Rickshaw Bank project is the flagship activity of the CRD. The project was started in November 20, 2004 with the strategy of mobilizing poor rural migrants, urban poor and facilitating them with asset-based micro-finance package to have their dignified livelihood. The project is being recognized as an innovative one and well-acclaimed both at national and international level. The project provides an asset-based micro-leasing package of tricycle, insurance, license, uniform with the terms of reference of handing over the ownership to the tricycles after realizing the cost of the package at Equal Daily Installment within a year or half. Besides, Rickshaw Bank provides other services to the pullers – health checkup, fuel package (LP Gas with Stove), educational exchange programme for the children of the rickshaw pullers etc.
Technical collaboration is made with Indian Institute of Technology (IIT), Guwahati and MIT, USA for designing and sophisticating of different tricycles and carts like rickshaw, momo cart, Vegetable/Fruit Cart, Fish Cart etc.
The project was initially supported by Indian Oil Corporation, Hindustan Lever Limited and Oil & Natural Gas Corporation Ltd. under their corporate social responsibility programme. Later on, different banks like ICICI Bank, Punjab National Bank also financed through their on-lending mode. The Govt. of Assam also supported its up-scaling at four places in Assam under the Employment Generation Mission.

Problem

There are currently an estimated 10 million rickshaw drivers in India. Cycle rickshaw drivers are amongst the poorest employed urban dwellers, with typical incomes of Rs. 50 – 80 per day (1– 1.6 USD), well within the target demographic of the first UN Millennium Development Goal. Many are migrants to the cities, and as such have no support networks and limited options for shelter. These rickshaw pullers bear the burden of low wages and subhuman living conditions. Because they don’t own their rickshaws (95% of rickshaw pullers hire their rickshaw on daily rental basis), much of their earned income is taken up with the next day’s rental fees. The work is extremely physically taxing, but requires no formal education. These Pullers are providing critical last mile transportation services.

Solution

Rickshaw Bank provides an opportunity to the 8 million rickshaw pullers of India to own their own rickshaw. Based on the principle of micro-leasing, pullers are able to pay daily installments on a “rent-to-own” plan, which lasts between 12-18 months. Rickshaw Bank provides a newly designed rickshaw (originally designed by the Indian Institute of Technology) that is lighter in weight, has an improved center of gravity, contains more luggage space, and has a canopy to cover both puller and passengers. In addition, Rickshaw Bank also provides a comprehensive package of insurance, licenses, uniform, and photo ID cards, to add dignity to their profession. More new cycle rickshaws are designed like momo cart, fruit cart, vegetable cart etc. and delivered to the poor people as a means of livelihood with the same Rickshaw bank modalities.

Example

Rickshaw Bank project is the flagship activity of the CRD. The project was started in November 20, 2004 with the strategy of mobilizing poor rural migrants, urban poor and facilitating them with asset-based micro-finance package to have their dignified livelihood. The project is being recognized as an innovative one and well-acclaimed both at national and international level. The project provides an asset-based micro-leasing package of tricycle, insurance, license, uniform with the terms of reference of handing over the ownership to the tricycles after realizing the cost of the package at Equal Daily Installment within a year or half. Besides, Rickshaw Bank provides other services to the pullers – health checkup, fuel package (LP Gas with Stove), educational exchange programme for the children of the rickshaw pullers etc. Technical collaboration is made with Indian Institute of Technology (IIT), Guwahati and MIT, USA for designing and sophisticating of different tricycles and carts like rickshaw, momo cart, Vegetable/Fruit Cart, Fish Cart etc. The newly designed rickshaw is having a bigger advertisement space on the back side and the is initially purchased by the Indian Oil Corporation, Hindustan Lever Limited and Oil & Natural Gas Corporation Ltd. under their corporate social responsibility programme. Later on, different banks like ICICI Bank, Punjab National Bank also financed through their on-lending mode. The Govt. of Assam also supported, providing incentives by subsidize the cost under the Employment Generation Mission.

Marketplace

In all cases, Rickshaw Bank‘s service was a more competitive offering for the Rickshaw Puller. Rickshaw Bank‘s Primary Competitor Large Rickshaw Fleet Owners (LRFO) so called “Rickshaw mafia”: In a typical industry set-up, a rickshaw puller does not own the rickshaw, rather he takes it on rent. The rent is inclusive of the maintenance charge. The rent for the rickshaw differs from city to city and also upon the newness of the rickshaw. The rent for a rickshaw is almost equivalent to the amount charged by Rickshaw Bank as daily installment. Another concern is that competitors could easily imitate the new design of the rickshaw and manufacture it for sale. Though this may prove to be a threat to Rickshaw Bank itself, it will aid in the spread of technology and thus increase impact.