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RIKSHAW BANK Asset based entrepreneurship An Asset: A Rickshaw development.• ASSET BASED• ENTREPRENEURSHIP• DEVELOPMENT
RIKSHAW BANK Dr. 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:email@example.com/ firstname.lastname@example.org 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 • Steps taken: - Rickshaw were Motivated the TEAM; distributed to Rickshaw ASSURED the pullers; pullers; Contacted IIT Guwahati;• On Nov 21, 2004…created CHAOS!!! Because…… Hired technical team. Rickshaw Chain constantly fell off, Rickshaw chassis were bend..
LEARNINGS• Never launch product At the time of failure without doing • always consider team experiments; perspective towards• Know your technical products; partners; • Always play a leader• Not to become over cum motivator; smart; and, • Work only on• COST CUT without feedbacks; and decreasing the quality. • Solve problems as soon as possible.
Asset Ownership Existence business Rickshaw Bank• Rent paid Rs.50 for 12 hours • Rickshaw ownership and in Chandni Chauk, Delhi. higher income• Puller hired Rickshaw for 6 • Safer work environment month and paid Rs 9000. through well engineered• Like that he pulled 20-30 rickshaws and insurance years of his life and paid Rs • Support network through 3,65,000 to Rs 5,47,500. discussion forums and peer• But still he is not called as groups the owner of that Rickshaw • Pride and confidence within which cost is Rs 6,500 only. 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 Benefits: Govt and Local Authorities Improves law and order• Bonafide membership of the Rickshaw Bank • Less corruption• Receive ownership of an income generating • Better documentation through availability of asset licenses• Inculcates the habit of savings • Safer roads• Social security such as insurance coverage for • Additional revenues both the rickshaw, the puller, the passenger Benefits: To Local Business (s) and the mediclaim facility. • Larger consumer market• Provided platform to work with dignity- • Job creation norms, uniforms, photo I-cards Benefits: To Corporate and Financial• Getting health and eye care support Institution• Subsequent loan • Builds goodwill in the community Benefits: Member of the Community • Larger consumer market• Less polluted environment • Effective and less expensive advertising• passenger insurance • Tax incentives and 100% donor efficiency• Jobs for youths • 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 Solutions and learnings• Raising fund; • Tap the CSR funding from three• Banks were unwilling to give line large Indian corporation; of credit; • Sign an agreement to give 86%• Lack of knowledge; discount on advertisement at the• Heavy vehicles; and, back of Rickshaw;• Rickshaw pullers were not • Visited Grameen Bank and met enjoyed. 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 • Amount recovered from• Particulars Cost (Rs) each Rickshaw Puller Rs.• Rickshaw Assembling Cost 12,390/- @ Rs. 25/- EDI for Rs 9600 496 days for a maximum period of 18-24 months• Uniform Cost Rs 450 • Average receivable Rs.• Insurance Cost, 2 years Rs 1800/- per rickshaw per 350 year from the corporate• License Cost for both, 2 advertisements till Rickshaw years 400 is owned by the RB and• Total = 10500 than 35% of the amount per year once Rickshaw is owned by the Pullers
BENEFITS - Social Entrepreneurship Corporate Donors• Avenue for CSR • Support in a sustainable• ‘Mobile’ advertisement model facility at 96% cheaper • Create a Visible impact rate for corporate • Working towards• Flexible term options on millennium advertising (1 month to development goal 3 yrs) (MDG) to bring people• Donors get 100% tax 2 USD income per day exemption • Leveraging of funds to• Donors can participate reach larger numbers in the programme monitoring process
BUSINESS MODEL The Revenue Drivers The Cost Drivers• Repayment from rickshaw • Manufacturing vehicles; puller; • Administrative and• Advertisement revenue; operational expenses; and,• Additional loan repayment; • Finance and Insurance• Member deposit and membership fees;• Revenue from franchises; and,• Support from International donor organization.
Franchising Model• Invite NGO’s; • Looking for• Provide capacity entrepreneurs; building; and, • Statistics reveal that the• Support first loss failure rate in business deposited guarantee ventures is much lover (FLDG) to leverage loan among franchises than from other Banks. among individual start- ups.
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 Things to do: p/d 1- Provide Money• Less Rs. 50 Rent Management service to• Less Rs. 150 food Rickshaw pullers.• Less Rs. 50 education 2- Through this inculcate• Total 350-250=100 habit of saving.• This Rs. 100 p/d is most 3- one’s they know the important to manage importance of Rs. 100 because Rs. 100 divert then we called Rickshaw puller to buy ASSET BASED intoxicated products. ENTREPRENEURSHIP DEVELOPMENT.