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Phillips apparently sees a fruitful market among the nearly 2 billion people who lack access to electricity. The company is rolling out a small line of lighting products specifically designed for the needs of those at the bottom of the economic pyramid. We've seen Phillips' interest in this area before with its smokeless cooking stove, and we've seen what a difference simple lighting technology can make for rural communities.

An entrant into this year's Index Award, the Phillips product line includes the Uday lamp, a hand-crank flashlight, and a special reading light designed for students.

The Uday lamp combines CFL and LED bulbs with a rechargeable battery pack and solar panel. A day's worth of solar charging delivers four hours of light. The hand-crank flashlight uses a dynamo to charge, and cranking it for two minutes generates 17 minutes of use. "My Reading Light" is an LED lamp designed for students. It works in conjunction with a plastic film placed over the page to make night-time reading more tolerable. The dimmable light lasts 3.5 to 9 hours, depending on brightness setting.

The significance of designing renewable lighting for the "bottom of the pyramid" is multi-faceted. It has strong health implications because it often replaces kerosene or other dirty fuels that fill homes with soot which is then inhaled, especially by women and children. Access to lighting also allows economic activity and education to continue at night when it otherwise might cease with the sunset.

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Harold Rosen  founded the Grassroots Business Initiative (GBI) of the World Bank's International Finance Corporation in 2004. In 2008, GBI spun off into the non-profit Grassroots Business Fund, which, among other things, looks at funding socially relevant projects in India. Rosen spoke to Atul Sethi about the potential of social enterprise funding in India:

What makes you want to invest in India?

India's world-class, cost-effective skilled labour force cannot be denied, and it can easily help bring business to the bottom of the economic pyramid. India has a large pool of social investors and entrepreneurs who have started to look at rural and underserved markets as systems-integrated business groups. Due to its scale, India can be viewed as an incubator for developing and testing business models through institutions and world-class business groups to drive social development. Once tested, these models can then be exported to other countries facing similar challenges. India's legal and regulatory regime complicates foreign investment dealings with organisations such as ours. Indian government has the same regulations for social and mainstream investors, many of which serve important functions in mainstream investing, but can be stifling for social investing. Social investing is in its nascent stages in India, and like every industry we expect some chaos as the industry moves from the invention phase to the growth phase.

Is there a model of social enterprise funding that India can adopt from other countries?

(This article continues - click on the link to continue)

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D.light Design Inc., which manufactures and sells solar-powered lamps in poor areas of the globe, is an example of a company that seeks to bring entrepreneurship to a social mission.

GlobalAtlanta met representatives of the company during the First East Africa Energy Conference held in Dar es Salaam, Tanzania, in June. The company, which was incorporated in May 2007, opened its East Africa office in Tanzania this year.

Sam Goldman, a co-founder, was a Peace Corps volunteer in Benin when he learned firsthand how extremely dangerous kerosene lamps can be. The son of his neighbor almost died from severe burns he suffered from spilled kerosene.

Even though they provide poor light and are dangerous, kerosene lamps are the primary source of lighting for Africans, and others elsewhere, living in rural areas.

Following his Peace Corps service, Mr. Goldman earned a master’s degree from Stanford University and started D.light Design with the purpose of replacing the millions of kerosene lamps with solar-powered lamps.

Positioned as a “social entrepreneur,” the company has been able to raise $6.5 million in capital from a collection of different venture firms, which responded to its mission.

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Family Bank has transformed itself from a building society formed in 1984 to a fully-fledged bank. The indigenous bank has since its conversion in May 2007 been on a growth path in terms of customer outreach and the bottom line.

It boasts of 44 branches spread across the country. Within the last one year the bank has added 11 branches to its network ,indicating its growth momentum. Operating in an increasingly competitive market, the bank has managed to hold its head high among its peers by being innovative and customer driven.

Indeed, it’s the only bank that offers paperless banking — no filling of deposit or withdrawal slips — which has enhanced its service delivery by eliminating an otherwise tedious process

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I have been in Nairobi for 10 weeks, but in terms of knowledge and experience accumulated it feels like aeons. I am working as an intern with Acumen Fund, a global social venture fund. It provides equity and debt financing to enterprises that use market-based approaches to supply goods and services to the base of the pyramid - people earning under $4 (€2.79, £2.42) a day.

My focus is on healthcare systems in East Africa, in particular mapping out the ecosystem for healthcare products and services for low-income consumers. I am also looking for pipeline investment opportunities that have the potential to improve the health and wellbeing of our target market.

Government spending on healthcare in Kenya is 5.1 per cent of gross domestic product or $16 per capita, far short of the $34 per capita recommended by the World Health Organisation. And in a country where nearly 60 per cent of the population is below the poverty line, 51 per cent of healthcare expenditure is paid out of pocket.

As a result, there is a tremendous need to strengthen the private sector's ability to provide affordable, accessible and quality healthcare in low-income communities.

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The developing world is home to some of the most challenging markets for any business: Urban slums. Rural backwaters. Lawless regions and battle zones.

But hundreds of millions of potential customers live in these places, and a few pioneering companies are thriving there. Their success offers lessons on how to tap these complex environments for profits and growth.

All of these markets share certain challenges. They often lack functioning legal systems, so contracts are rarely enforceable. Theft, vandalism and physical violence are common. Skilled workers are hard to find.

The widespread poverty in these areas makes it difficult for many people to afford whatever a company is selling. Marketing is challenging because conventional advertising media like television and radio don't reach many of the people in these environments, and more-direct approaches can be dangerous. And winning the acceptance of the people living in these communities, for companies and their products, is tricky because these societies are often a patchwork of religious, linguistic and cultural diversity.

Little wonder, then, that to succeed in the face of such challenges, companies first must recognize that traditional business strategies won't work. Instead, companies need to find local partners familiar with the terrain, and rely on those partners to help guide their operations and develop strategies unique to each market. And to sustain a business in these environments, companies need to assert their value to their employees, partners and the broader community by supporting their development.

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RAMANAGARAM, India -- A credit crisis is brewing in "microfinance," the business of making the tiniest loans in the world.

Microlending fights poverty by helping poor people finance small businesses -- snack stalls, fruit trees, milk-producing buffaloes -- in slums and other places where it's tough to get a normal loan. But what began as a social experiment to aid the world's poorest has also shown it can turn a profit.

That has attracted private-equity funds and other foreign investors, who've poured billions of dollars over the past few years into microfinance world-wide.

The result: Today in India, some poor ...

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The inclusive story is still a distant dream. Despite the government drive to reduce the unbankable population, the status is far from rosy. With less than 50% of India’s population operating a bank account, the country continues to have one of the highest number of financially excluded households world-wide.

What’s has been disappointing is the manner in which the Indian banking industry is pursuing the goal of financial inclusion. Banking experts say financial inclusion, as it exists today, remains a mere target to be achieved than an aim to bring financial service 

to the masses.

Stats are evident to support the claim. A study done by Skotch Development Foundation states that though 2.5 crore no-frill accounts were opened between April 2007 and May 2009, barely 11% of those are currently functional.
A closer look at the no-frills account features reveals that operating this account is a rather expensive proposition for the masses. Most of the banks levy high charges ranging from Rs 50 to Rs 250 for doing additional transactions above a certain threshold.

Says Robin Roy, associate director, PricewaterhouseCoopers (PwC); “The threshold levels for number of free transactions is based on business considerations and primarily to optimise the costs needed to serve this segment. But banks would need to seriously look at the bottom of the pyramid. It’s the quality of no frills account holders that holds the key.”

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Mahatma Gandhi gave independent India’s leaders a test for their policies. Consider how they will benefit the poorest man, he said.

India’s Constitution gave political freedom to all Indians. All, rich and poor, men and women, were given the right to vote: before the US and several European countries had given such rights to their citizens.

In the 1990s, new policies brought economic freedoms to Indians that they had been denied earlier: the freedom to start and expand businesses, accumulate wealth, and even venture abroad. With these freedoms, the economy began to grow and Indian businessmen appeared on the world’s stage.

In 2004, millions of Bharatis, using their freedom to vote, reminded the newly shining Indians that the masses were not included sufficiently in the benefits of the economic growth that followed economic liberalisation. Since that election, inclusion became the political mantra in India again. And with its emphasis on inclusion, the Congress won an even stronger mandate in 2009.

India sits on a demographic time bomb. Its economic growth is not providing decent jobs and incomes to everyone. Hundreds of millions of youth, who are expected to give India a demographic dividend, can be a huge liability unless the country alters its pattern of industrialisation to include more people more rapidly in the benefits of economic growth.

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By Ann Meyer

After nearly four decades of running a staffing agency on a shoestring budget, John Plunkett hopes the next business he starts will be a moneymaker thanks to a new law that recognizes for-profit businesses with a strong social bent.

The law, After nearly four decades of running a staffing agency on a shoestring budget, John Plunkett hopes the next business he starts will be a moneymaker thanks to a new law that recognizes for-profit businesses with a strong social bent.

The law, signed by Gov. Pat Quinn last week, allows the incorporation of low-profit, limited-liability companies, or L3Cs, a new hybrid structure for for-profit ventures that have a primary goal of achieving a socially beneficial purpose.

"One of the problems we've had for four decades is operating with enough capital to do what needs to be done to grow and thrive as a business," said Plunkett, founder and chief executive of Harborquest Inc., a Chicago non-profit staffing firm that aims to move disadvantaged workers into better jobs.

While the charity, which has an annual budget of about $5 million and employs 20 staffers, competes with for-profit staffing firms, it has struggled to come up with working capital to fund its growth because most of the grants it receives are designated for programming expenses only, Plunkett said.

By launching an L3C with a similar social purpose, Plunkett would be able to offer investors a financial return.
signed by Gov. Pat Quinn last week, allows the incorporation of low-profit, limited-liability companies, or L3Cs, a new hybrid structure for for-profit ventures that have a primary goal of achieving a socially beneficial purpose.

"One of the problems we've had for four decades is operating with enough capital to do what needs to be done to grow and thrive as a business," said Plunkett, founder and chief executive of Harborquest Inc., a Chicago non-profit staffing firm that aims to move disadvantaged workers into better jobs.

While the charity, which has an annual budget of about $5 million and employs 20 staffers, competes with for-profit staffing firms, it has struggled to come up with working capital to fund its growth because most of the grants it receives are designated for programming expenses only, Plunkett said.

By launching an L3C with a similar social purpose, Plunkett would be able to offer investors a financial return.

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