Chilasa Venture Philanthropy

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karpagam Entrepreneurs


Dear Friends,

Karpagam, is the women entrepreneur with the big smile and wearing the green sari in the photo.  There is good reason for the smile. Since being selected for Chilasa’s Small Business Accelerator (SBA), Karpagam has grown the revenue of her micro enterprise 35x, created 3 new jobs in her village, and helped to increase the household income of 100 vegetable producers. She began with a small plot of land growing her own vegetables, now she is in the distribution business with ambitions to expand even further!

We launched the Chilasa SBA project in 2013 to provide a solution to the problems and limitations of microfinance. Businesses like Karpagam’s cannot grow because microfinance loans are too small, and entrepreneurs need much more than financial support to succeed. Too many entrepreneurs like Karpagam get stuck on the treadmill of subsistence level activities. These enterprises fail to generate employment and economic growth, because the technical, mentoring, and financial support simply does not exist.

There are 30 million micro and small enterprises in India like Karpagam’s business, and more than 70% of these have unmet demand for financial and business building support. Helping families and communities lift themselves out of poverty requires that we unleash the potential of small growing businesses.

One of our recent accomplishments has been to establish a pipeline of 10’000 micro and small enterprises that have requested growth finance and business building support. The majority of these require debt financing.

To seize this opportunity I am very pleased to announce the launch of a second round of financing with an initial target of USD$1.5m. These funds will help support 10’000 women led enterprises, create 15’000 jobs, and leverage over USD$6m in local funding in India.

Karpagam is a catalyst of transformation, helping her family and community lift themselves out of poverty. Your support can be the difference between the treadmill or transformation.

If you would like to learn more about our plans to create 15’000 jobs, and discuss how you or your organization can be involved please contact me for further details.

Warm Regards,

Nigel Majakari

Cofounder & Managing Director

The first set of performance data from the Accelerator enterprises, a new investment in Ecoway Bricks, the Book Binding Unit goes live, investment pipeline update, and new research: “the miracle of microfinance? Evidence from a randomised evaluation”



The Small Business Accelerator provides finance, capacity building, and on-going mentoring to help selected women entrepreneurs develop their micro enterprises into small businesses. The project was launched early in 2013 to develop a disruptive solution to poverty that creates economic growth beyond microfinance.

The enterprise performance data (3 examples above), show encouraging growth including new job creation. The exception is the dairy production that only shows a marginal increase. Karpagam’s vegetable distribution enterprise is the outstanding performer during this first evaluation period. We helped the entrepreneurs with business planning and linked them to potential customers, as well as useful contacts in the local government departments. Going forward, we have identified book keeping and sales pipeline development as two key areas of skill development.

12 more enterprises have recently been added to the portfolio including food process units, bicycle rental and repairs, screen-printing, and fashion jewellery manufacturing.

Each month we collect 10 data points from the enterprises to help measure progress and impact. We analyze the results and use them to inform our decisions regarding the capacity building efforts required during the following month. Building this kind of data bank of knowledge is at the core of our long-term plans for scaling Chilasa’s impact throughout India and in other countries.



We are extremely pleased to announce the equity investment into Ecoway Bricks. The photo shows a recent field visit with Ecoway entrepreneur G. Gopalakrishan (2nd left), to see the new site for the manufacturing unit. If you missed the press release click here.


BOOK BINDING 1The Book Binding Unit is a social business that prints and binds educational materials for schools in Tamil Nadu. The business was developed by a charity to directly support the operational costs of the Friendship Home for children living with HIV Aids. A catalyst grant was made in 2013 to pilot the new business model which involved the purchase of machinery and a new facility. The enterprise has recently become operational and the sales order book is growing, as the photo shows!

Investment Pipeline News

IMG_3762 Highlights of some of the small enterprises shortlisted for due diligence:

  • Organic fertiliser company. We are in the final stages of closing a new equity investment into a small growing business producing a range of bio fertiliser products for small farmers.
  • Organic animal health and nutrition business.  This is an established family business with a generational change in leadership located in a small rural town. Animal health and nutrition is critical for the productivity of small farmers and food security in developing countries. We are currently conducting a product and market analysis. Early indications look positive.
  • Milk chilling and processing unit involving 1’700  producer families from 35 villages. This is a special situation requiring a restructuring of the business. The social impact potential is high. Discussions are ongoing.

Recycled eco-paper manufacturing
A community based recycled paper company with demand for products that outstrip their ability to supply, requires support to upgrade and expand the production capacity. The project will create 100 jobs and the profits from the business will help support the education of 500 children in the local school. Click here to watch video a short video.

Our Impact investment opportunities can be accessed through the Chilasa Angel Network. To request more information about Chilasa Angels click here.

Knowledge & Research

We recommend from our blog:

Recommended reading:

“Microcredit therefore may not be the “miracle” that it is sometimes claimed to be, although it does allow some households to invest in their small businesses. One reason may be that the average business run by this target group is tiny (almost none of them have an employee), not particularly profitable, and difficult to expand, even in a high-growth context, given the skill sets of the entrepreneurs and their life situations. And the marginal businesses that get created thanks to microcredit are probably even less profitable and dynamic:

In short, microcredit is not for every household, or even most households, and it does not lead to the miraculous social transformation some proponents have claimed.”   Banerjee, Duflo, Gennerster, Kinnan



RHA hands

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Chilasa Invests in Indian green building products manufacturer Ecoway Bricks


Chennai and Geneva. – 27 May 2014:  Chilasa Venture Philanthropy, a pioneer in small enterprise growth in poor communities, today announced a new investment to support the expansion of Ecoway Bricks PVT LTD, a manufacturer of environmental building products made from rice husk ash.
India is the world’s second largest producer of bricks after China, employing an estimated 3 million brick workers. The conventional burnt clay brick industry faces severe challenges due to slave labour practices, acute environmental pollution, and outdated production methods.
Ecoway was established in 2013 to expand the production of bricks and building products made with recycled material from modern rice mills. The founder G. Gopalakrishnan, developed the original brick product in 2007 while working with women’s self help groups to find solutions to environmental pollution affecting their communities. After successful product testing, supported by The Indian Institute of Technology Madras (IITM), Gopalakrishnan set-up a manufacturing unit in his home  district of Kanchepurram, Tamil Nadu, to supply the local construction market with quality bricks made from rice husk ash.  
Rice husk ash is a waste product resulting from the processing of paddy by modern rice mills. Approximately 20 million tonnes of rice husk ash is produced annually in India, much of which is indiscriminately dumped polluting water sources, wastelands, and agricultural land. In addition to the environmental benefits, Ecoway bricks are stronger, lighter, and are more durable than conventional burnt clay bricks.   
In recognition of the product innovation and positive impact on the environment, Gopalakrishnan has been awarded several prizes, including All India Business Development Association 2011- “BHARATIYA VIKAS RATAN AWARD” for social responsible activities.
Chilasa will draw on its strong manufacturing and operational expertise to support Ecoway’s growth from a local producer into a market leader in the region. Chilasa’s James Varghese, Director of Investments, is joining the Ecoway Board and R. James, Head of Entrepreneurship, will lead the capacity building and technical support. The investment will create direct impact on poverty by creating jobs, supporting the local economy, and reducing environmental pollution.  The investment in Ecoway is a strong representation of Chilasa’s strategy of investing in small manufacturing enterprises with proven leadership, where the underlying business model has high-growth potential for impact and scale through replication in multiple locations.

G. Gopalakrishnan, Managing Director of Ecoway Bricks, said: 
“The more bricks we sell, the more we save our environment, create employment, and help bring positive change to our industry. We have ambitions to grow and the Chilasa team has shown a unique understanding of the challenges we face as a small enterprise. With Chilasa’s expertise, R&D partnerships, networks, and on-going local support, we are going to make a big difference in our community and the wider brick making industry”. 
James Varghese, Director of Investments at Chilasa, said:
The construction industry is expected to grow at a rate of 8.9% p.a. for the foreseeable future, making the long-term prospects for the building materials sector very positive. The opportunity to support Ecoway’s expansion, create quality jobs in the rural manufacturing sector, and help solve environmental pollution, make this investment very attractive for Chilasa”. 
Nigel Majakari, Founder and Managing Director at Chilasa, commented:
“There is growing concern that India’s construction boom is built on the back of slave labour and environmental pollution in the brick industry. With pressure mounting on companies to clean-up their supply chain, urgent solutions are needed. Our investment will help position Ecoway as the leading supplier of green bricks with a no slave labour guarantee”. 


For more information please contact:
Ian Blowfield, at Chilasa on Email: ian.blowfield(AT)

Please share this link with your social media networks!


Founded in Geneva and Chennai in 2012, Chilasa invests in small growing businesses located in disadvantaged communities. Our mission is to break the cycle of poverty by building sustainable enterprises that create jobs and drive economic growth.

We provide small enterprises with an eco-system of support that includes: financing for growth, capacity building, technical assistance, research & development, and market access support. 

Our investments are financed by the Chilasa Angels, a selected group of focused investors with a heart for the poor.

Solar Entrepreneurs

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Young women entrepreneurs light up rural towns

About 70 per cent of India lives in villages with very poor or no electricity supply. Problems with electricity shortages are nothing new, but so far in 2013, Tamil Nadu has experienced the most severe shortage in all of India.  Full of drive and passion, two young women and their friends turned their backs on career opportunities in the big city to start-up a solar panel company in 2012. Their mission is to provide alternative power supply for rural towns and villages with their solar products. I went to meet them to find out more.

Solar Entreprenuer_2

So what does the quintessential college student in India envision for his/her career path? The picture often includes multi-storey buildings where workers sit beneath tubelights, staring at screens in their cubicles. Yanasoundary is not your average engineering graduate. Upon completion of her course in electronic engineering, she and a friend started up a solar panel company. I met with this young entrepreneur at her workshop in Kanchipuram where she’s been manufacturing solar-powered products for a year. “There are a lot of opportunities in the solar power field,” she said. “People in other fields look for work in big companies, but we thought we would do something different and also provide a solution to the electricity crisis. So, using the latest technology, we started our own business”.

I was not only impressed by how innovative these young women are, but also by their decision to remain in their hometown instead of following the masses to a metropolis. And with the frequent power cuts in Tamil Nadu, people are eager to find alternative power sources.

Just now, this local business provides work to 8 people; the team produces small solar panels for household/ day-to-day use (like powering fans or charging phones), lamps, and inverters for storing backup power. Since this is a small-scale business, Yanasoundary manufactures her products upon request. She receives an order, assembles the products, and sells them. Every month, the profits are divided amongst herself and her workers. The majority of profit comes from solar lamp sales. A minimum of 10 lamps are sold monthly and due to the scale of production, profit margins are slim. The plan is to expand the business in order to increase production capacity and revenue as well as to create more job opportunities.

“Last year there was a 25-30% rise in solar market sales from small scale industries and villages”

“We hope to have a 50 person team in the next 1-2 years,” said Yanasoundary. “We never really have cash in our hands because the business is small, but when it grows we will be able to save instead of always reinvesting. There is also a need to hire a sales agent to handle the purchase increase.”


The market interest is high for solar products, especially in rural towns and villages. However, Yanasoundary and her partners face tough challenges as they seek to grow beyond a micro-enterprise. The path to upscaling the company requires improvements in their production capacity and processes, sourcing of materials, more funds to pay for inventory, hiring a small direct sales team, and better marketing.

What she and her team have accomplished so far has given them a good learning platform. However, they realise they need more help, so Yanasoundary and her colleagues applied to be part of the rural small business accelerator (SBA) programme led by Chilasa and its community-based partner Action for Human Movement (AHM). The purpose of the SBA is to select the most promising micro-enterprises with capable and motivated women entrepreneurs and help them develop into small growing businesses. The programme will give the young entrepreneurs access to growth finance, business mentoring, entrepreneurship training, financial management, organisational development and marketing support– this will be critical to their success. They will also have access to Chilasa’s research and development (R&D) eco-system to help with product development and innovation.  With this kind of support, Yanasoundary believes she and her co-workers have every possibility to light up Tamil Nadu towns in the months and years ahead.

Follow the progress of Yanasoundary and her friends by signing up for our blog. You can also find out more about Chilasa’s pipeline of opportunities and latest news update by clicking here.

Hanna Sarangan 


Ashes to Bricks- Impact Investments

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New Analysis of Impact Investments in India

Convergence of patience, purpose and profit is the key message from the Indian Venture Capital and Private Equity Report 2013. The report focuses on the impact investment landscape in India providing empirical data and analysis based on total  investment of $1,303 million in 173 companies. Produced by the Indian Institute of Technology Madras (IITM),  Prof.Thiliai Rajan in his introduction states that the segment is expected to grow during the next few years at an annual pace of 30%.

Below is a summary of the contents, interviews and some highlights from the findings.


  1. Social enterprises and impact investments: Overview: Smitha Hari
  2. Impact investments in India: An analysis:  Thillai Rajan A., and Pawan Koserwal
  3. Patterns in the Investor – Investee dyad:  Thillai Rajan A., and Pawan Koserwal
  4. The performance differential: Thillai Rajan A., Pawan Koserwal, and Keerthana Sundar
  5. Institutionalising impact investing: Jessica Seddon


  • Democratising entrepreneurship; bringing in change: Vineet Rai
  • Strengthening the impact investing ecosystem: Anurag Agrawal
  • Scale critical for impact: Ronnie Screwvala
  • Sustaining the impact: Anil Sinha
  • Impact through philanthropic grants: Rohini Nilekani 

Highlights from the Key Findings

  • Close to two-thirds of the total impact investment has been in the banking, financial services and insurance segment (BFSI), most of which can be attributed to the micro-finance segment. The other major sectors that account for considerable amount of investment are Agriculture & Healthcare and Non-financial Consumer Services. These three industries account for 90% of the total investments. The trends in impact investment differ markedly when compared to other segments of venture capital investing. For example, BFSI segment accounts for only 24% of the overall VCPE investment. In terms of number of investments, IT&ITES and Manufacturing sector were the top two sectors in the overall VCPE investments.
  • Average investment per deal presents an interesting picture. The average investment per deal in impact investments works out to be $2.82 million. This is much lower than the overall average deal size ($32 million) seen in VCPE investments. This is also lower than the average deal size seen in early stage VCPE investments ($12.6 million).
  • Despite the perception that the target customer segment for social enterprises would generally be in smaller towns, the enterprises themselves are located in the large metropolitan cities. Enterprises in metropolitan cities account for a large chunk of investments, deals, and companies. The average investment per deal in metropolitan city is higher by 43% as compared to the average investment per deal in a non-metropolitan city.

Download the Report by clicking here.

For the latest update on Chilasa’s portfolio, opportunity pipeline, and news click here.


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Building an Inclusive Rural Economy through Local Manufacturing

According to a recent article in The Hindu, India’s manufacturing sector will need to increase from 16% to 25% in the next 12 years to keep up with economic and social development. This presents a serious challenge to industrialists, multi-national companies sourcing products, and even impact investors. Most acutely, what are the implications for small towns and rural villages? Communities without employment opportunities are condemned to poverty and sending their young talent off to the big cities in search of a better life. The Asian Development Bank predicts “labor mobility will continue from agriculture to manufacturing to take advantage of higher productivity”. In practice this means that jobs in manufacturing must be created on a local level to achieve growth.

My name is Hanna Sarangan, and over the next few months I will be visiting rural businesses to meet the entrepreneurs and people that are transforming their communities by building small growing businesses and creating employment.  I want to explore the challenges facing the entrepreneurs and provide insights on how they are making business work for their communities.

To get started, I visited Akash Eco-Friendly Paper and Boards based in Tamil Nadu.

Akash’s founder, Mr. S. Arokiasamy, arrived in Katchur 30 years ago, when the population was engaged in bonded labour (modern-day slavery). He established a school to liberate the children from a life of being confined to unhealthy working conditions. Today, the school is the area’s leading educational institution in terms of quality and impact— female students are given academic and personal support, which encourages them to stay enrolled (female dropouts are common in public schools). Finishing high school is the paramount component in their eligibility for a broader range of academic and employment options. Then in 2008 the social entrepreneur launched Akash in response to the requests from parents to help with employment opportunities and the perennial difficulties in raising donations to run the school. His purpose was to create employment and a sustainable source of income for the school from the profits of the business.

Akash occupies a 4% share of the local paper market in Chennai. The company sells high quality grey boards that ultimately get manufactured into products such as calendars, notebooks, packing materials, and diaries. There are 18-20 people involved in running the factory at a given time.

Recycled Paper

India’s paper output makes up 1.6% of the world’s paper supply and the demand is growing from a rate of 6% increase to 10% increase per annum. Local paper board manufactures only meet 25% of the demand from local producers. Given that local demand outstrips supply, there is a lot of room for substantial growth in this market.

One reason there is such demand for recycled paper is the savings on cost of raw materials. A senior manager at ITC says, “production costs can be down by about 40% with recycled paper. Cutting down these processes also helps to reduce levels of pollution caused by paper mills.”


Mr. Arokiasamy has the vision and drive to grow the business four-fold over the next 5 years. His objective is to create 100 jobs and from the profits provide a sustainable source of income to pay for the education of more than 500 children. This is an exciting vision, but tough to execute. So what are the specific challenges facing the social entrepreneur in upscaling the production capacity and growing the business? I identified four main barriers to growth:

  1. Access to affordable financing. High interest rates with short pay back periods prevent the business from moving forward.
  2. Shortage of production capacity to meet demand. His current production lines need renovating and an additional line to be added.
  3. Irregular power supply— the inefficiency caused by frequent power cuts and high cost of running a generator are prohibitive. Options for a renewable energy source rather than relying on the main grid should be explored.
  4. Governance, management and business development capacity. The social entrepreneur recognizes that to take the business further he requires professional support to help strengthen the business in key areas.

The founder of Shell Foundations says that social enterprises seeking to establish themselves do not have the benefit of much of the infrastructure that many other businesses enjoy. Akash is a good example of this. However, in spite of the hurdles,  Mr. Arokiasamy has proven his model works, and with the right kind of support he has the possibility to fulfill his social and financial impact objectives to benefit the community.

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Akash is not the kind of enterprise that will hit the headlines of the business news or appeal to venture capitalists, or socially minded investors looking for massive scale or attractive financial returns. However, Mr. Arokiasamy is in a business sector that is growing where demand outstrips supply. He operates his business for the benefit of his community and wants to create success that includes others, not just his own family.

Before my visit was over, I met a young woman called Sarla who is employed by Akash.  The short conversation highlighted the importance of supporting small growing businesses. She graduated from Mr. Arokiasamy’s school and has been working for Akash for five years. She says that without Akash, she would have been forced to leave her family home by going to Chennai to earn a living, or become a farm labourer.

I was impressed by how Akash was doing business. It is an environmentally friendly local initiative that understands the community at its core—a characteristic that will surely help to achieve long term sustainability and help to drive economic growth. Who better to lead the recovery of poverty stricken communities in rural India than local manufacturing business owners like Mr. Arokiasamy?

Akash is a project available for sponsorship through the Chilasa Angel Network.


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Growth in manufacturing key to prosperity for Developing Nations

Without growth in manufacturing there is only 5% probability of reaching high income status. This is a key message from the latest report by the Asian Development Bank. The report provides compelling statistics arguing that Developing Nations cannot take a shortcut to high-income status. The pathway to prosperity requires heavy investment in growing a vibrant manufacturing base.

“Historically, no economy has reached high income status without reaching at least 18% share of manufacturing in output and employment for a sustained period,” said Changyong Rhee, ADB’s Chief Economist.

There is encouragement  for India and other economies that have bypassed industrialization or are experiencing transition from agriculture into low-quality services, to develop a deeper and broader industrial base.

Click on the link to view the report by ADB.

Enjoy the infographic!



Entrepreneur producer


Social entrepreneurship: profiting from the poor or empowering them?

There are two schools of thought among social entrepreneurship practitioners. The first one treats the poor as consumers, while the second model believes that they can be co-producers, clients and even owners. Simply put, one asks the poor to part with their money, and the other puts money into their pockets. Which one of the two is better suited for India and which model has been adopted more? Do we have to choose one over the other? The answers are not simple. Lets look at the two models and understand them better.

Selling to the poor:
Bottom of the pyramid (BoP) theorists believe that targeting the 4 billion people who live on less than $2.50 per day with products and services can benefit them and also be lucrative for sellers. The late management guru C.K Prahalad was the first advocate of this model. In his book ‘The Fortune at the Bottom of the Pyramid’, he referred to the poor as a market segment that was ripe for tapping. The World Resources Institute estimates the size of the market to be a whopping $5 trillion have lead to MNCs like Hindustan Unilever and Groupe Danone devising extensive strategies to address this market.

But do the poor really need sachets of shampoo, fairness creams and TV sets? Prahalad and Allen L. Hammond in a 2004 article published in Foreign Policy, titled ‘Selling to the Poor’ speak about a young woman working as a sweeper who expressed pride and a sense of empowerment in using Fair and Lovely, ( a skin-lightening cream) because she feels, unlike her parents, she has a choice of using the cream and not let her skin suffer. Aneel Karnani, associate professor of strategy at the University of Michigan’s Ross School of Business, has been the most vocal critic of Prahlad’s model. He is opposed to selling things to the poor that they don’t need and can ill-afford. “Although Fair & Lovely is doing well for Unilever, it probably is not doing much good for its purchasers or for society,” states Karnani is his paper ‘Romanticizing the Poor’. “The ads are racist and sexist, and that they entrench women and darker-skinned people’s disempowerment.”

Karnani’s criticism maybe valid, however there are several products and services, which the poor can buy to improve lives and boost livelihoods. There are numerous examples of enterprises that have adopted bottom-up innovation to service the poor. Micro-lending company Ujjivan provides micro-credit to the urban poor. Healthcare providers like Aravind Eyecare and Asia Heart Foundation are solving the problem of lack of doctors by providing telemedicine solutions using telecom and web-based technologies.Embrace has developed a baby warmer, at a fraction of the cost compared to similar products, which addresses the problem of 4 million babies dying every year due to cold conditions. Husk Power Systems provides electricity to rural areas that are not on the grid, at affordable costs, using the pay-per-use model and aims to impact 10 million lives in the next five years. Sarvajal, part of the Piramal Foundation, provides clean drinking water through its water ATMs at reasonable costs. Lifespring provides low-cost maternity care to women.

The poor as producers, clients and owners:
Karnani’s acerbic rebuttal to Prahalad’s theory can be found in his paper ‘Fortune at the Bottom of the Pyramid: A Mirage’ where he talks of the poor as producers and owners. India is not new to this idea. Amul, the country’s first social enterprise, is the best example of the model. Started in two villages at Anand, Gujarat, in 1946 as a way to eliminate middle-men, Amul helped India go from a milk-importing country to become the world’s largest producer. Currently it’s a $3.2 billion enterprise that benefits more than 15 million milk producers. Agri-businesses like Amul and traditional sectors like crafts, are other obvious industries where the poor can be engaged as entrepreneurs. Fab India, which connects 80,000 artisans to markets, is a great example of employing artisans who are also shareholders in the enterprise, with more than 26 per cent of the company owned by the employees. rangSutra, a manufacturer of apparel, home furnishing and accessories, also employs more than 2,000 artisans, with more than half of them owning a stake in the company. Krishi Naturals, has a triple impact of social, environmental and financial gains. It improves the income of farmers by promoting organic farming by training them in organic farming and facilitating organic certification and marketing. Social enterprises that put more money into the hands of the poor are not just limited to rural and semi-urban areas. Sampurn(e)arth, for example works with 3,500 waste-pickers, mainly in Mumbai to provide decentralized waste management solutions. Companies like Rural Shores and DesiCrew are encouraging educated rural folks to stay put in villages by offering them white-collar jobs servicing the needs of foreign MNCs and large Indian companies.

India needs 50:50.
According to Intellecap’s report on India’s social enterprise landscape nearly 75 per cent of all social enterprises sell to the poor with only 25 per cent involving the poor is production. This comes as no surprise because entrepreneurs and impact investors have favored the low-hanging fruit of selling to the poor. But for social enterprises to fulfill their full potential and assist India make a dent in tackling its many development problems, the number of companies increasing the size of the poor man’s wallet needs to surge to at least 50 per cent.

However, creating opportunities for the poor is a more complex undertaking than selling shampoo or yogurt to them. They are tougher to set up due to missing market linkages, lack of supply chains, inadequate infrastructure and absence of banking services. Massive investments will be needed, and the only players with that kind of appetite are the government and the private sector. Solar power is an example, where government subsidies and international aid, has given the industry a boost. Along with grants, there’s a need for providing a combination of debt and equity. Small businesses will also require business building assistance and other support services to build and scale.

Clearly, the time to act is now.


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