Irfan Alam of SammaaN on BoP Entrepreneurship

Ifran Alam is a well known to many who follow Social Ventures in India. As the founder of SammaaN, which organizes rickshaw pullers into small marketing and courier businesses, Irfan has won a number of awards including the World Bank Innovation award and the TED India Fellowship. He is also a fan of Dr. Prahalad and his concepts on BoP business models. Irfan was recently in the US for President Obama’s Entrepreneurship Summit and was interviewed by India Currents. The full interview provides a great insight into how a social venture gets visualized, funded, launched and is sustained for a long period.

Excerpts from A Three-wheeled Revolution, India Currents by Sujatha Ramprasad,

When did this turn into a true social venture?

As I understood more about the lives of the rickshaw pullers and their plight, it turned into a social cause. There are about ten million rickshaws operating in India. Most of these rickshaw pullers do not own the rickshaws but instead rent them at the rate of 30 to 40 rupees per day. The money they make, after paying the rent, is barely sufficient to sustain their families. They continue to remain at the bottom of the pyramid. I thought if I could create an organization that could empower the rickshaw pullers and find a way to increase the overall revenue, it would be a win-win situation for both. I firmly believe in C.K Prahalad’s idea that businesses can be successful by targeting the bottom of the pyramid. Sammaan was finally founded in 2007 with seed money from family and friends.

Can you describe the operation model of Sammaan?

When a rickshaw puller approaches Sammaan, we first go through a verification process. The operator is then given training on basic etiquette and traffic rules. Then we approach the banks and help them get a loan for a new rickshaw. Previously, banks were very reluctant to give loans to this section of the society. Now, since we stand as guarantors, these rickshaw pullers have access to credit. The rickshaw pullers feel truly empowered when they drive their own vehicle. We provide the rickshaw pullers with accidental and health insurance. Each driver is given an id-card and is required to wear a uniform while operating the rickshaw. The rickshaw puller now becomes a part of the Sammaan family.

How does Sammaan help increase the revenues of the rickshaw pullers? How does Sammaan itself get its revenues?

Sammaan rickshaws are designed such that they have plenty of space to display advertisements. Several local and national brands place their advertisements here. The advertisement revenue is split in half between Sammaan and the rickshaw pullers. Also, rickshaw pullers can choose to sell water, fruit juice, cell phone prepaid cards etc. In that case they come to a central rickshaw yard in the morning and load up their wares.

At the end of day the profit from their sales is split between them and Sammaan. The money that rickshaw pullers earn through transporting the passengers is solely theirs. The revenues of our rickshaw pullers have increased 30 to 40%.

There are several other benefits on which we cannot put a monetary value. Rickshaw pullers now have a sense of belonging and empowerment. Children of the operators and their spouses attend free evening classes called Samman Gyaan. Sammaan has brought dignity and inclusion to those previously considered as menial laborers. In addition, I am very happy to say that Sammaan itself is profitable. Last fiscal year we made a net profit of eight lakh rupees (20,000 dollars) and revenue of 50 lakh rupees (125,000 dollars). My mentors have been emphasizing the importance of sustainability