ProGreen - Profits for People
Country: India
Organization: ProGreen
2) Sector of activity: Agriculture Market-Based livelihood development in rural India
3) Description of your products or services: ProGreen is a social venture committed to bringing marginalized communities in rural areas to the mainstream of economic activity, through: (a) Identifying, harnessing sustainable business opportunities (b) Formation of rural micro cooperatives. Currently, low-income communities in rural India have limited access to livelihood opportunities that are market driven. ProGreen intends to address this by identifying innovative market-driven business opportunities, and commercializing them by forming community owned cooperatives.
ProGreen is currently in the process of setting-up a cooperative to manufacture biodegradable tableware – disposable cups & plates made of an agricultural by- product – sheath of the areca tree. A pilot unit has been set-up at Salem, Tamil Nadu. ProGreen outsources production to its stakeholders (primary clients) comprising of rural unemployed and members of SHGs. These stakeholders (clients) invest in the machinery for production, which will ensure their ownership of the cooperative. ProGreen provides the technology, training and marketing support.
The cornerstone of the ProGreen model is the formation of these ‘micro-cooperatives’ and having a strong market- oriented approach towards livelihood development. ProGreen has identified other such innovative market-driven opportunities, that make strong business sense, to empower rural communities.
4) Description of the operational model: ProGreen model is leverages on the cost economies of small producers in rural India. Areca cup and plate manufacturing is a labor-intensive process, which involves employment of labor - from collection of raw materials to production of the finished product. The cooperative members are from low income communities in rural areas - will be involved in the manufacturing these cups and plates. The pilot unit has been set-up at Samudaram Village, Salem District.
These cooperative members are business partners for ProGreen, which will primarily outsources production from them. In addition to providing technology and training support, ProGreen will play a major role in accessing and establishing lucrative export markets for the product.
The cost of the machinery for manufacture will be borne by the low-income clients. ProGreen will partner with banks and finance institutions to finance the machines. ProGreen believes that it is important for the stakeholders to own their business, and become micro-entrepreneurs. This will ensure sustainability of the cooperative
In the long run, ProGreen believes in an innovative community driven model, and thus once the biodegradable leaf cup and plate cooperative attains a certian level of maturity, it will be handed over to the community. ProGreen, will identify many such market-driven business opportunities and commercialize them by forming ‘micro- cooperatives’.
5) Description of the financial model: Stakeholders from low-income communities invest for the ownership of the cooperative. The cost of the machinery for manufacture will be borne by the individuals from low- income communities. ProGreen will partner with banks and Micro-Finance institutions to help finance the machines. The cost of each machine is approx. 300 US$.
ProGreen is a key enabler in the whole process, from setting up the cooperative, and establishing the market, to ensuring sustainability. In return, the profits of ProGreen come from selling the bio-degradable cups and plates in highly lucrative markets. However, ProGreen ensures that low-income individuals receive fair-share of the value chain profits. Thus, a minimum of 40% of the profits from the value-chain reaches the low income individuals. This enables them to earn a minimum income of US$ 690 per annum.
The start-up stage funding required by ProGreen is financed by prize money from winning global social venture plan competitions. (ProGreen has won two already!). ProGreen will seek further funding from Social venture capitalists, once the initiative moves from pilot phase to full-fledged implementation. ProGreen will be financially self-sustainable (start making profits) within the first year of full-scale operation.
Client fees represent this approximate percentage of operational budget: 80%
6) Key operational partnership: In the process of setting up the pilot unit, ProGreen understood the key challenges in making the model work. The biggest challenge for ProGreen is to reach the low- income individuals and gaining their trust. ProGreen has addressed this by partnering with individuals in low-income communities with strong entrepreneurial traits. The success of these individuals serves as working proof, that partnering with ProGreen and becoming the part of the cooperative will enable low-income individuals to earn a sustainable livelihood. ProGreen has also partnered with NGOs, to reach the low- income individuals. It is currently working with AWAKE, an NGO dedicated to women entrepreneurship. Another important opportunity for ProGreen is to partner with micro-finance institutions. Many MFIs today have enormous access to funds that can be lend to their members, but lack business opportunities that can be leveraged upon. ProGreen can plug this gap, thus creating a win-win partnership.
7) Current outreach:
We are at the Start Up stage. ProGreen has set-up a pilot unit to manufacture bio- degradable cups and plates at Samudaram Village, Salem District, Tamil Nadu. The full-scale cooperative to manufacture bio-degradable cups and plates will be operational by August 2006.
ProGreen is also in the initial stages of piloting a textile cooperative in Bagalkot, Karnataka.
How many clients have benefited from your product/service in total? Over the last year? Five to ten clients have benefited in the pilot phase
What percentage of your clients is below the poverty line ($2 per day)? 95% Close to 100% of our client base constitute low-income
individuals
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):
According to 1993-94 Indian census, close to 244 million people in rural India live for less than $2 a day. Although, the economic growth has significantly lowered this number, the opportunity for ProGreen is still virtually unlimited.
With regard to the current initiative, there is a large unsatisfied demand for bio-degradable disposables in the food service industry. It is estimated that by 2007, close to 3% of $32 billion worth disposables market in foodservice will be occupied by eco-friendly biodegradable material manufacturers. ProGreen is conveniently poised to leverage upon this business opportunity, and translate the benefits derived to low-income individuals.
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?
ProGreen expects to expand its reach to approx. 500 low- income individuals, three years from now, through the bio- degradable cups and plates cooperative. The scaling-up will be done though the following means:
- By partnering with individuals in low-income communities with strong entrepreneurial traits, to improve the reach - Partnering with Non-profits - Partnering with micro-finance institutions
Meantime, ProGreen will continue to seek new market-driven business opportunities, to replicate this innovative model. Each opportunity will be commercialized by forming more such cooperatives, through which ProGreen intends to reach approx. 2000 clients in three years.
Which specific areas - and why - in your field would benefit most from investment by corporations, foundations, and other investors:
ProGreen is a venture founded on the principles of Social Entrepreneurship, with dual goals of Social change and Economic Return. Such initiatives, especially at start-up stage are experiments where the entrepreneurs face significant challenges. The community of social entrepreneurs will benefit immensely from investments aimed at funding, supporting and minimizing risk in their ventures.
9) The organization: How does the initiative fit with your overall organization's strategic goals and priorities? How did the initiative start?
The founders of ProGreen are students of business, who graduated recently from one of the best B-schools in India. During the two-years of study, when they were groomed for the world of business, they realized that solutions to address poverty in India has to be market driven, and based on strong business fundamentals. This philosophy, coupled with their grassroots experience, lead to the birth of ProGreen.
But, it was still a B-school dream, until, one day when the founders saw a flyer in the notice board, inviting entries for the Global Social Entrepreneurship Competition conducted by University of Washington. Competing with 170 teams, from 30 odd countries, ProGreen went on to win the competition held at Seattle. At that moment, ProGreen had become something more than a dream. ProGreen again competed, with an alternate business opportunity, replicated through the ProGreen model, in Imagine Cup 2005, sponsored by Microsoft. Again, there were 300 odd entries from across the world, ProGreen emerged as the winner.
Today, the prize money from winning these competitions is the seed capital for ProGreen.
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10) On the mosaic diagram, which of these factors is the primary focus of your work?
- Factor: High volume business based on small (even tiny) individual transactions
- Principle: Leverage the power of communities as both consumers and producers
Contact Information:
Name: Santhosh R and Deepak Kumar Bhatter
Organization: ProGreen
Mailing address: 302. Mana Residency, 616. 16th E Cross, Pai Layout, Opp to CC Club and Resorts, Bangalore 5600 016
Country: India
Email: san.naras@gmail.com
Tel: +91 98673 49279
Website: http://progreen.blogspot.com/
Organization's legal status: Association of Persons (Soon to be registered as a Pvt. Ltd company)
Number of Employees: 4
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