Getting a handle on poverty

If you happen to be in Sweden and pick up a teddy bear (they call it Bo Bear there) for your child back home, don't be surprised if it has an Indian connection — and a very humble one at that. It could well have gone all the way from Pondicherry, where an enterprise run by 50 poor Dalit women makes them. Till a few years ago, they were just housewives struggling to contribute to their families. Today, apart from being equal shareholders in Bo Bear Production Unit, as the enterprise is called, they earn Rs 150 for every doll they stuff and stitch for exports.

Bo Bear Production is one of the many success stories of Hand in Hand, a non-governmental organisation or NGO working to eliminate poverty by helping the poor set up enterprises. Started in 2002 by Percy Barnevik, shortly after he retired as non-executive Chairman of ABB Ltd, the power and automation giant, Hand in Hand today operates in Tamil Nadu and Madhya Pradesh and Karnataka. So far, it has created over 4.60 lakh entrepreneurs (4.59 lakh small enterprises and the rest medium businesses) through 38,947 self-help groups or SHGs involving 5.61 lakh beneficiaries — all women. And it has disbursed Rs 400 crore as credit, either directly or through banks.

Barnevik has taken Hand in Hand's model to foreign lands as well: it is today present in Afghanistan, Brazil and South Africa. In Afghanistan, Hand in Hand has managed to create close to 6,000 entrepreneurs (both men and women). These entrepreneurs have taken up carpet weaving, embroidery, tailoring and baking. "If we can achieve this in a country like Afghanistan, we can do it anywhere," Barnevik told Business Today over the phone.

Hand in Hand's model is held up by five pillars. It uses SHGs to create entrepreneurs, focusses on eradication of child labour, creates a framework of basic health care, sets up citizen centres for access to information, and helps build projects to protect the environment.

"Poverty is multidimensional. It is not just lack of money. Poverty is also triggered and sustained by lack of education, awareness and health," says Kalpana Sankar, CEO, Hand in Hand, Tamil Nadu. N. Jayaseelan, Chief Operating Officer (COO) of the NGO in Tamil Nadu, explains that they not only offer microcredit but follow it up with training. "We prefer to build the capacity of rural women by helping them improve their communication skills, learn how to work as a team and become financially literate," he says. "Then we follow it up with specific entrepreneurship training."

Hand in Hand is strict about the savings habit: the women actually have to prove that they can save before they can get loans. "Savings means running the enterprise well… Savings do not have to be big, but have to be regular," Barnevik says.

According to Sankar, the CEO, the total savings by the women in Hand in Hand's SHGs over the past six years exceeds Rs 100 crore. Another uniqueness of Hand in Hand is that it works with the government and community instead of bypassing them, says Kalyani Rajaraman, the COO in charge of child labour eradication and health projects. "We do not want to replicate schools all over. We work with the local community to improve the infrastructure at the local government-run schools so that dropout rates can be curbed and kids are better educated," she adds.

Hand in Hand runs 57 transit schools for children with a gap in their education and the community plays a part in all these schools. This strategy also helps the NGO to exit a project once it is made sustainable. "Once we get all the kids in the village into the school and put up systems for the community to watch over them, we exit the panchayat, categorising it as a child-friendly panchayat. The community then takes the responsibility, though we do watch over it from a distance," adds Rajaraman.

So far, Hand in Hand has rescued 47,786 children from child labour and a few of them have even taken up jobs in companies such as Infosys after completing their education. It has declared over 600 panchayats as child-friendly.

For Hand in Hand, scalability is important. "We ask people coming up with projects whether we can reach a million people. Otherwise, we are not interested. Our aim is to create four million jobs in India in 10 years and 10 million worldwide," says Barnevik.

"What we are doing is releasing the power of women, who are born entrepreneurs. Give them funds and training, they take off," he adds. For him, aid is not good. He cites how hundreds of billions of dollars have flowed into Africa as aid but half the countries in the continent have not started to develop yet. Barnevik, who retired from ABB when it had over $19 billion in revenues, ensures that Hand in Hand is run like a company. "I find that 95 per cent of what I learnt in my 45 years in multinational companies is applicable to charity. It is a matter of recruiting, keeping and developing the best people. Create teamwork and have a vision that the employees can buy into and are proud of," he says.

So each field worker has a target with follow-up action, and is rewarded for good performance. Every month, the NGO produces a 20-page report on key performance figures. "I feel at home when I review these reports," he says. Hand in Hand has 2,500 employees and 37,500 volunteers.

Having tasted success in India, Barnevik is dreaming big and wants to recommend the Hand in Hand model to the United Nations for use in other needy parts of the world. "By working with the United Nations we hope to spread the model even wider," he says. To benefit one billion poor people, 250 million jobs will have to be created. This can be done only with the help of other organisations, he adds.