A page each from Harish Hande and Naveen Krishna

A vegetable cart seller in Bangalore (Pic: courtesy blog.travelpod.com)

Recently, Harish Hande wrote a cogent and passionate article on Forbes India. The main point in his article is that businesses need to look at social sustainability in a long-term and holistic manner. From his article…

Amidst rising income inequality, corporations need to realise that social responsibility is essentially an insurance against social instability. Occupy Wall Street, the protests in Spain and Greece and the London riots are some classic examples to take cognizance of and learn from. They were not one-off events. Each of them has a deeper connection to social ‘un-sustainability’ that has crept in over decades of poor prioritisation by businesses and governments in their respective countries. India has a wonderful opportunity to show the world the right way of doing business.

He exhorts Indians to learn from the venerable neighborhood street vendor – a businessperson without an MBA degree who earns enough to feed her family without cheating anyone.

Learn from the street vendor. My mother has been buying vegetables from a particular street vendor for two decades now. Think about it—irrespective of floods, strikes and holidays she comes around selling her vegetables. Every morning, she borrows money at an interest rate of 10 percent a day, pays Rs 50 for her cart rental and Rs 15 for kerosene. In the evening, she has to determine the pricing strategy for vegetables that remain, as she has no refrigeration at home. After all these expenses, she has enough to feed herself and her family. And she does all of this without an MBA. Has one ever been cheated by a street vendor? Has one ever heard about a street vendor going out of business?

Three figures stand out – daily working capital loan at 10%, daily cart rental of Rs. 50, and daily kerosene expense of Rs. 15. The interest rate might seem low but remember that it is a DAILY rate. In Poor Economics, Banerjee and Duflo go into a great deal of detail into the MFI industry — first hypothesizing that the status quo of an exploitative interest rate was ripe for disruption by MFIs and eventually outlining the reasons why the interest rates charged by MFIs end up being as high as they are. Anyway, that’s fodder for a different blog post.

A fruit cart seller (Pic: courtesy digitalmusings.in)

What got me thinking was the daily cart rental of Rs. 50. I thought of Naveen Krishna and his Varanasi-based social enterprise SMV Wheels. I have written earlier about SMV Wheels’ remarkable story — a product+services value proposition to rickshaw pullers which involves forming  a 3-5 member group, not unlike a Joint Liability Group (JLG); each group member could then purchase a cycle rickshaw from SMV Wheels through a deferred loan scheme – an interest-free deferred loan with weekly payments for 12-15 months, at the end of which the rickshaw puller owns the rickshaw. SMV Wheels procures the rickshaws at a cost of 11,000 INR and sells at a price between 12,000 and 13,000 INR. The ‘services’ includes accident insurance, no-frills banking services and revenue-share from outdoor advertising.

By now, you must have gathered where I’m headed. Is it possible to create an SMV Wheels-like social enterprise catering to the vegetable cart sellers? The cart will cost much lesser than a rickshaw so we are probably talking about a shorter repayment duration. Outdoor advertising on a vegetable cart might be a bit of a stretch..Maybe.

This morning, my runner friend and I had our first conversation with a vegetable cart seller and we gathered the following facts:

  • She owns the cart – she paid 5,000 INR for it.
  • She lives nearby and her cart is not mobile.
A lot more market research needed obviously. How many cart sellers own their own carts vs. renting? How many of them take their carts home vs. leaving them at their ‘station’? For starters, I need to stop buying vegetables from the Namdharis and the Spencers and… start purchasing (and conversing) with the vegetable/fruit sellers. About time, eh? If nothing else, the results of this market research might be useful to a budding social entrepreneur.
Dear Bangalore Reader,
Next time you shop at your neighborhood vegetable/fruit cart seller, do ask them these 2 questions and post their answers in the comments. Thanks.

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  • meDilbert

    While it is true that they never go out of business, they do incur huge loss which makes them vulnerable to all kind of abuses and they are forced to abandon the business. 
    I wanted to help some of these people a year back and tried understanding their pain points and risks. Couple of them here in addition to what you have captured about cart and storageMost food cart vendors now rely on pvt gas connections. Each of these cylinders cost upward to Rs.800 ( + Deposit) and it seems some time spurious cylinders come with half water and these unorganized people are helpless and they cant even protest.There will also be couple of free loaders who don’t pay( Food cart) or forcibly put extra quantity or walk away paying less then asked value.Major issue is they don’t have simple way to get license from local authority. Even with some permit they have to keep bribing who ever comes from traffic cop to local goons. In spite of paying there is occasional “ride” where munciple guys confiscate everything and these events occur atleast twice a year. Vandalism of stationary cart is also major risk as most of these vendors wont have safe place to park the cart. Solution could be a NGO that would work with authority to identify locations, procure permits , give out low interest micro loans and provide some legal protection.

     For now my way of helping these people is not bargain and pay what they ask.

    • meDilbert

      Seems like formatting gets lost in comment. 

    • Thanks for your additions to the vegetable cart narrative, Girish. Perhaps there’s more in common with the “rickshaw puller” exploitation in North India — will research this some more.


  • Shriram R

    Thanks @Vishy, I have just ordered Poor Economics. Also 10% per day interest is a humongous 3650% p.a  – thats unpayable.

    • hi Shriram,
      You won’t regret the purchase. It’s been a bible for me in the past one year.


  • jyothi kiran


    SMV social enterprise is very good idea –  Also what is the possibility for connecting these street vendors to KIVA kind of money lending networks.

    More about KIVA:
    It’s non-profit organization with a mission to connect people through
    lending to alleviate poverty. Leveraging the internet and a worldwide
    network of microfinance institutions, Kiva lets individuals lend as
    little as $25 to help create opportunity around the world

    Some interesting KIVA Stats:
    ——771,389 Kiva lenders
    ——$317 million in loans
    ——152 Field Partners
    ——450 volunteers around the world

    ——61 different countries

    • Jyothi,
      Thanks for your note. I’m aware of Kiva though I didn’t realize they had processed+ $300 million. The 2 Kiva equivalents (with a 100% focus on India) are rangde.org and milaap.com. A common thread to all of them are the relationships they build with “field partners” – almost all of which are local NGO’s.

      You raise an intriguing possibility though — if an existing NGO were to broaden their ambit to include veg/fruit cart sellers (or even a new NGO were to form), they could become a field partner to one of Kiva/Rangde/Milaap — as an alternative to raising its own funding (ala SMV Wheels).


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