Social Entrepreneur- 2009 Ashoka Foundation

Assignment on social entrepreneur: Kaushlendra kumar-A modern vegetable seller

Submitted to – Submitted by-

Prof. Rajeev Roy Shitanshu Mosharaf Arvindra

INTRODUCTION It is really hard to write about a social entrepreneur. But why? A simple answer is you have to put your feet in his shoe to know him. When I was given a chance to write about any social entrepreneur then it was hard to think of any name as very few people opt for this after graduating from B- Schools. Then I contacted a friend of mine who is also studying in one of the B-School, then she reminded me the incidence “when I was in my second year of graduation (2006) and was going to Patna by train, she was also with me, our reservation was

in sleeper class and two other guys were also sitting along with us. She knew one of the guy named Irfaan. He is actually a neighbour of my friend in Begusarai. So she introduced him. By that point of time I came to know that this is the same person who had won the first prize in Bussiness Bazigar, a show on Star Plus(probably) where people had to prove his or her business mettle. He has just stated the business of providing rikshaw to the poor people to earn livelihood. Name of the company is SAMMAN. The other person who was along with him was very silent and was in his own world. He was very untidy and hair was totally uncombed. I thought he may be one of his friend from village. The moment Irfaan introduced him to me I was awaked. He was an IIM,A pass-out of batch 2004-06 in ABM stream. His name was Kaushlendra. He was a gold medallist of his batch. He did not talked so much to me and same applies to me. BUSINESS IDEA Through the same friend, I came to know about that Kaushlendra would be a good option on which I can write. Any way I contacted him to proceed further. He talked about his life in IIM,A then he said that he did not opt for placement in the IIM and was very determined to start his business. He had an idea in his mind right from his childhood- to do something good to the poor people of Bihar. His native is Nalanda district, Bihar and the whole Nalanda is a vegetable growing belt. So he thought for backward and forward integration of the vegetable grower and end consumer. STRUGGLE Considering the package which he could have got through placement, everyone was opposing his decision. His family was not convenience by his decision. He stated meeting with the IAS officers residing as MD in various government departments of Bihar like agriculture department, horticulture department to know what are the benefits, government are providing through various programmes to promote entrepreneurship. By hearing that he is an IIM, A pass-out, government officials used to respond in a better way. No bank was ready to provide money to him. Then he took help from family and friends. He registered his venture as Public Charitable Trust Registered under Registration Act 1908, guided by Indian Trust Act 1882. Trust is named as Kaushlya Foundation. Function started in 2007. He took several professional persons who were his friends in:

BOARD OF TRUSTEE (1) Mr. Kaushlendra MBA IIM Ahmedabad (2) Mr. Om Prakash Singh MBA IIM Ahmedabad Managing Director, KNIDS Green Pvt. Ltd.

(3) Mr. Dhirendra Kumar PG (Chemistry), Magadh University (4) Ms. Vineeta Singh Programme officer, Livelihoods, American India Foundation, Delhi. She holds a degree in Rural Management from Faculty of Management Studies-Institute of Rural Management, Jaipur with over 4 years of diversified experience in managing development project especially for livelihood generation programmes for the poor, covering all areas from planning to implementation. She has previously worked with the Ministry of Rural Development, Govt. of India, Delhi and Rural Development Department, Bihar. (5) Ms. Rashmi Ranjana Assistant Manager, RMAG, ICICI Bank Ltd. She holds degree in Agribusiness Management from MANAGE Hyderabad with over 3 years of experience in commodity trading and agribusiness financing. She has worked with Karvy Comtrade Ltd in the past. (6) Mr. Irfan Alam Founder and Chairman, SammaaN Foundation A social entrepreneur is working towards organizing rickshaw pulling sector in India. He started work with grass root people from college days, founded SammaaN Foundation. In 2006, he won ZEE T.V reality show “Business Baazigar” (First ever Entrepreneur hunts). In 2007 he has got half dozen national – international award nominations in social entrepreneur & economic development category like Bihar Innovation Award and most importantly nomination for “LEAD – Times of India Future Leader Award”. GOVERNANCE KF is a Public Charitable Trust Registered under Registration Act 1908, guided by Indian Trust Act 1882 Registration No: 131/2008-09 under Section 12 A of Income Tax Act, 1961 File No: 80G/08-09/2211-14 under Section 80G A of Income Tax Act, 1961

The KF is governed by a team of young professionals dedicated to social development and agriculture business. The team work under the guidance of advisory board comprises persons from management expertise and planning knowledge. Organisation’s daily activity is operated by different project manager who lead field base team members who are considered to be the most crucial human resource of the organisation.

BUSINESS MODEL KF came into being in 2007 by endless efforts of group of members of agribusiness and rural management background. The primary stakeholders in this business model are vegetables growers, vendors, organized retailers, input suppliers and agriculture expert. It realized the importance of integrated supply chain particularly for vegetables which is a highly perishable product. So it takes the holistic view of the vegetable supply chain and is organizing the two far ends of the chain. Presently it is working towards integrating the existing vegetable supply chain to make it more profitable from the view point of all the stakeholders with particular importance on primary producers. For this it takes following steps. organising farmers and infused them into a group to act as collective unit Establishing and creating the supply chain infrastructure organizing road side and other vendors to market vegetables. ensuring complete backward and forward integration of market. disseminate required information on farm practices among farmers particularly women. promote adoption of economically viable technology at farm level. providing plant protection measures through pesticide marketers. providing social, finance and information security like: Provision of identity card to the road side vendors Identity cards to the vegetable growers Insurance and credit facilities to the small and marginal farmers as well as vendors.

KF partner with: • • • • •

Agriculture Technology Management Agency (ATMA), a subsidiary of ICAR. Bihar Agriculture Management and Extension training Institute. Punjab National bank Women Development Corporation of Bihar. Friends of women’s world Banking, Ahmadabad.

KF believes in knowledge generating and sharing the same with other organization directly or indirectly linked with this particular field. Having a wide exposure to the ground level reality about this particular market, it shares its expertise and knowledge on mutual basis with other organizations like: •

Women’s Development Corporation, Bihar

•

Uttar Pradesh Agricultural Produce Marketing Board

•

Bihar State Co-operative Marketing Union (BISCOMAUN)

•

Agri business management programme , Birsa Agriculture University Ranchi

•

SEWA Bharat, Munger

Time to time state agriculture marketing board of Bihar and UP takes valuable consultancy from this KF to strengthening their state agriculture marketing mechanism for the benefit of farmers.

Vision of the organization: •

Equal dignity and identity for all

•

Formal introduction of small and marginal farmers into mainstream market mechanism

•

Improvement and creation of livelihood opportunities for the marginalised people

•

Better returns to growers and vendors

Objectives of the organisation: •

To connect vendors and marginalized growers to the mainstream of the society

•

To provide platform and support to vendors and marginalized growers in the evolving economy

•

To prepare vendors and marginalized growers for new market challenges

•

Creating infrastructure for proper functioning of the model.

Working model/Strategy: The sensitization programme is an intensive effort to inform and introduce the vendors and producers on the intervention, project Sensitization program on the scenarios, inform them on the value of collective action and on the value of collective value of coming together under a business model. This is being done through sensitizing community continuous interactions with the action primary producers. By the time of the third sensitization meet, enrolment into the program is initiated.

Organising members groups

into

Enhancing productivity, marketability and value addition

Establishing the supply chain network

Developing dedicated partnerships

Through a participatory process, groups (producer and marketing) are encouraged to develop an agenda for the meetings, developing microplans and encouraged to save to develop their equity in the program. The members are requested to provide critical information on their livelihoods, credit history etc to help build and consolidate a database. To demonstrate value of intervention, a first effort is to enhance productivity and marketability – both in terms of economic value and volume. This is being done through first level value addition, introduction of efficient technology, making processes more efficient, infusion of finance etc. Besides enhancing the productivity and marketability, first and second level value addition concepts will also be explored that would help achieving incremental margins, without substantial investment. Supply chain network has been established to facilitate primary producers to link up with input suppliers as well as with the market and government programs / extension agencies. The supply chain is made more efficient through professional set up. A key strategy of the approach is to develop dedicated operational and strategic relationships with key players like development agencies banks, insurance companies etc. in the value chain. It is built on the existing relationships that KAUSHALYA Foundation already has with government agencies and private organizations.

A creative marketing strategy is key to the success of the approach. Direct home delivery services has been introduced in the city which Developing has become very popular among the medium and high income group creative customers. Vegetables vendors are assigned a new role of sales and marketing marketing executives, process executives. Male vendors are appointed strategies as sales and marketing executives while women vendors has been designated as process executives where they do sorting, grading and packaging of fresh vegetables as per the order. Source: http://www.kaushalyafoundation.org/index_files/Howwedo.htm

Value/Supply chain of the enterprise:

Small and marginal farmers

• Vegetables are collected from villagers through field level worker and brought to Smriddhi Grameen Kendra (SGK) • Supply of farm inputs, agriculture information, extension service.

• Vegetables are sorted out and standardized and graded to add value. • Graded vegetables are transportaed to Distribution centre (DC) SGK

• Vegetables again sorted out and graded. • Sent to the Smriddhi city centre (SCC) DC

SCC

• SCC distribute the graded vegetables to various focul point for selling like Road side vendors, Institutional selling, organised retailing etc. • Branded push cart.

How he differentiated his product? product Product is branded as Knids Green Freshness- to maintain fresjness of the vegetable, he introduced Ice-cooled Ice cooled pushcart. This push cart was designed by IRFAAN who is running SAMMAN. It is made of plastic fibre so is light in weight and act as insulator. Quality- to maintain quality, proper grading and sorting of procured vegetable was done. In brinjal what happens insect bore the fruit and lay eggs but from outside it look normal. In order to ascertain quality of brinjal, proper checks were done. Faith/Trust – push sh cart is mounted with electronic weighing machine in order to build trust. On vegetable it is mentioned from which village it is procured. How does the business make money?

The business has four revenue streams: 1. Through direct sales of vegetables to the consumers 2. Through sales to associated vegetable vendors 3. Through institutional sales to restaurants, hotels and hostels etc. 4. Through selling of advertisement space on the panels of branded AC vegetable cart

Competition: Competitors

Unorganised vegetable vendors and organised retailers of Patna

How different is your product or service? Substitutes that differ in price, value, quality and It has... availability. In what way is your product or service Vegetable has been branded as Sammriddhi different? How the protected?

interest

of

producers

is Better price, timely payment, value addition of the product, dignity, promotion of collective action etc.

Progress made so far: No. of employees No. of locations No. of customers Turnover Profits Primary source of initial funding Primary source of additional funding Raised institutional capital? Amount (INR) Investor

2006 2007 Did not exist 16-25 Did not exist 2-5 Did not exist over 50 Did not exist 11-50 lacs Did not exist 1 to 5 lacs Family & friends Bank loans & mortgages Yes 67,00,000/Punjab National Bank

Benefit and impact of this initiative:

Smriddhi of KF foundation is still in its nascent stage. There is long way to go to fulfil its goals and objectives laid down in the mission statement. Starting in 2007 this initiative has shown various tangible and intangible impact on the society. Benefit to the farmers: • Assured and reasonable price for the produce. • Reduction of the losses due to efficient assembling and transportation of the produce. • Guidance on cultivation practices that lead to increase in the productivity. • Timely input supply, crucial for cultivation. • Dignity and confidence among farmers. • Linkages of farmers with formal market mechanism. Benefit to the Vendors/ organised retailers: • Regular and timely supply of vegetables. • Quality and quantity of their requirement is met in possible manner. • Credit facilities are available for vendors. • With indigenous refrigerator technology, shelf life of vegetables goes up and it helps vendor to maintain quality for longer period. Benefits to the consumers: • Assured with quality of the product. • They can avail vegetables at very reasonable price due to efficient inbound and outbound logistics. • Timely availability is also a benefit to the customers. Benefits to the society: • Empowerment of poor farmers and vendors both economically and socially. • Creating interface between corporate and primary sector. • Employment of local people in this venture. • Encouraging others to take up this type of venture which in turn will be beneficial to the society as whole.

SWOT Analysis: Strength:

• • • • • • • • •

Mobilised and loyal producers. Integrated backward market linkages. Efficient and dedicated field staff and project manager. Professional and technical members of advisory board. Rural and agriculture business background of the staff. Good understanding about local production and market environment. Supply need based extension service in timely manner. Good will in the society for its care for the producers. Support from Vendors and organised retailers.

Weakness: • Scale of business and area of operation is small and it can hinder the scale of economics. • Value addition only in the form of gradation, no scope for processing. • Capacity of Push cart is not sufficient to meet the rush in harvesting season. • Wastage is not eliminated but minimised due to lack of technical handling of the vegetables. It calls for introduction of more improved technology. • Although it partners with PNB in recent time but still it faces problems in regards of financial requirement. • Problem is

Opportunities: • Good scope to expand business in adjoining areas. • Huge production of vegetables in the surrounding districts of Patna. It will pave the way to increase the scale of operation. KF just started leveraging upon this and planning to reach out other districts. • There is growing demand of quality vegetables in organised retail as number of such modern trade retailing keep increasing. • There is enough opportunities to sell the products in neighbour states like Jharkhand, Orissa, Eastern UP etc. • Diversification of business is possible by venturing into other agriculture items which need similar marketing arrangements. • Establishment of suitable and economically viable processing plant for vegetables can change the economics of whole arrangement and it will certainly benefit all the stakeholders associated with it.

Threats: • Retention of skilled manpower is the big problem for the organisation as payment is comparatively lower than market trend. It is so because it is a non profit organisation.

• • • • •

This kind of business model is easily replicable. So there is continuous threat from new entrants as well as those working on the same line. Quality and quantity of vegetables is a big issue as these are dependent on weather, cultivation practices, level of input use etc. Pest attack is the major threat for the continuance of this enterprise. Political and bureaucratic complexities are the hindrances for the expansion of the enterprise. Threats from the organised retailers who have their own backward market integration. E.g PAN India for Panatloons.

Future plan of the organisation: ü ü ü ü ü ü ü

To expand its operation in two neighbour districts Bhojpur and Jahanabad. To employ more and more professional and technical persons to increase the operational efficiency of this model. Finding out scope of processing the vegetables and marketing the same. Export the vegetables to neighbour states considering the demand. Initiate welfare programmes in the field of health, education etc in the operational area. Include more and more growers in this efficient marketing system. Mobilise professional to work for underprivileged people.