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Case Story Title

Creating rural entrepreneurs ? Project Shakti

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  • Principle 1 - Businesses should support and respect the protection of internationally proclaimed human rights

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Internalization Project

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Case Description

Approximately 700 million people, or 70% of India?s population, live in some 627,000 villages in rural areas. Ninety percent of the rural population is concentrated in villages with a population of less than 2,000 people. In recent years, NGOs and government bodies have been working together to establish self-help groups for women in these villages to alleviate rural poverty. Supported by micro-credit, these groups can have a significant impact in alleviating rural poverty by enabling women to become entrepreneurs and brining much-needed additional income to rural households. Success for the groups, however, depends not only on access to this small-scale funding, but also on finding viable and sustainable investment opportunities. These are few and far between in many parts of rural India.

Project Shakti (means ?strength?) connects self-help groups with business opportunities. Hindustan Lever Ltd (HLL), Unilever?s company in India, offers the groups the chance to become very local, small-scale sellers of the company?s products. Project Shakti was piloted in 2002 in 50 villages in the state of Andhra Pradesh, and has since been extended to Karnataka and Gujarat, reaching over 6 000 groups. Each Shakti Entrepreneur earns on an average Rs 1000 ($20) per month. This has meant almost doubling their household income. This amount makes a significant difference to the living standards of a rural household in India.The groups, typically 15-20 people, buy a small stock of items such as Lifebuoy soap, Wheel detergent or Clinic shampoo, which are then sold direct to consumers in their homes. Working in conjunction with the local district authorities, Hindustan Lever provides free training on the basics of business management to the groups, whether they choose to become Hindustan Lever distributors or to set up another type of small enterprise. The company also offers ongoing "on the job" training once the business is running.
Many of the women have little or no education and no experience of running a business so such ongoing support is an essential component in enabling the business to succeed.The training given to the entrepreneurs and the administration of the project are key cost elements of this initiative and these have been financed by Hindustan Lever Limited. The total costs incurred on Shakti to date are in the region of $ 2 million.Already 1371 rural women who have chosen to become entrepreneurs distributing Hindustan Lever products, have managed to create a sustainable micro-enterprise for themselves. They are generating a steady income of approximately 1 000 rupees (around $20) per month, almost doubling their household incomes. In addition, through the nature of the products sold, the project is helping increase awareness of health, hygiene and nutrition, thus improving the standard of living of the rural community. Hindustan Lever?s goal is to create 11,000 Shakti Entrepreneurs across the country by 2005.
Learnings from the the pilot stage of the project indicated that there was a significant information need amongst the rural community in areas such as agriculture, education, health and hygiene, etc. HLL has initiated an IT based rural information service that provides solutions to these key rural needs. This initiative known as ?i-Shakti? is being piloted in 8 villages in Andhra Pradesh in summer 2003.


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