Ajay Chaturvedi, an MBA from Wharton Business School, USA, was happily doing a high-paid job at Citibank until one fine day when he decided to go to the Himalayas for introspection.
After some deep thought, he finally decided to quit his job in 2010 and follow his passion for empowering the rural India. It was the time when the foundation for HarVa – a for-profit rural enterprise – was laid. The enterprise primarily focuses on skill development, BPO, community-based farming and micro-finance in villages.
HarVa has a simple model which focuses on the vast intellectual and infrastructure capital available in India’s hinterland by developing profitable businesses and help rural communities gain employment and skills. Chaturvedi believes, “If you will sell the concept of a rural BPO, you are bound to fail. The business model has to be economically viable. It’s positioning also matters.” Hence, HarVa is positioned as a socio-capitalist model.
The initial journey was tough, recalls Chaturvedi. Like any other start-up, he has faced many challenges while operating initially. The basic were the lack of infrastructure and poor connectivity. Besides, he put efforts to change the mindset of the people and convince them to cooperate towards inclusive growth with HarVa.
He also worked on skill building and cultural barriers that exist in rural communities. And he did manage to attract a large number of women, who are free when the men are out for work and children asleep.
Besides, access to working capital is also an issue. To fulfill the working capital requirement, if you will go to venture capitalists, they will talk business. And banks bank’s definition of SME is somebody with a business of Rs 25 crore and above. Hence, it is a challenge till now.
Talking about the Government support, he says, "While the Government has a lot of schemes like the Rs1 crore collateral free loans for entrepreneurs, I have never seen any of our partners being able to get it. While we have managed to scale across 14 states with help of our partners, the partners themselves find it extremely tough to raise working capital for a BPO. The Public Sector banks are still focused on brick-and-mortar businesses. A BPO, while exciting and a romantic idea, still does not generate the confidence in them to give collateral-free loans."
Why the growth is still slow?
Chaturvedi firmly believes that a business can’t grow just because it is inexpensive, it will always grow if there is a demand. To keep the demand growing, the product or service quality has to be good which requires hiring qualified managers for rural. While scaling up the business, more and more such managers need to be hired. And the cost that you save in the form of low cost of operations would get compensated by these well-paid managers.
Looking forward, he believes the rural sector will be the engine for growth because prospects in urban India are shrinking. With technological advances, the outlook of villages has improved significantly, thus allowing companies to produce an array of goods and services for and from the villages.