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Monday, 21 May 2012

Social entreprises H3F gain business by training uneducated youth for organised industries

An article from Economic Times.

Eighteen-year-old Chandu Marati worked at construction sites and washed dishes in small, roadside hotels in the remote Gorentla village in Nalgonda, Andhra Pradesh. He now not only speaks fluent English, but can also easily operate a computer.
This transformation in his life was made possible by a social enterprise and education start-up , Head Held High Foundation (H3F). H3F, founded by entrepreneurs Madan PadakiRajesh BhatSamik Ghosh and Sunil Savara, creates skilled talent pool in villages and finds them assured placement in industries such as business process outsourcing (BPO).
The two-year-old start-up trains people in the 18-25 age bracket, who have barely been to a formal school, to take on salaried jobs in the formal sector. Marati who dropped out of school in the fifth standard due to financial constraints, now plans to become a hotel receptionist, once he completes the six-month residential course for boys and girls. "I didn't like going to school.
The teachers would beat me black and blue and make me do their personal chores. Learning here is fun and has given me a lot of confidence," said Marati, who lost his father when he was a toddler and has been living with his grandparents.
Marati is among the 250 students who are being trained by H3F at its centres in Hindupur located in Anantapur district in Andhra Pradesh and Gadag district in Karnataka. Many are construction, handloom and agriculture workers working in and around these villages.
A pool of 20 trainers who are mostly engineering and management graduates use various methods such as theatre, stories , videos, music and audios to help the students learn better. The students are taught English, mathematics , logic, business studies, computer and life skills.
The start-up counts India's largest BPO Genpact, Housing Development Finance Corporation (HDFC) and UK-based The Data Imaging & among the top employers of its students. Around 130 people have already been trained and almost 60% of them have got jobs.
Among them are Ramesh and Chandru, who never received any formal schooling . They now work as team leads for vBPO, a micro-BPO set up in Kanakagiri, Koppal district in Karnataka, earning over 10,000 per month. More than 300 million people live below the poverty line in India. A majority of them live in villages - isolated from the rest of the world - and can barely read or write, said Rajesh Bhat, co-founder of H3F and manages Magic Wand, the training arm of the foundation.
A former software engineer at OnMobile, a leading mobile value added services company, Bhat thought of starting H3F during one of his visits to his village Sirsi, a remote place in Karnataka. Bhat and team set up the proof-of-concept in 2007 by recruiting a group of village youth who had never received education .
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He demonstrated that it was indeed possible to make them employable in a short span of eight months. "It is a very radical model. The question is if you can do it for 500, can you do it for five million. I think they can succeed," said Kartik Kilachand, president at New York-based World BPO Forum, a platform for best practices in global sourcing.
H3F has approached National Skills Development Cor-poration (NSDC), which has expressed interest in working with the firm. NSDC has received seed capital of 1,000 crore from the government , which it is investing among social entrepreneurs and educational institutions . It has a mandate of skilling 150 million people by 2022 by catalysing private sector involvement in sustainable training ventures.
While entrepreneurs such as Bhat are focused on villages, Rajendra Joshi, cofounder of Empower Pragati, is tapping the urban poor. NSDC has invested seed capital in the social enterprise. It has given a loan of 18 crore and has a stake in the company.
Empower Pragati specialises in livelihood skill development to empower India's disadvantaged youth. It provides youth skills training, confidence building , and career networking. Empower Pragati's entrepreneurial and market-based courses, which includes computer and conversational English training, prepare the students for jobs in BPO and retail companies.
The one-yearold start-up has trained around 8,000 people at 33 centres across 16 districts in 10 states. The students have been hired by companies such as Vishal Mega MartBig BazaarMcDonaldsLifestyle,Hindustan Unilever, Reliance, Airtel and Vodafone.
Empower charges 500 per student and between 1500-5 ,000 from the employer. "Welfare schemes are not sustainable. We are trying to teach them how to fish," said Joshi, chief executive officer and cofounder of Empower Pragati.
Challenges
Kilachand of World BPO Forum believes that the key for these new social enterprises is the ability to scale on a sustainable basis, which implies bringing together other stakeholders such as industry, foundations, private equity firms and NGOs.
Joshi, who aims to establish urban resource centers to train the youth, says raising much needed private equity funds is a challenge. "We approached a few investors, who told us to first establish 2,000 centres in three years," said Joshi.
Other challenges for entrepreneurs such as Joshi and Bhat of H3F is finding good trainers, standardised curriculum and assessments, said Srikrishna Sridhar Murthy, co-founder and chairman at Bangalore-based Sattva Media and Consulting, which is focused on social enterprises and organisations.
He believes that around 60,000-crore grant goes to the non-governmental organisation sector, but the problem with social enterprises is they do not collaborate . They consider each other as competitors , as they are dependent on the grant agencies, which cannot fund everyone. "The key here is to make the business sustainable rather be dependent on grants," said Murthy.


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