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Venture capital meets microfinance at the innovative nonprofit Be! Fund.
“This is about people helping themselves and helping the other people in the area that they live in. We thought it would create a kind of ripple effect,” said Anusha Bhagat, chief operating officer at UBS.
Since getting started in early 2011, the Be! Fund has invested $50,000 in 15 entrepreneurs in Karnataka, as well as one in Uttarakand and another in Delhi. Now, with added funding from DeutscheBank and UBS, the fund is expanding to the Mumbai and Maharashtra and aims to invest another $50,000 before the end of the year. A grant from the US Agency for International Development (USAID) is also on the way.
The stories are inspiring.
Take Krishnappa's tailoring business. For the past four years, he was working as a tailor in a local garment factory along with other disabled workers. But his employers paid them half what they gave the other workers. His idea: Start his own shop, hire disabled workers, and give them equal pay for equal work.
Gowramma, another Karnatka entrepreneur, employs three neighborhood women making a nutritional supplement for HIV positive people from poor communities. Because she makes the powder out of her home, it costs the local nonprofit 25 percent less than the commercial product they were using before. Earning a profit of around $200 a month, she's already generating a “return” for investors – though the Be! Fund plows the repayments they receive into other new businesses.
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Twenty-six-year-old Radhakrishna M. used $6,000 from the Be! Fund to buy a truck and get his commercial vehicles license so that the farmers of his isolated of Nagamangala Village would have a cheap and reliable way to get their produce to the market. Previously, they were only able to make the 10-mile trip twice a month.
Within three months of buying the truck, Radhakrishna was making a profit, and has already paid $2,000 back to the fund. Now 45 area farmers can grow high-margin produce without fear of it rotting before it gets to market.
Part of an agricultural community that primarily grows areca or betel nut — which is chewed like tobacco by millions in Southeast Asia and India — 30-year-old Archana Rajendra Hegde used about $3,000 in start-up capital from the Be! Fund to buy pressing machines to turn areca leaves and waste products into environment-friendly disposable plates, replacing plastic.
Starting out with just six employees, all poor women who used the extra cash to send their kids to school, Hegde soon discovered a lucrative export market for her product. And today, barely a year after starting her company, she employs 83 women.
“It's literally one woman who hired a village,” said Heydlauff.
It's not easy, and there have been setbacks. When the electricity board shut off his power, Krishnappa lost employees who couldn't afford to be out of work even for a short time.
But he's certain he'll win his former colleagues back. "I just reopened a couple months ago," Krishnappa said. "Once they see I'm going to survive, they'll come back. I already have one now as a trainee."