Harish Hande is the founder and CEO of SELCO (the Solar Electric Lighting Company), based in Bangalore and operating in Karnataka and Gujarat states, India. Established in 1995, SELCO set out is to dispel the myth that solar energy is too expensive to be accessible to the rural poor. Hande has created a social enterprise that places this population at the center of the business – from product design to financing mechanisms to ongoing service and maintenance – to successfully overcome hurdles that underserved populations face.
SELCO is well known for re-purposing off-the-shelf solar energy components to specifically serve the needs of the poor, at a low cost. The company serves rural India with 21 business centers, each of which leverages local knowledge and operates independently of the company’s headquarters. As with every other aspect of the business, product design reflects the specific needs and priorities of the client base. SELCO’s products are customized to its customers, rather than the typical BoP strategy of lowering cost through standardization.
SELCO is not only in the business of solar technology, it is also in the business of financial inclusion. The company recognizes that access to capital is a major hurdle for its customers and therefore has created partnerships with regional rural banks, commercial banks, NGOs and farmer co-operatives to develop the necessary financial solutions that make SELCO’s products affordable. This focus on innovative solutions for financial inclusion is of extreme importance in order for SELCO to accomplish its mission and serve the broadest population possible. Hande fought hard to develop this network of partners and has leveraged the relationships he secured to bring additional local banks on board. SELCO even backs 15% to 25% of financing, which ultimately enables families and entrepreneurs to build credit.
The final piece of the business model is to provide excellent ongoing service to clients on the SELCO products they purchase. Therefore, customers receive training on proper use and maintenance of their customized products as well as after-sales support. The company builds long-term relationships with its customers, which helps ensure satisfaction with purchases and builds the business’s reputation through word-of-mouth marketing and opportunities for product demonstration.
SELCO’s greatest challenge is finding talent that appreciate SELCO’s social mission and yet can ensure the company operates efficiently. As Hande continues to replicate its business model to reach lower levels of India’s socio-economic stratum, human resources play an integral part of SELCO’s expansion because much of the innovation comes from an employee base that is in touch with local demands and obstacles. Hande asserts that the company is looking for an elusive “SELCO type” of manager, who is better identified by gut instincts than by distinct characteristics. A Yale case study (http://nexus.som.yale.edu/design-selco/) quotes Hande as seeking a balance of 50% of his employees to be passion-driven and 50% more operational in focus. With this mix, he believes the company can continue to innovate and better meet the needs of its customers, and yet operate smoothly and problem-solve along the way.
Because of the nature of this social enterprise, Hande considers the company’s ultimate responsibility to all stakeholders – including customers, employees, management, board members and shareholders – rather than solely maximizing shareholder value. Hande continues to creatively address the challenges that SELCO faces in its efforts to expand, and remains committed to finding the integrated solutions that will help the company improve the lives of the poor through access to solar technology.
Written by Courtney Drake Edited by Lindsey Blumenthal and Lindsay Siegel