Rickshaw Bank Project...Rickshaw Bank Project of the tion and impact of the initiative. For primary research, the GKC 95 percent are victims of high Salient Features • CRD was established

[email protected]

December 2012

Governance Knowledge CentrePromoted by Department of Administrative Reforms and Public GrievancesMinistry of Personnel, Public Grievances and Pensions, Government of Indiahttp://indiagovernance.gov.in/

Researched and Documented by

OneWorld Foundation India

Rickshaw Bank ProjectFacilitating Asset-Based Loans to Empower the Poor

Transparency and Accountability

Governance Knowledge CentrePromoted by Department of Administrative Reforms and Public Grievances

Ministry of Personnel, Public Grievances and Pensions

Government of India

Table of Contents

Methodology ................................

Background ................................

Objective ................................................................

Programme Design ................................

Key Stakeholders ................................

Process Flow ................................

Design of the Rickshaw ................................

Components of Rickshaw Bank Project

Principles on which Rickshaw Bank functions

Monitoring ................................

Financial Model ................................

Achievement ................................

Challenges In Implementation

Potential For Replication ................................

Sustainability of the Programme

Conclusion ................................

References ................................

Appendix A – Interview Questionnaire


Governance Knowledge Centre Promoted by Department of Administrative Reforms and Public Grievances


Researched and documented by


Rickshaw Bank Project

................................................................................................................................

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................................................................................................

................................................................................................

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................................................................................................................................

................................................................................................

Components of Rickshaw Bank Project ................................................................

Principles on which Rickshaw Bank functions ................................................................

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Challenges In Implementation ................................................................................................

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Sustainability of the Programme ................................................................................................

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Interview Questionnaire ................................................................


Case Study

Economy

Rickshaw Bank Project: Asset Based Loan to

Empower Poor

December 2012

1

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Government of India

Executive Summary The Centre for Rural Development (CRD) started the Rickshaw Bank initiative in Guwahati

district of Assam in 2004 to provide a means of self employment to poor and marginalised

rickshaw community with a unique style of service delivery and a design that addresses the

causes of poverty through asset based entrepreneurship.

The first of its kind, Rickshaw Bank Project ensures sustainable

by using local resources and skill up gradation along with community participation.

project, ownership of rickshaws are transferred to pullers by renting rickshaws to

pullers with a daily rent regarded as a repayment towards the cost of the rickshaw within one

year. The bank provides allied services that promote the micro entrepreneurship among urban

poor and rural migrant families and provides rickshaw pu

income generating asset. The entire concept is designed as such so that by paying the same

amount as their daily rickshaw rental, the drivers now make an

ownership and receive the whole package i

name. This initiative also provides access to banking system for the rickshaw drivers.

package, which includes the time cost assembling of rickshaw, uniform cost, and insurance and

license cost for two years, stands at INR 14,000 and each rickshaw puller is required to pay

daily towards the cost of rickshaw including additional benefits.

In 2004 when project was started the one

9600, uniform cost was Rs 450, insurance cost for two years was Rs 350, and license cost for

both two years was Rs 400 which totals the amount around Rs 10500. All this was financed

through amount recovered from each rickshaw puller which is Rs 12,390 i.e. Rs 25 / EDI for 496

days for a maximum period of 18

rickshaw per year from the corporate advertisements till rickshaw is owned by the bank and

35% of the amount per year once the rickshaw is owned by the pullers. But at p

package cost around Rs 14,000 and each rickshaw puller has to pay Rs 40 daily towards the cost

of rickshaw including additional benefits.

Rickshaw Bank was launched

Deep Bahans were introduced in Guwahati and various cities in Assam. Today, the initiative

has been up scaled to other cities like Lucknow, Allahabad and Varanasi. By adopting a

revenue generating model for providing asset based loan,

innovative approach for empowering rural community of rickshaw pullers while at the same







Executive Summary The Centre for Rural Development (CRD) started the Rickshaw Bank initiative in Guwahati



causes of poverty through asset based entrepreneurship.

nd, Rickshaw Bank Project ensures sustainable livelihood for the poor families

by using local resources and skill up gradation along with community participation.

ownership of rickshaws are transferred to pullers by renting rickshaws to


The bank provides allied services that promote the micro entrepreneurship among urban

poor and rural migrant families and provides rickshaw pullers with a technology


amount as their daily rickshaw rental, the drivers now make an installment

ownership and receive the whole package including photo ID and a uniform in their own

name. This initiative also provides access to banking system for the rickshaw drivers.


o years, stands at INR 14,000 and each rickshaw puller is required to pay

daily towards the cost of rickshaw including additional benefits.

In 2004 when project was started the one - time cost assembling cost of rickshaw was around Rs

as Rs 450, insurance cost for two years was Rs 350, and license cost for



days for a maximum period of 18- 24 months and total amount of Rs 1800 receivable per


35% of the amount per year once the rickshaw is owned by the pullers. But at p


of rickshaw including additional benefits.

Rickshaw Bank was launched as a pilot project in 2004 when newly designed rickshaw named

Bahans were introduced in Guwahati and various cities in Assam. Today, the initiative


revenue generating model for providing asset based loan, Rickshaw Bank



Case Study

Economy


Empower Poor

December 2012

2

The Centre for Rural Development (CRD) started the Rickshaw Bank initiative in Guwahati



livelihood for the poor families

by using local resources and skill up gradation along with community participation. Under the

ownership of rickshaws are transferred to pullers by renting rickshaws to participating


The bank provides allied services that promote the micro entrepreneurship among urban

llers with a technology-superior


installment payment towards

ncluding photo ID and a uniform in their own

name. This initiative also provides access to banking system for the rickshaw drivers. The entire


o years, stands at INR 14,000 and each rickshaw puller is required to pay

time cost assembling cost of rickshaw was around Rs

as Rs 450, insurance cost for two years was Rs 350, and license cost for



24 months and total amount of Rs 1800 receivable per


35% of the amount per year once the rickshaw is owned by the pullers. But at present the entire


as a pilot project in 2004 when newly designed rickshaw named

Bahans were introduced in Guwahati and various cities in Assam. Today, the initiative


Rickshaw Bank presents an





Government of India

time addressing environmental concerns and making it a sustainable initiative in term,

economic mobility, social relevance and establishing legal status for drivers.

Methodology The Governance Knowledge Centre (GKC)

documents best practices in governance in

India in support of further replication. For this

purpose, selected initiatives that are

significantly contributing towards the

betterment of public service delivery are

identified by the GKC research team. The team

conducted extensive secondary research using

credible web sources to establish the suitability

of the innovative approach adopted under the

Rickshaw Bank Project initiative in Guwahati,

Assam for providing ownership

rickshaw through asset based loans.

Having recognised Rickshaw Bank project as an innovative effort, the next step was to identify

the key stakeholders involved in the project and schedule interviews with them to gain a

deeper insight into the opera

team conducted a semi-structured interview with the Founder of this project who is also the

Director of CRD.

Efforts have been made to provide objective information in the document. However,

implementer of the project was interviewed, the study is limited in terms of documentation of

views and responses of the beneficiaries.

Background Nearly 8 million rickshaw pullers exist in India out of which

daily rental fees. Only 10 percent of rickshaw pullers have ownership of their rickshaws

whereas rest depends on the private owner by paying daily rental fees which is around Rs. 25

to Rs. 40 and varies according to the place. In addition, they face many other p

bearing the cost of any accidental damage to the rickshaw, physical and mental harassment,









The Governance Knowledge Centre (GKC)

documents best practices in governance in

India in support of further replication. For this

purpose, selected initiatives that are

significantly contributing towards the

betterment of public service delivery are

fied by the GKC research team. The team

conducted extensive secondary research using

credible web sources to establish the suitability

of the innovative approach adopted under the

Rickshaw Bank Project initiative in Guwahati,

Assam for providing ownership of the

rickshaw through asset based loans.



deeper insight into the operation and impact of the initiative. For primary research, the GKC

structured interview with the Founder of this project who is also the

Efforts have been made to provide objective information in the document. However,


views and responses of the beneficiaries.

Nearly 8 million rickshaw pullers exist in India out of which 95 percent are victims of high

rental fees. Only 10 percent of rickshaw pullers have ownership of their rickshaws


to Rs. 40 and varies according to the place. In addition, they face many other p


Salient Features

• CRD was established in 1994

• Launched Dipbahan Rickshaw

bank in Assam in 2004

• Issue asset based loan

• Entire cost of rickshaw Rs 14,000

• Replication of Rickshaw bank

project in three cities of Uttar

Pradesh

• Today there are 5,000 Dipbahan

rickshaws in Assam

• 1700 have become owners.


Case Study

Economy


Empower Poor

December 2012

3





tion and impact of the initiative. For primary research, the GKC

structured interview with the Founder of this project who is also the

Efforts have been made to provide objective information in the document. However, only the


95 percent are victims of high

rental fees. Only 10 percent of rickshaw pullers have ownership of their rickshaws


to Rs. 40 and varies according to the place. In addition, they face many other problems such as


CRD was established in 1994

Launched Dipbahan Rickshaw

bank in Assam in 2004

Issue asset based loan

Entire cost of rickshaw Rs 14,000

Replication of Rickshaw bank

project in three cities of Uttar

Today there are 5,000 Dipbahan

rickshaws in Assam

1700 have become owners.




Government of India

and financial problems that force them to migrate from one place to another without much

improvement in their living conditions. However, the lack of

are not able to provide adequate facilities to their family. Rickshaw pullers are considered

among the poorest of employed urban dwellers because of their low income and inability to

access basic public services

marginalized sector of the Indian society as they migrate from rural areas to look for work and

have to suffer a lot due to lack of their identity or official residential address. . Due to their

vulnerable conditions they are also deprive of getting access to

such as loans, savings, insurance, etc.

Recognizing these shortcomings among millions of Indian rickshaw pullers, the Rickshaw Bank

of Centre for Rural Development (CRD) in 2004 decided to launch Rickshaw Bank Project as

one of the flagship programmes of CRD to provide a means of self employment

members of the poor and marginalized rickshaw community who live in urban slums. The idea

is to provide a newly designed rickshaw named Deep Bahan, with insurance and license facility

at an affordable cost with facilitating their solidarity for ri

issuing asset based loan to the rickshaw pullers who can repay the debt in daily installments

over a period of 15- 18 months which eventually leads to ownership of the rickshaw they were

offered initially. Under Rickshaw Ba

rickshaw pullers so they can own their respective rickshaws

rickshaw. There is also a provision of bringing a new puller under the purview of the

programme to continuing using the contribution made by sponsor.

The Rickshaw Bank project is a part of CRD

a founder of this project. CRD has been in operation in North

for sustainable development through a holistic approach. The

sustainable livelihood for the poor families by using local resources and skill up gradation

along with community participation. CRD holds the responsibility of manufacturing rickshaws

by mobilizing the resources from corporate and individual tax payers. The project thus aims at

giving rickshaw pullers dignity and the chance to own their respective rickshaws within a

stipulated period of time after fulfilling the criteria of daily payment.

Rickshaw Bank project caters to the concept of CRD of transferring ownership of rickshaw by

renting rickshaws to participating pullers with a daily rent regarded as a repayment towards

the cost of the rickshaw so to become the owner of the vehicle within o

section 35 of the income tax act in July 2003 and approved by the National Committee for the

Promotion of Social Welfare the project got notified. The bank also provides allied services that

promote the micro entrepreneurship among urban








improvement in their living conditions. However, the lack of social security and dignity they



access basic public services. Rickshaw pulling community is considered to be the most



ditions they are also deprive of getting access to basic formal banking services

such as loans, savings, insurance, etc.



one of the flagship programmes of CRD to provide a means of self employment


provide a newly designed rickshaw named Deep Bahan, with insurance and license facility

at an affordable cost with facilitating their solidarity for rights and livelihood. It includes


18 months which eventually leads to ownership of the rickshaw they were

offered initially. Under Rickshaw Bank money is collected and finance is provided to the

rickshaw pullers so they can own their respective rickshaws after the puller paid the full cost of


nuing using the contribution made by sponsor.

The Rickshaw Bank project is a part of CRD, an NGO started by Dr. Sarmah in 1994 who is also

CRD has been in operation in North-East India with a vision to work

opment through a holistic approach. The mission of CRD is to ensure



mobilizing the resources from corporate and individual tax payers. The project thus aims at


stipulated period of time after fulfilling the criteria of daily payment.



the cost of the rickshaw so to become the owner of the vehicle within o



promote the micro entrepreneurship among urban poor and rural migrant and provides


Case Study

Economy


Empower Poor

December 2012

4


social security and dignity they



pulling community is considered to be the most



basic formal banking services



one of the flagship programmes of CRD to provide a means of self employment for the


provide a newly designed rickshaw named Deep Bahan, with insurance and license facility

ghts and livelihood. It includes


18 months which eventually leads to ownership of the rickshaw they were

nk money is collected and finance is provided to the

after the puller paid the full cost of


, an NGO started by Dr. Sarmah in 1994 who is also

East India with a vision to work

mission of CRD is to ensure



mobilizing the resources from corporate and individual tax payers. The project thus aims at




the cost of the rickshaw so to become the owner of the vehicle within one year. Under the



poor and rural migrant and provides




Government of India

rickshaw pullers with a technology superior income generating asset. The “One

repayment” is a daily repayment system to meet the needs of the rickshaw puller and his

family and creates opportunity for the puller

repayment system provides a way to own their respective rickshaws along with other facilities

such as accident insurance, a uniform, and shoes, licenses, identity card which helps them to

overcome poverty, old age risks, and unemployment.

Rickshaw Bank was launched

rickshaw was developed by IIT, Guwahati. This project was initially started in Guwahati and

was later expanded to other areas in Assam

flagship project of CRD. The project has been replicated in other places too like Agartala, Surat

and Chennai and has benefited more than 6000 people over a period of time. Similar to this

concept the CRD has also developed different models in different states such as ‘Momo cart’,

‘vegetable cart’ and fast food cart based on the requirement which follows the same process of

pullers paying the rent and obtaining its ownership.

Objective Rickshaw Bank project aims

them achieve ownership of the rickshaws they pull and issue an asset based loan and insurance

guarantee scheme. It also aims to provide livelihood options to rickshaw pullers and their

family.

Programme Design

Key Stakeholders

• Indian Institute of Technology(IIT), Guwahati

• Indian Oil Corporation (IOC)

• Oil and Natural Gas Corporation (ONGC)

• Hindustan Lever Limited (HLL)

• Punjab National Bank (PNB)

• Industrial Credit and Investment

• Millepede Foundation







rickshaw pullers with a technology superior income generating asset. The “One


family and creates opportunity for the pullers to gain social security through loan system. The



old age risks, and unemployment.

Rickshaw Bank was launched as a pilot project in 2004. The first type of newly designed


was later expanded to other areas in Assam and outside Assam too and has emerged as a

The project has been replicated in other places too like Agartala, Surat


o developed different models in different states such as ‘Momo cart’,


pullers paying the rent and obtaining its ownership.

Rickshaw Bank project aims to elevate the status of thousands of rickshaw pullers by helping



Programme Design

Indian Institute of Technology(IIT), Guwahati

Indian Oil Corporation (IOC)

Oil and Natural Gas Corporation (ONGC)

Hindustan Lever Limited (HLL)

Punjab National Bank (PNB)

Industrial Credit and Investment Corporation of India Bank (ICICI)

Millepede Foundation


Case Study

Economy


Empower Poor

December 2012

5

rickshaw pullers with a technology superior income generating asset. The “One –window


s to gain social security through loan system. The



as a pilot project in 2004. The first type of newly designed


and outside Assam too and has emerged as a

The project has been replicated in other places too like Agartala, Surat


o developed different models in different states such as ‘Momo cart’,


to elevate the status of thousands of rickshaw pullers by helping



Bank (ICICI)




Government of India

• McKinsey & Co

• American India Foundation(AIF)

Process Flow

Design of the Rickshaw

Rickshaw Bank Project was launched in

2004 as a pilot project in Guwahati

later expanded to other areas in Assam too.

Rickshaw Bank provides pullers with

superior technological and income

generating asset named Dee Bahan. The

rickshaw was first designed under

Department of Design, Indian Institute

Technology (IIT), Guwahati in 2003.

November 2010, a conventional rickshaw costs

Rs. 10,000 to Rs.11, 000 in Guwahati market.

initiative is designed to meet the needs of the rickshaw puller through “one window

repayment” which provides efficient services and help them to gain security .The repayment

made by the pullers eventually go towards their ownership of the rickshaw. Apart from

providing ownership of rickshaw the programme also provides accident insurance, uniform

and shoes, license, photo identity card and related training. The bank also provides allied

services for promoting the micro entrepreneurship activities among urban poor and rural

migrants. The need for the new rickshaw was assessed on the basis of

by IIT Guwahati and it was observed that people are facing difficulties in getting on and off the

rickshaw the seating arrangements for the old rickshaws were not comfortable and due to

inclined footboard it was difficult to carry anything on

effective and maintenance-free system and to overcome all these difficulties a newly designed

rickshaw was manufactured under the initiative of IIT Guwahati. The design included a

tubular structure with sub-componen

save the rickshaw pullers from damage in their limbs in case of an accident front guard were

planned to be added. Thus based on the required changes and addition of subsystems, the

manufacturing setup was planned and executed with which led to the creation of an

ergonomically designed passenger

pullers dignity and the chance to own their respective rickshaws.







Figure 1: Model of Deep Bahan

Source:http://www.vikalpa.com/pdf/article

s/2011/Pages-from-Vikalpa36

American India Foundation(AIF)

Process Flow

Rickshaw Bank Project was launched in

2004 as a pilot project in Guwahati and was

later expanded to other areas in Assam too.

Rickshaw Bank provides pullers with

superior technological and income

generating asset named Dee Bahan. The

rickshaw was first designed under

Department of Design, Indian Institute of

uwahati in 2003. In

November 2010, a conventional rickshaw costs

Rs. 10,000 to Rs.11, 000 in Guwahati market. The unique service delivery system of this


ich provides efficient services and help them to gain security .The repayment



shoes, license, photo identity card and related training. The bank also provides allied


migrants. The need for the new rickshaw was assessed on the basis of market surv



inclined footboard it was difficult to carry anything on the rickshaw. There was a need for cost

free system and to overcome all these difficulties a newly designed


components for the platform chassis, structure for the seat, etc. To



setup was planned and executed with which led to the creation of an

ergonomically designed passenger-friendly rickshaw. The project aimed at giving rickshaw

pullers dignity and the chance to own their respective rickshaws.


Case Study

Economy


Empower Poor

December 2012

6

Model of Deep Bahan

http://www.vikalpa.com/pdf/article

Vikalpa36-4-149-159.pdf

Process Flow

about

The unique service delivery system of this


ich provides efficient services and help them to gain security .The repayment



shoes, license, photo identity card and related training. The bank also provides allied


market survey conducted



the rickshaw. There was a need for cost

free system and to overcome all these difficulties a newly designed


ts for the platform chassis, structure for the seat, etc. To



setup was planned and executed with which led to the creation of an

The project aimed at giving rickshaw




Government of India


The programme not only covered providing ownership of rickshaws to rickshaw pullers but

also covered their licensing fee, uniform and life insurance. These efforts helped pullers to gain

social security and dignity and many livelihood options.

Important components that are covered under this project are:

Providing technological superior rickshaws

The newly designed rickshaws by IIT Guwahati are more ergonomically and aerodynamically

designed as compare to the earlier rickshaws. This makes it easier for the puller and

comfortable for the passenger because of the seating arrangement. There is increase in

consumer demand for Rickshaw Bank vehicles.

Providing rickshaws to pullers in groups of five

In order to manage the savings, repairing the rickshaws, updating the busin

collecting rent, pullers who are members of the Rickshaw bank form garages in different parts

of the city to monitor all these activities and among them five voluntarily form a group and the

other five operate from one garage or meeting poi

Collecting repayment on a daily basis

Repayment by puller is collected on daily basis and the Rickshaw Bank applies this revenue to

the cost of the vehicle which includes insurance premiums, driver licenses, uniforms and

operating costs.

Raising funds through advertisements

Loans are provided at commercial rates from formal financial institutions which are further

used to build internal capacity. Additional revenue is also generated by advertising the ad on

the back of the vehicles which also helps to

payments on time.

Licenses and training on rules and regulations








not only covered providing ownership of rickshaws to rickshaw pullers but


social security and dignity and many livelihood options.

are covered under this project are:

Providing technological superior rickshaws




consumer demand for Rickshaw Bank vehicles.

Providing rickshaws to pullers in groups of five

In order to manage the savings, repairing the rickshaws, updating the busin



other five operate from one garage or meeting point.

Collecting repayment on a daily basis



through advertisements



the back of the vehicles which also helps to reduce risk in case pullers are

Licenses and training on rules and regulations


Case Study

Economy


Empower Poor

December 2012

7

not only covered providing ownership of rickshaws to rickshaw pullers but





In order to manage the savings, repairing the rickshaws, updating the business records and







reduce risk in case pullers are not able to repay their




Government of India

In each locality bank form a partnership with the municipal corporation and police to provide

licenses to the rickshaw drivers to red

rickshaw puller community.

Uniforms

Rickshaw Bank also provides two uniforms to each driver along with the new rickshaw as

these uniforms will help to maintain uniformity and will be easy to identify drive

associated with rickshaw bank project.

Property and casualty insurance

Rickshaw Bank has formed partnerships with various insurance companies to provide property

and casualty coverage for drivers as they have no access to property insurance, to

accidental damage cost of their vehicles and have to take help from money lenders who lend at

high rates of interest. Each rickshaw is insurances for INR 9,000, the puller is insurance against

accidental injury or death for INR 50,000 and there i

passengers for INR 10,000 each which increase the passenger’s chances to hire the vehicle more.

Cash loans

Cash loans are typically under INR 15,000 and have to be paid back in less than a year. Once

the driver fully repays his loan on time he can apply for a cash loan to serve his needs and

family needs. Rickshaw pullers who are associated with bank project for a long time are eligible

for larger loans also and bank is also making efforts to expand the housing loan

with National Housing Bank of India.

Health care services

Rickshaw bank also arranges for low cost access to medical health care services for pullers and

their families. In collaboration with Netralaya an eye hospital in Guwahati it has provide

eye treatment to many rickshaw pullers. Under this project health unit is also set up to help the

community with daily health related problems and also provides medicines at low and

affordable prices.


Removing constraints

Rickshaw Bank works to remove constraints that prevent drivers from accessing the capital and

insurance and ownership of rickshaws by providing them with various financial services,








licenses to the rickshaw drivers to reduce the harassment and increase the dignity of the


these uniforms will help to maintain uniformity and will be easy to identify drive

associated with rickshaw bank project.

Property and casualty insurance


and casualty coverage for drivers as they have no access to property insurance, to



accidental injury or death for INR 50,000 and there is also a provision for insurance for the



ly repays his loan on time he can apply for a cash loan to serve his needs and


for larger loans also and bank is also making efforts to expand the housing loan

with National Housing Bank of India.


their families. In collaboration with Netralaya an eye hospital in Guwahati it has provide







Case Study

Economy


Empower Poor

December 2012

8


uce the harassment and increase the dignity of the


these uniforms will help to maintain uniformity and will be easy to identify drivers who are


and casualty coverage for drivers as they have no access to property insurance, to cover the



s also a provision for insurance for the



ly repays his loan on time he can apply for a cash loan to serve his needs and


for larger loans also and bank is also making efforts to expand the housing loan programme


their families. In collaboration with Netralaya an eye hospital in Guwahati it has provided free








Government of India

licensing facility, and identity proof. It covers damage

to the pullers and provides cash loans to drivers who hold credit history with bank.

Increasing community’s capacity

Rickshaw Bank works to increase the community’s capacity to earn and save. The newly design

rickshaws are more comfortable for the passengers and allow pullers to carry more passengers

in a single day. Through collaboration with local institutions bank red

necessities, arranges free healthcare, affordable clothing, and also provide access to cooking

LPG cylinders. After the pullers gain ownership of the rickshaws by completing the process of

payment for almost one year, all the future inc

Ensuring sustainability and scalability of programme

Since the project inception it has been able to provide over 6,000 rickshaws and has improved

the lives of many rickshaw pullers and their family members. Th

forward on a large scale by spreading itself in other states too. The Rickshaw Bank works with

the motive to empower the rickshaw pullers community and help them to gain their identity

and dignity and many other livelihood options.

Monitoring

The officials of Rickshaw bank provide support to Rickshaw puller community and their family

as and when required. This is done through practicing three

Coordinator, Branch Coordinator, and then reporting to Ch

Coordinator is responsible for daily collection and problems of pullers; the Field Supervisor is

responsible for collection of all the payments made by the Field Coordinator and solving their

problems; the Branch Coordinato

reporting to the Chief Executive Officer of Rickshaw Bank through the Assistant Director. The

Field Coordinator supervises the garages or the meeting points and each garage or meeting

point serves as the collection centre for the daily repayment. The accountant ensures updating

of daily accounts and report of nonpayment for necessary follow up. Hence for any sort of

grievance redressal and monitoring function, rickshaw puller community is encouraged to

organise meetings among themselves and solve issues through a common platform without

any need for outside intervention.

Financial Model

Cost break up unit

In 2004 when the project was started the assembling cost of rickshaw was around Rs 9600,

uniform cost was Rs 450, insurance cost for two years was Rs 350, and license cost for both two







licensing facility, and identity proof. It covers damage caused to the rickshaw as well as injury


Increasing community’s capacity



in a single day. Through collaboration with local institutions bank red



payment for almost one year, all the future income they earn goes to them and their family.

Ensuring sustainability and scalability of programme


the lives of many rickshaw pullers and their family members. The project seeks to move



and dignity and many other livelihood options.


This is done through practicing three -tier system which includes Field

Coordinator, Branch Coordinator, and then reporting to Chief Executive Officer.



problems; the Branch Coordinator is responsible for a given geographical territory and



the collection centre for the daily repayment. The accountant ensures updating




any need for outside intervention.


cost was Rs 450, insurance cost for two years was Rs 350, and license cost for both two


Case Study

Economy


Empower Poor

December 2012

9

caused to the rickshaw as well as injury




in a single day. Through collaboration with local institutions bank reduces costs of basic



ome they earn goes to them and their family.


e project seeks to move




tier system which includes Field

ief Executive Officer. The Field



r is responsible for a given geographical territory and



the collection centre for the daily repayment. The accountant ensures updating





cost was Rs 450, insurance cost for two years was Rs 350, and license cost for both two




Government of India

years was Rs 400 which totals the amount around Rs 10500. All this was financed through

amount recovered from each rickshaw puller which is Rs 12,390 i.e. Rs 25 / EDI f

a maximum period of 18- 24 months and total amount of Rs 1800 receivable per rickshaw per

year from the corporate advertisements till rickshaw is owned by the bank and 35% of the

amount per year once the rickshaw is owned by the pullers.

But at present the entire package cost around Rs 14,000 and each rickshaw puller has to pay Rs

40 daily towards the cost of rickshaw including additional benefits.

Business Model

This business model of this project is based on revenue from loan repayments

revenues and other services and fees and this income covers the manufacturing, management

and finance costs.

Revenue drivers include repayments from rickshaw pullers

pullers and this system of common liability

made on time, then the advertisement revenue

small businesses who want to post an ad for only a week or month on the back of each

rickshaw which cost only a fra

repayments made by members who hold good history and are

on a pre agreed condition, so the puller has to pass various phases to avail loans for other needs

such as household goods, children’s education , or for marriage purpose

and membership fees this includes revenue obtained through a non refundable deposit on the

rickshaw which is paid in one or two installments and a refundable membership

revenues from franchises in return for capacity building support

will help to reach to millions of poor people and will develop partnerships

bank derive a small percentage service fee but

international donor organisations

supports the initial set up , capacity building and knowledge assimilation. Funds are also

provided for to engage in further outreach with rickshaws. Thus all the above are the sources

which generate revenue for the Rickshaw Bank project.

Cost drivers include cost for manufacturing, administration and finance.

vehicles are manufactured on a sm

ultimately increase if outsourced to meet the target of producing rickshaws on large scale,

administrative and operational

pullers and to reduce paperwork so the investment is made in such software to expand the








amount recovered from each rickshaw puller which is Rs 12,390 i.e. Rs 25 / EDI f

24 months and total amount of Rs 1800 receivable per rickshaw per


amount per year once the rickshaw is owned by the pullers.

ut at present the entire package cost around Rs 14,000 and each rickshaw puller has to pay Rs

40 daily towards the cost of rickshaw including additional benefits.

This business model of this project is based on revenue from loan repayments


repayments from rickshaw pullers which cover daily payments from

pullers and this system of common liability group ensures that 85 percent of payments are

advertisement revenue makes it attractive for large businesses and for


rickshaw which cost only a fraction as much to rent, the additional loan payments

repayments made by members who hold good history and are eligible for other types of loans


s household goods, children’s education , or for marriage purpose

this includes revenue obtained through a non refundable deposit on the

rickshaw which is paid in one or two installments and a refundable membership

revenues from franchises in return for capacity building support , bank believes that franchise model

will help to reach to millions of poor people and will develop partnerships

bank derive a small percentage service fee but with time it declines and lastly

organisations donors play a very significant role in providing funds that


n further outreach with rickshaws. Thus all the above are the sources

which generate revenue for the Rickshaw Bank project.

Cost drivers include cost for manufacturing, administration and finance. Manufacturing vehicles

vehicles are manufactured on a small scale to avoid the increase in production cost but it will


expenses include the need for better software as to reach more



Case Study

Economy


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December 2012

10


amount recovered from each rickshaw puller which is Rs 12,390 i.e. Rs 25 / EDI for 496 days for

24 months and total amount of Rs 1800 receivable per rickshaw per


ut at present the entire package cost around Rs 14,000 and each rickshaw puller has to pay Rs

This business model of this project is based on revenue from loan repayments, advertising


which cover daily payments from

group ensures that 85 percent of payments are

makes it attractive for large businesses and for


additional loan payments include

eligible for other types of loans


s household goods, children’s education , or for marriage purpose, the member deposits

this includes revenue obtained through a non refundable deposit on the

rickshaw which is paid in one or two installments and a refundable membership deposit , then

bank believes that franchise model

will help to reach to millions of poor people and will develop partnerships and though the

and lastly support from

donors play a very significant role in providing funds that


n further outreach with rickshaws. Thus all the above are the sources

Manufacturing vehicles,

all scale to avoid the increase in production cost but it will


include the need for better software as to reach more





Government of India

outreach number, and lastly the bank access to

banks have offered help in terms of extending loans at their commercial interest rate and bank

pays premium to insurance companies for the pullers.

Franchising model

The rickshaw bank project is also in partnership with American India Foundation (AIF) which

has provided capacity building and support in the form of first loss deposit guarantee to

leverage loans from various banks .CRD has organised various meetings with AIF and many

other organisations to discuss about this project The Punjab National Bank (PNB), AIF and

CRD made a three way agreement to expand their project in three cities in Uttar Pradesh

where CRD will provide support to the new NGOs to establish the assembly unit and to start

other activities. To reach a large number of people Rickshaw Bank has developed

model. Under this model CRD shares it vision, provides finance and also provide expertise to a

local microfinance partner who provides a local network of field and branch coordinators.

Following are the day to day activities which are being oper







outreach number, and lastly the bank access to finance has become easier as many national

lp in terms of extending loans at their commercial interest rate and bank

pays premium to insurance companies for the pullers.

bank project is also in partnership with American India Foundation (AIF) which

city building and support in the form of first loss deposit guarantee to



ade a three way agreement to expand their project in three cities in Uttar Pradesh


other activities. To reach a large number of people Rickshaw Bank has developed



Following are the day to day activities which are being operated within the team:


Case Study

Economy


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December 2012

11

has become easier as many national

lp in terms of extending loans at their commercial interest rate and bank

bank project is also in partnership with American India Foundation (AIF) which

city building and support in the form of first loss deposit guarantee to



ade a three way agreement to expand their project in three cities in Uttar Pradesh


other activities. To reach a large number of people Rickshaw Bank has developed franchise



ated within the team:




Government of India

Impact/Achievements

Economic Mobility

Rickshaw Bank project has been designed to create positive impact on the lives of rickshaw

puller community. First they can now own the rickshaws within a restricted timeframe as

compare to before this programme when only few could afford to own their rick

high daily fees and interest rates charged by owners. Second, rickshaw pullers earn more

money as they have to pay less each day for the vehicle as due to the new design of the

Mobilization Coordinator:

600-2000 pullers

Rickshaw puller’s

Figure2: Daily operations of CRD, Branches and Franchisees

Source: innovations/Tech4Society 2010







Impact/Achievements



compare to before this programme when only few could afford to own their rick



Centre for Rural Development

Rickshaw Bank

Branch Coordinator:

600-2000 pullers

Coordinator: Accountant:

600-2000 pullers Field Coordinator:

125-250 pullers

Garage Owners: 25- 50 pullers

Rickshaw puller’s groups: 5 pullers per group


Source: innovations/Tech4Society 2010


Case Study

Economy


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December 2012

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compare to before this programme when only few could afford to own their rickshaws due to



Accountant:

pullers

pullers per group





Government of India

rickshaw they can actually carry more passengers per day. Third, p

open their accounts wit the bank with their own names and can avail various other services like

borrowing money for other ventures.

Social Status

The rickshaw bank has also proved its social relevance in terms of improving th

pullers and providing them with various livelihood options. It has offered various facilities

such as eye care for them and their families, driving insurance for the pullers which has made

their business more respectful and dignified their perso

access to accident insurance, health insurance and low cost medicines. Even the passengers are

preferring the newly design Deep Bahans because of their unique design and organisational

identity attached to it.

Improving Law and Governance

After the implementation of this project the law and order within the rickshaw puller

community has improved. This has been reflected in term of issuing licenses more easily to

pullers and has enabled the government to monitor the ci

project has also reduced corruption thereby decreasing the possibility of extracting bribes from

pullers for not having legal registration.

Thus overall Rickshaw Bank is helping pullers to improve their standard of living

become more financially independent by creating influential impact on the community making

it financially sustainable.

Achievement The Rickshaw Bank has been awarded various awards for its unique work and empowering

rickshaw puller community:

• The Citizen Base Investment award 2003

• The Change makers Innovation Award Competition2006

• Micro Finance Process Excellence Award 2006

• Recognition of this project under Limca Book of Records 2006







rickshaw they can actually carry more passengers per day. Third, pullers are getting a chance to


borrowing money for other ventures.

The rickshaw bank has also proved its social relevance in terms of improving th



their business more respectful and dignified their personalities. Rickshaw drivers now have



Law and Governance



pullers and has enabled the government to monitor the citizens and gain tax revenues. The


pullers for not having legal registration.

Thus overall Rickshaw Bank is helping pullers to improve their standard of living


The Rickshaw Bank has been awarded various awards for its unique work and empowering

Citizen Base Investment award 2003

The Change makers Innovation Award Competition2006

Micro Finance Process Excellence Award 2006

Recognition of this project under Limca Book of Records 2006


Case Study

Economy


Empower Poor

December 2012

13

ullers are getting a chance to


The rickshaw bank has also proved its social relevance in terms of improving the lives of



nalities. Rickshaw drivers now have





tizens and gain tax revenues. The


Thus overall Rickshaw Bank is helping pullers to improve their standard of living and to


The Rickshaw Bank has been awarded various awards for its unique work and empowering




Government of India

Challenges in ImplementationLack of financial support

In the beginning, the project did not receive much support from any donor agency or bank to

help the rickshaw drivers. Therefore,

the advertisement cost which was offered was 96 percent cheaper than th

with the establishment of the model with this sponsorship , banks started coming forward to

support the programme.

Lack of resources

Due to limited funds and manpower resource it is difficult to upscale the project in urban and

semi-urban areas even if there is a demand for such service. Besides, moblising the rickshaw

pullers in the urban areas there is a need to make lots of investment in capacity building

programmes and field level effort. Thus the challenge lies in overcoming the

up scaling the programme which is now visible as the impact of this project is bringing

different educational, financial, technical and social institutes forward for the overall growth of

the rickshaw and the rickshaw puller community.

Other challenges

The setting up of rickshaw bank project involved challenges such as

daily payments, no payment of loans, ensuring reliable partnerships, mobilizing resources for

expansion. However CRD is contemplating measures such

which regularly monitor the activities of this project and efforts are being made to make this

project more effective and sustainable.

Potential For ReplicationBy mobilizing community support and demonstrating the social relevance and economic

viability of the initiative, the CRD has been able to replicate Rickshaw Bank project in three

cities in Uttar Pradesh: Varanasi, Allahabad and Lucknow in 2008 and the proj

handed to Jan Mitra Nyas, Arthik Anusandhan Kendra and Bharatiya Micro Credit

respectively. The project holds capacity to be replicated in new cities in sustainable manner

through NGOs led by bank.

Rickshaw Banks strength lies in its ability to a

couple it with effective resources and adequate participation of the puller community. The use

of such an approach provides Rickshaw Bank with vast potential for replication, not just in the

state of Assam but all across the country. With a reported rough estimate of eight million







Implementation

beginning, the project did not receive much support from any donor agency or bank to

help the rickshaw drivers. Therefore, the initial venture capital was raised from the corporate as

the advertisement cost which was offered was 96 percent cheaper than th



urban areas even if there is a demand for such service. Besides, moblising the rickshaw

pullers in the urban areas there is a need to make lots of investment in capacity building

programmes and field level effort. Thus the challenge lies in overcoming the

up scaling the programme which is now visible as the impact of this project is bringing

different educational, financial, technical and social institutes forward for the overall growth of

the rickshaw and the rickshaw puller community.

The setting up of rickshaw bank project involved challenges such as problem of defaulting

daily payments, no payment of loans, ensuring reliable partnerships, mobilizing resources for

expansion. However CRD is contemplating measures such as formation of three tier structures

which regularly monitor the activities of this project and efforts are being made to make this

project more effective and sustainable.

Potential For Replication By mobilizing community support and demonstrating the social relevance and economic

viability of the initiative, the CRD has been able to replicate Rickshaw Bank project in three

cities in Uttar Pradesh: Varanasi, Allahabad and Lucknow in 2008 and the proj

handed to Jan Mitra Nyas, Arthik Anusandhan Kendra and Bharatiya Micro Credit

respectively. The project holds capacity to be replicated in new cities in sustainable manner

Rickshaw Banks strength lies in its ability to adopt an unique and innovative approach and

couple it with effective resources and adequate participation of the puller community. The use

of such an approach provides Rickshaw Bank with vast potential for replication, not just in the

across the country. With a reported rough estimate of eight million


Case Study

Economy


Empower Poor

December 2012

14

beginning, the project did not receive much support from any donor agency or bank to

the initial venture capital was raised from the corporate as

the advertisement cost which was offered was 96 percent cheaper than the commercial rate but



urban areas even if there is a demand for such service. Besides, moblising the rickshaw

pullers in the urban areas there is a need to make lots of investment i

Rickshaw Bank Project...Rickshaw Bank Project of the tion and impact of the initiative. For primary research, the GKC 95 percent are victims of high Salient Features • CRD was established

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