B2B: Changing Landscape of an Indian Village

I came to my native village in Bihar to enjoy summer vacation in true rural setting. To my pleasant surprise, the village has changed a lot since I last visited in 2004 summer. Changes are not only physical, i.e., approach road (from district hqrs to village) has become metallic, roads inside the villages are brick soled, and you can really experience electricity in villages etc., but there are other changes which are more important than those physical changes. Villagers are happier, more confident, and proud of their occupations. Although, economy is still agriculture oriented but many of the villagers have now other sources of income. Few of them are government servant, few have their small business in nearby market, and few have their children or relative working in cities. All these have made villagers a bit richer, have added into the confidence of the villagers about their financial security, and have given many options to villagers to spend. Proximity to the urban centres, penetration of media in the village houses, and frequent visits to the relatives working in cities to villages or villagers visits to cities have transformed a conservative villagers into aspiring consumers. Now villagers flaunt their Boleroes (a sturdy sports utility van) and not their bullock carts, show their mobiles phones and not radios, move on mobikes and not on bicycles, use Dove shampoo and not lifebuoy soap …….. i.e., village has undergone major change, i.e., Bullock cart to Bolero (B2B).


It is also true that caste difference and caste based class-differentiations are still prevalent. There are still poor people who have to struggle for meet their basic needs of food, clothes, and shelter. But effect of consumerism was palpable among such group of people as well. At least their thinking and aspirations reflected the impact of ‘development’. Such changes reminded me a book by T. K. Bhatia where author has categorized Indian consumers in three categories, namely, business, bike, and bullock cart. He further classified the business categories as super rich and rich. Second category has again interesting classification of motorbike (upper middle class) and bike/ cycle (lower middle class).

What is more interesting to notice that now in the villages one can notice only a continuum and not clear categories, and the rural population seems to be moving upward. Another interesting change one can observe in the behavior of villagers is that as they move up in the continuum their behavior tends to reflect increasing level of consumerism. Consumerism appears to be directly correlated with the income of the villagers also, which hitherto was the characteristics of urban population. The philosophy of simple living seemed to have been replaced by fast life with maximum consumption. Younger generations, irrespective of their family income, are interested in consuming and owning goods which their parents have not even thought of. I had heard of villagers taking personal loan from relatives or friends to buy lands or for social or religious functions but now villages are taking loans to buy durables and also goods of regular usage from banks. Only a decade ago for we villagers collective identity and community status were of prime importance but now I realized individuality and self status have overshadowed those values.

Electronic media has not only penetrated the village but has also been able to influence the lifestyle and purchase decisions of the villagers. Soap operas are popular among villagers particularly among women. Women are aware of names of different brands of the cosmetics and toiletry products and influencing the decisions of their male counterparts. The afternoon discussions among the women are on the subjects related to soap operas and the products of daily usage. I was surprised to see when village women demanded used branded spices and grocery products which were earlier home made.

Market too is now quite changed and responsive. All major brands are available in rural stores. Although the market and retail format are still same but customers have wide range of products and different brands of same product to buy from. Although actual purchases are still being made by male members but now they either ask for a branded product or ask many questions before they actually purchase and new product / brand. Certainly rural market has been changing from push to pull.

It is right that in last ten years we have lost some age old traditions and values but at the same time new groups of customers have emerged and market has further empowered them. Consumerism has affected the villagers both way, but majority of changes are certainly positive and welcome.

Enjoy your summer...as rain is knocking..
Niraj

What A News ?

Lending Rates in Microfinance
I was reading a news item in Economic Times about a Kolkata based MFI " Bandhan". It has slashed the lending rate to 19.1% from 24% that too on reducing rate. This is the news which will create a lot of discussions among the MFIs and also among the people like us who have interest in rural development.
Although the newspaper said that "it could spark off a rate war among the MFIs", but I don't see happening so. There are many reasons for that.
However, there are many positives about it, and we must see them first -

• The MFI has come out openly about the their lending rate.
• This may force others to declare abot their lending rates.
• This has also made clear that what is the rate the open market expects to be charged by MFIs.
• If lending rate is not comparable to what Bandhan has quoted (for which I am sure, most of the MFIs are not even closer to) the MFI will try to reach closer.
• Justifications by other MFIs likes, - lower rate is not possible because of smaller amounts to be given to larger number of people, reaching to borrowers is tough and costly, follow up and collection costs lot of resources, there is palpable risk associated with it, MFIs can't be expected to be very efficient because of objectives, type of clients they serve, and the type of service they are in, can not be accepted in the light of what Bandhan has declared.

Concerted efforts, dedication, and professionalism can make "development" cheaper. The team led by Chandrasekhar Ghosh, MD, Bandhan has proven that. This is true that financial institutions like banks are lending money to these MFIs on >12% , so reducing the operational cost to that level is commendable. Many MFIs and financial institutions like, SIDBI has already praised the move.
Why will many MFIs not fall in line ?

• There is no such strong demand from from clientele (consumers) side. Although, it is quite understandable.
• Most of the organisations are working at smaller units and one's actual lending rate is not known to other.
• Even if higher lending rates are known, so what ...?
• There is no system / authority in place to take cognizance of such practices ?
• MFIs own network or self -management body (although there is a network headed by Vijay Mahajan) is ineffective.
• Most of the MFIs (particularly those who have entered late in the "market") are being run as commercial organisation and not as a development organisation. It is important to mention that development organisation too can make profit (only to extent it is required to sustain or grow).

You must have come across the outcome of recent meeting of Network of MFIs where many decisions were taken about the - whom to lend, how much to lend, why to lend, how much to charge, what would be recovery mechanism, maximum how many MFIs can feed one borrower... etc. But what is happening is known to every one.
However, I must appreciate the efforts of 'Bandhan', it will certainly have some impact....positive.
Summer is catching up. Hopefully, this will bring good monsoon for us and then it will be cooler..Same may happen with lending rates of MFIs.

Keep enjoying..
Niraj

Learning From Past and Present For Future....

Dear Friends,
Greetings and Congratulations from the blog of Rural Managers!
First, we take immense pride and pleasure in welcoming  'new managers in making' in the club of Rural Managers. This is a club of those who care for their 'roots (Indian Villages)'; and of those who care for the 'surroundings (Society of which we are part of). We represent professionals dealing with development, rural banking or rural-finance, agribusiness, rural marketing and many more for whom rural India is both gyaybhoomi (place to learn) and karmbhoomi (place to work). By joining the club of rural managers we dedicate ourselves to study and contribute to the sectors in more professional way.
Be clear, business and development are complementary and not competitive; and you can’t think of one without other. I am sure, at the end of two years you will not only be able to unravel the myth of “business managers don’t think of development, and development managers don’t appreciate the contribution of business”, but will also be able to learn skills of managing both simultaneously.
I also take this opportunity to welcome seniors who are back from their summer internship. I am sure you are now wiser, more professional, and closer to the reality. Build on the learnings you had...these are precious.
This blog assures you an interactive forum of discussions on meaningful subjects and appeals you to be the active partner in this noble venture. By signing in as the follower of the blog you not only join the group of elite rural managers but can also contribute to the cause for which you have decided to be a rural manager.
To start with I have invited Anuj who is one of those rural managers who have decided to dedicate themselves because of genuine interest in the sector to write for new members of our club. An engineer, worked in highly ranked IT company, did management with specialisation in rural management, currently contrtibuting to much needed health sector. I am sure, his welcome note will not only give you the importance of course but will also help you making best use of management education and institution which you have selected for yourself. He is an alumnus of XIMB so he talks about his alma mater but it is applicable for all the new members of club irrespective of institutions.
We Wish You Very rewarding Years ahear and A Very Bright Future.

With Best Wishes,
Niraj

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Dear Friends,

I am honoured by the fact that Prof. Niraj gave me this opportunity to welcome you all to the Rural Management program. First, let me congratulate you for choosing the path less travelled.
You stand on an important milestone in your career as well as your personal life. Because what you will experience in the coming 24 months or so will completely redefine you as an individual. XIMB as an institution is respected for moulding students to become professional managers and I truly believe in that. RM program also makes the students sensitive and it is this human aspect of the program that is the biggest differentiator it has from the rest of the courses offered anywhere in India.
XIMB is an amalgamation of cultures in the truest sense. With multiple residential programs running at the same time, the institute offers students with an opportunity to meet with the best minds in the country. We have a whole lot of faculty who are experts in their fields and believe me you are going to find it extremely difficult to find reasons to miss their sessions. Many of these ‘mentors’ come with credible industry experience, so you can count on their words of wisdom in the toughest moments in your professional life.
I have myself been through the journey and I will share my guiding light with you. One of my seniors told me – Keep your mind open. And I followed his advice. RM program is a niche course, yet I found it is so relevant to today’s business scenario that you cannot stop yourself from thinking about the possibilities that exist. Our world and our nation are in the midst of a chaos and you can hear all sorts of cries for ‘development’. RM program at XIMB gives you the space to define for yourself what ‘development’ truly means for you and for the people around you.
Let me also give you a word of caution. XIMB has a very open culture. That means that it leaves the onus on you to decide what you want to take away from it. So you may end up going back empty-handed if you do not utilize your time properly. We have all sorts of initiatives to shape your personality to become a really sensible and responsible human being and a highly competitive management professional. But it finally depends on you to what extent you are able to realize the potential in yourself.
Life at XIMB might also seem hard at times because we believe in academic rigour. One may also find oneself lost in the number of subjects one is supposed to study or the amount of assignments one is expected to deliver. Make sure that you define your purpose carefully, because that will help you sail through this maze.
Now the time for a hard-hitting fact. It is a common observation that students enter management program with a focus on ROI (return on investment). Generally this is determined only in terms of PLACEMENTS. While I personally agree that it is important to look at placements, but this consideration has to be made secondary to the learning that will take place during the next two years. You just cannot predict which job you will finally land up with. You can have high expectations and big dreams but do not make the mistake of missing the learning aspect because that is the only thing fully guaranteed at XIMB.
On the 17th day of July of 2010 you start your voyage to a successful career and I wish you good luck and hope you immensely benefit from your stay at XIMB. Keep your mind open, do not keep your ideas to yourself, seek guidance from your faculty inside and outside the classroom, make lots of friends, keep time for enjoyment, dream for a better world and believe in yourself.
Best Wishes,
Anuj Jindal
RM Program – XIMB, Class of 2010



In response to our blog, I got a very useful mail from Kiran, one of of our alumni, and I felt it worth sharing with you. I reproduce here and will be happy to get your comments..
Niraj
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Sir,
Warm Greetings !!
I was going through your blog & I thought ,why not share some insights which could probably act as pointers for future rural managers.

• There is no substitute to knowledge about varied subjects & diverse topics. This is especially helpful when you are asked to illustrate concepts to interviewers. You’ll never run out of examples or cite the ones given in text book (A key point of difference).Moreover, in marathon interviews lasting around 1-1.5 hrs, only knowledge can be the saviour! This knowledge has to transcend beyond text books & probably can only be acquired by voracious readers who read anything they can lay their hands on! Nonetheless, newspapers & magazines can be a good beginning.
• It is high time students understand the difference between marketing & sales/business development. In India, mostly fresh B-School graduates get a sales or business development profile, though designation may be different depending on the stature of the company & the concerned business school. Profiles in core marketing are only handled by experienced hands & such profiles are rarely offered in campus placements. If you closely observe the PGP placements at XIMB also you’ll realize this is the truth! It is an accepted & proven fact that recruiters usually don’t prefer women (unless they prove otherwise) for such roles (More so for RM Area companies viz. Amul, Monsanto, ITC etc.)The only exception has been new age sectors like telecom & media. This fact should be clarified at the outset to students especially females, so as to avoid any undue expectations on their part.
• Knowledge can’t help if one lacks soft skills viz. voice modulation, conviction & proper body language. This is one area where RM students have to do a lot of work & this can only be possible if in group presentations, all students are asked to present & appropriate post presentation feedback is given. Sadly, some students always prefer to remain in the background and faculty members haven’t taken due care of this aspect. Deduction in grades or higher weightage to class participation component doesn’t help and it has been proved again & again.
• Very few students understand the importance of CV Value & the fault lies with the academic fraternity also for the same. One has to understand & appreciate the fact that corporates look for your achievements in the two year stint at XIMB & not what you have achieved in the past. There are numerous ways to enhance CV Value like participation in Case Study Contests, Business Plans, and Live Projects etc. Faculty members should encourage such activities & provide necessary support also for it also enhances institutes’ Brand Equity outside.
• There is an acute lack of clarity w.r.t. career choice amongst rural management students. They have failed to appreciate the fact that PGDM & PGDM-RM are two different courses & one isn’t a substitute for other or for that matter PGDM-RM students aren’t poor second cousins of the flagship course. This is reflected during placement process, when our students apply in hordes for certain companies displaying herd mentality! A company may be good and pay a good compensation, but it’ll only take people who fit in into its scheme of things. Just because it is a good choice for one, doesn’t mean it is good for all & vice-versa. Similarly, students fail to judge their own standard for there is a huge difference between interest & capability and grades certainly aren’t a determinant of one’s standard or interest in a particular sector/company. Faculty members should assist the students in making informed career choices.

Thanking in advance for a patient reading!
Regards,
Kiran Jyoti Mahasuar
Alumnus,Class of 2010 (PGDM-RM)
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C. K. Prahlad: A Development Guru

Sad and untimely demise of C. K. Prahalad, Professor, Stephen M.Ross School of Business, University of Michigan, USA is a great loss to the world of business, academics, and of course for all those poor about whom he has talked in his most popular book " The Fortune at the Bottom of the Pyramid- Eradicating Poverty through Profits". People call him a management guru, a strategy man, a business visionary....but for me he was a great "Development guru". I am among those who have not read most of his writings but have read all the edition of his above mentioned book.
The book gives us probably the most potent approach of eradicating poverty. His consideration of poor at the bottom of pyramid had many implications for the business and for the development. For him the people at the bottom of pyramid were not to be moved upward so that the pyramid either gets upside down or becomes a flat structure; but, they need to be considered for development and for building their capacity. He opined that those who are at the bottom need to be made active players in the business. For him business complements development and vice versa. This very thesis is enough to call him a " Development Guru".
The concept of inclusive growth, inclusive business, inclusive profit.... all have their root in approach suggested by Prof. Prahalad in his book. There was also criticism .....His views were considered to be extractive, exploitative, and were meant for profit . However, when it became clear that his 'Bottom of Pyramid' is not meant for making profit but for its inclusion in business processes , and once they become the part of business the empowerment is bound to come. He showed the world that empowerment does not come by charity or by the allocated fund meant for empowerment. The true empowerment comes by participation and by inclusion.

Further, the bottom of pyramid approach changed the thinking of development professionals. The paternalism (of giving away or doing things) is not the right approach because it further creates dependence and we miss the bus of true development. The examples and the cases given in the book clearly indicate that out of box creative thinking and innovative approaches, this not only provides opportunity (to those at bottom of pyramid) to use products and services which were hitherto available to only those higher in the pyramid but also, take care of underdevelopment by making corporations partner in development.
There are many more reasons to call him a "True Development Guru". We will certainly miss him.
May His Wisdom Continue to Benefit All Including Those At Bottom of The Pyramid.

Niraj

Agri-Tourism

This new concept is now picking up. During a recent training at IIM, Lucknow, one of the trainers talked about it and I got interested. I find some details on internet as well. But the questions remain...
-Is it only of academic interest or can it work..?
-Do you feel it is feasible in India ?
-If yes, has it a future in India ?

I would like to know more and more about it.

Niraj

CSR....

An interesting way of looking on CSR. Click on following link
http://epaper.timesofindia.com/Repository/ml.asp?Ref=RVRELzIwMTAvMDMvMzAjQXIwMTMwMg==&Mode=HTML&Locale=english-skin-custom
Happy Reading,
Niraj

Great ! Good Reading...

Dear Colleagues,
Its great !!!!! to see so many people joining the blog as followers. This brings added responsibilities on us. We need write more and more so that people can learn from our each others experiences, and explore themselves in answering many questions which some of us may put.
But I must tell you looking on this year's placement - I have many questions of which I do not have answers, and many observation to make which I consider worth considering.
Although I am not sure whether I will be the part of the placement team (in coming academic year) or not; but, I am sure, the success of students and also the institute depends on many factors which are under our control -
Learning from others' successes or failures is the easiest to do.
Engagement of students' community in many timely and academic discussions is other way of getting ourselves ready for future.
Going beyond the syllabus has always helped every one.
Exploiting every opportunity to learn.....seems too 'ideal' and 'most difficult' but pays most in long term.
We will continue to have discussions on such subjects.....
Once again, Welcome to the blog.... Do share, share,.......and share, because every one else wants to learn from your experiences and questions..
Niraj

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Good that you have brought some important points...I will rephrase it just to emphasize.. !
Clarity of your own goal is - must. Sometimes we develop a feeling that it is too early or too late to decide the goal. Probably you are wrong. "Everyday is the first day for rest of your life" and you can make a resolution,...you can decide the goal....and start moving in that direction. Few of our alumni who are known to us, like Anirban, Inir, Jayesh, Vikash, Shikha, Jaya ....... had made their respective goal very clear during the early part of their stay in campus; I find them exactly on same path which they had thought of and had selected.
One very interesting suggestion...be sincere in class. That is the 'most important' and can make your stay in campus but also in your organisation...very comfortable.
Networking and keeping relation alive...Great ! This is the reason we have blogs. Keep blogging.

Niraj


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This is what (excerpts) Saurabh..commented ! Thanks a lot !
1. My Gurumantra for the Juniors is that Believe in yourself and try to understand what you want. If you are clear with what you want you will surely work hard to achieve it.
2. Well for the second part-making your stay useful. I think that it is for you to decide. As per me the activities other than studies on campus are as good to learn as the classes. Do not take them lightly. Classes are to study so have a good time in class.
3. For the three questions part, Like Vikas sir I would prefer saying that their is no hard and fast rule for it. Questions can be from any aspect. Studies, Family Background, Project or any other dimension. Being confident is more important. If you are confident I am sure you can have a good time in the room in there. My whole Finals Interview was based around my Summer Internship Process.
4. But just one thing I can say is communicate with your superiors. It will really help you.
Thanks
Saurabh Singh
RM 2008-10
(for detailed comments please follow the comment link)

Dear Vikas....Greetings from XIMB and many thanks for your comments !
Few months back I read your interview on X-Post our alumni newsletter and could know about your professional growth. When I read your comments on the blog I find that with time you have really grown as a 'true professional' without leaving the your personal touch. Let me have my views on your comments...
Networking.....It is must for any professional. Probably we the managers in making and common professionals like us think that it is required for 'self' (mostly taken negatively), however, of late, I have realised that it is the expectation of 'society'. Society expects you to share your experiences, learnings, reasons for happiness and so... We all learn more from others than from books. So while you are sharing (networking) ..your attempt is not seen as selfish but is seen as the 'contribution'.
Secondly, what I found interesting....the comparison between RM and PGP. Yes, these differences are more in mind of we all. Beyond us it is XIMB, XIMB...and XIMB. However, I feel such comparison does affect our performance and affects "development of rural managers" adversely. It seems that we spent two years in campus as the 'second grade students' (PGP students are considered first grads). However, such feeling is absent from our ex-pgp students. This is my personal feeling and I would love to see the comments of other rural managers on this aspect.
However, I must reiterate, and emphasize... this is not true. I can't talk on behalf of others but general feeling (among the academic fraternity of XIMB).is that we, the RM students, are doing better or equally good (but in no case, inferior). Outside world has a lot of expectations form us (rural managers).
Your suggestion not to forget your 'root' and 'soil' is fantastic.....
Overall, it was good to see you on blog...I would be happier to see you again and again.....
With Best Wishes.......Niraj

Connecting the Links....

Fellow Rural Managers, and Rural Managers in Making.....

Your are a proud rural manager, or it is a matter of few hours when you will be donning the cap of "Rural Manager" - CONGRATULATIONS !!! I must tell you....you have a lot to cheer, and lot to feel proud of. You are the flag bearers of your great alma mater.

But, you will agree that you also have lot to share. You know, your few strokes on key-board will help someone making one's life, in being the part of organisation one has dreamt about, in making one's parents and peers proud. You have always tried and have shown the world that you are sensitive and compassionate towards need of your colleagues and friends. Then why don't you join me in making your owns happier ?

Are you ready....?????? Here are few tips....

1. Just put your one Gurumantra (in one sentence) for your own (juniors) to get maximum but meaningful out of one's about 24 month's association with your alma mater ....
2. Two ways to make stay most useful.....
3. Three qualities which a recruiter will always look for........
4. Four sentences which will make professional lives of future rural managers happier and valued by every one...
And yes, do not forget to write your batch and present profile (if you are already working).
I shall be happy if you accept my invitation and help me in creating a 'forum' from where your next, next to next....and future generations of rural managers learn and contribute for their juniors....

With Best Wishes
Niraj