IFLA 2013-Deepak Nesarikar

8/10/2019 IFLA 2013-Deepak Nesarikar

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IFLA 2013:

Empowerment and social businesses

AbstractWhat is empowerment?

Empowerment means to give power. The power can be in terms of money, intelligence, fame,material etc. Empowerment defined by the World Bank is -Empowerment is the process ofincreasing the capacity of individuals or groups to make choices and to transform thosechoices into desired actions and outcomes. The article will describe different facets ofempowerment and their interrelation and sequence based on few examples.

Who should be empowered? Who should empower?

I am focusing on people who are underserved and lack services and amenities which averageIndian citizen deserves. These people are in vast numbers hence should be empowered. Poor

people (both urban and rural) or people at Bottom of the Pyramid (BoP) in India areestimated in the range from 335 million (a central govt. estimate by assuming income lessthat Rs 32 and Rs. 26 for urban and rural respectively) to 1.05 billion people (By Mckinseyreport). I have taken the New socio-economic classification- 2011 to calculate BoP

population. Classes from D1 to E3 can be called as BoP based on the items they own. Theseclasses comprises of 70% population which comes to 840 million people.

Some examples of the entities which empower people can be business having CSR activities,social entrepreneurs, social businesses, NGOs, Government and philanthropists.

Why empowerment is needed?

Complete capitalism or socialism is not efficient in removing the inequalities of the world. Incapitalism, it is assumed that the benefits will trickle down to the poor if its a true freemarket economy. But this is not the case; hence we need some entities to empower the

underserved people like social businesses. The aim of empowerment is increase per capitaincome and HDI of India, to give basic rights to live good, healthy and balanced life.Therefore, Empowerment is necessary to bring equality and is must process for nation

building.

When should empowerment be focused?

Now is the inflexion point Indias growth. This is the time to show the world the Indian wayof doing business. India is practicing Porters shared value and Prahlads inclusive capitalismtheory into business from long time. Now world should know about it.


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How can we achieve empowerment?

I believe the tool for empowerment is real business and entrepreneurship. It can be Profit or Non-Profit, but philanthropy is not the answer for problems, business is. The article willdescribe why social business is the only solution for empowerment.

Empowerment Model

The model describes the factors of empowerment which needs to be address to reach theultimate empowerment of people.

The Model describes the level of empowerment and its chain reaction. Hence if we have toempower people in true sense, i.e. if people have to live with confidence and happy life theyhave to get identity for themselves. To achieve identity creation we should empower people

by finance, material and intelligence first. Therefore, human empowerment captures theessence of empowerment.

Let us see each factor of empowerment in detail, how it can be achieved and theoutcome/impact of the factors on lives of 840 million people.

Financial

Intelligence

Material Human

Relational

Innovation

Identity

Level 1 Level 2 Level 3 Level 4


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Human empowerment 1- FinancialWhat is financial empowerment?

It is to make people learn how to use money to better off their lives. The main worry of any person in the bottom of the pyramid is money. Therefore naturally the aim of the poor persons life becomes to earn money and be financially secure. We can say that a person isfinancially empowered when he does not have to worry about his tomorrows earnings.Financial empowerment is assuring poor that they will get a fair opportunity to earn theirliving. Financial empowerment cannot be quantified because it differs for every individual.Ex- for daily wage labourer of 5/- per day, getting a salaried job of 500 can be empowerment,

but for a monthly salaried person of 500/-, getting monthly income of 5000/- can beempowerment. In both the cases, poor is aspiring for financial security and if they have to beempowered financially, their worry about tomorrows earnings should be eliminated.

The other visible aspects of financial empowerment are financial inclusions (banking andaccessibility to loans); driving poor towards consumerism and making BoP spend on leisure.Finally I feel purpose of financial empowerment is to make poor worry free about their futuremoney.

How to empower financially? The Chain reaction :

Vehicles for Financial empowerment

1. Grameen Bank OR Ujjivan financial services (India):

The pioneer of microfinance in the world, Dr. Mohammad Yunus served the poor ofBangladesh by giving them loans of small amounts at 20-25% rate to help them start their

Input

Microfinance facility Microsavings Banking facility to Self help Groups (SHG)

Output

Accessibility to loans and lower interest rate than money lenders Facility for saving money with saving's interest rate

Outcome

Poor are bankable proven. Dependance on moneylenders broken Confidence to break the viscious cycle of poverty Rise in consumerism and focus on poor for developing products

Impact

Productive Micro loans ensured that incomes are increased Savings increased providing financial security Spending on education/health increased. Financial Empowerment


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own small enterprises. The effect was 1/3 rd of the Bangladesh population was lifted from poverty and 2/3 rd of the remaining poor were lifted near to poverty line.

Ujjivan, a microfinance company in India has also reported that 83% of their 12lakh poorcustomers in India increased their income by 50% or more in a year. Hence, these companiesare the vehicles for financial empowerment.

Human empowerment 2-MaterialWhat is material empowerment?

It can be explained as providing products/goods or services to people to help them live a better life. The product or services should be engineered or re-engineered to exclusively servethe BoP population. The aim of the companies should be to provide solution to the problems

by their products and services rather than to earn financial profits. Hence, materialempowerment should be done as a social business.

Financial empowerment results into increased income and savings of poor; therefore it is the prerequisite for material empowerment. Material empowerment can be providing sanitation,good drinking water, health care services, energy and power solutions, transport and logisticsfacilities and giving access to information and communication to the rural and urban poor.

Material empowerment is to provide better health and illness free life, connectivity with themodern world and necessities to the people. Ex- health care, water, sanitation, internet,transportation, power (electricity and solar lamps) etc.

How to do Material empowerment? The Chain reaction

Input

Power (solar lamps/biogas and biomass electrification) Portable Water purifiers and cheap plastic toilets Low cost/free health care Cheap cell phones and landline coin boxes

Output

Continuous electricity and light Low cost/free health care Communacation facility

Outcome

Self sustainance of villages Income source for people Clean water and healthy living conditions Humans connected to each other

Impact

Productivity of people increased because of electricity Businesses started locating in villages Increase in entreprenuership due to connectivity Human development index and Life expectancy increased Material Empowerment


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Vehicles for material empowerment:

1. Hindustan Lever: To increase the distribution in the rural markets, HLL startedallocating female stockist for every village for selling its goods. They called themShakti amma. This resulted in increased income of Shakti ammas and social statusin the village

2. BoP products: Nirma launched a low cost detergent which made detergent washingaccessible to the poor. TataSky, a DTH cable service launched its rural variant with

prepaid recharges for the channels and zero installation fees. Also they were madeavailable in every village s kiraana stores. Following Tata, other cable service

providers also launched their sets in the rural markets. The effect was that we can seecable TV in majority of rural houses giving direct access to the happening of theworld.

3. Health care: Aravind eye care provides low cost eye care for poor and attracts rich

people because of high quality eye care. Aravind conducts outreach camps to servethe distant rural villages. Aravind has treated 20% of Indias curable blind populationdirectly impacting lives of these people.

4. Energy: SELCO (solar electric company) gives solar lamps on loan to rural poor andstreet vendors. Their aim is poverty alleviation through energy.

5. Sanitation: 3sindia is a rural focused organization providing low cost plastic toiletswhich can be directly installed into the houses.

6. Water: a company called Waterlife provides water purification services where small purifiers are used to purify and clean drinking water is given to the poor people at therate of rupee per litre.

7. Information: A project E-Choupal helps farmers get real time information about themarket rates of vegetables and cereals of different markets. Internet kiosks areinstalled at 6500 villages to give information about the markets. This empoweredfarmers to decide where to sell their goods so as to get higher prices.

8. Communication: Sam Pitroda created a telecom revolution by introducing coin boxtelephone in every nook and corner of India which enabled even a labourer to call andconnect with people at just 1 rupee per minute. Reliance introduced CDMA mobile

phones at just 800/- with a down payment of only 100/- This empowered every personin this country to own a mobile phone.

Therefore, everything mentioned above has resulted in empowerment of poor and increasingcapacity of individuals in every aspect.


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Human empowerment 3-IntelligenceWhat is intelligence empowerment?

Today is the world of knowledge economy. People having expertise, skills and knowledgeare paid more. Intelligence empowerment can be explained as making people educated so thatthey can start earning on their own. Education need not be a degree or formal kind ofeducation, but should lead to value addition in every individual. People who start working ordoing business because of their knowledge or skills can be called as intelligence empowered.

BoP People can be empowered by intelligence scholarship program, vocational training, providing quality education facility to poor and entrepreneurship or self-employment.

How to achieve intelligence empowerment? The Chain reaction

Vehicles for intelligence empowerment:

1. Self-employment: Aavishkar venture fund invests in start-ups which are based onrural innovations. The Companies funded are directly related to problem solving inthe villages.

2. Formal Education: Teach for India- a non-profits organization recruits top collegestudents and make them teach to the low income schools for two years. It believes thatevery child should get excellent education. Teach for India fellows teach at 209colleges all over the India bringing in quality and updated education facility to thechildren of underserved families.

3. Vocational training: Head Held High (HHH) is an organization which trains rural

youth in English speaking and BPO job and then help them get job in the leadingBPO/KPOs. HHH is successful in bringing rural youth and urban youth on the same

Input

Scholarship program Vocational training (Languages, technical skills, driving etc.) Funding/ loans for self employment

Output

Students get opportunity to be educated and join knowledge economy Opportunity to work by utilizing their skills Self-earnings (Ex-Mess, taxi facility, agriculture)

Outcome

BoP youth joins mainstream career paths Confidence gained by youth because of acquiring skills

Secure and self sustaining life for poor people and youth

Impact

Gap between haves and have nots decreased Opportunities created Role models giving inspiration for the other youth Intelligence Empowerment


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platform because of training them in English language.4. Scholarship training: Jnana Prabodhini Rural development centre (Pune), an NGO

working for nation building runs a scholarship program for rural children. Its calledGrameen Prajna Vikas. Children with above average IQ are selected from the

villages near Pune and brought to the city for their higher education. They arementored and helped financially to get their education. The aim of education is tocreate rural leaders who can go back to their native village and empower them.

Totality of Human empowermentThe above mentioned three factors of human empowerment cannot be studied in isolation.They are very much interrelated. Financial empowerment leads to material and intelligenceempowerment. Intelligence leads to financial. Therefore the 3 factors work in a circle, ofwhich human empowerment is the centre. Human empowerment can also be explained as to

bring confidence into lives of people.

Let us see some vehicles operating on all the three factors of human empowerment, which istotality of human empowerment.

Vehicles

Organizationname

Human empowermentFinancial Material Intelligence

JnanaPrabodhini

Empower Women toform Self-help groupscalled as Jijamatabachat gat and financethemselves fromcollective savings

Develops waterwells and reservoirs

by studying thetopography ofvillage

Distribute solarlamps on loans tothe villagers

Runs agricultureteaching schools in3 parts ofMaharashtra toteach moderntechniques ofAgriculture.

Gives machinetools training to theyouth of villagesthrough its machinetraining centres.

Barefootcollege Provide finances for thecrafts manufacturers

Empowers ruralvillages by providing solarenergy health care,rain waterharvesting anddesalination plants.

Also providehealthcare andcommunicationfacility

Runs balwadis, nightschools, and dayschools for ruralchildren.


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Grameen Grameen bank pioneered the conceptof microfinance to the

poor.

GrameenDANONE (Milk),

Grameen Veolia(Water),

Grameen Shakti(power),

Grameen Phone(communication)

Grameen fisheries-train people inaquaculture anddairy development.

Grameen Shikha- promote masseducation and giveloans for education

Empowerment by Relational capitalThe empowerment by relational and innovation capital come after human empowerment

because they require basic human skills and confidence. Relational empowerment requiresconfidence to interact with people and innovation needs confidence and intelligence together.

Relational capital is an asset which people own because of their social relations andinteractions with people. People can be further empowered by harnessing the power of socialnetworks and groups.

Businesses can capitalize networks of people and innovate a sustainable business model inwhich the producers are group of individuals. BoP people tend to be more social than rich

people. These people still believe that people are important assets and therefore are moresocial in their behaviour. The intensity of relationship, friendship is high among this people.Their festivals and cultural activities also enhance their social behaviour. For Ex- hugemarriages, common chatting points in villages etc. Use of social groups brings scalability andhigh volume to the back end of the business.

Hence, any business can use relational capital present in the BoP population to create a business, based in these human networks, for empowering them back.

Examples of businesses empowering people by using relational capital

1. Co-operatives: AMUL- Gujarat co-operative milk federation collects milk daily fromabout lakh farmers and sells it under the brand name called AMUL . The milk

packaging factory is jointly owned by the milk producers therefore make individual,

owner of the factory. It harnesses the power of human relations to create a scalable business and in return empower people.

2. Groups as producers : Industree foundation, the owner of the brand Mother Earth has10000 artisans in their back end network. The brand sells exclusively fashion andhome dcor handicraft items. The network of thousand artisans gives it competitiveadvantage and empower the artisans by giving them regular demand for their art.Cycle brand agarbatti has 20000 women network to make agarbattis from the rawmaterial. It operates the most robust supply chain and uses the power of social groups.


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Empowerment by Innovation capitalJugaad or Reverse innovation is the most talked about phrase now days. Rural youth is busyinnovating cheap and low cost alternatives for the urban amenities. Ex- scooter chakki. Newschannels also have dedicated shows to showcase the agricultural innovations done by the

farmers who even dont have formal education. Traditional handicrafts and arts are now preserved and practiced only by the rural people. Therefore, Rural India can be called asinnovation capital.

This capital can be used by businesses to empower people. For Ex- in Maharashtra, a tribeknown Warli paint their hut walls with white colour made of limestone. The drawings aremainly made by using shapes like triangles and lines. Later, this art was patented and namedas Warli and rights were given to the tribe. Today, the art is globally known and practiced.Hence innovation of the Warli tribe empowered them with money and fame.

Examples of businesses empowering people by using innovation capital

1. Honeybee network: It is a network of people who collectively are trying to create adatabase of rural grassroots innovation and empowering innovators by giving them

patents. It also helps them to commercialize the innovation2. Nimbkar Agriculture research institute (NARI-Phaltan): teach rural people new

innovations in agriculture, poultry and dairy productions. NARI develops energyefficient power solutions for rural households and allow rural people tocommercialize them.

Ultimate empowerment-Identity creationEvery kind of empowerment leads to the identity creation of an individual, community or avillage. Therefore, lets go back to the question of why to empower poor people? The answeris as stated, to create individual or group identity.

Many argue that increasing in per capita income, material growth, and improved health parameters etc. are the aims of empowerment. But I feel these are by-products and theultimate sustainable empowerment is to create identity in the underserved people. Social

businesses should have this in mind that their work should aim for giving them true identity.

Grameen was successful in creating identity for its customer. A person felt proud whilesaying that he was a Grameen customer. HLL Shakti ammas are known throughout theworld and these rural women are now seen as aspiration by their peers. Warli tribe now isglobally known for their art and paintings. Honeybee network gives recognition to the ruralinnovators on national level. GCMMF empowers the individual by harnessing the power ofgroup production of milk and selling them under global brand called AMUL. Every woman is

proud to sell her produced milk to AMUL because it gives her pride.

The above organizations are successful in creating identity for its customer. Hence, even after

businesses have their desired impact, they should continue to help people get their identity


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which will empower them in true sense.

ConclusionThe sustainability of empowerment can be achieved only if business or organizations aresuccessful in creating confidence, pride and identity in its customers or the beneficiaries.Business should be done within the societal system giving them back. The relation ofbusiness as giver and people as taker will not empower people in true sense. People will beempowered only when they are having confidence in themselves and therefore businesseswhich are successful in creating identity; will empower people which will sustain in a long-run.

AnnexureIMAGES OF BUSINESSES MENTIONED IN ARTICLE


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Warli Painting Advertisement for Warli promotion


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Works Cited(n.d.). Retrieved from Teach for India: http://www.teachforindia.org/

(n.d.). Retrieved from Honeybee network: http://www.sristi.org/hbnew/

(n.d.). Retrieved from shramik Sanitation: http://www.3sindia.com/

(n.d.). Retrieved from Aaviskar: http://www.aavishkaar.in/

(n.d.). Retrieved from Warli art: http://www.warli.in/2010/12/history-of-warli-art.html

(n.d.). Retrieved from Unitus seed fund: http://usf.vc/resources/defining-base-of-the-economic-pyramid-in-india/

India), M. (. (2011). The New SEC system.

Kurian, V. (n.d.). I too have a dream.

Nimbkar. (n.d.). Retrieved from Nimbkar Agriculture research institute:http://nariphaltan.org/

Padaki, M. (n.d.). Retrieved from Head held high: http://www.head-held-high.org/

Phrahlad, C. K. (n.d.). Fortune at the bottom of the pyramid. HBR.

Roy, B. (n.d.). Solutions . Retrieved from Barefoot college:http://www.barefootcollege.org/solutions/livelihood-solutions/

services . (n.d.). Retrieved from Aravind eye care systems: http://www.aravind.org/

Ujjivan. (2012). Social impact report . Bangalore.

Yunus, D. M. (n.d.). Banker to the poor.

~Deepak Nesarikar

Phone: 09742481263

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IFLA 2013-Deepak Nesarikar