Vijay Pratap Singh Aditya and his social enterprise, Ekgaon Technologies, are creating technology platform’s to provide financial, health, and agriculture services to rural customers. As more and more companies compete for the “bottom of the pyramid” markets in rural India, Vijay’s technological solutions force private companies to compete fairly and offer better services to their rural customers. In return, Vijay’s platform offers these companies the aggregated consumer information they need to develop stronger and cost-effective products and services. Vijay’s enterprise and vision are transforming the way rural producers compete in increasingly globalised markets and are able to increase their incomes and provide for their families.
The New Idea
More then 60 percent of the Indian population lives in rural areas where the potential to develop new markets in financial, health, education and agricultural services is enormous. Many Indian and international companies understand the possibility in these and other associated sectors and are beginning to create services and products tailored for the rural consumer. However when entering the rural markets many companies rely on traditional methods of market capture by creating proprietary access technologies and systems that limit consumer choice and product diversity, further there is lack of incentive in costing of there products and services for the price conscious rural consumer. The conscious lack of technological coordination among service providers leads them to use proprietary technology platforms even at higher overhead costs, aiming to monopolize geographical sections of the rural market. This expensive monopolization becomes counter productive, and captive customers end up paying higher prices. The end result of this strategy is lowering cost of operations and expanding markets, that leads to poor service quality and institutionalizes lowered service expectations on the part of the rural consumer, who start weaning away slowly.
Vijay wants to establish parity in access to services to the rural producers and consumers. He is creating a wide variety of open-source solutions based on common access software and a free-to-access (as much as possible) platform on which service providers can access a market of rural customers who are, in turn, able to comparison, shop for services as well as share their needs and reviews. This widely available access software decreases the costs for new market entrants and encourages competition by firms that otherwise might not have been able to reach the rural consumer. The resulting competition and lowered service delivery costs stands in stark contrast to the normal situation in rural areas where monopoly or duopoly power have kept prices artificially high and limit product/service diversity. Additionally, Vijay’s platform and software technology is in the process of providing a whole new level of information access that protects consumers’ personal information, while at the same time allows insurance companies, banks, and other service industries access to limited aggregated and accurate information about the customers they hope to serve, by helping them redesign there products and services offer.
Vijay’s definition of an appropriate “platform solution” is not limited to digital software. For example, to create a certification system for small-scale and numerate, but illiterate organic farmers, Vijay utilizes an approach based on number symbols and color coded paper. He uses a similar approach with color coded paper to help illiterate Self Help Groups to effectively manage their financial operations and network with financial institutions for there credit needs.
Vijay and Ekgaon’s long-term objective is to design an integrated platform which contains a wide range of community-owned, common access solutions; allowing rural service providers, rural customers and producers to access each other in a transparent, efficient, and competitive way.
The shift to more free market policies in India has meant more choices for urban consumers, but rural consumers have been left behind. This is beginning to change, as domestically-owned and international companies expand their positions in the growing Indian market by reaching out to rural consumers. At the same time rural producers are being tapped by companies for ensuring supply of quality produce for rapidly expanding retails markets, here again producer find it difficult to make a informed decision due to lack of information and controlled nature of supply chain.
A great deal is at stake including livelihood security of rural producers. Early and successful entrants to these markets not only provide products, but also dictate to a great extent how this growing market will be organized and the extent to which rural citizens will have access to a wide range of products, services and markets. To recover the somewhat higher cost of accessing rural markets, and as part of their strategy for growing market share, private companies in the financial services, health services, and other industries, seek to build proprietary software platforms for rural communities that effectively exclude their competitors. These access solutions are adaptations of approaches that succeeded in urban markets, but are ill-suited to consumers for whom transportation and wage loss are major obstacles. For example, when ICICI Bank (a large private Indian commercial bank) decided to offer rural banking services, it designed mobile phone software that was incompatible with other banks and MFI institutions—limiting the ability of rural customers to compare alternative rates available from other banks, MFIs, or non-banking financial institutions. The effect was to create a captive market in a few rural areas where customers were charged very high interest rates on small business loans and received poor returns for their savings. ICICI Bank tried to justify these rates by pointing out that no other institutional investor was willing to invest in the area due to the high risk of default. Unfortunately, this argument overlooked the fact that there already are large numbers of non-bank financial institutions in rural communities lending to customers with the same loan risk profile.
Similarly rural producers are increasingly getting tied down in a cycle of dependency where loan taken for production is tied to a single crop, for which seeds and other inputs are usually provided by large retailer without assurance of assured market or price, forcing the producers to own all risk in case of failure or lower quality produce, resulting in loss and endangering livelihood security of the family. This phenomenon was widely evident in cotton producing regions of Vidarbha in Maharashtra and Andhra Pradesh, leading to mass suicides by farmers from year 2001 onwards. Informed decision making and diversification of risk by exploring other markets can help producers to overcome (to a certain extent) these risk, however due to the way market forces work such information is not accessible to them.
There are also a number of academic and citizen organizations (COs) doing work on appropriate technologies that seek to make the development process truly consumer and producer driven. What they have lacked is a more systematic and conscious approach to designing a rural and community-owned platform for health, financial, and agricultural services.
The legal remedy for private company monopolization of an access platform is prohibitively expensive for rural communities. The costs of collectively organizing all the rural constituents affected by technology monopolization would be larger than the costs faced by the private companies who first designed the access technologies. Use of the courts also runs the risk of cases being drawn out for years and years. Faced with technology monopolization, the most that a rural community could realistically hope for would be to bargain through the farmers’ federations or other forms of community collectives.
Vijay’s work in the field of rural service provision access extends across a wide array of initiatives, programs and software; driven by and in the hope that rural consumers are in control of what services they can access and receive.
One category of solutions Vijay has developed are for rural customers in need of immediate, operational-type support. For example, the mutual organic certification program he created with rural farmers. The farmers wanted to certify their produce as organic in a local market to command a higher price, but since monitoring costs are high, they had trouble attaining certification on a case-by-case basis. Vijay’s solution was to pool their products, have them periodically tested, and have the farmers certified as organic producers on a collective basis—shifting monitoring to specially appointed farm auditors (members from same farming community) and allowing them to exert collective pressure to maintain high organic production principles. The self certification was also made accessible to consumers buying the produce at a premium, helping them gain confidence in what they were buying.
A second category of solutions is aimed at filling gaps that will empower all rural consumers. For example, to create a rural credit rating system that takes into account the financial performance of each rural client, and not simply the group to which the client belongs. It is common practice for microfinance institutions in rural areas to offer group loans and charge entire communities the same interest rates on loans, regardless of an individual’s default history. In contrast, a rating system that evaluates the default history of individual client will allow banks and insurance agencies to consider individual financial behavior when charging interest on loans and establishing premiums. Another example is Vijay’s plan to create personal medical histories linked to family medical history. Currently, rural health insurance policies are rarely renewed from year to year; the rate is under ten percent—because the insured do not have effective access to service providers. Health insurance providers are stymied because they do not have access to the kind of organized information that would facilitate realistic price policies for classes of beneficiaries. Vijay’s solution is to build a community-based medical history on a platform that protects a person’s medical history from being disseminated without their consent, but allows the community to aggregate the information in ways that enable potential service providers to develop products and services for them. The proposed system is owned and operated by community financial institutions, as a further safeguard, Vijay is designing this system so that the data gathered will be managed and accessed by stakeholders based on the services offered and Ekgaon would provide value added services like finding cheapest medicines, treatment centers and availability of doctors besides health alerts like epidemic, immunization and treatment schedules aimed at individual members of the community.
Vijay is also developing solutions that anticipate the future direction of rural markets. For example, he is developing a micro weather forecasting system in partnership with a local agriculture university in Tamil Nadu. The academic meteorology program is providing weather data from small reporting stations and then using a simulation model to predict weather conditions up to a 10 square kilometer area. Vijay recruits farmers into the program and has the forecasts delivered to their cell phones. This information is then used to determine optimal planting and harvesting periods besides managing schedule of application of fertilizers and pesticides. Vijay foresees these forecasts will include information on seeds, soil nutrients and irrigation techniques in the projects next stage. The system would be self-sustaining if agricultural supply and insurance companies pay for advertising in the cell phone messages. He is in the trial stage of this program; crop yields will be compared to previous years and farmers will decide if they want to continue with the program and expand the service offerings.
Vijay’s company, Ekgaon Technologies, licenses their software and solutions through the Creative Commons and GNU General Public License (GPL) an initiative that seeks to protect the intent but not the content of creative work. Many of the software he creates are freely available in open source solutions. This means that private service providers, such as MFIs, insurance groups, and hospitals, may use, copy, and modify the software (under the terms of GPL) in any way they choose without paying Ekgaon. Vijay’s primary concern is that the solutions developed by his team level the playing field of accessibility for private participants and increase community ownership.
Vijay and Ekgaon have found that designing solutions based on specific minicomputers and PDAs type hardware devices are costly and difficult to repair in rural use scenario. Instead they have adapted the software to operate on market hardware devices such as mobile phones which are commonly accessible, have simple user interface and have wider support base for repair and maintenance, besides being personalized devices. Hospitals, citizen federations, and COs act as franchise and serve as aggregation points for the information that cannot be stored on cell phones. These organizations, which usually have computers, partner with Ekgaon facilitated by COs to set up and administer services to enable the software services Ekgaon designs. The computers at these facilities are used to store and serve financial, health, and meteorological data to users’ cell phones. To ensure these intermediary institutions sustain and serve there constituents, Ekgaon has developed highly-secure network, that allows interfacing with private service providers through middle-ware applications, these institutions get share in revenue generated against the services provided.
Vijay is a first generation entrepreneur. Vijay’s family is from the state of Uttar Pradesh and his father worked in the government administrative services at the district level. When Vijay went to university for a degree in electrical engineering he wanted to write his final year thesis on fuzzy logic traction control, a field within the study of artificial intelligence. When his advisor told him that his project was outside the bounds of faculty specialty he found an alternative advisor from a top public sector company doing work in his area of interest, however still could not pursue the same due to pressure from institution to look at theoretical aspects of technology then practical. After finishing his undergraduate studies, he obtained a post graduate degree in management from the Indian Institute of Forest Management, Bhopal and developed his thesis-Action Plan on Micro-watershed using GIS & Remote Sensing. His action research work using computer mapping led to a working watershed project in a section of the forest area in Madhya Pradesh. Inspired by the response to his work, Vijay focused on how to use technology to help rural people preserve their environment, secure livelihood and improve their way to life.
Vijay went to work with the knowledge networking project of the Honeybee Network at the Indian Institute of Management, Ahmadabad developing networking technologies for interfacing grassroots innovators, but soon realized that despite the good work that was being done, to sustain it an organization was needed which provides revenue based services to rural areas leveraging the potential of open source technologies and software platforms. He founded Ekgaon Technologies with a NRI colleague who left shortly after to become a distinguished professor at the University of California, Berkeley. Vijay established Ekgaon as a for-profit because he wanted to encourage others to see the potential for serving rural users as a business with lots of potential, rather than as ‘just another rural charity’ driven approach. Vijay is in the process of making Ekgaon’s rural software service platforms and programs financially self-sufficient, and is committed to put any profits generated by Ekgaon back into the platform and software he has developed to improve the lives of rural communities.