Questions
Procedure
- Assembly
o When were the first 75 rickshaws constructed, timeline of construction?
o What does JIG mean? How was new design constructed (timeline)
- Details of insurance agreement (initial cost, has this changed? Term of agreement, Can it
change in future?)
- Advertising agreement - Advertising penetration rate?
o Solutions for introducing advertising to Varanasi (batch advertising, e.g. 1,000 rs/month for
10 rickshaws). Is there advantage to CRD brand for this? Visit to local businesses? Help
from Tata Tea?
- Who designs uniforms? What is the cost? How much inventory left?
o Are drivers wearing the uniforms? Why not? Is this a potential cost saving?
- Full overview of loan process and supply chain
o How much money repaid to own rickshaw?
o Surrender process: unofficial notice, legal notice, etc.
- Are rickshaws only distributed in ceremonies? What are the benefits / costs to ceremonies?
Affiliates
- Personnel distribution per organization?
Finances
- Full budget with cost overruns & explanation
- Loans
o Surrender rate by batch
o Surrender policy
-
Other
- Annual goals for next year? / Expected growth?
JAN MITRA RICKSHAW SANGH ANNUAL REPORT
for the Period from September 2007 to September 2008
Introduction
The Jan Mitra Rickshaw Sangh project was initiated by Jan Mitra Nyas in August 2007 to improve the
livelihoods of cycle rickshaw drivers in the Varanasi area by enabling vehicle ownership and providing access
to basic financial services and benefits.
The JM Rickshaw Bank is serving the 25,000+ rickshaw drivers in the Varanasi area by offering the
opportunity to own rickshaws under rent-to-own programs, open bank accounts and gain access to social
services such as insurance. As of October 2008, the program currently has nearly 150 rickshaw driver
members who are on the path to ownership. After between 18 to 24 months of daily rental payments, drivers
own their own rickshaws. After gaining the financial independence of asset ownership, drivers might
leverage this to increase savings, pursue household and educational loans and develop communal facilities.
JM Rickshaw Team
The JM Rickshaw Bank project team was chosen through an interview process. The current team consists of
five employees involved with daily operations, all under the oversight of Dr. Lenin Raghuvanshi, the Director
of the Rickshaw Bank as well as two affiliated organizations, the People’s Vigilance Committee on Human
Rights (PVCHR) and Capital Markets for the Marginalized (CMM),a public charitable trust.
[Explanation of roles]
The Rickshaw Bank is also affiliated with Capital Markets for the Marginalized (CMM), a public charitable
trust pursuing market-based development work that was founded in January 2008. CMM is also settled by Dr.
Lenin and is affiliated with PVCHR. CMM is the actual entity that enables banking loans for rickshaws and
purchases rickshaws from suppliers. The Rickshaw Bank shares office facilities with CMM.
The Rickshaw Bank receives support from the American India Foundation (AIF) as part of AIF’s Rickshaw
Sangh livelihoods initiative. AIF provides the First Loss Deposit Guarantee on Punjab National Bank (PNB)
loans for the rickshaw project. AIF has also funded the operating expenses for the Rickshaw Bank since
entering into an agreement in July 2007.
The Rickshaw Bank works under the guidance of the Center for Rural Development (CRD) as part of CRD’s
India-wide cycle rickshaw initiative. CRD oversaw JMN’s relationship with the local PNB office as a lending
partner, and provided the initial 100 total rickshaws distributed in Varanasi through a loan agreement with the
PNB branch. CRD has provided operational support to JM Rickshaw Bank through personnel training and
workshops. The first 100 rickshaws distributed by the Rickshaw Bank followed a design developed by CRD.
Organizational Chart
CRD
Rickshaw
loans
Operational
Support
- Staff - Rickshaws
- Office - PNB Loans
NGO / Trust
For-Profit
The Rickshaw Bank Field Coordinators survey the rickshaw driver community to choose prospective partners.
Drivers are given a written application that was designed by CRD. The application includes contact details,
the signed endorsement of an introducer in the driver’s community and information on the driver’s family.
Once drivers are selected, there is a requirement for an initial deposit of 300 rupees for the rickshaw loan, plus
a 50 rupee membership fee. Applications are generally submitted on an individual basis.
Typical turnaround for issuing a rickshaw after approval of a driver is less than a week. However, since
operation, the majority of rickshaws have been distributed at three inauguration ceremonies in batches of 50
or more vehicles. The ceremonies are operationally efficient and generate publicity for the project.
After receiving a rickshaw package, drivers are expected to make daily payments of 25 rupees, six days per
week. [How much repayment required to own rickshaw?] The Every Day Installment (EDI) payments are
collected by field coordinators in field locations. There are currently 7 cluster points throughout Varanasi and
one garage location for meeting with drivers.
Partnership Agreements
The Rickshaw Bank formed an agreement with Punjab National Bank (PNB) in December 2007 for PNB to
act as lending partner. This agreement falls under AIF’s national-level contract with PNB, and AIF serves as
the guarantor on all loans. Rickshaw drivers were also granted savings accounts with PNB.
CRD initially negotiated an agreement with PNB for 100 rickshaw loans, and purchased the rickshaw
packages directly. CRD negotiated loans of 8,650 rupees per rickshaw, which includes costs for rickshaw
assembly and the provision of licenses and insurance to drivers. The JM Rickshaw Bank maintained
responsibility to distribute rickshaws and pay back the loans to PNB. CMM and the Rickshaw Bank started
taking loan bundles directly from PNB in July 2008, and CMM purchased the latest batch of 50 rickshaws
directly.
The Rickshaw Bank also reached an agreement December 2007 for the Varanasi Municipal Corporation to
provide licenses to drivers. The current cost of licenses is 425 rupees for two years per driver.
An insurance agreement was established with Oriental Insurance Company in December 2007. The cost of
insurance is [ ] as defined in the agreement.
Uniforms agreement?
Suppliers
In September 2007, CRD and the Rickshaw Bank surveyed local suppliers and manufacturers, and decided on
an agreement with Rohit Kumar of Sri Ram Steel Art in Shivpur, Varanasi. CRD trained Rohit’s team on the
CRD-rickshaw design, and set an agreement to purchase the first 100 rickshaws at a total cost of
approximately 7,700 rupees per unit.
There were some initial problems with the CRD-design rickshaws produced by Sri Ram Steel Art.
[ JIG is prepared in Varanasi after 2½ months hard work of Alag and Andi and Research and Development
(R&D). Solution had been found by taking into account even the small body parts of old rickshaw. Now new
assembler will be trained easily.]
CMM established its own agreement with Rohit Kumar on August 30, 2008. The agreement calls for the
purchase of 50 CRD-design rickshaws at a manufacturing cost of 1,050 rupees per rickshaw. In combination
with current market prices for cycle parts at almost 8,700 rupees, rickshaws will cost 9,730 rupees per unit.
Rohit will produce at least rickshaws per day.
Due to several issues with the CRD design in Varanasi, CMM has also entered an agreement to purchase
traditional cycle rickshaws. On September 4, 2008, CMM entered an agreement with Sunil Gupta of
Sonarpura, Varanasi to produce traditional-style cycle rickshaws. Sunil will produce two rickshaws per day at
a total cost of 9.600 rupees per unit.
In the event that Rohit Kumar cannot manufacture the CRD-style rickshaws at an appropriate pace, other local
assemblers, including Sonal Fabricator (Taktakpur) and Pooja Fabricator (Baghwanala), have agreed to
prepare rickshaws at the same rate. The Rickshaw Bank is also evaluating potential future options to create
an independent rickshaw assembling workshop for the project.
Transparency / Governance
All rickshaw drivers are told by Jan Mitra Rickshaw Bank about their responsibilities through meetings
and folk school. The drivers and community are also educated on the source of the rickshaw loans, rickshaw
construction process and our partners. All Rickshaw Bank activities are documented, and rickshaw drivers
are given stamped receipts accompanying their signatures with daily payments. Weekly meetings are held to
encourage timely loan repayments, communal discussion and solving of problems and accountability.
Initial Steps
From August to November 2007, the Rickshaw Bank distributed a survey form to rickshaw drivers that also
included an explanation of the bank lending scheme. The survey successfully collected information about
Varanasi rickshaw drivers while promoting the project. It identified approximately 450 rickshaw drivers by
December 2007, of which 380 drivers had proper documentation for eligibility.
At the same time, we started communication with several important community members –including the
Commissioner of Vanranasi Division, the Secretary of Municipal Corporation, Circle Officers, and Traffic
Police – to establish an advisory committee and ensure the cooperation of both the administration and the
public. Subsequently the advisory committee was established and the Commissioner Varanasi was made ex-
officio chairperson.
The Rickshaw Bank contacted the Varanasi Municipal Corporation to ensure future registration and issuance
of driving licenses for drivers. To determine insurance options, we initiated discussions with Oriental
Insurance, New India insurance, ICICI Prudential, and LIC.
To build publicity for the project, two demo rickshaws were assembled in September 2007, and two drivers
drove them around the local area, advertising the project and providing information about the lending scheme.
CRD Workshop
The Council on Rural Development (CRD) organized a three day workshop in October 2007 at Jan Mitra
Rickshaw Bank to discuss the project. Several members of CRD, including Executive Director Dr. Pradeep
Sharma were in attendance, along with members of the Aarthic Anushandhan Kendra rickshaw bank. The
workshop introduced the rules and procedures of lending to rickshaw drivers, familiarized the team with
lending documentation, and provided lessons on resolving typical problems and disputes. The workshop also
provided direction to the JM Rickshaw Bank team to advertise the project and build a target group.
During January 2008, 121 rickshaw drivers opened savings accounts with PNB. PNB initiated its loan for 100
rickshaws to CRD on January 22, 2008.
[Rickshaw Assembly]
The Jan Mitra Rickshaw Bank distributed its first rickshaws in Varanasi in an inauguration ceremony on
February 2, 2008. At the ceremony, we distributed 75 rickshaws CRD-design rickshaws to previously
identified drivers.
Then after by taking into account the inauguration of Jan Mitra Rickshaw, the group formation of rickshaw
driver, cluster forming, address verification of rickshaw driver, and garage point had been assured.
[Explain: On 02.06.2008, 50 rickshaws of Jan Mitra Rickshaw in Allahabad and on 04.06.2008 50 rickshaws
of Jan Mitra Rickshaw in Lucknow had been distributed by Sri Hanumant Ji, Pradeep Sharma of CRD and
K.C. Chakravarti of CMD (PNB) in an inauguration].
August to January to
December 2007 September 2008
Financial Overview
Loans
Financial Statements
Challenges
Procedural Issues
This cost, in addition to approximately 1,400 rupees for the insurance, licenses and uniforms, placed total cost
to CRD at 9,112 rupees creating a deficit of approximately 462 rupees per loan.
However, due to serious Problem in rickshaw, the rickshaw driver demoralized after distribution of
rickshaw and due to this the other eager people who want to associate with this rickshaw project are
compelled for rethinking. Following person has returned the rickshaw by showing their health problem:–
Due to unavailability of CRD budget and finance there was delay in rickshaw distribution. Therefore
many of selected rickshaw drivers started to hesitate to take rickshaw.
However they have show their health reason but it is founded from the other rickshaw driver that they
returned because the quality was not good. Out of which three rickshaws belonging to Mumtaz, Babu was
given to three new parsons in Mar. 07, and rickshaw belonging to Anil was given in Aug. 07, to new persons.
1. Heavy to drive
2. Inclination towards back side.
3. The body parts of rickshaw are adverse to the hope.
4. Partial difference between exhibited and issued rickshaw (Brass Hub, two pair of brass bell,
change in front hood & more inclination of seat in back side.)
5. Lack in the strength and quality of soccer.
6. Type of rickshaw is not of high quality.
7. Lack in the quality of baring.
8. Negligence in the making of rickshaw.
9. Distribution of one set of dress instead of one pair of dress, and no distribution of license on time.
10. Distribution of remaining 25 rickshaws at very long interval.
11. Delay in the insurance of rickshaw driver, rickshaw passenger.
Due to above mentioned point five member associated with rickshaw project have taken back their
security amount. More them 70% rickshaw driver wanted to return their rickshaw. The counseling of worker
of rickshaw bank, unforeseen benefit and satisfaction after becoming rickshaw owner, had cooperated in
successful conduction of project.
After taking these problems seriously, on 19.03.08 Livelihood Director AIF – Sri Hanumant Ji, Dr.
Pradeep Sharma of CRD and Naveen Krishna Participated in Meeting held at JMN office, Varanasi. In this
meeting the new experiment of Sri Alag Natrajan and Andi for permanent reformation in rickshaw, had been
discussed along with the discussion about stopped ball bearing and formation of JIG for making standard form
of rickshaw in less time. Both of them constructed JIG after hard work of 2-3 month and by R&D. Solution
has been found to remove even small problem of old rickshaw. Along with this old rickshaw had been
rectified, so that the rickshaw driver may get relief and feel satisfaction by driving rickshaw. We got
cooperation about rickshaw part, alignment, quality and R&D during this rectification.
We distributed 25 rickshaws in July 08 by using JIG by taking into account the above problem.
The EDI (Every Day Installment) collection of rickshaw driver in every week is in advance. There was
negative impact on EDI collection of previous 75 rickshaws and outstanding on some rickshaw drivers
became more, who are either trying to pay it slowly or return rickshaw by telling the fault of rickshaw and bad
effect on health.
We are sending notice through advocate to rickshaw driver for outstanding. After that legal process
will be adopted. Some rickshaw drivers are making effort to minimize their outstanding gradually.
Jan Mitra Rickshaw Bank ensures its work plan and strategy by learning from past experience. They
are as follows [ CRD workshop, Oct 2007 ] :-
had been motivated with new energy according to - strategy for their work, exhibition of rickshaw,
advertisement of rickshaw bank, Building group, clustering, address verification and marking garage paints.
It is known from the above statement and thinking of rickshaw driver that rickshaw driver are very
curious to associate with Jan Mitra Rickshaw Project. To associate with Jan Mitra Rickshaw Bank, the wives
of eight rickshaw driver have opened the bank account in the name of their husband by taking initiation. Out
of which five of them have been distributed rickshaw in inauguration ceremony. Jan Mitra Rickshaw Bank is
Feeling glorify because it initiative on national level project.
Rickshaw driver welcomed warmly to Jan Mitra Rickshaw Bank and showed eagerness by associating
to receive rickshaw.
Counterparty meetings
Kanupriya of AIF-New Delhi came to Varanasi on two days official Visit on 11.06.2008 for work on
scheme related with Jan Mitra rickshaw bank project, and a discussion has been held on field visit and project
accounts.
On 28th July Nicole Patel affiliated with AIF came to Varanasi for photography of rickshaw, field visit
and case study.