Delhi Sustainable Development Summit

DSDS 2002: Plenary session 6, 10 February 2002

Creating business models for the poor: expanding sustainable development
Ms Meera Shenoy
Advisor, Society for Elimination of Rural Poverty, Hyderabad, India

Meera Shenoy, Advisor, Socially Responsible Business, SERP, has interests in media, print and television, management and development. She has worked in a project for IIM Ahmedabad on strategies for small scale industries, has several years of experience in senior positions in the services sector including the hospitality industry. Trained by BBC, she has made several documentaries on social issues like street children, bonded labour and gender issues and worked for CNN IT India show. As Assistant Editor of Business India, she has written articles, features and interviews, both from India and abroad. She is working on a book on Corporate Social responsibility . She also currently heads the Partnership programme of SERP .

Business models for Sustainable Development 10 February 2002

Poverty reduction is identified as the single most important initiative to realise Vision 2020 of the state of Andhra Pradesh . As a part of this endeavor, Society for Elimination of Rural Poverty(SERP) was set up

as an autonomous society by the Chief minister of AP,Chandrababu Naidu . Funded by World Bank, it has a corpus of Rs600 crores spread over five years and the Chief Minister is the society chairman. With this structure, SERP has the flexibility of a society and the reach and policy-influencing ability of the government . Presently , it works in six districts of Adilabad, Anantpur, Chittoor, Mahboobnagar, Vizainagaram and Srikakulam .The project will cover 6,20,000 households in 180 mandals making it perhaps the single largest poverty initiative in the country. Shortly the project will be rolled out all over the state.

The main objective of the District Poverty Initiatives Project(DPIP) implemented by SERP is to improve opportunities for the rural poor to meet their priority needs ,social and economic. The project focuses on the most backward mandals, on the poorest of the poor. One of the main planks of the strategy is social mobilisation, or getting people together. This helps the poor build their own organisations at grass root level and participate in decision making in all issues concerning poverty. Andhra Pradesh has 60% of the country’s self-help womens groups. The project strengthens existing groups and helps the poor left out of the loop to come together. Then it facilitates federating them at the village and mandal level to access bank loans and link with government departments. For this there is a sensitive support mechanism set up at the grass roots level. Community coordinators, trained professionals, work closely with 1000 families each,living and interacting with them .Then there are the para-professionals who are people from within and paid by the community like bare foot botanist and vetenarian. It is this blend of professionals and activists that makes the model sustainable.

The qualitative results envisaged for the project is to give the poor a sense of well-being and enhance their social effectiveness and economic state. Quantitative targets are eradication of low-end poverty in 1,20,000 families; ensuring basic minimum needs to all 6,20,000 families; to get 3,60,000 children out of work back to school and help build 40,000 self-help groups,5000 Village organisations and 180 Mandal Samakyas to lay the building blocks of a self-reliant society .

More than 60% of the project outlay is for the people’s projects, through Community Investment Fund (CIF), to enhance their livelihoods, to earn a decent income.

The three pillars of livelihood enhancement are social mobilisation, knowledge and resources to help the poor move up the value chain.

As the community organizations get built, the Livelihood Enhancement Action Plans (LEAP) are being facilitated in all the villages. LEAP starts with the Social and Resource Maps of the village. Analysis of the Traded-in and Traded-out items, and Income and Expenditure of the poor is the next step. Then, the value-chain analysis of the critical/significant livelihoods of the poor is facilitated. The credit system, the risk and uncertainties, the best practices in each of these livelihoods are captured. Infrastructure gaps, constraints and structural needs are also figured out. A mechanism of breaking the silence of the poor and sharing their livelihood needs and gaps slowly gets institutionalized.

This comprehensive mapping of livelihoods and opportunities available for the poor would trigger the ideas for the people’s projects. These projects will be financed by various government and non-government sources including the CIF.A pool of Livelihood Associates is helping the community coordinators in the facilitation of LEAPs.

Since the canvas is large, SERP has launched a partnership program called STEER(Social transformation of Economy with Enterprise) . The philosophy of STEER is when business promotes business ,that is, when profit making companies get involved in helping the small scale and rural industries, a vibrant sustainable economy results. CK Prahlad, the well-known management guru, points out as urban markets get congested, the emergence of 3-4 billion poor people in the lowest Tier 4 of a Pyramid cannot be ignored Accessing this market requires innovations in technology, credit, cost and distribution. More importantly he points out that the poor must become active participants in the market. Opening Tier 4 means lifting billions out of poverty; creating managers devoted to sustainable development

This Partnership Cell invites corporates, management and financial institutes, scientists ,NGOs and non-resident Indians to lend a helping hand . Corporates can get involved by volunteering time and skills . An external agency will measure this impact. Or corporates can intervene in the value chain of the existing wide range of agriculture, forest, livestock and allied commodities . They could also generate work and stem migration of the rural unemployed by outsourcing their industry requirements. Other sectors where partners are needed are retailing to set up shops by and for the women; finance- to develop a financial convergence card which takes care of their working capital and risk factor. ITC, Hindustan Levers, ICICI and the RPG group are discussing possibilities of partnering with SERP. In Science for the Poor, we are linking with the National Innovation Foundation and its sister organisations, GIAN,Sristi and Honeybee Network.

SERP looks forward to fulfilling its vision with partners The Vision is "disadvantaged communities shall be empowered to overcome all social, economic, cultural and psychological barriers through self managed organisations. They will attain higher productivity with improved skills and asset base and utilise resources to full potential and gain full access to services."