A district collector’s experiment in Tamil Nadu is showing the way for more rural BPOs even in times of recession.
Rural BPOs (business process outsourcing) as social business are attracting a lot of young explorers. Last year, Kartik Raman, an economics graduate straight out of a college in the US, joined hands with two young men in India, one younger than his 26 years and another slightly older, to start a rural BPO in Bagad village in Jhunjhunu district of Rajasthan.
They recruited ten women, many of them just out of Class X, and some graduates, and trained them in entering and processing data. Today, 30 more have joined the BPO, called Source of Change, started under the umbrella of the Piramal Foundation, and earning between Rs 3,500 and Rs 7,000.
Kartik says they are planning to expand to more semi-rural towns in Rajasthan and are targeting1,000 recruits by 2012. So far, NGO Pratham has been their main client. They are also doing a pilot for the Confederation of Indian Industries to do contact verification for their members.
But it is southern India which is witnessing a rural BPO boom with over 30 already existing and more on the way. The inspiration for many is the unique experiment started a year ago in Tamil Nadu’s Krishnagiri district.
When an enterprising District Collector, Santhosh Babu, a medical graduate from Trivandrum Medical College, decided to have a BPO for his collectorate, he decided to open it in a village and recruited and trained villagers who had failed in Class X. Today, Babu has been made the managing director of Electronics Corporation of Tamil Nadu (Elcot) by the state government to oversee the expansion of his experiment in all 30 districts. This in a unique public-private partnership whose aim is to bring business and jobs for rural dropouts.
The first BPO, a 100 seater, was set up with a loan of Rs 20 lakh from the rural development funds of the District Rural Development Agency. The society formed in the village under the collector to run the BPO is repaying the amount. The society has BSNL and the Husur Industries Association as members and is totally free of government control. Today, its biggest client is none other than the US All State Insurance.
The most important gain of the BPO experiment in Tamil Nadu is that it recruits mostly people in villages who have failed Class X as well as graduates and pays both equal salaries of up to Rs 5,000.
Every seat should have a return of $300 to make it profitable, while giving jobs to dropouts and those who have no hope of a career, says Babu.
Elcot has started a rural finishing school where 7,000 dropouts from various villages in 30 districts have already been trained. After the elections, it is planning to call tender applications for franchises in every district. They would be drawing from the trained candidates. The National Association for Software and Service Companies and Fostera are partners along with a private company called Adventity.
The recruits, who start with a typing speed of 15 words per minute, are trained to improve it to 25, and given a three-month crash course in English. There is no compromise on quality, says Babu. It is already becoming a model for neighbouring states like Karnataka and Kerala which have set aside funds to begin rural BPOs.
There is no subsidy or charity. It is pure business and franchisees have to profit to find it attractive, says Babu. He says there is a lot of work coming which can be handed over to the BPOs but it would be up to the franchisees to get more.
Societies formed in the villages will sign pacts with franchisees and share profits, says Babu. Meanwhile, there are 25 other rural BPOs in Krishnagiri itself, he says, started by individuals and societies, not to speak of initiatives in a tribal village in Gujarat and three in Andhra Pradesh started by the Byrraju Foundation. Babu does not exaggerate the goodness of the BPOs and feels that expansion has to be dictated by the volume of the work available. It cannot become the only alternative job option for villages, he says.