Small-scale entrepreneurs in a developing nation

Small-scale entrepreneurs in a developing nation have come for the rescue of poor villagers. These entrepreneurs are studied in the context of delivery of IT services to rural and poor populations. Sriram Raghavan is one of them. He intends to prove that the world’s billion-plus rural poor can produce sizable profit for online services.

Raghvan’s challenge -

36 year-old Raghvan once built a software for U.S. corporate clients. But now he has devised something which has proved profitable for his own company. Raghvan runs Comat Technologies in southeast Karnataka. In the past 5 years, Comat’s revenue growth has been from less than $1 million to $15 million. Providing internet services to poor villagers who actually need it helps Comat gain a modest profit from their 800 kiosks. They called it ‘Nemmadi’ which means ‘peace of mind’ in Kannada, which is Karnataka’s official language. Villagers come to file their applications for a certificate that will help their children go to school. As a member of the Adi Karnataka, one of India’s “scheduled castes,” formerly known as untouchables. Their children can go to a good school for free as long as their father has the official “caste and income” certificate to prove their poverty. A kiosk operator comes in the picture when he helps a farmer with his application. Internet according to Raghvan can replace millions of paper documents. Within seconds that farmer’s application gets sent to the server in the state’s capital miles away through the state Government’s intranet. Until Raghvan came for their rescue, this certificate would take a long time and would cost a lot of money including bribery. The development pundits pushed Internet connectivity as a cure for poverty. But many entrepreneurs have learned, to their cost, that what we think of as core Internet services - e-mail and the Web - are of very little use to illiterate farmers. Villagers don’t care about a computer with ‘Wi-Fi’ or any other feature. All they want to know if that thing can help them find them a job or help them get fertilizer.

How does Comat help the rural citizen?

Comat empowers rural citizens by creating local economies and enabling access to information and services essential to people in India. To an average a farmer earns around Rs 5,000 per annum from rice and millet farming, hence it is difficult for him to handle all the expenses. For instance the 14-mile bus ride to the nearest government office, costs 30 rupees. Then if they are illiterate, they have to spend another 100 rupees to hire one of the form-filling brokers who wander around any Government office building all over India.

After all that is done, the official needs to be paid another Rs 200 to get the certificate made faster. This still gets worse when he has to visit this government office at least thrice before he gets the certificate. While on the other hand the kiosk man’s idea gets simpler and more effective. The operator who is logged in on the state government’s intranet can be visited in a five-rupee bus ride. The helpful operator does everything for the poor villagers including the status of their application. So a simple phone call can also avoid that five-rupee visit. The certificate once ready can be accessed online and a print out will be available within minutes. This hassle-free service only costs Rs 15 which is very affordable compared to the so called ‘traditional’ process. Hence, Comat Technologies’ services are focused on revolutionizing the lives of rural citizens by providing access and delivery of citizen records and entitlement benefits on behalf of the government.

Their Impact -

• Reach 10 million rural lives through a network of over 2000 Rural Business Centers
• Present in 6 Indian states and reaching nearly 50,000 villages
• Deliver Citizen records and Government benefits to over 50,000 rural citizens every day
• Provide Training, Education and Financial services to nearly 250,000 rural citizens

How will internet facilitate the villagers & How can they use it?

Entrepreneurs also find that the uses that villagers have for IT services are not so different from those which first world users have. Take Amir Alexander Hasson, a Cambridge, Mass-based technology entrepreneur. In 2003 his startup, First Mile Solutions, developed technology that allowed hardware attached to a bus to upload data wirelessly from village computers and then connect to the Internet when the bus got to the nearest town. When the bus returned to the village, it connected to the local computer again and dropped off the data, like a virtual post office. Hasson soon realised that he couldn’t generate enough revenue to cover the cost of the equipment. His new business, United Villages, provides e-commerce services to Indian villagers via cell phones. The company recruits and trains entrepreneurs to operate kiosks. These kiosks are installed with Wi-Fi antennas along any vehicle’s route. Here villagers can go to send and receive emails, SMS, voicemails, web searches, and take advantage of other locally-relevant products and services. Wireless broadband can have the biggest impact in rural areas where there is the least infrastructure. E-shopping could help villagers buy products or book a railway ticket.

In the well-known bureaucratic nature of India, Comat started out as an international software outsourcing firm specializing in network support. Raghvan later sold the Indian outsourcing business to Atlanta-based Software Paradigms International. Raghavan is also looking to bring mobile ATMs to villages in Karnataka and set up bank accounts for state pension payouts, so the money can be deposited automatically. Comat had rolled out 800 centers, positioned so that most rural Karnatakans wouldn’t have to travel more than seven miles to reach one. Raghvan decided that Comat should own and operate everything. Although an expensive venture, costing Rs 2 lakhs per center plus 170 back offices, for a total of $5 million. The company is drawing on $20 million in venture funding to finance its growth. Each center was equipped with a computer, printer, backup power and satellite hookup. Comat for the past one year are offering vocational training such as English lessons and IT classes. Every poor farmer has aspirations for his children and somewhere knows that a better life is possible only through education. By connecting communities village by village, Raghvan is trying to make a “better government”.