Structure: A for-profit social enterprise
Despite SELCO’s problems with investors, Hande continues to believe that the organization is best structured as a for-profit business rather than as non-profit NGO. Hande’s time spent in India’s rural areas had left him disenchanted with the NGO model, which he felt dysfunctional.
“NGOs were working in an unsustainable manner,” Hande said. “The grant funding was mostly for their own survival—for their salaries and then for the work that was supposed to be done, rather than vice-versa. So we said, ‘Let’s form a company.’ Even if it was a loss-making company, you know where the losses are and you strive for reducing those losses.”
Hande set out to prove that even in serving the poor, a company could be sustainable. By taking a steady, long-term policy toward growth and adjusting expectations for single-digit rates of return, Hande believed SELCO could balance successfully economic and social goals, becoming self-sufficient rather than relying on grant funding to support its mission.
In 2009, the company served 25 districts in the states of Karnataka and Gujarat. SELCO’s delivery system was made up of a network of 25 energy service centers (ESC) and regional branch offices that employ more than 130 people. Overall, SELCO consisted of four Regional Sales Managers; eight Senior Managers; 21 Branch Managers; 32 Sales Executives; 40 Customer Support Executives and 18 Office Administrators in addition to members of the Projects, Finance and Innovation departments. The company is overseen by a board of directors headed by Hande.
The SELCO network
SELCO’s overall operational structure is broken down to three main pieces:
Energy Service Center (ESC): The ESC is the basic building block of the Company’s rural operations, and each one has a service territory in which it markets, sells, installs, and services SELCO’s energy services. An ESC can have anywhere from three to seven employees, including a manager, technicians, and sales staff, who are paid by commission.
Regional Branch Offices: SELCO operates Regional Branch Offices (RBOs) throughout its service territories to supply, administer, and manage its ESCs. Each RBO is responsible for identifying, establishing, and managing each ESC in its district. The RBO provides ongoing management and supply of components to these ESCs, and serves as the contact point between SELCO central headquarters in Bangalore, and the ESC offices. It is also responsible for maintaining relationships with participating banks, through which customers finance their SELCO purchases. SELCO generally creates one RBO for each five ESCs.
Headquarters Office: SELCO's headquarters office in Bangalore is responsible for the overall management of SELCO operations. The Headquarters office handles the procurement and delivery of all solar components and installation materials to its RBOs. It is responsible for development and management of personnel. In addition, the headquarters unit provides all accounting services and managerial oversight.