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Indian social entrepreneurs battle bureaucracy, need help to expand

Source: Thomson Reuters Foundation - Thu, 10 Apr 2014 10:27 GMT
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Children with chalkboards attend a class inside a bus converted into a mobile "School on Wheels" by an NGO at a slum area in the southern Indian city of Hyderabad. Picture November 1, 2011, REUTERS/Krishnendu Halde
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MUMBAI (Thomson Reuters Foundation) - Millions of businesses in India are using innovative ideas to help the poor access services such as water, education and healthcare, but bureaucracy, scarce capital and an absence of technical support are making it hard for them to scale up their work, the co-organiser of India's largest gathering of social enterprises said.

Social entrepreneurship in India has seen exponential growth over the last decade, with an increasing number of skilled men and women starting up businesses which provide out-of-the-box ways of improving the lives of the country's 400 million poor.

Despite their number, social entrepreneurs still remain under the government radar and have no formal recognition as a sector in their own right, depriving them not only of key investments, but also of incentives such as tax breaks.

"There is no sector called social enterprise in India. There is no difference in terms of government policy between the regular entrepreneur and a social entrepreneur," said Anurag Agrawal, CEO of Intellecap, adding that this meant there were no policies geared to support businesses doing development.

"But more than any tax breaks or special incentives, social entrepreneurs struggle with the basics of just getting their business up and running - very often the government bureaucracy is a major roadblock."

Agrawal was speaking on the sidelines of the Sankalp Unconvention Summit. The gathering brings together hundreds of social entrepreneurs, investors, civil society groups and academics to form partnerships in sectors such as water and sanitation, clean energy, healthcare, education, finance and agriculture.

The three-day summit showcases businesses which are providing everything from solar lanterns and clean cooking stoves to micro-finance and mobile healthcare to poor urban and rural populations at affordable prices.

Agrawal, whose own company Intellecap is a social enterprise which provides support to other such businesses, said the Indian government and large corporations could do more to help entrepreneurs.

"Most of the funding to social enterprises is foreign funding coming in. There is no dearth of capital in India - these huge corporates are sitting on huge amounts of money," he said.

"Corporates and government could not only provide investment, but also human resource support, help with distribution networks and access to markets. These are the things that the social entrepreneurs struggle with."

NEED HELP TO EXPAND

Despite India's economic growth over the last two decades, one-third of the country's 1.2 billion population still live below the poverty line.

According to government surveys, more than 40 percent of children under five are malnourished, while the World Health Organisation says some 620 million people are forced to defecate in the open.

Experts say India, which is home to the largest number of social enterprises in the world, could play a key role in accelerating development - not just at home, but also in regions such as Africa where innovative business ideas can be replicated to solve similar social problems.

But many social enterprises face a lack of knowledge when it came to scaling up their businesses, Agrawal said, adding that most were working on their own and had no access to a support network or any technical advice.

To help remedy that, Intellecap has launched a new tool called ‘StartUp Wave’ - an online platform which will be a one-stop service that takes start-ups from having an idea through to getting investment for their business.

"’Startup Wave’ is very pertinent because there are a lot of enterprises out there, located in all corners of India, who don't identify themselves as social enterprises, who don't have this outreach and who don't know anything about venture capital," Agrawal said.

"They are just people trying to create a business but they don't realise these are making a lot of impact. So this will hopefully help bring concepts to them and scale up their businesses."

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