food & beverages

• Industries: Mining, Minerals, Iron & Steel, Engineering, Chemicals, Handloom, Plastics, Printing & Packaging, Tourism

• Iron & steel ancillary units

• Engineering & fabrication

• Auto components • Textiles • Casting & metal

fabrication

Madhya Pradesh 14 / 29 3 / 15 in LIS/NES

• A large number of consumer goods companies have manufacturing bases in the state because it is centrally located and is equidistant to all major cities of India

• Madhya Pradesh has rich mineral resources and has the largest reserves of diamond and copper in India

• State government is actively working with World bank, IFC, DFID and other DFIs on host of developmental projects

• Agriculture: Agri processing, forest based industries

• Industries: Mining, Minerals, Auto & Auto components, Textiles, Cement, Pharmaceuticals, Minerals, Manufacturing, IT & ITes, Tourism

• Engineering & fabrication

• Auto components • Textiles • Food processing

Odisha 15 / 29 4 / 15 in LIS/NES

• Leads in iron, steel, ferroalloy & aluminium production. It also has a strong base for coal-based power generation

• Has a stable political environment and is actively working with IFC, DFID and other development organizations

• Offers a wide range of fiscal and policy incentives for businesses

• Agriculture: Agri-processing, Food & beverages

• Industries: Mining, Minerals, Aluminum, Handloom,Tourism, Electronics, Iron, steel & Ferroalloy

• Food processing industries

• Handloom • Handicrafts • Textiles • Agro & Forest

based industries


29



Rajasthan 15 / 29 4 / 15 in LIS/NES

• It is a natural corridor between the wealthy Northern and the prosperous Western states of the country, which makes it an important trade and commerce centre

• Rajasthan is one of the most attractive tourist destinations in India

• Rajasthan offers a variety of unexploited agricultural and mineral resources, which is indicative of scope for value addition and exports

• Rajasthan ‘s GDP growth rate fell from 11% for the year 2010-11 to 5.4% for the year 2011-12

• Agriculture: Agri-processing

• Industries: Cement, IT & ITes, Ceramics, Mining, Minerals, Steel, Chemicals, Auto & Auto components, Textiles, Gems & Jewellery, Marble

• Ceramics • Textiles • Marble slates • Auto & Auto

components • Food processing • Gems & Jewellery

Uttar Pradesh 19 / 29 7 / 15 in LIS/NES

• Newly formed state government in Uttar Pradesh is seen as an industry friendly government

• Government is actively working with Gates foundation, DFID and others

• The state has witnessed high infrastructural growth , which is seen as a positive facilitator for industrial growth, in the past few years

• Agriculture: Agro processing, Food processing

• Industries: IT & ITes, Ceramics, Mineral based industries, Tourism, Sports goods, Leather based industries, Textiles, Handloom & Handicrafts, Auto & Auto components

• Engineering equipment

• Textiles • Leather products • Auto & Auto

components • Rice mills • Foundry

West Bengal 20 / 29 8 / 15 in LIS/NES

• One of the most needy Low Income state • Under the new government , the

erstwhile communist state is actively looking for a larger role by the private sector for its growth

• It has a good geographical advantage due to its proximity with sea ,North east and other landlocked countries

• Agriculture: Tea, Jute products, Agri & Agri allied industries

• Industries: Mining, Minerals, Petroleum & Petrochemicals, Leather, Iron & Steel, IT, Auto & Auto components, Biotechnology

• Engineering equipment

• Textiles • Leather products • Auto & Auto

components • Rice mills • Foundry

Arunachal Pradesh 28 / 29 15 / 15 in LIS/NES

• Undulating topography and varied agro-climatic conditions offer vast potential for horticulture and growing a variety of fruits, vegetables, spices, aromatic and medicinal plants, flowers and mushroom

• Central government is taking up many initiatives to improve infrastructure and other amenities in the state

• Agriculture: Cane & bamboo, Horticulture

• Industries: Art & crafts, Weaving, Carpet weaving, Wood carving, Ornaments, Tourism, Saw mills & plywood, Power, Mineral based industries

• Textiles • Handicrafts • Handloom • Food processing


30



Assam 22 / 29 10 / 15 in LIS/NES

• Assam is the largest economy of the Northeast region and is the most industrially advanced state in the Northeast India

• Assam is rich in natural resources such as natural oil and gas, rubber, tea, and minerals such as granite, limestone and kaolin

• The state is rich in water resources. Other potential areas of investment include power and energy, mineral-based industries, tourism and crude oil refining

• Agriculture: Tea, Food processing, Horticulture, Sericulture

• Industries: Coal, Oil & Gas, Limestone, Cement, Tourism, Traditional cottage industry

• Tea • Handicraft • Handloom • Food processing

Manipur 27 / 29 14 / 15 in LIS/NES

• Manipur has significant potential for growing various horticultural crops because of varied agro-climatic conditions

• A wide variety of rare and exotic medicinal and aromatic plants grow in Manipur and Entrepreneurs get easy access for processing and marketing such plants

• With 79.8 per cent literacy rate, Manipur offers a largely educated workforce. Good Knowledge of English is an added advantage of the Manipuri workforce

• Agriculture: Food processing, Sericulture

• Industries: Tourism, Handlooms, Handicrafts, Bamboo processing

• Bamboo Handicraft

• Handicraft • Handloom • Food processing

Meghalaya 24 / 29 12 / 15 in LIS/NES

• Meghalaya is endowed with abundant natural resources in terms of flora, fauna, medicinal plants, forests, coal, lime stone, feldspar, quartz, sillimanite, granite, industrial clay and uranium

• Meghalaya has a literacy rate of 75.5 per cent and a majority of local population speaks and understands English

• The state provides good support through various central and State Government agencies

• Agriculture: Agro processing, Food processing, Horticulture, Dairy & Livestock

• Industries: Tourism, Mining, Cement, Steel processing, Handlooms, Handicrafts, Hydroelectric power

• Foundry • Handicraft • Handloom • Food processing

Mizoram 25 / 29 13 / 15 in LIS/NES

• Mizoram contributes 14 per cent to the country’s bamboo production; the climate is ideal for setting up agricultural and forestry produce-based industries

• With a literacy rate of 91.6 per cent, Mizoram offers a highly literate workforce. Knowledge of English is an added advantage

• With improving connectivity and the establishment of trade routes with neighbouring countries, trade facilitation has improved significantly over the last decade

• Agriculture: Bamboo, Sericulture, Food processing, Medicinal plants, Horticulture

• Industries: Tourism, Energy, IT, Minerals & Stones, Handlooms & Handicrafts

• Handicraft • Handloom


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Nagaland 23 / 29 11 / 15 in LIS/NES

• Nagaland has a high literacy rate of 80.1 per cent. Majority of the population in the state speaks English, which is the official language of the state

• The state provides institutional support through various central and State Government agencies viz., North East Council, Ministry of Development of North Eastern Region and Nagaland Industrial Development Council

• Agriculture: Bamboo, Sericulture, Horticulture

• Industries: Tourism, Handlooms, Handicrafts, Minerals, Mining

• Handicraft • Handloom

Tripura 18/ 29 6/ 15 in LIS/NES

• Tripura is rich in natural resources such as natural oil and gas, rubber, tea and medicinal plants

• Tripura is connected with the rest of Northeast India by National Highway (NH)-44. Improved rail, air connectivity and establishment of trade routes have further facilitated the trade

• At 87.8 per cent, Tripura’s literacy rate is higher than the national average rate

• Agriculture: Tea, Rubber, Bamboo, Sericulture, Medicinal Plants, Horticulture

• Industries: Natural Gas, IT & ITes, Tourism, Handlooms, Handicrafts

• Handicraft • Handloom • Bamboo • Leather

Sources: Dalberg Analysis, UNDP, India Competitiveness Report-2011, IBEF, UNIDO


32

7 DEEP DIVES ON PRIORITY SECTORS

Figure 8: Sector snapshot of water and sanitation

Figure 9: Sector snapshot of energy access

Key indicators across LIS & NES: Access to water and sanitation

NOTE: Data for Nagaland is N/A

SOURCE: MDG States of India Report 2010; WHO

93

82

52

81

77

83

95

91

33

Assam

Manipur

Jharkhand

Chhatisgarh

Bihar

60

50

Tripura

Meghalaya

80Mizoram

84

India avg.

75

Arunachal 93

West Bengal

Uttar Pradesh

Rajasthan

Odisha

M. P.

18

15

23

17

25

26

60

17

51

India avg.

94

98

66

96

70

89

% of population with access to improved sanitation

Key trends and facts:

% of population with access to improved water sources

• The Planning Commission has allocated 4.6 times the amount reserved for improved sanitation in the 12th 5-year plan (2012-17), amounting to $6.8bn

• Government along with bilateral aid and loans from multilateral development banks loans have created successful PPP models

• Government of India’s Total Sanitation Campaign (TSC) is operational in 578 rural districts with an outlay of $3.35bn; for each sponsored project, the central gov’t shares 60% of total cost, while the state and the community contribute 20% each

• Key policies: JNNURM, National Water Policy & other state policies

Other low-income States (LIS)Northeastern States (NES)

Key indicators across LIS & NES: Energy access

NOTE: Solid fuels include biomass fuels, such as wood, charcoal, crops or other agricultural waste, dung, shrubs and straw, and coal.

SOURCE: India Census, 2011

90

88

87

80

86

76

80

77

67

India avg.

Tripura 79

Mizoram 45

Meghalaya 83

Manipur 69

Assam 80

Arunachal 70

West Bengal

Uttar Pradesh

Rajasthan

Odisha

M. P.

Jharkhand

Chhatisgarh

Bihar 82

23

53

32

55

31

62

44

37

14

25

31

India avg.

16

62

19

% of people using kerosene lamps for lighting


% of people using solid fuels for cooking

• Central government is taking up various key initiatives such as Solar Mission to electrify the off grid locations

• Central government is focusing more on Nuclear Energy & Solar Energy to electrify the un electrified villages and under electrified villages

• Solar Mission is expected to create more than 100,000 jobs and attract USD 820mn investment

• Central government has announced tax-free bonds of USD 1.90bn for financing projects related to power sector

• Key policies: Solar Mission, Electricity Act 2003, Electricity Act During 2006, Revised tariff guidelines, National Biomass Cook stoves Initiatives (NBCI)



33

Figure 10: Sector snapshot of healthcare

Figure 11: Sector snapshot of education

Key indicators across LIS & NES: Healthcare

SOURCE: HRH Report I; Public Health Foundation of India; World Bank

7.5

6.0

7.1

4.0

2.7

4.9

3.9

4.1

4.0

2.8

Assam 3.2

Arunachal

West Bengal

Uttar Pradesh

Rajasthan

Odisha

M. P.

Jharkhand

Chhatisgarh

Bihar

6.1

India avg.

Tripura 5.3

Mizoram 2.5

Meghalaya 4.5

Manipur

5.7

6.2

5.8

5.0

2.8

2.8

17.9

12.3

7.4

India avg.

6.2

11.8

9.2

10.4

14.1

12.8

# Nurses per 10,000 population


# Doctors per 10,000 population

• Healthcare is an increasingly attractive sector for the PE & VC industry

• Total expenditure on healthcare is expected to increase to $81.2 bn by 2015

• To meet domestic demand, India needs $143 bn investments in healthcare by 2030

• Government of India has decided to increase expenditure on healthcare to 2.5% of the GDP by 2017, from the current 1.4%

• Government allots high priority to proposals related to hospitals, life saving drugs and equipment

• Key policies: National Rural Health Mission (NHRM), National Urban Health Mission (NUHM)


Key indicators across LIS & NES: Education

SOURCE: UNESCO; CIA Factbook; State Elementary Education Report Card, DISE (2010-11)

64

76

76

90

69

87

61

85

Chhatisgarh

Bihar

Arunachal 91

76

72

India avg.

Tripura 97

Mizoram 102

Meghalaya

Assam

89

Manipur 77

West Bengal

Uttar Pradesh

Rajasthan

Odisha

M. P.

Jharkhand

58

24

41

35

26

12

44

30

18

30

India avg.

20

14

16

19

21

Pupil to teacher ratio


Gross enrollment ratio • By 2020, India needs 800 more universities and 35,000 colleges to meet the demand

• The sector witnesses spends of more than $10.4 bn, which is estimated to grow at 18.0% annually

• Key policies: Right to Education Act (RTE), and Foreign Educational Institutions Bill (FEIB)

• RTE makes access to primary education a fundamental right and mandates 25% reservation for underprivileged students in schools

• FEIB allows FEIs to setup multi-disciplinary campuses and award degrees; it mandates FEIs to invest at least 51% of capital expenditure required and regulates the admission process, fee structure, period of operation



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8 GOVERNMENT SCHEMES RELEVANT TO ADB’S FUND

Below we have highlighted some government programs that ADB should strive to work together with. The resources devoted to these schemes and programs also indicate the level of priority that the Government of India has assigned to the issue in question. Most of these programs are already large, and would benefit greatly from a complementary approach from other actors. The following brief descriptions of each such government program are meant to provide some background and overview.

NATIONAL SKILL DEVELOPMENT CORPORATION (NDSC) NDSC is a not-for-profit company set-up by the Government of India under the Ministry of Finance. The Government of India holds 49% of the company, with the private sector controlling the remaining 51%.4 It is structured as a Public-Private-Partnership. The National Skill Development Fund that funds the activities of the NSDC is set up as a trust that is owned completely by the government of India and is run by professional fund managers. The trust can receive financial contributions from donors, private entities, governments (both central and state), financial institutions etc. The Prime Minister of India is the chairperson of the National Council on Skill Development.

Set up as part of the National Skill Development Mission (NSDM), its primary objective is to promote the development of skills in the country. It does so by catalyzing the creation of large, scalable, for-profit vocational training initiatives. The NDSC provides funding to private sector initiatives and also enables support systems like quality assurance, information systems and training initiatives for the trainers. Its target is to contribute about 30% to the overall target of the NSDM of skilling / upskilling 500 million people in India by 2022.

As part of its mission statement, the NSDC focuses on the underprivileged section of the society, backward regions and significantly on the unorganized and informal sector. One of the core operating principles of the NDSC is to target market failure and not compete with private financing. It does that mainly though funding innovations targeting labour market outsiders.

The NSDF is the operating arm of the NSDC and was created with a corpus of $188 million (Rs. 995.10 crore).5 Currently, its corpus stands at $472 million (Rs. 2,500 crore) and it has made a commitment of $256 million (Rs. 1356.41 crore) till march 2012.6

Established in October 2009, the NDSC has so far trained 181,691 people and placed 144,238 people. So far, it has funded 32 training institutions and 4 sector skill councils. Skilling of India’s workforce presents a $22 billion opportunity.7

4 NDSC website

5 “Coordinated Action on Skill Development”, Planning Commission

6 Business Standard, May, 2012

7 NSDC, May, 2011


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NATIONAL INNOVATION FOUNDATION (NIF) National Innovation Foundation – India (NIF) is an autonomous body under the Department of Science and Technology, India.8 It was set up in February 2000 at Ahmadabad to provide institutional support for scouting, spawning, sustaining and scaling up the grassroots innovations.

NIF conducts a biennial national competition for grassroots green technologies developed by farmers, mechanics, artisans and others through their own genius without any recourse to professional help. NIF validates these innovations with the help of experts and ascertains the novelty in these innovations. If the innovation is deemed novel, NIF files a patent on behalf of the innovator. NIF also funds value addition initiatives in these innovations to upscale them and make them more useful for a larger segment of people.

To determine the feasibility of the commercializing of technology, NIF conducts market research and test marketing. Those technologies which are found to be commercially viable are licensed to willing entrepreneurs.

A Micro Venture Innovation Fund (MVIF) of $750,000 (INR 4 Crore), sponsored by Small Industries Development Bank of India (SIDBI) , supports the activities of prototype development, test marketing and pilot production by providing necessary capital in the form of loans. Since 2003, a total of 168 projects have received financial support through this fund.9

NIF is mandated to build a national register of ideas, innovations and traditional knowledge practices related to agriculture, plants, animal health, and human health. With the help of the Honey Bee Network, NIF has been able to document more than 150,000 ideas, innovations and traditional practices.

8 NIF website

9 MVIF – online database of list of projects supported


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JAWAHARLAL NEHRU NATIONAL SOLAR MISSION: The Jawaharlal Nehru National Solar Mission (also known as the National Solar Mission) is a major initiative of the Government of India and state governments to promote ecologically sustainable growth while addressing India’s energy security challenges.10 The Mission has set an ambitious target of deploying 20,000 MW of grid connected solar power by 2022. It is aimed at reducing the cost of solar power generation in the country through (i) long term policy; (ii) large scale deployment goals; (iii) aggressive R&D; and (iv) domestic production of critical raw materials, components and products, to achieve grid tariff parity by 2022.

The Mission has adopted a 3-phase approach - 2010-13 as phase 1, 2013–17 as phase 2 and 2017–22 as phase 3. An evaluation of progress, review of capacity and targets for subsequent phases, based on emerging cost and technology trends will be done at regular intervals during this period. The mission’s targets are:

To create an enabling policy framework for the deployment of 20,000 MW of solar power by 2022

To ramp up capacity of grid-connected solar power generation to 1,000 MW within three years – by 2013; an additional 3,000 MW by 2017 through the mandatory use of the renewable purchase obligation by utilities backed with a preferential tariff

To create favorable conditions for solar manufacturing capability, particularly solar thermal for indigenous production and market leadership

To promote programs for off grid applications, reaching 1,000 MW by 2017 and 2000 MW by 2022

To reach 15 million sq. meters installed solar thermal collector area by 2017 and 20 million by 2022

To deploy 20 million solar lighting systems for rural areas by 2022

So far, National Solar Mission facilitated a 62% increase in investments in solar energy in India to $12 billion during the year, the fastest investment expansion of any large renewable energy market in the world.11 NVVN, the nodal agency for solar projects, has selected 37 projects accounting for a total of 1,480 MW (32 projects – 5MW each; 1 project – 20 MW; 3projects – 100 MW each).

10 MNRE website

11 The Hindu, June, 2012


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NATIONAL RURAL LIVELIHOOD MISSION (NRLM) The National Rural Livelihood Mission (NRLM) was launched by the Ministry of Rural Development (MoRD), India in June 201112. Aided in part through investment support by the World Bank, the mission aims at creating efficient and effective institutional platforms of the rural poor enabling them to increase household income through sustainable livelihood enhancements and improved access to financial services.

NRLM has set out with an agenda to cover 70 million Below Poverty Line (BPL) households across 600 districts in the country covering 6,000 blocks, 250,000 Gram Panchayats and 600,000 villages through self-managed Self Help Groups (SHGs) and federated institutions. It supports them for livelihoods collectives for a period of 8-10 years. In addition, these BPL households are facilitated to achieve increased access to their rights, entitlements and public services, diversified risk and better social indicators of empowerment. NRLM believes in harnessing the innate capabilities of people and complements them with capacities (information, knowledge, skills, tools, finance and collectivization) to participate in the growing economy of the country.

The key features of the NRLM are:

(1) Social mobilization: Universal social mobilization through formation of SHGs under NRLM. The related mission is to bring every BPL household under the SHG network.

(2) Institution building: Setting up SHG federations at various levels to nurture the SHGs; enable them to become good quality institutions, help SHG members in articulating their demands, enable collective action for getting their entitlements with various government departments, developing backward and forward marketing linkages, maintenance of accounts, conducting audits and documentation.

(3) Financial inclusion: Based on the eligibility criteria, NRLM would provide financial support with intent to inject financial resources into the institutions of poor for meeting their credit needs for both, consumption purposes and also for investment in livelihoods promotion

(4) Livelihood program: Major focus of the NRLM is to stabilize and promote existing livelihoods portfolio of the poor. The NRLM livelihoods promotion priorities are:

a. 'Vulnerability reduction' and 'livelihoods enhancement' through enhancing and expanding existing livelihoods options and tapping new opportunities

b. 'Skilled wage employment' - building skills for the job market outside c. 'Enterprises' - nurturing self-employed and entrepreneurs (for micro-enterprises)

(5) Convergence & partnerships: a. Ensuring that states agencies (SRLM) develop partnerships with major government

programs and build synergies to address different dimensions of poverty and deprivation

b. Working in tandem with civil society organizations, industries, educational institutions, banks and other resource organizations who share the similar objectives

12 NRLM Website


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INDIA INCLUSIVE INNOVATION FUND (IIIF): India Inclusive Innovation Fund (IIF) is a $1 Billion fund setup in February, 2012 by the National Innovation Council, a division in the Prime Minister’s Office.13 This fund is setup as an effort to drive and catalyse the creation of an ecosystem of enterprise, entrepreneurship, and venture capital, targeted at innovative solutions for the bottom of the pyramid.

The IIIF is built on the principle that innovative enterprises can profitably, scalably, and competitively engage citizens at the bottom of the economic pyramid and in doing so, provide goods and services that will transform their lives for the better.14 The fund proposes to invest in a new generation of Indian entrepreneurs who will build, and are in the process of building, world-class enterprises that focus on the problems of the poor, without compromising on economic success. In doing so, the fund will help create a new Indian model of innovation, one that bridges growth and equitability.

The fund will support investment at different stages of the enterprise development cycle – from early stages, through later phases of scaling-up of potentially successful solutions and business models.

The fund proposes to seek capital from a range of sources: seed fund contributions from the government and its agencies; contributions from various Indian public sector enterprises, banks, and so forth; and contributions from private investors, corporate organizations and investment firms.

Crucially, the fund will also explore the possibility of establishing ‘soft’ incubation capacity and resources – expertise and programs that will support individual investee entrepreneurs and companies, in successful enterprise development and performance. This effort will address social impact objectives, by kick-starting an ecosystem of capacity-building around BOP-focused enterprises and entrepreneurship; and economic return objectives, by providing entrepreneurial teams with the capacities needed to successfully deliver on their ideas.

The Government of India has announced an initial investment of $20 million (INR 100 Crores) in the fund.15 The fund is currently in the process of conceptualization, design, and development. It plans to start its operations once it has $100 million. Hence, it is actively scouting for $80 million from private sector and other non government agencies.

13 Times of India, Jan, 2012

14 National Innovational Council Website

15 Indian Express, November, 2011


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RURAL INNOVATION FUND The Rural Innovation Fund (RIF) is a fund managed by the National Bank for Agricultural and Rural Development (NABARD) to foster innovation in the rural sector. The RIF supports innovation in farm, non-farm and microfinance sectors that have the potential to promote rural livelihood opportunities and employment. The support the fund offers can be in the form of a loan, grant, incubation fund support or a combination of the three up to a maximum of $56,600 (INR 0.3 Crores). Individuals, NGO’s, community based organisations, self help groups, farmer’s clubs, Panchayati Raj Institutions and private sector companies can all apply for funding to the RIF.

The preferred areas that the fund supports relate to agricultural productivity, rainwater harvesting and distribution of water, generation and distribution of energy, rural sanitation and waste disposal, managing common property resources, rural housing and habitat development, financial inclusion, rural tourism and rural health care.

Since the inception of the fund in 2005, NABARD, through the RIF, has supported 455 projects till date with disbursements of $8.11 million (INR 43 Crores). In 2011-2012 alone, the RIF has disbursed $1.92 million (Rs. 10.18 crore) supporting 80 projects. 16

16 NABARD website

i nclusive business ma rket study for india and sri lanka · 2015-05-04 · 10 indo-us rajesh raju...

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