Rickshaw Bank Project
Country: India
Organization: Centre for Rural Development (CRD)
2) Sector of activity: Financial Services Innovation and Technological
 Fleet of rickshaws ready to be on road
3) Description of your products or services: The cliental is the community of poor RICKSHAW PULLERS. The problem of the Rickshaw Pullers is similar all over. They migrate to cities in search of a job and being unable to find one, start plying rickshaws on a hire basis at the daily rent of Rs. 30/-. They fall into this vicious circle and keep plying rickshaws on this rent for years together, but are not able to purchase their own rickshaws. They do not have access to financial institutions to avail loans due to lack of identity proof. This unorganized sector is very vulnerable and is denied any kind of social security.
Rickshaw Bank has provided an alternative to these pullers where they pay Rs. 25/-, which is lesser than the market price they pay but as the daily repayment towards the ownership of Rickshaws and own their bread earning assets within maximum period of 15 months. Rickshaw Bank has provided a solution to an old problem.
The rickshaws of Rickshaw Bank are aerodynamically designed ensuring safety of the pullers and passengers, making it easy for the puller to ply the Rickshaw and make more visits. The Rickshaws have become very popular amongst passengers as the seats are comfortable and they are easy to climb. This has increased the income of the pullers significantly. The unorganized sector of Rickshaw Pullers has been put under the umbrella of social security and dignity of labour through the provision of license for the Rickshaw and the Puller, Uniforms, Photo ID card and Insurance Coverage both for the puller and the Rickshaw.
4) Description of the operational model: The rickshaw was originally designed by Indian Institute of Technology, Guwahati but now they are assembled in the production unit of CRD. The production unit has provided employment to 18 other unemployed youth. The finished products are only delivered directly to Rickshaw Pullers who become members of the Rickshaw bank by forming groups of 5 members each. 5 groups of Rickshaw Pullers form a Garage located at different parts of the city that are easily accessible to Rickshaw Pullers. Garages have been developed to do minor repairs of rickshaws and also collect pullers’ daily rent, update the records and manage the savings and lending programs. The pullers make an easy daily repayment of Rs 25/- towards the ownership of Rickshaw. Once the repayment is done within the maximum period of 15 months, CRD hands over rickshaws to the pullers.
 Inauguration of Rickshaw Bank in November 2004
5) Description of the financial model: The Rickshaw Pullers pay directly to purchase a rickshaw but through easy daily repayments of Rs. 25/- each which is lesser than the existing daily hiring amount. It is easily affordable by the pullers. This repayment is towards the cost of the Rickshaw, Insurance, License, Uniforms and Operation Cost of Rickshaw Bank. Earlier they paid more money for years and were unable to own rickshaws but now they get other benefits apart from owning rickshaws through easy repayment within the maximum period of 15 months. The money received from the pullers is reinvested in developing more rickshaws in order to meet the increasing demands of the rickshaw pullers. The Rickshaws are designed in a way that advertisements can be placed at the back of Rickshaws. These advertisements substantiate the income of the Rickshaw Bank apart from the client fee.
The Project was started with the initial sponsorship of 100 Rickshaws by Corporates like ONGC, IOC, HLL for the pilot project but now has become self sustainable and is in the phase of scaling up. Though the project is self-sustainable it requires funding for scaling up activities to meet the demands of the market.
Client fees represent this approximate percentage of operational budget: 80%
6) Key operational partnership: Direct partnership has been developed between the Corporates, Government, Business Houses, Civil Society and the Beneficiaries. All the stakeholders contribute towards a viable solution to a social problem but being in a win- win situation. Besides Corporate Social Responsibility, sponsoring Rickshaws provides mileage to the Corporates, as their advertisements are placed at the back of the Rickshaws with cent percent tax exemption. Municipality issues licenses to the Rickshaw Pullers as the Rickshaw Bank ensures their reliability. It gives legitimacy to the pullers to ply rickshaws. Network has been created with the Police where they train the pullers on traffic rules and they work in cooperation. Rickshaw Bank is in the process of linking pullers to the Banks. Banks would also have a direct link with the unorganized community of pullers. Insurance Companies are linked with the rickshaw pullers, which provide the pullers with social security and increase company’s clientele as well. Passengers prefer to ride with new designed Rickshaws for their comfort and safety as seats are comfortable and ID Cards of the pullers make them more reliable than the other pullers.
 Meeting of dignified pullers in uniforms
7) Current outreach:
We are at the Scaling Up stage. The Project has successfully passed the Pilot Phase and is self-sustainable. Looking at the success of the project with the high average monthly repayment rate of 92 %, it is in the phase of scaling up and can be replicated in any part of the country or even abroad where rickshaws are plied.
How many clients have benefited from your product/service in total? Over the last year? 360 Rickshaw Pullers have benefited directly and 1800 people (dependant family members) indirectly. Rickshaw Bank is working towards holistic development of the community of Rickshaw Pullers. Apart from providing Rickshaws and social security to the pullers, it is also working with their families. Being the migrants the pullers did not have access to cooking gas connections (LPG). Rickshaw Bank has facilitated to get the connection through companies. We have also tied up with an eye hospital for treatment for pullers and family members. Family Planning norms have been introduced and HIV-AIDS awareness is being imparted. Network has been created with another NGO, GOONJ to provide clothing support to them and their families.
What percentage of your clients is below the poverty line ($2 per day)? 99% The earning of the Pullers earlier was 60-70 INR but with
the association of Rickshaw Bank has increased their income
to 150-200 INR. Links of articles on Rickshaw Bank are:
http://us.rediff.com/money/2005/aug/12rick.htm
http://www.crdev.org/rb.asp
http://www.citizenbase.org/awards/investawards03.html
http://www.financialexpress.com/fe_full_story.php
content_id=99258
http://incometaxindia.gov.in/Notifications/Incometaxact/2003
/17820030724.asp
http://www.ndtv.com/features/showfeatures.asp?
slug='Rickshaw+Bank'+creates+jobs+for+youth&id=982
http://www.business-standard.com/common/storypage.php?
hpFlag=Y&chklogin=N&autono=175933&leftnm=lmnu4&lselect=0&lef
tindx=4
http://www.thestatesman.net/page.arcview.php?
clid=14&id=108310&usrsess=1
What is the order of magnitude of the potential demand for your products or services? Which
other low-income groups, countries or regions could benefit from it? Try to quantify (number
of clients, market size in currency):
The plight of rickshaw pullers is similar all over the world. The rickshaw bank has provided a successful and a sustainable model for reducing the plight of the Rickshaw Pullers. There is a huge demand for rickshaws of the Rickshaw Bank as they not only provide an asset to the pullers but also provide a solution for their holistic development. The Rickshaw Bank Model is replicable as is in the phase of being replicated in other cities of Assam and Noida in Uttar Pradesh. There are around 5 million Rickshaw Pullers in India, sharing the same plight and Rickshaw Bank is a successful and a sustainable model to cater to their problems and has a great scope of replicability.
Taking only 50% of the total pullers as the potential market, Rickshaw Bank can cater to 2.5 million pullers with a business volume of Rs. 215 Crores.
The project can be replicated in any other developing/ under developed country as it provides self-employment to many unemployed people and saves them from the vicious circle of the middlemen and moneylenders. It provides them employment opportunity with the dignity of labour and self respect.
 Production unit employment opportunity for other youth
8) Scale-up strategy:
How many low-income individuals do you plan to benefit in three years from now? How are you planning to scale up or replicate your solution? What are the major constraints to scale up?
Rickshaw Bank is planning to extend its services and cover 20,000 pullers in 3 years time. We propose to scale up through the Franchisee Model by involving other NGOs, VOs and CBOs working in different parts of the country. The Franchisee model has been designed on similar lines of the Pilot Project, which has been successfully completed.
The constraint could be the initial funds required in scaling up activities, capacity building support and training manpower resources.
Which specific areas - and why - in your field would benefit most from investment by corporations, foundations, and other investors:
Since the Project is in scaling up phase, investment by Corporations, Foundations and other resources would be beneficial in supporting the initial scaling up activities, capacity building and training of manpower. Since Rickshaw Bank is working towards holistic development of the pullers; investment would be of help to work in the area of health and sanitation, HIV-AIDS and education.
9) The organization: How does the initiative fit with your overall organization's strategic goals and priorities? How did the initiative start?
The organization’s objectives include to work on various livelihood issues in the rural and urban sector and Rickshaw Bank provides employment opportunities to the unorganized sector of the Rickshaw Pullers. This Project fits well into organization’s objectives as it works on livelihood opportunities of Rickshaw Pullers, an issue that has gone unnoticed for years and is a matter of concern.
The initiative began with an idea when the Chief Executive of the Organization was traveling in a rickshaw. During his conversation with the puller, he understood the plight of the pullers and the fact that though they were plying rickshaws for many years, they were unable to own their bread-earning asset and lacked any social security. Having a sense of empathy for them, he developed this concept and initiated the project. The concept of Rickshaw Bank won the Citizen Base Investment Award in India in 2003.
-
10) On the mosaic diagram, which of these factors is the primary focus of your work?
- Factor: Limited purchasing power of individual clients
- Principle: Design products and services that tap into the wealth of poor
Contact Information:
Name: Dr Pradip Kumar Sarmah - (Ashoka Fellow), Executive Director
Organization: Centre for Rural Development (CRD)
Mailing address: Centre for Rural Development, Dewan House, Zoo Narengi Road, Guwahati-781021, Assam
Country: India
Email: crd4ev@yahoo.com
Tel: +91-361-2228281
Fax: Nil
Website: www.crdev.org
Organization's legal status: Registered under Section XXI of Societies Registration Act of 1860, Indian Income Tax Act 12 AA & 80 G, Registered under Foreign Contribution Regulation Act of 1976, Rickshaw Bank Project has been notfied under 35 AC of IIT.
Number of Employees: 45
 Rickshaw Puller with his family
|
Return to Home Page