Investments by service voucher companies in government schemes are on the rise, as firms are setting their sights on large volumes that emerge from this business, despite margins tending to be low. Companies like Edenred of France and Sodexo are engaging in government sponsored social projects in a bid to beef up their revenues from the country.
Recently, global prepaid service voucher company, Edenred, formerly known as Accor Services, in partnership with the Centre for Civil Society (CCS), ran a pilot project in Delhi to educate 500 underprivileged girls. The girls had an option to choose any school out of the 1,000 tied up with the government.
Under this scheme, Edenred has issued biometric cards to those girls between the age of 6-14 years to apply in any of the 1000 schools (private or public) in Delhi for primary education. Post admission, the card would be redeemed by the company. After that, the government would take care of school fees. Edenred would get a transaction fee per beneficiary. This project ran under the government?s Right to Education Act (RTE).
?This programme is more about the scale than margins and we will continue to bid for such projects. In fact, we feel that majority of our revenues might come from this business in the next three years,? said Sandeep Banerjee, managing director and CEO, Edenred India.
The company is also in talks with four states ?? Andhra Pradesh, Tamil Nadu, Jharkhand and Bihar ?? to issue food coupons for the public distribution system.
A few months ago, a competitor in the meal voucher business, Sodexo India, along with Edenred, bid for the public distribution system to provide food coupons to 1.4 crore BPL families in Madhya Pradesh. Sodexo proposed to disburse around 60 food coupons per BPL family a year. These coupons are redeemed by the company from the fair price shops to verify that food has reached the target group. The fee generated per ration card was the revenue stream for the company.
?We are in talks with four-five states for entering the public distribution system (PDS), which not only will help the state governments keep track of the consumption pattern of below poverty line (BPL) families, but will also prevent any leakages. The initial capex required would be upward of Rs 100 crore,? said Banerjee. The vouchers for PDS will be colour-coded for wheat, rice, sugar and kerosene, making identification easier for those who cannot read or write.
Edenred, which was earlier part of Accor Hotels, managing its pre-paid service voucher business, was demerged into a separate entity. Edenred operates in 40 countries.