RIKSHAW BANK Asset based entrepreneurship

development.

• ASSET BASED • ENTREPRENEURSHIP • DEVELOPMENT

• An Asset:• A Rickshaw

RIKSHAW BANKDr. Pradip Kumar Sarmah (Ashoka Fellow, India)Executive Director, CENTRE FOR RURAL DEVELOPMENT (CRD)Dewan House, Zoo Narengi Road, Guwahati- 781 021, Assam, Phone : +91-361-2228281 (O)Skype: PRADIP1963

E-mail:crd4ev@yahoo.com/ pradipsarmah@hotmail.com Website: www.crdev.org

CRD IS AN NGO

• Registered under the Societies Registration Act of 1860 (Section XXI) in 1994-95

• Registered under the Income Tax Act - Section 12AA & 80 G

• Registered under the Foreign Contribution Regulation Act of 1976

ASSET BASED

• November 20, 2004, 80 Rickshaw were distributed to Rickshaw pullers;

• On Nov 21, 2004…created CHAOS!!! Because……

Rickshaw Chain constantly fell off,

Rickshaw chassis were bend..

• Steps taken: - Motivated the TEAM; ASSURED the pullers; Contacted IIT Guwahati; Hired technical team.

LEARNINGS

• Never launch product without doing experiments;

• Know your technical partners;

• Not to become over smart; and,

• COST CUT without decreasing the quality.

At the time of failure• always consider team

perspective towards products;

• Always play a leader cum motivator;

• Work only on feedbacks; and

• Solve problems as soon as possible.

Asset Ownership

Existence business• Rent paid Rs.50 for 12 hours

in Chandni Chauk, Delhi.• Puller hired Rickshaw for 6

month and paid Rs 9000.• Like that he pulled 20-30

years of his life and paid Rs 3,65,000 to Rs 5,47,500.

• But still he is not called as the owner of that Rickshaw which cost is Rs 6,500 only.

Rickshaw Bank• Rickshaw ownership and

higher income • Safer work environment

through well engineered rickshaws and insurance

• Support network through discussion forums and peer groups

• Pride and confidence within the rickshaw driving business

RB - OPERATION MODEL• 5 Drivers constitute a group & 5

groups under one garage/ meeting point

• Under each garage/meeting point cover 25 rickshaws and also provides repair facilities

• Each garage/meeting point serves as the collection centre for the Drivers’ daily payment

• Garage/meeting point are the creation of new entrepreneurship

• Opening of new branches on a Franchise Model

Daily Operation of CRD and its Branches and Franchisees

BENEFITS Benefits: RICKSHAW DRIVERS• Bonafide membership of the Rickshaw Bank

• Receive ownership of an income generating asset

• Inculcates the habit of savings

• Social security such as insurance coverage for both the rickshaw, the puller, the passenger (s) and the mediclaim facility.

• Provided platform to work with dignity- norms, uniforms, photo I-cards

• Getting health and eye care support

• Subsequent loan

Benefits: Member of the Community• Less polluted environment • passenger insurance• Jobs for youths

Benefits: Govt and Local AuthoritiesImproves law and order • Less corruption• Better documentation through availability of

licenses • Safer roads• Additional revenues

Benefits: To Local Business• Larger consumer market• Job creation Benefits: To Corporate and Financial

Institution• Builds goodwill in the community• Larger consumer market• Effective and less expensive advertising• Tax incentives and 100% donor efficiency• Better investment opportunity

Design Innovation

• Rickshaw originally designed by IIT, Guwahati

• Aero-dynamically designed thus lighter

• More spacious• More attractive to

clients• Comfortable for all age

groups• Longer functioning life

How RB grab opportunities?

Problems • Raising fund;• Banks were unwilling

to give line of credit;• Lack of knowledge;• Heavy vehicles; and,• Rickshaw pullers were

not enjoyed.

Solutions and learning's• Tap the CSR funding from three

large Indian corporation;• Sign an agreement to give 86%

discount on advertisement at the back of Rickshaw;

• Visited Grameen Bank and met Professor Mohammad Yunus;

• Made Rickshaw on the basis of the feedback through IIT Guwahati; and,

• Provide uniform, licence, technology superior Rickshaw, and property and casuality Insurance.

ENTREPRENEURSHIP

Cost Breakup of the Unit• Particulars Cost (Rs)• Rickshaw Assembling

Cost Rs 9600• Uniform Cost Rs 450• Insurance Cost, 2 years

Rs 350• License Cost for both, 2

years 400• Total = 10500

• Amount recovered from each Rickshaw Puller Rs. 12,390/- @ Rs. 25/- EDI for 496 days for a maximum period of 18-24 months

• Average receivable Rs. 1800/- per rickshaw per year from the corporate advertisements till Rickshaw is owned by the RB and than 35% of the amount per year once Rickshaw is owned by the Pullers

BENEFITS - Social Entrepreneurship

Corporate• Avenue for CSR• ‘Mobile’ advertisement

facility at 96% cheaper rate for corporate • Flexible term options on

advertising (1 month to 3 yrs)• Donors get 100% tax

exemption• Donors can participate in

the programme monitoring process

Donors• Support in a sustainable

model• Create a Visible impact • Working towards

millennium development goal (MDG) to bring people 2 USD income per day • Leveraging of funds to

reach larger numbers

BUSINESS MODEL

The Revenue Drivers• Repayment from rickshaw

puller;• Advertisement revenue;• Additional loan repayment;• Member deposit and

membership fees;• Revenue from franchises;

and,• Support from International

donor organization.

The Cost Drivers• Manufacturing

vehicles;• Administrative and

operational expenses; and,

• Finance and Insurance

Franchising Model

• Invite NGO’s;• Provide capacity

building; and,• Support first loss

deposited guarantee (FLDG) to leverage loan from other Banks.

• Looking for entrepreneurs;

• Statistics reveal that the failure rate in business ventures is much lover among franchises than among individual start-ups.

DEVELOPMENT

BUT THE QUESTION IS STILL LEFT

Identified Problem

• Rickshaw Drivers – socially disadvantaged community (harassed, HIV-AIDS, exploited)

• Majority suffer from tuberculosis due to constant exposure to smoke, dust on the road and smoking

habits,• No access to formal finance: 95 % hire rickshaw on high

daily rental fee,• Below poverty line and without any social security, • 46% are illiterate,• 8 million such rickshaw drivers in India.

who will pay for it ?????????

Solutions

The Rickshaw Bank provides • a newly designed rickshaw payable through a

minimal daily installment• eventual ownership of the rickshaw, • insurance, uniform, licenses, a photo ID,

slippers etc.WHAT YOU THINK??????????????

first is Credit, Second is Saving, money management service will be the third revolution in Microfinance.

– Mohammad Azhar not insurance……November 28, 2011 at 12:12pm · Like

– Mohammad Azhar If you are handling money you can save no matter how poor you are, you can save. ....November 28, 2011 at 12:16pm · Like

– Mohammad Azhar in this perspective, management service may be become the hot product for microfinance institutions...November 28, 2011 at 12:16pm · Like

MONEY MANAGEMENT SERVICE

• Average Income = Rs 350 p/d

• Less Rs. 50 Rent• Less Rs. 150 food• Less Rs. 50 education• Total 350-250=100• This Rs. 100 p/d is most

important to manage because Rs. 100 divert Rickshaw puller to buy intoxicated products.

Things to do:1- Provide Money

Management service to Rickshaw pullers.

2- Through this inculcate habit of saving.

3- one’s they know the importance of Rs. 100 then we called

ASSET BASED ENTREPRENEURSHIP

DEVELOPMENT.

• Please Questions!

Thank you….