NextBillion

MUMBAI: Tata Capital's private equity fund has acquired a 10% stake in Roots Corporation, which runs budget hotel chain Ginger. The stake-purchase in Ginger was completed by the $550 million Tata Opportunities Fund and it marks the one-year-old fund's debut investment, said sources familiar with the matter.

Tata Opportunities Fund, spearheaded by Mukund Rajan, is a third party private equity fund in which several global institutions are investors. The deal had valued the loss- making Ginger Hotels at around Rs 1,000 crore, sources added. Tata Opportunities Fund is the largest ticket-sized fund within Tata Capital's private equity franchise that includes a healthcare fund and an innovation fund. It had a final close of $550 million in September this year. A final tranche of $100 million was raised during the last quarter.

Roots Corporation, an arm of Indian Hotels Company (Taj hotels) entered into budget hotels through the launch of Ginger in June 2004. The country's first smart basics hotels concept was developed in association with renowned corporate strategy thinker C K Prahalad. Sources explained that Taj's move to bring in a financial investor in Roots Corporation was to deleverage its balance sheet. The seven-year-old Ginger chain is yet to make money. It recorded a loss of Rs 8.8 crore on a turnover of Rs 78 crore in 2010-11.

PEORIA, Ill., Nov. 29, 2011 /PRNewswire/ -- Caterpillar Inc. (NYSE: CAT) today announced that the Caterpillar Foundation and Water.org announced a $3 million partnership to reach more than 218,000 people with clean water and sanitation over the next three years. The program will support a significant expansion of Water.org's WaterCredit activities in India, and also fund a market assessment to explore the launch of WaterCredit in Indonesia for the first time. WaterCredit facilitates small loans for water and sanitation access for people living in poverty without access to these most basic necessities. A successful, market-based solution, WaterCredit is accelerating large-scale, sustainable progress against the water and sanitation crisis.

"We are honored to be working with the Caterpillar Foundation on this high-impact program," said Water.org Chief Executive Officer and Co-Founder Gary White. "Because of Caterpillar's generous support, we will reach more people with clean water and sanitation, at a faster rate, and at a decreasing philanthropic cost-per-person. Furthermore, we will also be able to attract divergent sources of capital to support lending in the water and sanitation sector in South Asia."

"The Caterpillar Foundation supports a number of basic human needs programs in areas where Caterpillar has a presence," said Caterpillar Corporate Public Affairs Director Jim Baumgartner. "The sustainability of Water.org's model is really what drew us to WaterCredit. This program will provide clean water and sanitation facilities to thousands of families in India, but the cycle of progress will continue as the loans are repaid and these funds are provided to others in need."

The Caterpillar Foundation grant will support two WaterCredit programs in India. This includes the expansion of a Revolving Loan Fund managed by one of Water.org's local partners in Bangalore to provide an additional 8,000 households (about 38,400 people) with access to micro-loans for clean water and sanitation. Through this financial model, once a loan is repaid, it is then re-lent to the next person in need. The Caterpillar grant will also support Water.org's work with its existing microfinance partners in Bangalore and Tamil Nadu, India. It will facilitate WaterCredit loans for sanitation purposes, enabling more than 180,000 residents to gain access to hygienic sanitation facilities such as household toilets. Finally, the Caterpillar Foundation grant will fund an initial market assessment in Indonesia by the Water.org team to assess and lay the groundwork for the launch of WaterCredit in Indonesia. 

Since 2008, Water.org and its partners in India have used the power of WaterCredit to impact twice the number of people than could have been reached using other, more traditional approaches, all while reducing the philanthropic cost per person served by nearly 50 percent. Water.org's program with the Caterpillar Foundation builds on this solid success.

In a dusty hallway in Mumbai's Dharavi slum, two women barter used clothes for pots and pans. The going rate today is ten pieces of used clothing for one new tin pot.

This is the informal economy, growing as the world's population continues to urbanise in mega-cities like Mumbai and São Paulo. In Mumbai, where 60% of residents live in slums, activity in the informal economy, from bartering to neighborhood savings groups to co-ops, rivals the scale of the formal economy of retail stores, banks and taxes. The scale of this endeavor has not gone unnoticed by the corporate sector, and companies are beginning to embrace this population as a future market for their goods and services. But more important than what they buy is what they can teach about building highly integrated neighborhood economies.

Shabana Begum smiles shyly as she opens the door to her small home in the Dharavi slum. Dirty water pools in the meter-wide lane that passes her door. Laughing children rush past towards a pick-up game of cricket. Her two older children proudly show off their impeccably neat 40sqm home, as Shabana describes the savings group she's been a part of for the last three years. Savings groups, pioneered in slums like this one and spread throughout the world by the organisation Slumdwellers International, are the backbone of a neighborhood support system that provides these communities services that the government and corporate world does not provide.

Shabana saves 100 rupees a day (about $2) through her savings group. Her husband, a rickshaw driver, earns 500 rupees a day. There are twenty families in this group. A volunteer representative comes by her home each day to collect her contribution. Saving 1/5 of your income is no small feat. When I ask her how she is able to save that much she says, "My husband makes a good living, I'm able to save it easily. It's important to save every day." She pauses, "And I've not had to take one withdrawal from it yet."

Big Issue Invest has edged closer to its £10m target for its Social Enterprise Investment Fund, with HSBC Bank investing £4m, bringing the total committed capital to £8m.

Big Issue Invest (BII) is now seeking to raise a further £2m to complete its £10m target by the March 2012. The Social Enterprise Investment fund aims to provide creatively structured, medium-term growth capital to social enterprises that have the potential to have a significant social impact, and provide a financial return target in excess of 5 per cent to investors.

The total committed capital into the fund has now reached £8m and comprises initial investments from Deutsche Bank, The Esmée Fairbairn Foundation, the National Endowment for Science, Technology and the Arts, the Ulster Community Investment Trust and Eric Lonergan, fund manager at M&G Investments.

To date, the Fund has invested £1.1m in four social enterprises and has approved a further three investments worth £1.4m.

The Fund is a close-ended limited partnership with Big Issue Social Investments Ltd, a wholly owned subsidiary of BII. CCLA is the FSA approved fund manager.

Richard Cole, global head of principal investments and private equity at HSBC, said:  "We believe that the Social Enterprise Investment Fund is an exciting and well executed initiative which will have an extremely positive impact on a number of UK-based social enterprise businesses. 

"There is an important role for banks to play within this area which encompasses their own corporate sustainability agendas. As part of our own agenda HSBC is delighted to be part of this initiative as an investor and whilst a pilot initiative for us we hope that this could be the start of a number of investments HSBC makes in this area."

Big Issue Invest has a long-term vision to become a social merchant bank providing a full range of finance for the social enterprise sector. 

As a turbulent snowstorm whips across the vast, desolate Mongolian grasslands, a group of schoolchildren huddle over laptops, their eyes transfixed as the sagacious Sal Khan works through Newtonian physics.

But Khan is only reaching these kids because of a bold initiative from another creative edupreneur: Neil Dsouza, age 27, cofounder of TeachAClass.org, a San Francisco-based nonprofit dedicated to enabling access to education in developing countries. Dsouza was previously an engineer at Cisco, where he helped develop the first 4G core routers for AT&T and eventually Verizon's mobile network.

Plenty of people have tried to tackle education in remote areas. The One Laptop Per Child (OLPC) project, for instance, has shipped millions of laptops to impoverished corners of the world. The impact has been faint, however, leading OLPC founder Nicholas Negroponte to recently propose a more radical approach: dropping tablets from helicopters to remote villages, "then go[ing] back a year later to see if the kids can read," he has declared.

But to those already on the ground, the idea of indiscriminately flinging equipment from the air and hoping for a positive educational outcome seems like a recipe for waste. OLPC has already donated over 7,000 laptops to Mongolia. When Dsouza arrived, he found many collecting dust on shelves. Some have not even seen the light of day, still unopened in shrink-wrapped boxes.

"Technology is starting to become a waste in developing countries," notes Dsouza. He points to startling findings from the World Bank's very own Independent Evaluation Group that "only 30 percent [of its projects worldwide] have achieved their objectives of implementing universal assess policies or increasing ICT [information and communications technologies] access for the poor or underserved areas."

It's not just due to misguided strategies like airlifting hardware, either, Dsouza says. Too many Western-driven programs have neglected to take into account geographical limitations and cultural differences-whether it's failing to realize the lack of basic IT infrastructure in developing countries, or assuming that everyone naturally understands the potential and use of computing devices.

Haunted by memories of piles of unused laptops, Dsouza devised an ingenious plan: Bring a chunk of the Internet's offerings to Mongolia. He packages content from Khan Academy, MIT open courseware, and other resources into portable, self-contained servers that can be wirelessly accessed by laptops and computers. These servers, which cost roughly $350 apiece, are small enough to fit in a backpack and need only a power outlet to boot up. Other laptops need only wireless capability and a browser that supports Flash to log on. What this creates, in essence, is a local intranet network-what Dsouza has dubbed an "Education Hotspot"-that allows users to access materials hosted on the server, even in areas so remote that Internet is either outrageously expensive or non-existent.

The connection was not of crisp video quality, but the chorus of schoolchildren from San José de Huamaní, near Ica in the south, could be heard loud and clear: "Good morning," they chanted.

Hundreds of kilometres away, they were greeted with applause, through video link, by a brightly lit conference room full of Peruvian and European Union officials. They were meeting in Lima to announce the completion of an aid programme that is taking renewable energy and the internet to 130 rural communities in Peru.

With funding from the EU, the Euro-Solar programme is being rolled out across the eight poorest nations of Latin America, such as Peru, at a cost of €36m ($47.6m/£30.9m). The aim is to benefit more than 300,000 people whose communities are not connected to the electricity grid.

Via satellite linkup, the Lima audience heard live testimonies from four isolated villages about how they finally had electricity posts that powered a school and a convenience store, and they could now store vaccines, purify water, use computers and surf the web.

"There's more interaction from the kids," said Teresa Uribe, a teacher. She spoke from her classroom, surrounded by her pupils who were all hustling to get a view of the computer screen at their end. "They now want to learn more, thanks to this technology." She was happy, too, about the improvements to her school environment.

Each community was given solar panels and, in some cases, a back-up wind generator to produce its own renewable and clean energy. With the free EU kit, it could now run five laptop computers, a printer-scanner, a multimedia projector, an antenna for satellite internet connection, a refrigerator, a water purifier and a battery charger. Simple things such as charging a mobile phone or emailing medical lab tests to a central hospital could now be done.

Vodafone India and HDFC Bank have announced plans to launch a mobile banking service across the country next year after a successful trial period, according to an Economic Times article.

The service, which is called 'M-Paisa' (named after its monetary unit, the paisa), enables selected retailers to offer banking services to Vodafone customers, who are able to withdraw from or deposit to their HDFC account and transfer funds using their mobile device.

The initiative is currently up and running in Rajasthan, India's largest state, where a pilot allows HDFC customers to enjoy basic banking services at the 2,200 retailers that support the initiative across the state's 320 villages and 54 towns.

Following the successful trial, the service will be extended across the country through a phased roll-out during March and April 2012. The service supports only English currently, however the companies are planning to support a range of local languages that will significantly increase its potential.

M-Paisa is tipped to be particularly significant in regional areas that are under-serviced by banks, according to Rahul Bhagat, of HDFC Bank:

There are 6,00,000 habitations but only about 89,000 bank branches in the country, making access to banking services difficult in remote areas. We feel that Vodafone's significant distribution reach will provide customers the security of financial transaction offered by bank.