Experience with a Social Entrepreneur in your area

This is about a social entrepreneur from Patna named Kaushlendra who passed out from IIM Ahmedabad as a topper and went on to manage a business in Bihar starting in 2007, now worth Rs.6 Crore.

Introduction:
Kaushlendra was born in Nalanda district of Bihar in a farmers family. After completing his MBA from IIM A, he could have chosen to sit in the plush air-conditioned premises of a top multinational like his peers. But he chose to rough it out.

Mission
He started with the mission Help small vegetable growers and vendors get the best price in his mind.

The Beginning Of The Journey

The seed for Kaushlendras business idea was sown very early in his student life. Growing up in a farmers family, he was troubled by two observations. One, farmers struggle to get the right value for their produce. Two, consumers in Bihar, the third-largest vegetable producing state, ironically cant get fresh vegetables. By the time he passed out from IIM (A), he knew what to do. He started SAMRIDDHII Before starting he had to understand the needs of farmers, consumers and even vendors and then create a supply chain. After passing out of IIM-A, he did extensive fieldwork, meeting farmers, studying cultivation techniques and finally taking a bank loan of Rs.4 million to start the project. It took him nine months in all. He discovered new aspects of the vegetable supply-chain during this period. He understood why the mandi-system does not work. He started by saying The Age of the Entrepreneur is here and now. If you have a dream, there is but one life to realise that dream. To begin with,

Kaushlendra believed in himself even when all those around him raised their eyebrows. The biggest influence in Kaushlendra's life has been his mother who has continually encouraged and supported him even in his darkest hour. She taught him that success is the by-product of struggle with patience and successful people write history.But above all, his mother instilled within him the confidence to take on any challenge. Nothing is impossible! His mother made sacrifices for her family and school children of their village. Today she is a primary school teacher in his village and Kaushlendra wants to do her proud.

He spent his life in Patna without having a single penny in his pocket for several days. That was the period when everybody laughed at him and used to make fun of him. Moreover, he had been deemed as a failure. At one point, he was making commitments without knowing how to fulfil them. But he always knew that in the end everything would fall in place. He was there to do something. It was his childhood dream to contribute to the development of rural Bihar. He has opted to make vegetables the new brand of Bihar. And that is the belief that has carried Kaushlendra to the giddy heights of the entrepreneur world. His venture, the Kaushalya Foundation, established in 2007, focuses on mobilizing and organizing the informal, fragmented vegetable sector. The Foundation primarily targets poor vegetable growers as well as the vendors and the farm hands from the state of Bihar. The Kaushalya Foundation launched project Samriddhii in Patna in February 2008. They also created a public private partnership with Agriculture Technology Management Agency (ATMA), Patna. However, in order to get such a large project off the ground the Foundation required quite a large sum of money. Thankfully, they managed to acquire a soft loan from the Friends of Women World Banking (FWWB), Ahmedabad. They received a second boost when Punjab National Bank (PNB) agreed to sanctioned Rs. 50 lakh for their project. To begin with Kaushlendra wanted to ensure that his product was preserved from the moment it left the fields to the time it was placed in the hands of the

customer. The Kaushalya Foundation has employed an integrated supply chain, coupled with service bundles, to connect and maintain the flow of goods. The biggest advantage that this system offers is waste reduction, greater shelf life and a diminished cost price.

Working of SAMRIDDHII
As early as 5 am, five of the Samriddhii members from Patna start towards collection centre in rural Bihar. Waiting for them at those centres are 600 farmers, with loads of fresh vegetables. Samriddhii members spend the next two hours picking and choosing the best vegetables on offer. Having procured 5 tonnes in all, they pay farmers in cash. This saves them the cost of the dearly middlemen. The vegetables then find their way to homes, shops, mandis and hand driven carts in Patna. By evening Samriddhii sells all the vegetables it procured early morning. This has been the routine since December 2007, when Kaushlendra kicked off his business. Kaushlendra may not have got any private equity or venture capital funding till now. But the 29 year old has done well in area where big players such as Reliance Fresh have failed and those like Bharti are trying to find their feet. Less than three years since it sold its first kilogram of vegetables, Samriddhii has a turnover of Rs. 6 crore. What is more, margins are between 20% and 30%. Unlike other vegetable vendors, he is minutely studying consumer behaviour as he goes along. It was important for him to study consumer behaviour when they purchase vegetables from his pushcart to help prepare a blueprint of expansion. After doing his MBA, he along with some of his friends and teachers from IIM-A developed a pushcart to make it easy for vendors to carry a vegetable load of up to 200 kg. His pushcart is made of fibre with an attached weighing machine, is ice cooled to keep vegetables fresh for up to five days, and sold under the brand name of Samriddhii. Initially, there was only one pushcart for trial but now he has already ordered 50 more. It will go up in the next phase. Each cart costs Rs 50,000, which Samriddhii bought with bank loans. The vendors hire them for a security deposit of Rs 3,000. Within less than three years since it sold the first lot of

vegetables, Samriddhii works with over 500 farmers of 20 villages, 200 vendors and offers jobs to 500 families. Clad in a simple shirt and trousers, the bespectacled youth is popularly known as the MBA sabziwalla among his loyal customers, particularly women in the Kankarbagh colony, a middle class locality. In a bid to establish direct links with vegetable growers or farmers, Kaushalendra has tied up with over 250 vegetable growers in different villages in Nalanda and Patna districts. He has also tied up with the Agriculture Training and Management Agency (ATMA) to take his dream to vegetable producers in different parts of state. To have an edge in the cut-throat market, Samriddhii offers quality assurance for which it has roped in wives of farmers and vendors. After the produce is brought to collection centres, the women segregate vegetables according to quality and weigh and pack them. The best quality vegetables go to carts and the low-grade ones are supplied to hotels. The profit earned, after paying the establishment costs, is shared between vendors and Samriddhii. Since the market price of vegetables fluctuates every day the profit margin varies. Vikas Diwakar, an IIM- Indore alumnus, and two other B-school graduates joined him after Samriddhii started rolling in 2007 Success, though, did not come easy. A major setback was alcoholism. Vegetables are given to vendors on credit; they return the money after selling the stock. A steady income gave rise to increased cases of alcoholism and gambling among vendors. This led to payment delays. In 2009 Samriddhii annulled contracts with men vendors and gave the charge to their wives. The experiment worked. The decision also gave the women a sense of ownership. They now maintain the quality of vegetables supplied to the carts.

Advantage Samriddhii
Making money for itself is not the reason why Samriddhii is in existence. Kaushlendra started this under the kaushalya foundation to help small vegetable growers and vendors. To start with, it brings together farmers and vendors under an umbrella, without which they will be left to fend for themselves in a marketplace that is becoming ruthless by the day.

Samriddhii works with farming self-help group. Farmers are not tied to Samriddhii and can sell their produce to anyone. But they continue to sell it to Samriddhii just because they get the cash payment. The formation of the selfhelp groups has also given its members easy access to bank loans. During lean times Kaushlendras team organises training for farmers in organic farming, best practices and cultivation of new exotic vegetables. Kaushlendra knew that Bihars vegetables are still not getting the right price. Very few know that Bihar has the lowest use of chemical fertilizers per hectare. About 60% of the produce is organic by default. He felt a need to tell this to the consumers. Samriddhiis consumers can also look forward to grading and differential pricing. The taste of vegetables change within kilometres in Bihar. Locals pay the same market rate. Vendors on the other hand can get vegetables a tad cheaper from Samriddhii than elsewhere. About 600 farmers and 3000 vendors are doing business with Samriddhii.

The Future Dreams

With orders flowing in, Kaushalendras next target is to supply vegetables grown in Bihars fertile riverine area across the country. By next year he plans to launch Samriddhii in Lucknow. He plans to take Samriddhii, launched by his NGO Kaushalya Foundation, across the country and abroad within five years. His vegetables are priced slightly lower than those sold by other vendors. He is confident that all major players in the vegetable market, including Reliance Fresh, will purchase from them in the next five years. They have been working towards professionalizing street vendors of vegetables and marginal growers. They want to empower them through our project Samriddhii to help them face the future challenges in the new global economy. Attractive partnerships have been formed between the farmers and the vendors with a focus on shared interests and mutual growth. The Samriddhii model loosely resembles how Mother Dairy runs its fruit and vegetables brand Safal in Delhi. But there are differences. Unlike Safal,

Samriddhii does not hand hold farmers on the choice of crop and the quantity to be produced. Rather, it sells quality seeds to farmers 25% cheaper than the market price. Safals procurement area is spread across the country, with different regions supplying different products. Samriddhii works on the principle of local procurement. Samriddhiis target is ambitious. It is gunning for a turnover of 100 crore by 2011. By that time it should be up and running in Uttar Pradesh, Chhattisgarh and Maharashtra. Its other plan is to send vegetables to large retailers in Bangalore and Delhi. For this it will get 15 refrigerated vans from Europe by next year. Their expansion in other states will bring the economies of scales and revenues. They are eyeing to scale up the model to an all-India level and in the process make Bihar the Vegetable Capital Of India I wish him all the success in future. He must carry the good works.

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