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4. Business model
Boonds selling model is two-fold:
- For its big solar system prod-
ucts (200 USD or more), the company
receives a 40% Government subsidy on
each product, 20% upfront by the cus-
tomer, which pays the 40% left in 4 years
installments. Indeed, the state banks
Boond has partnered with offer (with con-
ditions) micro credits to the customers ata 12% annual rate (far
below the 26% rate
offered by MFIs)
- For its smaller products (such
as a 3W solar lanterns at 25 USD), the
customers pay upfront.
On a 200 USD product, Boond wins a 35
USD margin.
5. Marketing strategy
Boond has also set up a strong marketing
strategy. He organizes one-week events inrural areas to attract
the villagers through
dance performances, free medical ser-
vices and so on. It is the opportunity for
the company to display its products, ex-
plain the financials behind it and take
orders. The events are organized by
Boonds 50 local entrepreneurs, who act
as salesmen for the company, and who
are remunerated on a commission basis.
Boond consolidates the orders and fills
the credit demand applications for each
person interested in buying a Boond SHS.
Yet, the state banks only fulfill 50% of the
total applications, because they demand
that the microcredit record of the cus-
tomers family is default-free. Still, by a
strong lobbying, Boond greatly helps the
customers access to state banks credit,
and thus to SHS.
6. Social impact
Since its inception, Boond has sold 6 to
7,000 solar lamps and 140 Solar Home
Systems. The company has implementedan operational follow-up of
its activities
India is the worlds 6th largest energy
consumer, accounting for about 3.5% of
the global energy consumption. Although
the demand is mostly urban in the coun-
try, 25% of the rural population (300m)
still lives in complete darkness or with
poor lighting.
1. Introduction
During our stay in Noida, we had the op-portunity to meet with
Rustam Sengupta,
founder of Boond, a social business willing
to bring Solar Energy in rural areas of In-
dia.
After his bachelor in Engineering at UC
Irvine in the US, Rustam undertook an
MBA at INSEAD (2008) and worked in the
financial sector in Singapore. He quit in
2009 and started thinking about setting
up social business in India. He spent 9
months on the field, in Manipur, Bengal,
and Rajasthan, to better understand the
needs of the villagers and the potential
problems he could face in implementing abusiness in the rural
sector. His bench-
mark led him to start his project in 3 dis-
tricts of Rajasthan (about 1,000 villages).
2. Presentation
Rustam Sengupta won the Economic
Times Power of Ideas Award[1] in 2010.
This was the start of Boond: he received
angel investors and Government
funds (from the CIIE: Center for Innovation
Incubation and Entrepreneurship) andstarted his company with
70,000 USD.
Boond aims mainly at providing access to
affordable energy to off-grid rural villag-
ers. The company first started by selling
3W solar lamps, but soon realized that the
villagers were expecting much more. As
Rustam puts it, They want what we
want: they want light inside their homes
that they can switch on and off.
Boond chose to broaden its product range
(from 3W solar lanterns to bigger systemssuch as Solar Home
Systems (SHS), which
include two lanterns, a fan and a TV plug
(75W). All their products are certified by
the MNRE (Ministry of New and Renew-
able Energy).
3. Partnerships
The Indian government is strong-rooted in
rural areas. Thus, social businesses that
are willing to implement their activities in
these areas seek to deal and partner with
the Government. This is a very difficult
challenge yet, Boond managed to get
into the Governments books by winningthe Innovation Award in
2010. Their part-
nership takes the shape of subsidies and
customer credit facilitation with state
banks. Boond also partners with NGOs,
such as SEVA Mandir, which greatly
helped the company establish its offices in
Udaipur.
BOOND : Bring affordable solar systems to rural Rajasthan
thanks to an innovative financial scheme
http://www.sevamandir.org/http://www.sevamandir.org/http://www.sevamandir.org/
