Annual Report Of Jan Mitra Rickshaw Sangh

JAN MITRA RICKSHAW SANGH Annual Report 2008

The starting of the Rickshaw Bank in Varanasi is the beginning of new era for labour and those earning their livelihood by driving rickshaws.

OUTLINE I.

II.

III.

IV.

V.

Introduction & Overview a. Mission b. Team c. Org Structure / Role of affiliates Operations & Guidelines a. Loan Procedure & Guidelines b. Partnership Agreements i. PNB ii. Insurance & licensing iii. Advertising iv. Suppliers 1. Cost Breakup c. Governance Progress to Date a. Initial Steps b. Full Operations / Rickshaw Distributions c. Timeline d. Financial overview i. Paybacks so far, analysis of loan recoveries ii. Operation expenses e. Issues & Challenges i. Role of traditional vs. CRD rickshaws (driver taste, distribution) f. Characteristics of each distribution cycle (insurance given out?, CRD-funded?, etc) g. Meetings with other parties Detailed exhibits a. Financials b. Unit costs c. Detailed contract summaries (suppliers) Case Studies

Questions Procedure - Assembly o When were the first 75 rickshaws constructed, timeline of construction? o What does JIG mean? How was new design constructed (timeline) - Details of insurance agreement (initial cost, has this changed? Term of agreement, Can it change in future?) - Advertising agreement - Advertising penetration rate? o Solutions for introducing advertising to Varanasi (batch advertising, e.g. 1,000 rs/month for 10 rickshaws). Is there advantage to CRD brand for this? Visit to local businesses? Help from Tata Tea? - Who designs uniforms? What is the cost? How much inventory left? o Are drivers wearing the uniforms? Why not? Is this a potential cost saving? - Full overview of loan process and supply chain o How much money repaid to own rickshaw? o Surrender process: unofficial notice, legal notice, etc. - Are rickshaws only distributed in ceremonies? What are the benefits / costs to ceremonies? Affiliates - Personnel distribution per organization? Finances - Full budget with cost overruns & explanation - Loans

o o

Surrender rate by batch Surrender policy

Other - Annual goals for next year? / Expected growth?

JAN MITRA RICKSHAW SANGH ANNUAL REPORT for the Period from September 2007 to September 2008

RICKSHAW BANK OVERVIEW Introduction The Jan Mitra Rickshaw Sangh project was initiated by Jan Mitra Nyas in August 2007 to improve the livelihoods of cycle rickshaw drivers in the Varanasi area by enabling vehicle ownership and providing access to basic financial services and benefits. The JM Rickshaw Bank is serving the 25,000+ rickshaw drivers in the Varanasi area by offering the opportunity to own rickshaws under rent-to-own programs, open bank accounts and gain access to social services such as insurance. As of October 2008, the program currently has nearly 150 rickshaw driver members who are on the path to ownership. After between 18 to 24 months of daily rental payments, drivers own their own rickshaws.

After gaining the financial independence of asset ownership, drivers might

leverage this to increase savings, pursue household and educational loans and develop communal facilities.

JM Rickshaw Team The JM Rickshaw Bank project team was chosen through an interview process. The current team consists of five employees involved with daily operations, all under the oversight of Dr. Lenin Raghuvanshi, the Director of the Rickshaw Bank as well as two affiliated organizations, the People’s Vigilance Committee on Human Rights (PVCHR) and Capital Markets for the Marginalized (CMM),a public charitable trust. Rickshaw Sangh Team Dr. LeninRaghuvanshi, Director

Mr. Sanjay Srivastava Field Coordinator

Mr. Upendra Kumar Project Coordinator

Mr. UmeshSingh Coordinating Accountant

Mr. Arvind Mishra Mobilizer Coordinator

Mr. Ashish Singh Field Coordinator

The Project Coordinator is responsible for … [Explanation of roles]

Organizational Structure and Role of Affiliates

The Rickshaw Bank operates under Jan Mitra Nyas (JMN), a trust organization founded in 1999. The Rickshaw Bank and JMN’s operations, facilities and personnel are tied to People’s Vigilance Committee on Human Rights (PVCHR), a membership-based advocacy organization founded in 1995. Both organizations are directed by Dr. Lenin. PVCHR leads public movements for providing human rights to disenfranchised communities throughout Uttar Pradesh. The affiliation with PVCHR has provided an advantage in reaching out to the rickshaw driver community and ensuring cooperation from the public administration and city police. The affiliation may also offer the opportunity to expand operations into areas in Uttar Pradesh where PVCHR is active. The Rickshaw Bank is also affiliated with Capital Markets for the Marginalized (CMM), a public charitable trust pursuing market-based development work that was founded in January 2008. CMM is also settled by Dr. Lenin and is affiliated with PVCHR. CMM is the actual entity that enables banking loans for rickshaws and purchases rickshaws from suppliers. The Rickshaw Bank shares office facilities with CMM. The Rickshaw Bank receives support from the American India Foundation (AIF) as part of AIF’s Rickshaw Sangh livelihoods initiative. AIF provides the First Loss Deposit Guarantee on Punjab National Bank (PNB) loans for the rickshaw project. AIF has also funded the operating expenses for the Rickshaw Bank since entering into an agreement in July 2007. The Rickshaw Bank works under the guidance of the Center for Rural Development (CRD) as part of CRD’s India-wide cycle rickshaw initiative. CRD oversaw JMN’s relationship with the local PNB office as a lending partner, and provided the initial 100 total rickshaws distributed in Varanasi through a loan agreement with the PNB branch. CRD has provided operational support to JM Rickshaw Bank through personnel training and workshops. The first 100 rickshaws distributed by the Rickshaw Bank followed a design developed by CRD. Organizational Chart

AIF

First Deposit Loan Guarantee

CRD

PNB

PVCHR > 40 employees •Founded in 1995

Rickshaw loans

Operational Support

-Funding -Operational Support

Jan Mitra Nyas (JMN) Founded in 1999

- Staff - Office

Capital Markets for Marginalized (MM)

Payments

Suppliers

Funds Founded in 2008

Rickshaws

- Rickshaws - PNB Loans NGO / Trust For-Profit

JM RICKSHAW BANK

Membership / project-based

OPERATIONS & GUIDELINES Loan Process The Rickshaw Bank Field Coordinators survey the rickshaw driver community to choose prospective partners. Drivers are given a written application that was designed by CRD. The application includes contact details, the signed endorsement of an introducer in the driver’s community and information on the driver’s family. Once drivers are selected, there is a requirement for an initial deposit of 300 rupees for the rickshaw loan, plus a 50 rupee membership fee. Applications are generally submitted on an individual basis. Typical turnaround for issuing a rickshaw after approval of a driver is less than a week. However, since operation, the majority of rickshaws have been distributed at three inauguration ceremonies in batches of 50 or more vehicles. The ceremonies are operationally efficient and generate publicity for the project. Membership packages to rickshaw drivers typically consist of the following: -

New rickshaw (CRD or traditional design)

-

Driver’s insurance (rickshaw auto & liability, health insurance)

-

License & registration

-

Identification card and pass book

-

Rickshaw bank uniform

After receiving a rickshaw package, drivers are expected to make daily payments of 25 rupees, six days per week. [How much repayment required to own rickshaw?] The Every Day Installment (EDI) payments are collected by field coordinators in field locations. There are currently 7 cluster points throughout Varanasi and one garage location for meeting with drivers. Partnership Agreements The Rickshaw Bank formed an agreement with Punjab National Bank (PNB) in December 2007 for PNB to act as lending partner. This agreement falls under AIF’s national-level contract with PNB, and AIF serves as the guarantor on all loans. Rickshaw drivers were also granted savings accounts with PNB. CRD initially negotiated an agreement with PNB for 100 rickshaw loans, and purchased the rickshaw packages directly. CRD negotiated loans of 8,650 rupees per rickshaw, which includes costs for rickshaw assembly and the provision of licenses and insurance to drivers.

The JM Rickshaw Bank maintained

responsibility to distribute rickshaws and pay back the loans to PNB. CMM and the Rickshaw Bank started taking loan bundles directly from PNB in July 2008, and CMM purchased the latest batch of 50 rickshaws directly.

The Rickshaw Bank also reached an agreement December 2007 for the Varanasi Municipal Corporation to provide licenses to drivers. The current cost of licenses is 425 rupees for two years per driver. An insurance agreement was established with Oriental Insurance Company in December 2007. The cost of insurance is [ ] as defined in the agreement. Also agreement with United Insurance, LIC ? Uniforms agreement? Suppliers In September 2007, CRD and the Rickshaw Bank surveyed local suppliers and manufacturers, and decided on an agreement with Rohit Kumar of Sri Ram Steel Art in Shivpur, Varanasi. CRD trained Rohit’s team on the CRD-rickshaw design, and set an agreement to purchase the first 100 rickshaws at a total cost of approximately 7,700 rupees per unit. There were some initial problems with the CRD-design rickshaws produced by Sri Ram Steel Art. [ JIG is prepared in Varanasi after 2½ months hard work of Alag and Andi and Research and Development (R&D). Solution had been found by taking into account even the small body parts of old rickshaw. Now new assembler will be trained easily.] CMM established its own agreement with Rohit Kumar on August 30, 2008. The agreement calls for the purchase of 50 CRD-design rickshaws at a manufacturing cost of 1,050 rupees per rickshaw. In combination with current market prices for cycle parts at almost 8,700 rupees, rickshaws will cost 9,730 rupees per unit. Rohit will produce at least rickshaws per day. Due to several issues with the CRD design in Varanasi, CMM has also entered an agreement to purchase traditional cycle rickshaws.

On September 4, 2008, CMM entered an agreement with Sunil Gupta of

Sonarpura, Varanasi to produce traditional-style cycle rickshaws. Sunil will produce two rickshaws per day at a total cost of 9.600 rupees per unit. In the event that Rohit Kumar cannot manufacture the CRD-style rickshaws at an appropriate pace, other local assemblers, including Sonal Fabricator (Taktakpur) and Pooja Fabricator (Baghwanala), have agreed to prepare rickshaws at the same rate. The Rickshaw Bank is also evaluating potential future options to create an independent rickshaw assembling workshop for the project.

[Summary chart of suppliers & costs & cost overruns]

Transparency / Governance All rickshaw drivers are told by Jan Mitra Rickshaw Bank about their responsibilities through meetings and folk school. The drivers and community are also educated on the source of the rickshaw loans, rickshaw construction process and our partners. All Rickshaw Bank activities are documented, and rickshaw drivers

are given stamped receipts accompanying their signatures with daily payments. Weekly meetings are held to encourage timely loan repayments, communal discussion and solving of problems and accountability.

CURRENT STATUS & PROGRESS TO-DATE Initial Steps From August to November 2007, the Rickshaw Bank distributed a survey form to rickshaw drivers that also included an explanation of the bank lending scheme. The survey successfully collected information about Varanasi rickshaw drivers while promoting the project. It identified approximately 450 rickshaw drivers by December 2007, of which 380 drivers had proper documentation for eligibility. At the same time, we started communication with several important community members –including the Commissioner of Vanranasi Division, the Secretary of Municipal Corporation, Circle Officers, and Traffic Police – to establish an advisory committee and ensure the cooperation of both the administration and the public. Subsequently the advisory committee was established and the Commissioner Varanasi was made exofficio chairperson. The Rickshaw Bank contacted the Varanasi Municipal Corporation to ensure future registration and issuance of driving licenses for drivers.

To determine insurance options, we initiated discussions with Oriental

Insurance, New India insurance, ICICI Prudential, and LIC. To build publicity for the project, two demo rickshaws were assembled in September 2007, and two drivers drove them around the local area, advertising the project and providing information about the lending scheme. CRD Workshop The Council on Rural Development (CRD) organized a three day workshop in October 2007 at Jan Mitra Rickshaw Bank to discuss the project. Several members of CRD, including Executive Director Dr. Pradeep Sharma were in attendance, along with members of the Aarthic Anushandhan Kendra rickshaw bank. The workshop introduced the rules and procedures of lending to rickshaw drivers, familiarized the team with lending documentation, and provided lessons on resolving typical problems and disputes. The workshop also provided direction to the JM Rickshaw Bank team to advertise the project and build a target group.

Initiation of Operations and Rickshaw Distributions During January 2008, 121 rickshaw drivers opened savings accounts with PNB. PNB initiated its loan for 100 rickshaws to CRD on January 22, 2008. [Rickshaw Assembly] The Jan Mitra Rickshaw Bank distributed its first rickshaws in Varanasi in an inauguration ceremony on February 2, 2008. At the ceremony, we distributed 75 rickshaws CRD-design rickshaws to previously identified drivers.

Then after by taking into account the inauguration of Jan Mitra Rickshaw, the group formation of rickshaw driver, cluster forming, address verification of rickshaw driver, and garage point had been assured. On June x, 2008, 25 rickshaws were distributed … [Explain: On 02.06.2008, 50 rickshaws of Jan Mitra Rickshaw in Allahabad and on 04.06.2008 50 rickshaws of Jan Mitra Rickshaw in Lucknow had been distributed by Sri Hanumant Ji, Pradeep Sharma of CRD and K.C. Chakravarti of CMD (PNB) in an inauguration]. Timeline of Key Events August 2007: - JM Rickshaw Bank initiated - Survey started

Oct 2007: - CRD Workshop

Nov 2007: - Driver survey completed - Umesh Singh joins as new Accountant

July 2008: - 25 new rickshaws distributed

August to

January to

December 2007

September 2008

Sept 2007: - 2 demo rickshaws displayed in Varanasi - Community outreach started

Dec 2007: - Partnership with PNB - Designated partners f or insurance, licensing and assembly

Financial Overview Loans

Financial Statements Challenges

Jan 2008: - PNB agrees to f inance f irst 100 rickshaws - 121 drivers open accounts with PNB

Feb 2008: - 75 rickshaws distributed at inauguration ceremony - Upendra Kumar joins JMRB as Project Coordinator

September 2008: - CMM signs supplier agreements with Rohit Kumar (50 CRD rickshaws) and Sunil Gupta (traditional rickshaws)

Procedural Issues This cost, in addition to approximately 1,400 rupees for the insurance, licenses and uniforms, placed total cost to CRD at 9,112 rupees creating a deficit of approximately 462 rupees per loan. Not using SHG or garage system Have not signed on to garage model – why? However, due to serious Problem in rickshaw, the rickshaw driver demoralized after distribution of rickshaw and due to this the other eager people who want to associate with this rickshaw project are compelled for rethinking. Following person has returned the rickshaw by showing their health problem:– Due to unavailability of CRD budget and finance there was delay in rickshaw distribution. Therefore many of selected rickshaw drivers started to hesitate to take rickshaw.

Sl. No. Name

Address

Rickshaw No.

Return Date

1.

Sri Mumtaz Ahmad

Lohta

CRD/RB/018

Feb. 07

2.

Sri Babu

Lallapura

CRD/RB/034

Mar. 07

3.

Sri Anil Gaud

Lohta

CRD/RB/071

Jul. 07

4.

Sri Bartulla

Lohta

CRD/RB/023

Jul. 07

5.

Sri Bharat Lal

Lohta

CRD/RB/03

Jul. 07

6.

Sri Muslim

Lohta

CRD/RB/012

Jul. 07

7.

Sri Kamaluddin

Lohta

CRD/RB/066

Jul. 07

However they have show their health reason but it is founded from the other rickshaw driver that they returned because the quality was not good. Out of which three rickshaws belonging to Mumtaz, Babu was given to three new parsons in Mar. 07, and rickshaw belonging to Anil was given in Aug. 07, to new persons. Several problems were noted with the CRD rickshaw model: 1. Heavy to drive 2. Inclination towards back side. 3. The body parts of rickshaw are adverse to the hope. 4. Partial difference between exhibited and issued rickshaw (Brass Hub, two pair of brass bell, change in front hood & more inclination of seat in back side.) 5. Lack in the strength and quality of soccer. 6. Type of rickshaw is not of high quality. 7. Lack in the quality of baring. 8. Negligence in the making of rickshaw. 9. Distribution of one set of dress instead of one pair of dress, and no distribution of license on time. 10. Distribution of remaining 25 rickshaws at very long interval. 11. Delay in the insurance of rickshaw driver, rickshaw passenger. Due to above mentioned point five member associated with rickshaw project have taken back their security amount. More them 70% rickshaw driver wanted to return their rickshaw. The counseling of worker

of rickshaw bank, unforeseen benefit and satisfaction after becoming rickshaw owner, had cooperated in successful conduction of project. After taking these problems seriously, on 19.03.08 Livelihood Director AIF – Sri Hanumant Ji, Dr. Pradeep Sharma of CRD and Naveen Krishna Participated in Meeting held at JMN office, Varanasi. In this meeting the new experiment of Sri Alag Natrajan and Andi for permanent reformation in rickshaw, had been discussed along with the discussion about stopped ball bearing and formation of JIG for making standard form of rickshaw in less time. Both of them constructed JIG after hard work of 2-3 month and by R&D. Solution has been found to remove even small problem of old rickshaw. Along with this old rickshaw had been rectified, so that the rickshaw driver may get relief and feel satisfaction by driving rickshaw. We got cooperation about rickshaw part, alignment, quality and R&D during this rectification. We distributed 25 rickshaws in July 08 by using JIG by taking into account the above problem. The EDI (Every Day Installment) collection of rickshaw driver in every week is in advance. There was negative impact on EDI collection of previous 75 rickshaws and outstanding on some rickshaw drivers became more, who are either trying to pay it slowly or return rickshaw by telling the fault of rickshaw and bad effect on health. We are sending notice through advocate to rickshaw driver for outstanding. After that legal process will be adopted. Some rickshaw drivers are making effort to minimize their outstanding gradually. Jan Mitra Rickshaw Bank ensures its work plan and strategy by learning from past experience. They are as follows [ CRD workshop, Oct 2007 ] :1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11.

To develop as a cluster the dense area of rickshaw drivers. To strengthen group system. To make aware rickshaw driver to deposit money in their saving bank account. To associate new rickshaw driver to Jan Mitra Rickshaw Bank (JMRB). To effort for payment of installment by rickshaw driver. To organize workshop from time to time for training about traffic rule and health camp for rickshaw driver. To make strive for advertisement according to Jan Mitra Rickshaw Bank Project. To improve economically and socially to old rickshaw driver and their children should be associated with school by associating them with mainstream. To distribute 300 rickshaw by Rickshaw Bank by the end of Dec. 2008. To make aware the beneficiary about the other benefit and to associate new rickshaw driver. To think and make scheme on the effort to associate migrant rickshaw driver with rickshaw bank. In this context on 24.07.08, Livelihood Director of AIF team – Sri Hanumant Ji Kanupriya and

Vineeta Singh, Naveen Krishna of CRD, Local assembler Sri Rohit Mourya and director Dr. Lenin along with member of core-team have ensured participation in the meeting held at the office of JMN, in which the discussion have been held related with forth coming work plan and strategy. Which are as follows:1. 2. 3. 4. 5. 6.

Development of condition and family of rickshaw driver. The outline and achievement of project. Comparative study of 75 old rickshaws and 25 new rickshaws. Conversation and solution of reformation on outstanding. Break even volume. Assessment of case flow.

7. Strategy of market value and new budget, which was Rs 5650/- per rickshaw in previous year. Now PNB is taking Rs 10500/- loan per rickshaw. 8. To make available loan by PNB to CMM.

had been motivated with new energy according to - strategy for their work, exhibition of rickshaw, advertisement of rickshaw bank, Building group, clustering, address verification and marking garage paints. It is known from the above statement and thinking of rickshaw driver that rickshaw driver are very curious to associate with Jan Mitra Rickshaw Project. To associate with Jan Mitra Rickshaw Bank, the wives of eight rickshaw driver have opened the bank account in the name of their husband by taking initiation. Out of which five of them have been distributed rickshaw in inauguration ceremony. Jan Mitra Rickshaw Bank is Feeling glorify because it initiative on national level project. Rickshaw driver welcomed warmly to Jan Mitra Rickshaw Bank and showed eagerness by associating to receive rickshaw.

Counterparty meetings Kanupriya of AIF-New Delhi came to Varanasi on two days official Visit on 11.06.2008 for work on scheme related with Jan Mitra rickshaw bank project, and a discussion has been held on field visit and project accounts. On 28th July Nicole Patel affiliated with AIF came to Varanasi for photography of rickshaw, field visit and case study.