SELCO’s sustainable business model to revolutionize Indian social system
In the beginning, the Greek Titan Prometheus was the first to bring fire to Earth and give it to the human race. Or so the story goes. Nowadays, it is Harish Hande, managing director and co-founder of SELCO-India, who is bringing the light to rural Indian households, or, as he prefers to put it, “We are just their partner; they are helping themselves.”
The social enterprise SELCO Solar Pvt. Ltd grew out of a PhD thesis into an innovative company that supplies and customizes solar energy technology, services it and helps with the finance. Targeting the under-served households and businesses in the states of Karnataka and Gujarat, SELCO has “serviced and financed over 100,000 solar systems” since 1995.
Moving forward with sustainability
The idea of such a social enterprise might have little to do with Greek mythology but had much to borrow from the Gandhian philosophy on sustainability. Mr Hande believes that India needs to move forward in a more sustainable manner than the way it is doing today. The poor therefore need to be part of that change and social enterprise is the way to do it.
Engaged in a Yunusian struggle against poverty, Harish Hande hasn’t stopped feeling a sense of personal responsibility towards the poor who lacked basic services such as energy: “You live through that for a certain time. You become part of that society, and, inevitably, you want to change it for the better, which led to the creation of SELCO.”
The problem-to-solution approach
The competitive advantage of SELCO within its sustainable business agenda is the integrated economical and social approach to the problem of energy in rural areas. Mr Hande provides a service and takes it a step further to ensure its full potential. As he puts it, “Better access to energy leads to benefits such as better education, but energy alone will not necessarily take children to school. Therefore, we bring partners to fill in that missing link, be it teachers, books or finances.”
SELCO is working with regional rural banks (aka grameena banks), cooperative societies, commercial banks and microfinance institutions to create standardized financing packages for the end users to be able to afford the technology. In order to defy the myth that poor people cannot maintain sustainable technologies, SELCO, through its Energy Service Centres (ESCs), provides technical assistance and makes sure the product is handled accordingly.
With regionally distributed technology and after-sale assistance, the end user benefits from a highly customized product that translates into efficiently handling energy at individual level, a standard that in an ideal world would be the norm for any energy industry.
A social revolution
For decades, humanity relentlessly searched for solutions to poverty while engaging enormous financial sources in the process. In a world where almost half the population – over 3 billion people – live on less than $2.50 a day (World Bank Development Indicators, 2008, updated 2010), it might turn out that the sustainable model of a social enterprise such as that of Mr Hande could be one of the solutions.
With a focus on the individual and the family as the social cell, Harish Hande attempts to solve the inequalities resulting from the lack of resources. “Whether the male society agrees or not,” he says emphatically, “if you go to the Indian rural areas the woman represents the backbone [of the family]. On the other hand, women aged 3 to15 are those who collect the wood as their energy source while sacrificing school. So if in 20 years, we have 20 million illiterate mothers, we are all responsible for it. And this not only affects the usual household but also the society as a whole. That’s why a better access to energy becomes so important in multiple ways.”
Hande is looking as much at sustainability in the future as he is to trying to provide energy to even more customers of the lower social classes. “Why wouldn’t we include the poor people and bring them into the economical strata?” he asks, which he sees as a more fruitful way to apply his company’s experience in contrast with simply expanding geographically. The latter could be achieved through a share of entrepreneurs who would like to replicate the business model and take it further.
Refocusing the perspective
In the view of a possible social revolution, where poor people would have access to basic needs such as energy, Hande pleads for deromanticizing what he refers to as “the bottom of the pyramid” when saying it is a 5 trillion dollar market. The problem is, he asserts, that at the bottom of this structure the money is non-expendable – i.e. it is used for food, shelter and other basic needs – and therefore if you try to sell anything in that market which does not lead to asset creation, you are actually taking money out of it, thus making it poorer. “You have to look at the bottom of the pyramid more sustainably – by creating asset-based consumer goods,” he says. The idea is simple: if one sells a shampoo in that market that does not indirectly contribute to, for example, cleaner cooking practices or to better education, thus creating no asset, you are making the customer poorer than what he was before.
In 2007, Harish Hande won the “Social Entrepreneur of the Year” award, thereby being selected by the Schwab Foundation to be part of its worldwide Social Entrepreneurs’ network (see leading article in Swiss Style issue 216). With this year’s second participation at the World Economic Forum’s Annual Meeting of New Champions in Tianjin, Harish Hande has a lot to look forward to, given his previous attendance in Davos the same year. “My last participation was devoted to meeting the Indian officials, pushing the policies and saying, ‘Listen to me, I’m in the field and this is the problem I am facing.’ I am also speaking on behalf of the small entrepreneurs who do not have access to them while in India.”
With serious questions ahead to discuss at the next meeting in Tianjin, one could not help but wonder where would this new Prometheus lead us – and whether there would be triumph or else be eaten up by the eagles of corruption and ignorance.
Article by Diana von Trupp