(..continued from previous post)

The morning discussion on "Rural markets and Entrepreneurship opportunities" had an interesting mix of panelists - one from corporate sector, two social venture captialists, an entrepreneur and a village panchayat head. While Sanjay Kapoor from Bharti made a marketing pitch of how Airtel sees a huge business opportunity in rural, Elango Rangaswamy, who has been heading the Kuthambakkam Village Panchayat, posed a question on why most corporates look at rural as a pure consuming class and not look at ways to increase the dispoable income of the families. As a true Gandhian, Elango spoke very passionately about his community and how his institution has been trying to do its wee bit on the developmental front. From his humble attire and not-so-well- polished speaking style, one cannot possibly make out that he is an IITian who quit the mainstream career options to make a difference to his village (Click here to read more). Not sure if one Kuthambakkam amongst 265,000 Gram Panchayats in the country can be viewed as glass half-full. 

Later Aavishkar Venture Management co-founder Vineet Rai spoke on how they have partnered with Elango's Panchayat on one of their projects to manufacture burners. Now that the demand for the burners couldn't be serviced from the village alone, owing to its production limitations, the firm was looking for other communities that it could partner with. 

All in all, though the panel did manage to throw some interesting tit-bits, it failed to focus on the theme of entrepreneurial opportunities in the rural market. Though the panelists managed to hover around the subject, neither the entrepreneur nor the two social venture capitalists in the panel could bring to light some of the opportunities and challenges of entrepreneurship. It would have been good to hear on some of the entrepreneurial initiatives on ground that the VC firms have funded and how they have created a social impact. Probably, someone from Acumen Funds, Ashoka Foundation or Skoll Foundation would have been more appropriate considering the theme.  

The panel discussion on "Financial Products for Rural Consumers": had a better panel mix - Vijay Mahajan of Basix, Somak Ghosh of Yes Bank, Viral Acharya of LBS, Priya Basu of World Bank and Rajesh Balaraman of Diamond Consulting. Talking about about recent findings (check my earlier post) on missed opportunity in the rural sector, Rajesh spoke about how apart from Product, Cost and Convenience, Eligibility Criteria needed much focus. Many of the rural consumers surveyed lacked financial literacy and preferred borrowing from the money lender owing to huge ambiguity that surrounds the paper work with a formal financial institution.

Priya talked about policy implications and how it would be good to have "Priority Sector Lending" part of a bank's obligation tradeable so that the counterparts more competent in rural banking could do it more efficiently and effectively. Speaking on how from a banking perspective the urban poor was not any different from that of a rural one, Somak Ghosh called for more action from all domestic banks - both public sector and private sector ones.

Taking a tangential view, Vijay Mahajan spoke of how it was not product offerings, but channel that has been a barrier in expanding to the rural market. In his words - "Products is a glib MBA talk. What is needed is one to travel to slums and deliver the product at the poor's footsteps". Speaking of customer friendliness, he cited his experience with a bank in Salempur, which is in the heart of the city, had created such a perceivable barrier for a bank customer, let alone a prospect,  to make any transactions. In a country where one has cumbersome, and in some cases no options, to get a birth certificate as a proof-of-age, it is ridiculous that a formal financial institution mandates this document as prerequisite for opening an account of any kind. He proposed a 3P focus on channel strategy - Place, Process and People.  In his view, STEMS - Single Terminal Enabling Multiple Services - and pre-paid debit cards such as Zipp Interchange, was the key to provide low-cost, yet friendly, banking services to the rural.

In the subsequent key note session, Abhijit Banerjee, Director of Poverty Action Lab at MIT, spoke about primary education and its challenges. His talk was primarily centered on Pratham's ASER report and findings from experiments conducted by MIT. It was sad however that the talk did not dwell on the entrepreneurial opportunities in the sector. More so, not much was spoken about the limitations of a technology in improving the access and quality of education. 

Though the following panel discussion on "Supply chain and Logistics" had dignitaries from Reuteurs, Reliance, HLL and Mahagrapes, it failed to throw any insights into the opportunties and challenges. One interesting thing that came out of the session was RML - Reuters Market Light - a BOP service from Reuters that provides mobile information services to the farmer. It was good to hear some evidences, though anecdotal, on how this information service helped farmers in making better decisions and subsequently in making higher profits.

Overall, the second India Business Forum could be termed informative. However, there was probably a scope for more insightful & quality discussions. The conference seemed to rather just scratch the surface of business opportunities and hurdles in the countryside. It is sad that none of the politicians invited to the panel discussions did not make it, despite this being scheduled on Sunday. I hope such conferences are not an end in itself but a beginning to more fruitful brainstorming, action plans and cross-sector partnerships. I keenly await to see how LBS takes this forward.

~ Santosh 

12/23/2007 04:31

Both the reviews of the proceedings of the conference is thorougly wonderful..
But I just could not digest the fact of you being in tune with the speakers' views and comments... only to correct myself...
there goes the lasting final impact!!!
You Pessimist!!!

12/24/2007 20:49

It is being "critical", not "pessimist" :)


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