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Royal DSM N.V., the Netherlands headquartered global life sciences and materials sciences company is looking at the bottom of the pyramid market in India for bringing in their micronutrient business.

DSM plans to bring in its rice fortification programme to India and is ready to demonstrate the benefits of rice fortification to fight micronutrient malnutrition, Nico Gerardu, member, managing board, DSM N.V. said.

This has been in testing phase in India and China and the pilot project has demonstrated that these micronutrients did improve health of the people involved in the pilots being carried out in southern parts of India as it is a staple diet there, Gerardu said.

In India, the average consumption of milled rice is around 200 kg per year. This rice just provides mass and lacks in micronutrients, points our Gerardu.

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Like most urban dwellers, I too live in an apartment complex with the associated service suppliers, two of them being my household help and the couple who iron my clothes (in perfect crease) every week. My household help's daughter works alongside while her cousin is practising as a lawyer in Australia; the ironing lady's son is midway through a degree course in information technology. Both families are clear that the next generation will not be in any way associated with the professions of their parents.

Over the last decade, when economic growth acquired a new trajectory, particularly in the five years ended 2007-08 when growth averaged almost 9%, you would have heard this anecdotal tale of social change over and over again. It is no coincidence; instead, it is a facet of the opportunity that the explosion in India's growth process has provided to various demographic segments.

More importantly, they are also part of the growing tribe of new stakeholders. It is my case that they are an outcome of the melding of some game-changing norms in society, such as the empowerment of the backward classes through the implementation of the Mandal Commission report and the opportunity that such rapid economic growth creates. It is an aspect of the political economy of the emerging India: the challenge to status quo and the growing number of stakeholders with a keen desire to uphold the system that gave them an opportunity.

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MUMBAI: In his khadi jacket, sitting in a south Mumbai fivestar hotel, Jayant Sinha does not look any bit of the hedge fund manager that he was until a few months ago. In fact, he looks more like his father, former finance minister Yashwant Sinha. But it is a different sort of deal that Sinha is chasing. As the India head of Omidyar Network , Sinha is looking at various initiatives to improve the lot of those at the bottom of the pyramid in India, which probably explains the change in attire.

Omidyar Network, an investment firm of Pierre Omidyar (founder of Ebay) has already invested around $45 million in India and is looking to invest around $150-200 million in the next couple of years. Omidyar is among the handful of global billionaires who are turning to philanthropy in India and are investing in the upliftment of the country's bottom of the pyramid. However, the motive is not pure charity, but more to empower the weaker section. 

The others include New Zealand billionaire Christopher Chandler's Legatum Ventures, which has invested around $40 million in the past few years in the country. Even the legendary investor George Soros is into philanthropic investments in India. These investors are investing in microfinance institutions (MFIs), rural energy, education and other areas of empowerment such as property rights. 

"Philanthropic investors, essentially look for providing financial assistance and empowering those innovative organisations that impact the life at the bottom of the pyramid," according to Jayant Sinha, MD and country head of Omidyar Network India Advisors. He added that the network can bring inventure capital funds or debt for profit organisations and may provide grants to non-profit organisations. Incidentally, around half the money from the network is invested in not-for-profit organisations. 

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PUNE: They collect garbage from your door-step, sort it out without the aid of any safety gears and earn their livelihood selling paper, plastic, metal and glass to recycling industries... They help reduce the burden on landfills... However, they are treated with neglect and indifference by the government and the society at large. 

To change this scenario, about 15 lakh scrap and waste collectors across India, under the banner of Alliance of Wastepickers', will be hitting the streets on March 10, to make their voices heard. In Pune, the rally will be held at the General Arunkumar Vaidya stadium, Bhavani Peth, from 2 to 5 pm. 

Some of the demands of the waste-collectors are that every scrap and waste collector should be registered by the Urban Local Body and provided a photo-identity card that authorises him/her to collect, retain or sell waste. They are also demanding better enforcement of state and national policies promoting decentralised solid waste management. 

Saru Waghmare, office bearer of Kagad Kach Patra Kashtakari Panchayat (KKPKP) said, "Every local body, as a part of its land-use and development plan, should make provisions for amenity spaces in every neighbourhood for undertaking composting, biogas and categorisation of scrap. Micro-waste collection and processing enterprises of waste pickers should be given capital and infrastructure by the Urban Local Body and state governments. And, moreover, all registered waste pickers should be eligible for benefits under government schemes." 

One of the most important demands of the waste collectors is that waste to energy projects, whereby municipal solid waste is used as feedstock for burn technology, should not be permitted. 

Explaining the motive behind the rally, Laxmi Narayan, general secretary, KKPKP, said, "The value of the informal waste sector is undeniable. The contribution of these invisible environmentalists has been taken note by government bodies, largely due to the efforts of workers' organisation. Even high-powered committee and the second labour commission have recorded the contribution of these informal waste workers, called for recognising and upgrading their livelihoods." 

Waste collectors assert their livelihood is under threat, since the government is planning to give out the waste processing work to waste management companies, who are not interested in informal collectors' welfare. 

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Narayan Ramachandran, Ex-Country Head and Managing Director of Morgan Stanley India has decided to focus on financial inclusion of the urban poor. He has been now appointed as the Director on the board of Janalakshmi Financial Services run by Ramesh Ramanathan, who is the Chairman of the organisation.

Here is a verbatim transcript of an exclusive interview with Narayan Ramachandran and Ramesh Ramanathan on CNBC-TV18. Also watch the accompanying video.

Q: How does it feel to be the Director on board of Janalakshmi Financial Services?

Ramachandran: I wanted to be associated with this organisation. It's almost as if I designed what I wanted to do. It's bang in the space of where I wanted to be, which is opening out financial access to sections of the population that probably easily defined as underserved but not just in credit, which is what's happening now but also beyond that.

Q: You have some ambitious plans for Janalakshmi. Can you outline some of those for us?

Ramanathan: There is a lot of experimentation going on, on how do we do justice to the issues of financial inclusion, but harnessing market forces while you are keeping the social agenda intact. It's a difficult kind of a line to walk across. So, one ambition for Janalakshmi is that we have created a unique two tier structure. We have a not for profit holding company in which all the promoter stake is kept but we have an operating company in which there is no confusion, it's a market driven organization, its going to raise money from investors, its going to hire good people and reward them well. We want to make this two tier structure work, which is the concept of a social business doing just as both legs of the stool.

We are very ambitious for what we think needs to be done for financial inclusion. We have certain focus which is urban poor, the urban underserved as Narayan would like to call it. It's a huge issue and it's not unfortunately on the radar screen of most people. It's one of those creeping issues that it is only growing because India has already 300 million people in urban India. It's going to be 600 million people, 40% of whom do not even have any access to financial services. So we hope that we can play a big role in addressing that issue.

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Microfinance is in the news, again for the wrong reasons. Five years ago, it was tension over multiple lending and coercive recovery in Andhra Pradesh. Now it is Muslim community leaders in a couple of districts in Karnataka issuing a fiat to their members to renege on microfinance institution (MFI) loan repayments as they do not approve of such borrowings. What's worse, the Reserve Bank of India (RBI) has issued a severe warning to MFIs against wrong practices. RBI's main concern, reports indicate, is benami lending, re-lending to cover up bad loans and poor governance.

But these are not the ultimate concerns. If this was all then the large number of unhealthy and unprofessional MFIs would wither away, ending the sector's exponential growth. The bigger problem, say insiders, lies not with failures but successes. The original founders of the industry are increasingly exiting in favour of private equity (PE) funds, enabling some founders to encash at $100 million or more and thereby establishing MFI valuations at even half a billion dollars! The PE funds are seeking at least 20 per cent return on equity. If anybody dreamed of microfinance becoming mainstream and getting global funding then this is it.

Some of the best MFIs are hiring top managers, who have seen their prospects dimmed by the global financial crisis, at annual compensations of Rs 8-9 crore. Some of the best professionally-run MFIs are getting ready to come out with public issues, which will allow a partial, highly-profitable exit for the PE funds.

The entry of PE funds into the best and the biggest MFIs brings in resources and professional management practices. This aids growth and a fall in costs, leading to the high rates of return. RBI is upset that the fruits of healthy growth are not being passed on to the borrowers via lower lending rates, which remain in the 26-30 per cent range. If this continues, the central bank threatens, it will stop categorising loans to MFIs as priority-sector lending, thus making it difficult for them to access bank loans at around 12 per cent and onlend.

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New York, NY (PRWEB) March 2, 2010 -- Acumen Fund, a nonprofit venture firm addressing poverty in South Asia and East Africa, today announced a new investment in Husk Power Systems (HPS), an innovative rural electrification company that will establish decentralized power generation to remote villages in India. The company uses novel biomass gasification technology to convert abundant rice husks into combustible gases, which then drive a generator to produce electricity. Acumen Fund invested US$375,000 in HPS, adding to the US$18 million Acumen Fund has already invested in India since 2001. The new investment continues Acumen's commitment to investing in safe energy alternatives for the poor. 

"As both developed and developing nations search for alternative sources of energy in response to the growing energy crisis, we at Acumen Fund believe that investing in entrepreneurs who provide innovative energy solutions is an increasingly critical part of the solution," said Jacqueline Novogratz, CEO, Acumen Fund. "Companies like Husk Power Systems are working to impact positively not only the environment, but to ensure that someday everyone, including the poorest of the poor in rural India, will have access to clean and affordable electricity." 

Husk plans to set up 50 systems providing electricity to 125 villages by the end of 2010 with a long term vision of deploying 2000 plants reaching 5000 villages and over 20 million individuals, while creating 6000 jobs. HPS tackles the challenges faced by the rural villages in the region by providing clean, safe, and efficient electricity at affordable rates. A plant is installed along with low-voltage insulated wiring to each household, business, or farm, with Husk Power Systems charging subscription fees to each user according to the number and type of the electrical appliances they own.

"We pride ourselves in providing affordable and reliable electricity to rural areas at the lowest installation, distribution cost per watt and having intimate local knowledge and the expertise to manage relationships with each village," said Gyanesh Pandey, Co-Founder and CEO, Husk Power Systems. "Our goal is to have our model help to deliver rural electrification to India's villages and eventually to rural areas around the world."

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Once upon a time, Sumitra used to roam the streets of the Indian city of Ahmedabad, collecting discarded caps which could be recycled and sold back to manufacturers such as Coca-Cola.

She would spend the whole day sifting through the rubbish collecting the caps in return for a few hundred rupees - about $2.

Then in 2006, Sumitra was introduced to a microfinance initiative which provided her with a small loan to start her own business.

Four years on, she employs five women, and is the proud owner of six bottle-cap straightening machines which process 50kg of caps a day.

After paying the salaries of her employees, her business makes a small profit that Sumitra saves every month - a move that she says has transformed her life and that of her family.

Changing emphasis

Sumitra got the small loan from the Vikas Centre for Microfinance Development, one of the oldest clients of the non-profit organisation Women's World Banking (WWB) which helps lift women out of poverty.

They work closely with microfinance institutions, or MFIs, which provide a credit lifeline to millions of deprived people in some of the poorest countries of the world.

Now, after a few decades of providing small loans, they want more people to do the same as Sumitra and start saving.

"As the microfinance industry matures, we are seeing the beginning of a major shift from a focus on credit to an emphasis on savings," says Mary Ellen Iskenderian, the president of WWB.

"Loans or credit were the model for the first 30 years of microfinance. Savings is the future.

"We will continue to look for new and innovative ways to increase global access to savings products and services for the poor," she adds.

WWB is holding a series of leadership workshops across South Asia in conjunction with the MFIs that have been working hard to empower people in poorer societies, especially women.

WWB is planning to create innovative savings products and services, apart from small loans, for nearly seven million low-income people in Asia, Latin America and Africa during the next 10 years.

The initiative has just received the backing of the Bill and Melinda Gates foundation, which has pledged $8.5m (£5.5m) to the project.

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The much-hyped 'Chotukool' refrigerator from the appliances division of Godrej & Boyce Manufacturing Co Ltd may take a year to launch, according to company chairman Jamshyd Godrej.

Godrej Appliances is test-marketing the product in Maharashtra. It was earlier eyeing a March 2010 launch.

But, this may not happen, says Godrej, as the company looks at alternative channels of distribution. "By alternative channels, I mean a community-led distribution model. We are working with non-governmental organisations to try and facilitate distribution of Chotukool at the community level. We are not looking at conventional dealers, distributors and retailers to push the product. Building this model will take some time," he says.

Like the Nano from Tata Motors, which lowered the price point of entry-level cars to Rs 1 lakh, Chotukool does the same in refrigerators, billed as the world's lowest-priced model at Rs 3,250. Weighing just 7.8 kg, it has a capacity of 30-40 litres and is devoid of a compressor, running on a battery and cooling chips instead.

The product is targeted mainly at rural areas, keeping in mind consumers at the bottom of the pyramid, says Godrej.

This consumer, incidentally, is one that most durables' companies are after today. The sub-Rs 7,000 range, in particular, is the new price point that companies such as LG and Godrej Appliances have identified to get consumers, especially in Tier-II, III and IV cities into their fold, as far as refrigerators go. Typically, entry-level refrigerator models are priced above Rs 7,000.

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The Indian government's push for financial access for hundreds of millions of the unbanked is helping secure its vote base and creating lucrative opportunities for financial institutions, technology and mobile services firms.

In his budget speech on Friday, Finance Minister Pranab Mukherjee may announce funds for a common technology platform to reach the goal of a banking outlet in every village of more than 2,000 people by March, 2011, senior government officials say.

The government may also say it will channel more welfare payments through banks, including the National Rural Employment Guarantee Act (NREGA), the flagship scheme which analysts say was key to the Congress-led government's re-election last year.

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