Visit to Mulkanoor

I had a chance to spend time in Mulkanoor for professional exposure visit recently. Why? Mulkanoor is guiding light of India's cooperative movement. I was able to visit Mulkanoor Women's Cooperative Dairy (MWDC) and Cooperative Development Federation (CDF) promoted Thrift Cooperatives but unable to go at Mulkanoor Cooperative Rural Bank and Marketing Society. The purpose of the visit was to gain an insight into Community Micro Finance & Livelihood intervention work and gradual evolution of the cooperative model formed by the local women. I tried to learn from personal experiences as well as technical formalities by interacting with staff, members, & board directors of the cooperatives. My visit began with a morning ride from Hyderabad and it was about a four-hour drive. Mulkanoor falls in Bheemdevarapalli mandal of Karimnagar district.

Mulkanoor is a hub of agriculture related activities. This area is known for paddy, maize and cotton cultivation. In addition to it, Mulkanoor is famous for its milk production too. Mulukanoor Women’s Cooperative Dairy (MWCD), a model enterprise was established in 2002, the dairy today is an enterprise powered by 22,000 women producers. Currently, the dairy has 138 societies also known as women dairy co-operatives (WDC) having members from the bottom of the pyramid (BoP) spread-out in Karimnagar and Warangal districts. MWCD’s brand Swakrushi stands for quality for its consumers.

Cooperative Development Foundation, popularly known as Sahavikasa, was formed in 1975 when a group of Individuals came together and started working for the development of cooperatives. The CDF has provided technical assistance to the cooperatives with the strategy revolving on the social construction of an economic institution. The following working paper throws light on CDF and Women’s Thrift Cooperatives in Mulkanoor.

I am sharing few peculiar observations about Mulkanoor here -

1. Access to credit is the primary reason to join thrift cooperatives. Financial inclusion is always an enabler of other development objectives and not as a standalone goal. The financial inclusion goal has been achieved in Mulknaoor but the action to ensure social justice or affirmative action in political space have been shunned. The premise of cooperative movement is the result of the struggle against traditionally dominant business class. They have chosen a strategy to fight on the single front rather than spreading limited resources for democratizing the social, political, and economic life.

2. Many women believe that financial products and services are too complicated for them to understand, and this perception serves as a barrier for adoption of these products and services. It’s unfair to expect women members to be expert investors in various available financial services. But thrift cooperative has done ample of capacity building and localization of the financial services. This is inspiring to see how real banking services is supposed to work for real people leading real lives. Thrift cooperative has ensured service accessible to all and not turning into a complex maze only a few can navigate.

3. Most cooperatives fail in running enterprises due to being insulated from the discipline of the market especially in consumer-facing enterprises. MWCD has again proved that AMUL Model can be replicated and adopted anywhere in India. Also, Thrift cooperatives at Mulkanoor have not been caught the in the trap of imposition of across-the-board waivers in the interest rates and loans repayment. Good governance can be attributed to the Andhra Pradesh Mutually Aided Cooperative Societies Act specially. This helps management in not allowing outside interference of the government as they want to maintain the integrity of this cooperative. The institution has developed because they were not politicalized and kept away from concessions and subsidies of the government.

4. Democracy in the cooperative did not just mean that one has the right to vote, adding that it is necessary that the democratic ethos spread in the community. CDF has served the community with the commitment to deregulation and entrepreneurship. It's difficult in a practical sense because a cooperative can't be run like business corporations. Internal issues have to be resolved in a sensitive and tactical way as the community has to live with those whose status quo are affected by the cooperative. Such deregulation and upholding of power by community representative have helped cooperatives in avoiding governance crisis and not transforming into an ineffective parastatal institution.

5. CDF and community leaders have dared to challenge conventional wisdom and social assumptions. Community leaders at Mulaknoor have brought next generation with skills into decision-making positions. That has built a cadre of professional and leaders at the community level. The chance to get skills and to practice and learn leadership has expanded the leadership base and increased the age of the institution.

Mulkanoor cooperative is an exception rather than a rule in Indian cooperative ecosystem. Cooperative Movement has been burdened with a variety of problems, mainly from the outdated cooperative law and practice, conflicting with the basic tenets of cooperation and sound business principles. The cooperatives who are most successful work in an enterprise way without being at odds with transparency as well as accountability. Trust and perception matter more than financial benefits in the cooperative movement. Roots must go deeper in the creation of the power to the people, which is opposed to the coercive power of the state and differs from the traditional business.

Street Entrepreneurs - 2

The informal economy in India is run by entrepreneurs providing products and services to the customers. These low-skilled occupations require low financial investments and thus have a relatively low threshold for entering. The street vendors have created a carefully constructed beehive of economic activity in the public space. They have created a functional system for themselves without waiting for government to provide them the legal permission, space and subsidy. In the series of street entrepreneurs (first part), I am presenting here a blog post by Anishok Mishra from the 2016-18 batch of XIMB:

The Cost behind the Taste - The Chaiwalas of Bhubaneswar.

Tea, or as we fondly call it "Chai" is one of India's most preferred hot beverages. Almost every person in our country has had a sip of this drink once in their lifetimes. Some prefer it black, some with milk, some with a splash of lemon and those looking to get healthier by drinking it prefer it "Green". No matter the variety or the recipe used to brew, this drink has only grown from generation to generation.

A big contribution in the same can be attributed to the numerous vendors who are situated on the streets in shops and "thelas", sporting aluminium kettles and gas stoves, serving tea to all who pass by their shops in glasses, earthen "matkas" or sometimes in plastic cups too. They all have their ways of working and their ways to making ends meet. This article attempts to take a closer look into the lives of these "Chaiwalas" and attempts to analyse how they recreate the same taste every day and the rewards they earn for their efforts.

At the outset, during the course of our short study we observed the following average trend in the expenses that surround a tea vendor:

Monthly sales (Rs) 24600
Montly Cost (RS.) 15193
number of cups per month 4920
Quantity of tea sold (liters) 388
quantity of Tea used (as input IN KG) 12
Cost of Tea Purchased per month 2898
Milk used (litres) 318
Cost of milk 9432
Electricity /Gas 587
Other Expenses 2276
Profit per month 9407

Let above figures not lead you astray. The same are simply an average of the shops that were surveyed at random and follow no patterns as such. Not every tea vendor makes more than Rs. 9000 as profit in a month. Besides this does not consider the expenses such as the cost of his equipment (Stove/Fridge/Utensils etc.) or the support staff. This means that the profit gets trimmed down even further and comes within a range of 4 to 7 thousand a month. This figure gives an insight into the hard lives that these vendors have to endure.

During our survey we approached each of these vendors with a set of questions. Although our intent was strictly academic at the start of the project, we could not help but indulge ourselves into the brimming cups of tea as they shared the information with us in a forthright manner. Be it their sales or their expenses, the "Chaiwalas"seemed as relaxed sharing this information as Toyota inviting people to study its Just In Time systems. Though the comparison may seem far fetched, the same is precisely what transpired.

During the time spent at the stalls asking for information, we observed the plethora of customers that these stalls catered to. Ranging from students who were headed back from tuition to tired office staff blowing off steam after a hard days work; or even the rickshaw drivers when they take a break. Somehow, these "Chaiwalas" have established their presence in all our lives as focal points where people meet and socialize irrespective of their occupation or status. The experience reinforces the importance of these vendors in the social landscape in maintaining a delicate balance between the lives of individuals.

Selling averagely 5000 cups a month and making only a rupee of profit per cup is a grim situation for any business. But the "Chaiwalas" have endured for the better part of a century and continue to do so serving us with a smile across their faces and the amazing fragrance of brimming tea filling our nostrils.

Job Search in Rural Management Domain

Rural management gives career option in both for profit as well as non for profit sectors. A rural management professional can very well be part of the mainstream down the line even though starting career from a rural base. Job search in the rural management domain is more about information asymmetry than plain vanilla hunt for opportunities. While seeking for job, professionals apply for anything and everything in response to the posted vacancies in the job portals. Consequently, the chances of resume being ignored by the recruiters becomes high. To avoid the rejection, it is suggested to have a customized resume and job applications by including the keywords used in the job description that fits with your skills and experience. An updated Linked-In profile and healthy networking helps in a great way.

I have faced difficulties as a job seeker looking for the right job and even knowing name of various companies/ organization of the rural management domain. It is best to choose a target employers where one would like to work, and focus your efforts on those jobs and employers. I have compiled list of organizations apt for a rural management professional that will assist one in reaching the right and targeted organizations easily.

This database will come in handy to the development professional, current students and alumni of XIMB, XISS, EDI, XIDAS, IRMA, VAMNICOM, Amity University, TISS, KSRM, IRM, IIFM, IIHMR, NIAM, GBPSSI, BIMT, NIMT, IISWBM, NIRDPR & TERI University.

Please provide feedback for any company and organizations not mentioned here.

Learning of the Day: It is important to negotiate on the salary and consider this as a marathon, not a sprint. Prof. Deepak Malhotra offers 15 pieces of negotiation advice in an informal session for students at the Harvard Business School.

The Future of Self-Help Groups

SHG Bank Linkage Model pioneered by NABARD served the dual purpose of financial inclusion as well as social empowerment for rural poor women from excluded communities. SHG program had shown to be successful in connecting both unserved as well as under-served customers with financial services.

In the changing financial landscapes, it's merely a question of time before the JLG movement overshadows the SHG movement. The data on regulated microfinance institutions (MFIs) that submitted their numbers to the Microfinance Institutions Network indicates that over the past year, loan portfolios grew by 84 percent and loan disbursements grew by 45 percent (Source). SHGs financed by the bank despite government schemes like NRLM became stagnant with the growth of the MFI sector. The data set (Source) shows a decline in SHG financed by banks post 2013 while the JLG movement is seeing tremendous growth.

JLG model has led to the establishment of a large microcredit sector in India post-2010. While SHG promoted by NGOs and government agencies are either small in numbers or with high default rates. The reason behind this can be explained through last-mile outreach, continuity in service, strategic approach of the movement, and market-led changes in the society.

Both SHGs and JLGs have distinct credit delivery models. The members are expected to visit the bank and make repayments on their own in the SHG model even when a visit to the bank branch leads to travel expenses and loss in daily wages for the client. SHGs have to manage the entire repayment collection process and maintaining records. This process is reversed in the JLG model practiced by MFIs with a door-to-door delivery solution of cash disbursement and repayment with proper records.

SHPIs (mostly NGOs) promote SHGs for deepening the impact of their programs and consolidating their own social agenda. Promoting agencies are solely dependent on the funding agencies and aid under any government schemes for the cost of formation. SHPIs typically have a mandate for capacity building through training, credit linkage of the SHGs to banks, and their monitoring role vis-a-vis the group discipline that is limited for the project duration. Hence, SHPIs were able to sustain regular and quality customer service to the women members during the project period only. Public sector and rural banks have been lending to SHGs only due to government-imposed, priority-sector lending quotas. Once the support from the SHPI ends, the bankers are a bit reluctant to provide financial support to SHGs due to fear of default. SHGs are also implementing vehicles for various welfare schemes in rural areas and get funds for it. But most SHGs are running on paper only. The validation and grading exercise to know the health of SHGs are avoided by both government machinery and NGOs as this can expose fraud at the ground level. This also led to decay in the quality and credibility of SHGs.

MFIs diversified the geography to cover for political risk post-Andhra crisis. The consolidation phase was achieved in the MFI market as the crisis has swept away small players and make investors cautious. But the value of acquiring customers went up due to the introduction of credit bureaus. The strategy adopted by MFI for acquiring new clients was based on low risk and high pace growth. They concentrated on the regions where the SHG program was implemented on a large scale with successful results. The new borrowers came by the restructuring of already existing JLG and SHG members. The incentives of a loan officer in MFI are based on loan disbursements and recoveries. As a result, they could form JLGs and disburse bigger ticket size loans if they include SHG members with inculcated good credit history in the JLG formation. Also, women preferred the JLG model due to the availability of credit in increasing amounts without any mandatory savings.

SHGs are gradually becoming the aggregate of individual actions and rarely work as collective action. The members of SHGs are more inclined towards starting an individual-based activity rather than collective-based activities. This behavior shows either SHG members have not much awareness about the benefits of coming together or don't have cohesion among them. A major role behind the screen was played by the external market-led economy having dynamic individualism and consumerism as its underlying themes. There is tremendous heterogeneity even among the poor SHG members based on parameters of aspirations and entrepreneurism. The break with tradition and affirmative action of state meant the break with established identity-giving authority. The new individuals, freed from the traditional collective, have started to reorient themselves in a new manner. In the booming economy, there are chances of class mobility for entrepreneurial households through remittances and migration. The lines of class division are crossed now more frequently,  the collective identities based on class or caste association are loosening up and leading to ineffective collective action. Hence, theories of collective action are not working as effective now in the rural ecosystem,

This concludes the brief summary of the emerging debate. The popularity of the JLG has eclipsed SHG but its current clients will be shifting to Small Finance Banks to avail savings, credit, and other full range of financial services. The affluent clients will drift towards JLG while the SHG movement will continue to reach out to vulnerable and marginalized people who own little or no land, are predominantly illiterate, and lack access to formal sources of financing.

Life in ALC India

I have joined at ALC India Limited today. I have moved into consultancy act from programme implementation role. I hope my work will take me places and the initial exposure that was localized in the nature and context will be broadened. Tangible gains go hand in hand with the intangible ones in career of every employee. There will be business relation to establish, field tours to get insight, policy level to conduct and markers to lay for the future. Hoping this life will not be fully devoted to the job and conforming to its mindless dictates.

When I quit the job with Chaitanya, I almost felt I had unfinished business to do. I felt that my reputation with ADS and in peers had been very good. And then you have to start searching for job after a gap, it is tough. It knocked me out for few interviews. I have seen a lot of ups and down with the career even a pink slip. I have emerged stronger after experiencing harsh realities of the lives early on in his career. When you get on a learning path, it is the best time of your life. Every day means something, every lesson provides the clarity you clamour for. Life is not about doing it alone. It's about learning from those who have already achieved great heights, and adding that history to one's own built-up.

"Life is not easy for any of us, but what of that? We must have perseverance and, above all, confidence in ourselves. We must believe that we are gifted for something, and that this thing, at whatever cost, must be attained" - Marie Curie