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MicroKarma - Crowd funding meets Impact investment.

A platform that allows citizens to act as social investors, and enables the needy to improve their condition with dignity and self-reliance.

Photo of Shankar Srinivasan

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What problem does the idea solve?

Our idea links the supply and demand sides of providing access to Water and Sanitation (or WatSan) facilities among poor households in India in a scalable and sustainable manner.

Why is it worth solving?

Unicef estimates that over 595 million Indians do not have access to toilets and the poor access to WatSan has disastrous consequences for India. This impacts every aspect of public policy in India ranging from public health, gender equality, social discrimination to the loss of human capital and GDP. The fact that approx. 188,000 children under the age of five die every year due to poor WatSan access makes it a humanitarian crisis that needs urgent attention.


How is this being addressed today?

The mainstream approach sees open defecation as a simplistic funding problem where a certain amount of money is spent, and its impact is measured by the number of toilets built. The intended beneficiaries often have little or no say in this process. This approach does not also provide an opportunity for civic engagement that stems from the increased civic awareness.

The public toilets built using this approach often fail to address the issue because:

  • the processes for maintaining these facilities aren’t effective.
  • The toilets are constructed in a desolate location that is not safe for women or children to access
  • The buildings have been constructed without provision for water, lighting, etc. 

An example of a govt built public toilet in the area where we piloted.

Even when such programmes construct toilets for individual households, they don’t reduce open defecation because:

  • the households are not educated on the topic of sanitation, how the fecal matter is processed or decomposed, the methods of maintaining the toilets, etc.
  • the toilets that are constructed by a third party do not address the needs of the family in question. For e.g. many households place a slab of concrete over the toilet floor and use the structure as a bathroom because women prefer bathrooms over toilets.
An example of a makeshift bathroom in a household without toilet. It serves to show why many toilets were converted to bathrooms after their construction.

Also, the choice of fecal sludge collection technology is taken in unscientific manner. A central government funding is often contracted to a contractor who opts to construct a single toilet technology type across the district without customizing solutions by understanding ground water table, soil & subsoil conditions of every locality. 

The deficiency of the conventional approach is demonstrated by the fact that the Indian govt has spent at least $300 million per annum for constructing toilets since 2010 without much success in reducing open defecation. 


What's our idea?

The crux of the idea is to create a social-funding platform where those who are willing to loan funds for the construction of toilets are linked to households who seek short term credit for installing WatSan facilities that address their needs. We are building a curated crowd funding platform that extends loans for WatSan under an umbrella of demand driven, de-centralized, financially & technologically sustainable, scalabe, transparent, community driven model.

How is our approach different?

This difference between our platform and the conventional models of microfinance, the charitable sector, govt. projects, crowdsourced funding, etc.  stems from our guiding principles:

  • Demand generation - We emphasise on bottom up demand for change as the first step for any funding and work towards creating demand if it is absent. This involves instilling the need for basic sanitation among children, focussing on educating men on the necessity of sanitation as they hold a disproportionate say on the family’s decision making, and empowering women with the road map to achieving better WatSan facilities.
  • Another example to reinforce the importance of a bottom up approach. Only a bottom up approach would show that women in many poor communities prioritize the access to a private bathing area to a toilet. The make-shift structure in the picture is a bathroom in one of the households that doesn't have a toilet. We learnt that it is more productive to support the construction of a bathroom and toilet, rather than just focus on toilets.
  • De-centralized implementation - We have seen that one size does not fit all and that it’s best if each household decides what works best for them. Making decision for oneself and being involved in one's decisions has the desired side effect of increasing the sense of ownership. It is widely accepted that the greater the sense of ownership towards the WatSan facilities, the greater the chances of its usage and maintenance. To ensure informed decision making, we ensure that the beneficiaries have access to expertise in a variety of areas, such as technology options, government policies and subsidies, construction options, etc.   
  • Another public toilet in the area where we implemented the pilot. Shows what happens with centralised solutions and lack of ownership.
  • Financial inclusion and responsibility - Self-reliance is probably the only proven scalable and sustainable solution to provide better WatSan access to millions of citizens of a developing country. We focus on providing financial independence from welfare payments, charity, loan sharks etc. for those without a credit history. Simultaneously, we tie this with the individual responsibility using lessons from community based lending models which ensure low default rates. This also creates the virtuous cycle of inculcating the habit of saving and investing in self-improvement, offering a dignified and credible alternative to the dependence on an inefficient and poorly funded government welfare system.
  • One of the success stories from our Pilot project. She took a fixed loan to build the toilet that suited her needs in her house. The impact of her sense of ownership can be seen in the way the toilet is maintained and in her pride in eliminating open defecation in her household.
  • Impact Investment for citizens - It is about time the social sector had a curated Kickstarter platform specialising on social entrepreneuship projects, isn't it? We certainly think so. We view our platform as a much needed means for ordinary citizens to get involved in social projects in a sustainable manner, where they are able to increase their impact by making a medium term investment instead of making a smaller one-off contribution. The funds are returned to the investors after a fixed period when the project is implemented. A small rate of interest may be offered to the investors depending on the scale of the project, however the main returns on offer is a clear demonstration of the social impact the funds have had. As the funds are loaned to beneficiaries rather than provided as one-off grants, the impact of the funds is multiplied with every subsequent reinvestment of the funds. To illustrate, a one-off $200 grant would help to build only one toilet. If $200 is extended as a loan through the platform,  it would help to build a toilet every 10 months because the funds are available after a 10 month repayment cycle.
  • Sustainable Technology: Though several technological recommendations have been suggested by the Government of India (Ministry of Urban Development - CPHEEO Norms & Bureau Indian Standards), we understand that we are morally responsible for educating the households the right technological solution customized to their locality. We closely work with grassroot organizations and encourage them to study the soil and subsoil conditions in the locations were demand is generated. This data is analysed with several secondary literature and Swacch Bharat Mission Data to understand the appropriate technological recommendation suitable for the location and is suggested to the households.

  • Transparency and Impact Measurement: The social sector could immensely benefit from a mature approach to data.  Firstly, we believe in the importance of opening our datasets to public scrutiny and for the community to benefit from our experiments. We also believe in a data-driven approach to evaluate the impact of the projects that we fund. We will assimilate a variety of data such as self-reported usage statistics, school attendance records and draw out inferences on impact on the beneficiaries, the community and the environment. Lastly, we aim to provide an exact account of how every last dollar of an investor was spent. For example, someone who invests $200 (the typically amount loaned to a household for constructing one toilet) will be able to track the repayments and the process of constructing the toilet. Nothing beats the satisfaction of knowing exactly how one has had a positive impact on someone else’s life!

Pilot Project:

We put this approach to action through a pilot project in April 2015 after many months of research and planning.  To summarise,

  • Leaf Society, one of the partners in this idea, created a demand for toilets in many hamlets in the Namakkal district, Tamil Nadu.
  • The households that were willing to construct toilets were incentivised by an offer of a fixed loan of $200, which was to be repaid in monthly instalments across 10 months at an interest rate of 12% per annum. One of the key conditions of the loan was that each beneficiary must use the funds for constructing toilets.
  • We used a seed fund of $4000 and disbursed loans to 20 households. 
  • Leaf Society's staff engaged with the beneficiaries in providing technical support for constructing the toilets, collecting the repayments, and encouraging the usage of the toilets. 
  • Leaf Society invested resources to process the loans, collect repayments, etc. with the understanding that the interest from the repayments would cover some of the costs, and the remainder would be managed by Leaf Society through other external grants and spare capacity.

Impact of the Pilot:

 As of Feb 2016, we can report that

  • 16 households out of 20 have completed building the toilets that addressed their needs and have started using them. The remaining 4 households are in various stages of construction, and we are confident of the completion and subsequent usage because the Indian govt. provides a post-construction subsidy of $240 per household.
  • Leaf Society's expertise ensured that the toilets were environmentally and financially sustainable. For example, many of the toilets used single leech pits to deal with the fecal matter rather than use septic tanks, with a provision to add a second leech pit in the future.
  • 17 out of 20 households completed their payment cycle and the remaining 3  households have partially completed the repayment with interest, and have committed to completing the repayment. We recovered approx. $3950.6 in principal and interest, for an investment of $4000, with a further $269 still to be recovered from the households that have partially repaid.
  • The interest, approx. $200, would compensate some of Leaf Society's efforts to create demand, process loan applications, collect payments, book keeping, etc. The original funds would be available for reinvestment in a similar project or to return to the investors.
  • We are also considering providing loans to households who have stopped open defecation, to help them invest in their access to Water. For e.g. they may invest the funds in building a water storage or purification facility. This approach sends the signal that the NGO is invested in the community on a long term basis rather than a one-off game. Further, this underscores our view that the solution is not a simple challenge of building toilets.

Takeaways from the project:

  • The pilot has showed us that the model of creating demand, offering loans as an incentive, supplementing with technical support, and following up is a scalable and sustainable solution. 
  • The pilot, combined with the experience of Leaf Society in delivering hundreds of similar loans through other projects with a low default rate reinforces the credibility of this model.
  • It is evident that when the scale of the project increases, the costs of the NGOs can be met by the interest from the repayments.
  • We also see that this creates a self perpetuating cycle of creating demand because toilets now become the shiny toy that everyone else in the community wants.
  • Despite minimal efforts to market the project, we have attracted attention from fellow  citizens who are willing to loan funds for similar projects. This clearly highlights the need for the idea of a social investing platform.

[Question from Comments] How important is marketing or getting the word out to potential donors/lenders and how will you tackle this issue?

Marketing is a vital element to enable scalability in our idea. Our work on the pilot project has shown us the value of working on demand generation ahead of actually enabling toilet construction. We are keen to apply these lessons by generating interest on the supply side prior to seeking funds. We intend to do this by using word-of-mouth promotions, networking and social media assets (blogs, Facebook, Twitter, Youtube, Google Ad Words, SEO) to get the word out to potential donors.

Website and Social Media Assets:

  • Website -
  • Facebook page
  • Google Plus Page
  • Quora account and blog -
  • Twitter Account –

As a start, we have registered a website for our platform idea which we are calling Microkarma ( We plan to run our platform under a new charitable incorporated company in the UK. The website will be a repository of details of the past, present and future projects run through the platform. Potential donors would be able to see the objectives of the project at initiation, the progress of the projects, transparent financial records and the outcomes of a completed project. We would also publish metrics on our performance and the impact we are making in the communities we serve.

Search-Engine Optimization:

Part of increasing visibility around both our platform and the idea behind it is ensuring that we have a strong online presence. We plan to spread the idea by blogging about implementation track record and learning from our project alongside regular updates about the progress of implementation. We are also considering using advertising in the early stages (through Google AdWords) to increase visibility with potential investors. Being part of the OpenIDEO challenge is a great boost for our platform’s presence and we hope to continue engaging with the OpenIDEO community to learn more about attracting people to our platform.


In addition to building a strong digital presence, we would invest in traditional networking avenues to get word out to as many potential lenders as possible. By establishing MicroKarma as a charitable incorporated company in the UK initially, we would like to tap into the vast Indian diaspora.

We would also extend our networking to work with UK companies and individuals interested in contributing to the cause of Water and Sanitation. In parallel, we would also explore the possibility of attracting CSR funds from Indian companies that are mandated by law to spend on CSR. For reference, please refer to PWC’s handbook on Indian CSR requirements here:

[Question from Comments] Which market (UK/US/India) would you target first to raise funds for the loans?

We plan to operate our micro lending platform,, using our UK based Charitable Incorporated Organization (CIO). We would attract funds from NRIs in the UK and also work with companies interested in contributing to the charitable sector in India. In parallel, we would try to attract CSR funds from Indian companies using our networks in India. Based on our learning from working in the UK market, we would target the US market subsequently.

Please share the details of your financing model. We would like to understand more about the costs of lending (finding borrowers, assessing, repayment, data tracking, etc.) and also the costs of providing support for toilet information/education and construction.

The attached spreadsheet describes three scenarios of our financing model, along with assumptions, risks and predicted outcomes.

[Question from Comments] Is your plan to start a new organization or work through Leaf Society?

We plan to run our UK funds through a Charitable Incorporated Organization. We would initially fund the work in India through Leaf Society. We are also actively looking for other FCRA compliant NGOs who can implement a similar model.

BDO (based in Nilgiris, Tamil Nadu) is one of the NGOs we came across, who apparently implement a similar loans-for-toilet model. I was told by Gramalaya (Trichy, Tamil Nadu) in June 2015, that they would be interested in collaborating in projects of this nature and we would explore this engagement more seriously.

Our main criteria for partnership are:

  • Community engagement for demand generation, follow up, technical support, etc. Additionally, co-operations and sharing information/learning with other NGOs in this sector would be desirable.
  • De-centralized implementation - i.e. provide loans and technical knowhow, and empowering the beneficiaries.
  • Transparency - Provide regular updates of progress of the project, and transparency of the project’s finances.

Working on this OpenIDEO challenge has allowed us to look at a variety of partner organizations whose motivations are aligned with our own.

From the Refinement phase of the OpenIDEO challenge, we have looked at the following submissions and are in the process of learning more about them and exploring the potential for collaboration.

How would you describe the stage of development of your idea?

  • Piloting completed

How big or scalable is the potential of your idea?

We believe our guiding principles can also be applied to successfully improve Wat San access across all states of India. Similarly, we are confident of attracting investments from many citizens and companies alike for projects that follow our guiding principles. The diversity of skills and experience in our team, will enable us to not only build a platform successfully, but also attract funds, implement successful projects and build new partnerships to scale up this work across India. Our short term focus at this point is to build the platform, attract funds in the UK/India (to the tune of $200,000 in 2017) . In our pilot project a loan of approx. $200 helped build one toilet in a year, so $200,000 would contribute to 1000 toilets per year during the duration over which these funds are available for reinvestment. Pleas take a look at the attached business model that shows how the project operates at different scales.

Explain the sustainability aspect of your idea

Technological: Our core principle is on "Quality of the Toilet and its impact on the environment"and not on the volume of toilets built. We train all the NGOs working with us to have a strong focus on the type of toilet technology recommended by studying the ground water table, soil and subsoil conditions along with secondary literature on the locations were demand is generated. Toilets that best suit the local conditions will be recommended to the households. Financial: We are keen to ensure that the project is financially viable before we seek funds for a curated project. The financial model of the projects curated by us is attached. Our experience with the pilot project has taught us that: 1. Low income households in India have an appetite for loans. 2. Community based lending has a high repayment rate (typically above 98%), especially when we build a long term relationship. 3. Loans can be incentivised for constructing toilets, especially because the Indian govt. has a subsidy that covers only a portion of toilet construction cost. 4. There is a demand for impactful social investment among Indian companies who have a CSR budget mandated by the law.

What types of financing would be required for your idea to be successful?

We anticipate the following costs for the platform: 1. Building/marketing the technology prototype (Web and mobile portal) 2. Incremental addition of features to the platform 3. Ongoing maintenance 4. Auditing the projects financed by the platform. We have attached our proposed business model in which we explore three cases under which a project curated by our platform would operate. As for the platform itself, we are building the platform through our personal savings in our spare time. So, we hope to persuade organisations like IDEO to support us with grants so that we accelerate the process of building a good platform. We expect the ongoing work of maintaining the platform and the value added services from the platform to be funded through a part of the interest repayments in the projects that we curate.

If you are proposing to partner with other organizations, please explain their role and reason for partnership.

We have formed a team of three - myself (Shankar Srinivasan), Kowshik Ganesh (a consultant at, and L.Sathyanesan (the founder of to explore the idea of creating the social investment platform for sustainable WatSan projects. We will be exploring partnerships with other NGOs and recruiting talent as we progress. Our roles are as follows: 1. As a computer science engineer, I will be responsible for the technology platform, for running the legal entity (CIO) in the UK, for fundraising in the UK/India, transparency, partnerships and strategy. 2. Kowshik is a development consultant with expertise in WatSan and applications of data in social science research. His focus is on building partnerships with NGOs in India, training NGOs on sanitation technologies, collaborating with Local Governments, attracting CSR funding in India, and shaping the analytical approach 3. L.Sathyanesan has extensive experience in the non-profits and charitable sector in India, and in WatSan in particular. His role in our partnership is to scale up our existing pilot implementation and to train other NGOs to take up similar projects through the platform.

In-country experience

  • Yes, for two or more years

If you have been operating in India, what has been your focus?

While the platform would operate as a registered legal entity in the UK, attracting funds from business and individuals based in India and abroad, our team members have been involved in the field of water and sanitation in India, for a number of years. We would fund projects run by Indian NGOs that are fully compliant with the Indian law. Moreover, one of the partners, Leaf Society, is a registered not-for-profit voluntary Organization in India with more than 5 years of in country experience and employs more than 5 team members. Leaf society is registered under Tamilnadu Societies Registration act 1975, bearing registration no: 85/2004 registered with district registrar of Namakkal. Leaf Society has a Permanent Account Number and FCRA registration of Government of India and audited statements of accounts for past five years and annual reports of activities, which include projects on WatSan. More information about Leaf can be found here:

Is your organization currently legally registered in India?

  • Yes

What states or districts will you target/are you targeting within India?

As a first step, we aim to generate funds to scale up our successful pilot project in Namakkal district in Tamil Nadu. We would leverage Leaf Society's experience in other districts in Tamil Nadu and Karnataka to explore similar projects across these geographies. The rich network that Sathya and Kowshik bring to the table will allow us to form new partnerships with other NGOs across India, and in the southern states in particular.

Tell us a bit about yourself.

-I am a London based computer science engineer aspiring to transition into a career in the social sector. Issues relating to women’s safety in India and my parents' experience growing up in rural India, inspired me to contribute to the issues of Water and Sanitation in India. - Kowshik Ganesh, is a development consultant with a a focus on use of data and social science research in Water, Sanitation and Urban Governance. - (headed by L Sathyanesan) an NGO working on WatSan related social projects. Contributing to better sanitation access in India is important to us because - Sanitation is a fundamental human need that has impact on a wide range of social issues ranging across gender equality, education, health & safety. - the solution to protect our environment (eradicate open defecation) is not by constructing any toilet but by constructing the right toilet technology. - we strongly believe that market processes can offer sustainable and scalable solutions

Is this a new or recent idea for your organization? How does it differ from what you are already doing?

This idea has been implemented as a successful pilot already. Scaling it up and working towards a completely self sustained project is the next logical step for our approach. As part of this next step, we would 1. Build a platform (Fully functional website) to generate adequate response on the supply side (micro-loans) from untapped investors in the UK, US, CSR initiatives in India and abroad. 2. Scale up our pilot project 3. Spread this model to different locations in India by partnering with other implementing NGOs ( like BWDA, BDO, etc.)

What are the two or three biggest risks for your idea and how will you manage the risks?

Some of the risks we anticipate as we scale up our project and build the platform are: Market distortions from government involvement: While we benefit Indian govt.'s post implementation subsidy for the construction of toilets, this becomes a dependency in our model. Changes in government policy would impact the project even if they seem positive at first glance. For instance, should then govt. consider an increase in subsidy, the uncertainty among recipients could reduce or delay loan uptake. Similar uncertainties could be caused from other changes in govt. policies, periodic election cycles, changes in the RBI regulations, FCRA regulations, etc. Risks like this can be forecast/mitigated by close engagement with both the community, local governance structures and other NGOs/think tanks working in this space. Macro-risks like currency Fluctuations (as we would raise funds from abroad), natural calamities, etc would be harder for us to predict or mitigate.

How would you propose to track or record the households or customers reached?

We would collect and share data through multiple streams for impact measurement and transparency : 1. Financial information – Initially managed through spreadsheets and maintained by the NGO’s loan processing officer. 2. Progress of project - Progress of the Project will be highlighted through open records on the website. Have attached the data tracking spreadsheet from the pilot project as ref. 3. Impact measurement - MicroKarma and independent surveys to identify 1st & 2nd order effects.

If you had two years and $250,000 USD in funding, how many households or customers would you reach?

Our current business model assumes the cost of incentivizing the construction of a toilet for a household is approx. $200. We would use $200,000 of the grant money to disburse loans for toilet construction. This would allow us to convert 1000 households (or approx. 10 hamlets) to being Open-Defecation Free (ODF) within a year. The attached model shows the associated costs with building these toilets. The benefit of our model is that at the end of the repayment cycle (10 months), we could have the $200,000 to re-invest in building a further 1000 toilets. The remaining $50,000 would be used to build the platform,recruiting interns, marketing our projects to attract more funds from fellow citizens and institutions with CSR budgets.

How would you propose to invest $250,000 USD if you received philanthropic/grant funding support from

Our idea has grown organically by investing our personal funds and exploring possibilities in our spare time . A grant, however small, would help accelerate the pace of our progress by giving us the ability to recruit interns, build an attractive platform, scale up our pilot project to showcase in our platform, market our platform with greater credibility/bigger datasets of track record, etc. We would allocate $50K towards building MicroKarma, fundraising, recruiting interns etc. We would allocate $100K for scaling up our pilot project in the Namakkal district after the current Tamil Nadu election cycle where Leaf Society's ground research has shown the desire for loans among more than 1000 households. We would aim to use the remaining $100K to fund similar projects by NGOs like BWDA, BDO, Gramalaya, etc in order to spread this idea and model.

What type of support beyond grant funding are you most interested in?

We set out from scratch as ordinary citizens with a desire to effect social change instead of watching from the sidelines. While working with Leaf Society has taught us immensely we could benefit from mentorship from IDEO and in a number of areas. Considering IDEO and's strengths, we would hope for support in refining our design and business models, improving our networks, marketing our idea, using the best data approach, accounting and legal compliance.

Does your organization have Foreign Contribution Regulation Act (FCRA) approval?

Leaf Society – one of the partners in this idea, with whom we have implemented our pilot does have FCRA approval. We would also actively seek out other implementation partners with FCRA approval in India. Depending on the need, we are open to the option of setting up an indian entity for MicroKarma and applying for FCRA approvals.
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Attachments (3)

MicroKarma - Business Model_20160419_V2.xlsx

Customisable business models for the projects that we would curate on our platform. Our pilot project was very similar to scenario #2 in this model in the sense that the implementing NGO's costs were met by a combination of interests from the loan repayments and grants from other organisations.


The spreadsheet in which we tracked the progress of the project - it has tabs that detail the applicant information, the latest status of the toilets, and the monthly repayment information for the project.


One of the project's beneficiaries.


Join the conversation:

Photo of Langston Hamer-nagle

I thought it was very inteasting that the government spends 30 million on toilet construction and it does nothing to drop open dedication rates. It seems like such a waste when that money could be going else where to do better things. Have you guys tried contacting the local or Indian government to see if they have a grants or funds that you can obtain? Just a suggestion. Also once you have your project fully operational will it be paying for itself and become self sufficient? And how do you plan to get the word out about what your company does? Are you going to rely on word of mouth or look to other means of advertisement.

Photo of Shankar Srinivasan


Thanks for your comment.

Yes, it is a shame that significant portions of the govt expenditure has not yielded proportional results.

Our implementation NGO partners (Leaf Society) does have a relationship with the govt. bodies at different levels and have a good understanding of how the govt. provides subsidies (post implementation grants). This is used to help our beneficiaries receive funds from the govt. after they build their toilets.

Our goal is to have projects that are self-sufficient. However, we need to balance this with keeping an interest rate that is not onerous for the beneficiaries. So, we would seek to use institutional grants in cases where the interest rate would not pay for the NGO's costs in running the project. More details can be found int he business model attached in our submission.

With regards to promoting what we do, we are working on our internet presence (Web Site, Facebook page, Google Plus, Quora etc.), promotions through our social network and online advertisements.


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