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The Final 50 Miles: Using Village Level Entrepreneur networks for increasing clean energy access

The VLE model is a decentralized local approach for addressing market based challenges in reaching out to rural areas. New Ventures reached out to the leading VLE networks and clean energy companies working with the VLE model to understand the details of their operation.
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VLE Network Details

New Ventures India interviewed the leading VLE networks across India to understand their models. In our study, we have categorised the existing VLE networks in the country in two main types:

Snapshot of General Purpose VLE Networks

General purpose VLE networks engage with the local community to promote and sell consumer goods and government services.  Highlighted below is a snapshot of the leading General Purpose VLE Networks in India.

Basix

BASIX, started by Dr. Vijay Mahajan- is a leading microfinance institution in India. The VLE division of Basix   focuses on the government’s CSC (Common Service Centres) programme and employs local youths (VLEs) to run the kiosks on a fixed salary and commission.

VLE India

VLE India started off as an online web platform that integrated local villagers to sell consumer services across various small towns and villages in India. VLE India is active in more than 7 states of India. VLE India was started by Mr. Girish Lad, Mr. Prashant Karhade and Mr. Amin Shaikh.

Villgro Stores

Villgro Stores began as Samruddhi- a project administered by Villgro- a social business incubator founded by Mr.Paul Basil. Currently, 10 Villgro Stores are operational with each Villgro Store having 3 staff and 5 to 6 village level entrepreneurs (VLEs). Most of Villgro Store’s offerings are agricultural products and services.

Sakhi Retail

The parent organization of Sakhi Retail is Mumbai-based Swayam Shikshan Prayog (SSP) – an 18-year old NGO that works in disaster relief and women's empowerment programs. Prema Gopalan, SSP’s Executive Director, led to the formation of Sakhi Retail in 2009. Sakhi retails energy based products, water purifiers and FMCGs.

ITC eChoupal

ITC established the e-Choupal as a platform to connect with the rural farmers via the internet. The VLE or “Sanchalak” acts as an interface between ITC and the local farmers. The VLEs role is to aggregate produce demand for agricultural inputs and consumer goods, and he earns a commission for his services from ITC.

HUL Shakti Programme

Project Shakti was launched by Hindustan Unilever (HUL) in 2001. HUL sells fast moving consumer goods (FMCG) to the rural populations through women VLEs known as “Shakti Ammas” The project is designed to help these women set up a direct-to-consumer retail business.

Srei Sahaj

Common Service Centres (CSC) set up using the PPP (Public Private Partnership) model by the Indian government in 2006 to provide official government services across villages in India.The most successful implementation partner of the Government Common Service Centres (CSC) program is Srei Sahaj. Srei Sahaj e-Village Limited is a subsidiary of Srei Infrastructure Finance Limited. It is a business Integrator in the field of IT infrastructure with a focus on rural India.

Table 1: General Purpose VLE networks

Organization

Basix CSC

VLE India

Villgro Store

Srei Sahaj

Sakhi Retail

ITC eChoupal

HUL Shakti

Product

E-Governance and Agri Based

E-Governance and Agri Based

Agri Based and Clean Energy

E-Governance

Daily Needs, Grocery items mostly.

Agri Inputs, Daily Needs

Daily Needs, Cook Stoves

Defining attribute

Set up by a leading MFI which provides financial loans to VLEs

Services such as ticketing and exam facilitation provided by the VLE

Relationship with local farmers.

The geographical spread and the stringency of the VLE selection process

Women  VLEs with excellent local connects. 

Set up by one of India’s largest conglomerates and focus on providing userful services to farmers. 

Women VLEs selling well known brands.

VLE Income

Wage + commission

Commission

Commission

Commission

Commission

Commission

Commission

Financial support provided by the VLE network

Loan and wage

None

Partial working capital for products.

Loan provided/facilitated.  

Case to case.

Initial equipment cost and cost of maintenance.

Facilitates working capital. 

Snapshot of Clean Energy VLE Networks

There are some VLE models that have tried to address the issue of providing clean energy access using their network.

Adharam Energy

Adharam Energy Private Limited was promoted by the “Covenant Centre for Development” (CCD) in 2006 as a commercial venture to be the distributor for British Petroleum (BP) Oorja Stoves. Started by Mr. N Muthu Velayutham, Adhram energy used members from its existing NGO to adopt the role of a VLE and promote the stoves.

TERI Lighting a Billion Lives Model

TERI lighting a billion lives uses VLEs to disseminate solar lamps through micro enterprises set-up in un-electrified villages. These enterprises are operated and managed by a local entrepreneur trained under the initiative, who rents the solar lamps every evening, for an affordable fee to the rural population.

Project Dharma

Project Dharma is a social enterprise started by Mr.Gaurav Mehta, which aims to serve the needs of rural households at the Bottom of the Pyramid (BOP) by creating a rural retail network providing customized products and services sold at a socially affordable price point. The company works with Pratham (India’s largest NGO). Products currently offered include solar lighting, smokeless cook-stoves, water purifiers and nutritional drinks, mostly manufactured by large MNCs.

Table 2: Clean Energy Access VLE networks

Organisation

Adharam Energy

TERI LaBL

Project Dharma

Product

Energy Efficient Cookstoves

Solar Lighting Products

Solar lighting, smokeless cook-stoves, water purifiers and nutritional drinks, mostly manufactured by large MNC

Defining attribute

Was set up to promote BP Oorja cookstoves. VLEs sell both cookstoves as well pellets; the latter provides a regular income.

VLEs make regular income with Solar lantern rentals.

Multiple products (with focus on clean energy) with support from Shell Foundation.

VLE Income

Commission

Solar charging rentals.

Commission

Financial support provided by VLE network

Working capital

The initial cost of setting up the VLE charging station was provided through a grant (full grant replaced by partial grant as the model has progressed).

Working capital/facilitation of loans

Specialized Clean Energy Vehicles: Proprietary Networks

In addition to the above VLE networks, there are a few clean energy companies that have experimented with the VLE model to promote their product.

Greenlight Planet- Saathi Model

Greenlight Planet sells solar lights and lanterns. Greenlight Planet has its own direct to village network of sales agents, known as “Saathis”. The “Saathis” are VLEs who go from house to house selling the lamps. Currently Greenlight Planet has over 600 Saathis in India operating out 80 talukas of Orissa and Bihar.

Nuru Energy

Nuru has developed a paddle generator which charges lights and cell phones. Nuru Energy mainly uses women as sales agents and the women entrepreneurs nominate a person from among their community to run the service station. The service station VLE makes profits based on the recharging of the solar lanterns. Nuru Energy has around 3 partners and 10 VLEs currently.

Clean energy companies have the advantage of creating dedicated marketing material to promote their products. The other advantage of a proprietary network is that the network can also be used to provide after sales service support.

Experience of micro grids in using VLE networks for promoting clean energy access

Mera Gao Power

Mera Gao Power builds and operates micro lighting utilities in Uttar Pradesh, India serving off-grid customers with lighting and mobile phone charging services. By tailoring its micro grid design to meet the specific needs of the poor, off-grid household. Mera Gao Power initially used VLE channels for collection of revenue and maintenance of systems. For this, they had to train one individual in the village to take up VLE operations. However, the VLEs faced difficulty in the collection since the villagers would be known to the individual VLE. Gradually, MGP moved off the model as MGP wanted more control over the network.

Minda NextGen Tech

Minda NexGenTech Ltd. (MNGTL) was incorporated as an entity in 2011. It has a Power Generation vertical – Covering off grid power plants, micro grids and rural electrification initiatives as outlined above, followed by grid connected power plants and finally, backward integration into cell-to-panel manufacturing. Minda Group wants to directly work with the VLEs, engaging them as clients. The company’s business model is not to provide power and earn money; rather the company is in the business of selling the system. The power plants and the gridlines will be owned by entrepreneurs. For making this possible, Minda is also focusing on the subsidies that the VLE can avail to purchase any of the power plants.

VLE - Software Support Partners

In addition to clean energy companies and VLE networks, a group of service providers that form an equally important part of the ecosystem are VLE software support partners. Most VLE networks have their proprietary software with the typical functions being:

  • Small CRM system (Records information on users).
  • Inventory Management
  • Registration for Government Services

Artoo

Started in 2010, Artoo is a technology support company focusing on creating platforms and solutions for enterprises that have field employees working at the Base of the Pyramid. Companies working on financial inclusion, health care and energy access require extensive field work coupled with paperwork for data maintenance. Artoo reduces the paperwork by transferring the data onto a cloud based platform thus enabling easy sharing among various stakeholders.

VLE - Clean energy access company  partnerships

Our objective is to help clean energy companies understand the current VLE networks, how they work and how to leverage their network. We aim to help VLE networks interested in distributing and/or servicing clean-energy products, to understand the clean energy products, marketing techniques and after sales service better. New Ventures India conducted successful workshops across the country that were aimed at facilitating partnerships between clean energy companies and VLE networks.

As the next step, New Ventures has created the following Linkedin Group. The group will help in facilitating discussions between VLE networks and Clean Energy access companies with the hope of fostering partnerships. The detailed report can be seen here

The detailed presentation of the project can be found here that provides additional details that would help VLE networks and clean energy companies’ work with each other.

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