Drishtee: Rural Economic Development

Vivek Durairaj 11/15/2010


Nature of the problem and challenges: About 70% of the Indian population lives in rural areas and few Indian villages have access to good education and most of them lack basic communication, health and financial services. The average literacy rate in rural areas is 52% and average rural family income is roughly $61 per month1. There is a huge disconnect between the rural and Urban India. Even though the growth of India is propelled by information technology, most of the rural India is untouched by it. Decreasing the economic gap between the rural and urban areas is important in order pull the rural poor from poverty. A strong rural economy is essential for the agricultural growth and a stronger organic consumer growth. About 68% of the rural economy remains untapped.2 With India being the second biggest by population and with a high GDP growth, the Bottom Of Pyramid economy in India offers a huge opportunity. Even though the potential is huge, the market at the Base of the Pyramid is not readily available and needs to be developed from the grass roots, which need a multi-pronged effort from any company that wants to succeed in this level of economy. Drishtee: Drishtee is a leading social enterprise in Development domain that provides a platform for rural networking and marketing that enables education, health services and helps rural entrepreneurs. Drishtee aims not just to capitalize on a rural market but to develop the rural economy using information and communication technology. In 2006 Drishtee was recognized by Deloitte, as the fastest growing high-tech company in India that provides a rural network for delivering various

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www.drishtee.com/cms/app/.../Drishtee%20Profile%20-%20General.ppt http://www.ilfsindia.com/projects1.asp?Category=2&Project=12&subLink=103


services.3Drishtee first started operating through Information and Communication Technology center called Drishtee Soochnalya(Information Kiosk) and has established a rural network of these kiosks. Drishtee helps in multiple projects to create community owned, sustainable businesses in the rural areas. The information kiosks are operated by the entrepreneurs selected from the local village. Drishtee provides training to the local entrepreneurs in information and communication technology to operate these kiosks efficiently. Initially Drishtee used these kiosks to promote computer education and e-services to the villager and has now developed into a distribution network of wide variety of products and services in rural India. The kiosks charge a fee based on the services provided to the local people. Technology: The kiosks in different villages are connected to a district centre through Internet in a hub and spoke model. Drishtee has developed its proprietary web based software to manage the front-end interface for the owners of the kiosks to use easily. The software is available in multiple regional languages to enable the local people who are not English literate. The district centers operated by Drishtee provides the content for all the kiosks that includes local employment listings, market prices and other e-government services. Drishtee leverages the existing technologies in cheaper hardware and software in order to help the franchisee to establish the kiosks. Business model: Drishtee operates based on a Franchise business model. Drishtee offers four types of Franchises. 1. Centre for Education and Entrepreneurship Programme Franchise This franchise offers basic computer training to the local youth in partnership with Microsoft and spoken English courses in partnership with Centre for education and entrepreneurship



programme.Drishtee also offers vocational courses through this franchise to create a livelihood for the local people. As a part of this franchise, Drishtee has piloted Rural BPO micro enterprises, which offer BPO services to the urban companies. The district centers acts as the hub with the kiosks as the spokes that controls the different BPO projects and the quality assurance. Drishteehaat.com, ecommerce site operated Drishtee helps in bringing rural artisanship to the rest of the world.This franchise also provides agriculture related information to the farmers and employment exchange for the rural youth. Drishtee uses its own customized web based software called Gyandoot to offer the e-governance services like driving license, passport, birth and death certificates. Recently these kiosks have also started provide digital photo services. 2. Women Health Franchise This franchise is operated by trained women from the village. Drishtee offers health training to the local women entrepreneurs. The health kiosks offer basic emergency care and non-invasive diagnostic tests. The health franchises are linked to qualified doctors who take weekly visitations to the villages. The franchise also offers Tele-health services through which rural patients can get consultations from the qualified doctors over the phone. 3. Drishtee Money and Business Facilitator Franchise Drishtee partners with Acumen fund to offer micro credit to the rural population through this franchise. It leverages the local self-help groups to increase their reach and ensure repayment. Drishtee partners with State Bank of India to provide banking services. By providing microcredit, it prevents the exploitation of the villagers by loan sharks. In partnership with ICICI, it also offers insurance services to the villagers. This franchise acts as a facilitator for the local entrepreneurs to create micro-enterprises in agriculture, health and other businesses. 4. Drishtee Rural Retail Point Franchisee.


Drishtee has create platform for the unorganized retail shops in the rural areas. Using its kiosk model as the base, Drishtee has created a distribution network. Using its communication network for market prices andits supply chain management, Drishtee has created an efficient distribution network that offers customized products for the local population. It has used conversion franchising that brings the existing retail businesses to expand Drishtee’s network in shorter time. Revenue Model: Drishtee uses a three-pronged revenue model. 1. License fee – A initial license fee to setup the kiosk is to be paid by the franchisee once his application to be a franchisee is approved. This fee includes the initial training given to the franchisee. 2. Monthly fee – A nominal monthly fee for the marketing and management support provided by Drishtee. 3. Transaction fee – based on the services provided by the franchises. Role of Franchisee With Franchisee being the owner of the kiosks, there is very little conflicts for interests between the franchises and Drishtee. Drishtee allows increased freedom to the franchisee in offering customized services according the needs of the local villagers. The franchisee can also design and introduce his own offerings in the kiosks. This helps in the franchisees to break even soon and establish a sustainable business. Role of Government Drishtee gets a license from Indian government based on contractual agreements to provide egovernance services through its network to the villages. Many of the kiosks are established with


the help of government sponsored loan scheme. Even though IT has been propelling India’s growth, many of the local governments are very slow in leveraging IT to provide e-governance services and local administrations show lack of interest in using technology. This is a hurdle in expanding Drishtee in many states of India. In spite of this, government has played an important role in the initial success of Drishtee. Partnerships Corporate Partners – Drishtee partners with multiple corporate partners like Microsoft, Intel and Nokia top provide educational services. Product Partners – Drishtee partners with Scojo foundation to market reading glasses and Amar Raja batteries to market new battery solutions. Financial Partners – Drishtee partners with Acumen fund, ICICI bank, State Bank of India and Grameen Bank in providing financial services. Social Enterprise Partners – Drishtee partners with Drishtee foundation to provide health services and Quiver Infonetics to provide cyber services. Scalability The company has been operating in a network-based structure helping it to customize products and offering of the franchises according to the local needs. The synergies between the different types of franchises have been properly utilized to make it a sustainable operation. The franchise based business model has helped in decreasing the capital requirements for Drishtee helping it to scale up its operations. With local entrepreneurs being used in financial franchises, it assuages the concerns of the villagers who place increased importance on the familiarity with the person operating the franchise before they can trust a financial organization. As e-governance services being a very important part of the services offered by Drishtee, the company needs to establish


and develop good relationship with many state governments in order to scale up their operations to a national level. There are about 14 official regional languages and about 114 recognized languages in India. With most of the rural people not literate in English and clustering based on languages, the software used by Drishtee would need a lot more customization and an increased effort from Drishtee to train the local entrepreneurs to break the language barrier. With a low literacy rate in rural India, expanding rural BPO might be a daunting task due to the lack of readily available talented pool of resources. Distributed BPO kiosks with a hub in District might not be an efficient way to operate, as it would make it difficult to assure quality due to the limited skilled resources of a village. Moving the BPOs closer to a town that can act as a BPO center for all the surrounding villages, would give it access to more skilled resources. The recruitment for the BPOs can be done through its existing employment exchange services provided through the educational kiosks. In 2006, the company reported that it operated about 1019 kiosks mainly in North India.4Drishtee plans to increase this number by more 10 folds in few years. With a successful franchise business model, multiple partnerships, diversified services and synergies between businesses, Drishtee seems to be in a healthy growth phase and can be used as an example for other social entrepreneurs to emulate.



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