Heard about Mehmood Khan, Unilever's global innovation head? This article narrates a success story that beautifully demonstrates how an enterprise model coupled with strong emphasis on education can transform a village.
Nai Nangla in Haryana’s Mewat district could be just another Indian village, ridden with the usual problems of a people trapped in poverty: Lack of healthcare and clean water, low productivity, high unemployment and illiteracy. But Haji Siddiq Ahmed, a local farmer in his late 60s, sees a different vision. “I want this village to be an adarsh (model) village. Others should look up to this village — that this is what an ideal village should be like,” he says.
The image Ahmed sees is actually taking shape in this quiet village with a majority Muslim population. What’s more surprising is the way the change is taking hold. It may be difficult to imagine the humble folk of Nai Nangla as business executives, but the cool concepts reviving the economy of the village are no less professional.
Mehmood Khan, Unilever's Global Innovation Head and a Nai Nangla native, is the man behind this dramatic change. Mehmood's philosophy: "Focus on education and use enterprise to bring change by leveraging resources in villages".
All Mehmood Khan did was to convert a local resource, livestock, into a productive enterprise. He roped in the National Dairy Development Board’s Mother Dairy to spur Nai Nangla’s milk output and break the stranglehold that milk vendors had on local dairy farmers.
At one time, these vendors — middlemen really — would lend money to farmers to buy milch animals. In return, they would demand milk at low fixed prices until the loans were repaid. For most farmers, their income was too low to enable them repay the debt. The result: They remained trapped in debt.
Khan, troubled by this age-old exploitation, brought in Mother Dairy and ushered in a new system to break this debt trap. Debt-laden farmers were given loans from institutions so they could repay the vendor and start selling direct to Mother Dairy. “Almost 25 people got loans to buy cattle, without having to pay any bribes,” says Ahmed.
In July 2008, Mother Dairy set up milk collection centres in Nai Nangla and six other villages. In the first week, it got 70 litres of milk. Today, Nai Nangla alone gets 250 litres a day. “Gross income from agriculture is now Rs. 1.2 crore,” says Khan. “Milk has become a constant income source in a village which had seasonal income due to Kharif and Rabi crops.”
Khan woke up to the need for change in his village when the voluntary organisation Pratham, which educates the urban poor, launched its services in the UK in December 2003. Pratham can teach a person to read and write, and take interest in it within 35 days. He asked Pratham to test the abilities of children in Nai Nangla and the results shocked him.
Pratham found that students as high as fourth and fifth grades couldn’t even perform basic tasks like multiply or read a complete paragraph. Khan realised the enormity of ignorance in his native village. The low level of literacy among women gave him sleepless nights. “Women are change agents,” he asserts. “If a community has to progress, one must empower women and education is the first step.” So education for women is one of the priorities for the trust he has formed in the name of his parents — the Rasooli Kanwar Khan Trust (RKKT).
And there was another problem. “Mewat is a male-chauvinist area,” says Khan. While the villagers agreed that educating their girls was important, they had reservations. They didn’t want them to go outside the village, study with boys or be taught by male teachers. So the group decided that they would be taught by female teachers from their own village.
In July 2008, the girls suggested that they could learn to sew and be self-employed. Khan installed 30 sewing machines in nine villages. Some of the women are turning a profit, making a neat Rs. 2,000 - Rs. 2,500 a month.
Khan is leveraging his business network to bring employment to Mewat. A year ago, Aviva General Insurance was looking at a rural play. He connected them with 60 local youth. “It’s a cycle that generates money into the system. Aviva hired some people whose income went up. They can now buy Unilever products, for instance... This creates a market economy,” says Khan.
Khan has bigger plans. He is working with Deloitte to set up a water company in Mewat. “We’ll make 100,000 families of Mewat as shareholders. We’ll involve the community to green the Aravallis, replenish the lake here and then harness water and distribute it,” says Khan. He will need help from outside. He is looking to the World Bank for financing. It is expected to cost Rs. 1,000 crore, of which Rs. 900 crore will come from a funding agency and Rs. 100 crore from the people of Mewat, who will then become promoters in this company.
Together with Genpact, Khan has also set up a computer centre in Nai Nangla. Sixteen of the 30 men trained in the first batch have been hired by ICICI Bank. These previously unemployed men now earn Rs. 7,000 to Rs. 16,000 a month. For English training, Khan has roped in Kusuma Trust, a Gibraltar-based charity and ReadingWise, a company that works with NGOs to administer literacy programmes.
Nai Nangla is soon buying nine low-cost sanitary napkin machines from a Coimbatore-based supplier. A company called Crafts of India, funded by the Future Group, will help design and package the napkins, to be sold in Big Bazaar outlets. This will employ 100 women.
Mehmood Khan has taught us an inspiring lesson on how a market based approach can bring a miraculous social change. This story will strongly challenge critics who advocate against market mechanisms to tackle development.
* The story is an abridged version of a recent article at business.in.com
