Evolution Process Continues

It has been long time since I wrote anything on this blog. Facebook has taken the space for the small headlines. But for long write up, this is the place.

Over last one year and half, things were too hazy and tough but we persisted and waited for some divine moment of inspiration. The inspiration never came but small small steps towards survival guided our way forward. Only good thing that we did that we kept walking. We kept on moving despite having hazy vision and dark clouds.

At this moment of time, the path way forward is getting more clearer.

Bihar Development Trust as a non profit organisation will survive now.


BDT 2.0 will be different from last five years. The headlines will be changed. The focus will be sharp.It will become a professional led organisation with 100% dependence on grant and donation for its work. It will exit from the social business space over next five years and the space will be taken over by businesses in private limited company mode. Over the next five years, Its debt will reduced to zero and it will execute projects on grants only. Its main role will be to build community based institution and enable them to do business in this market economy. All this nurturing will be done by the support of grants only.The focus area of Bihar Development Trust is also getting delineated. It will work on bamboo and weaving thematic area. This will entails fields like livelihood promotion, institution building, capacity building, climate change, environment , sustainable development etc. We are planning to hand over the management of Bihar Development Trust to professionals by 2017. The idea is to transform Bihar Development Trust into a resource organisation on Bamboo and weaving over next five years. Marketing activity of Bamboo based programme and weaving based programme is in process of being shifted to private limited company form.

We have become more patient and preferring to go slow and focus on consolidation of the business processes.Lot of innovation and good HR practices have evolved after these two years of struggle of becoming focussed.

The faith has become stronger . The ability to survive has acquired a new meaning.
Lots of things are happening which will be shared in coming posts.

BDT UPDATES

Dear Friends,

Greetings from BDT!!!

It has been long time since I wrote and shared BDT updates with you. Its has been an eventful last six months for Bihar Development Trust. We survived micro finance scare and are emerging as Livelihood institutions. The debt freeze to micro finance industry was biggest threat to BDT survival which forced the acceleration of livelihood programmes. Besides running a well managed micro finance programme, We are now implementing three established livelihood programmes with dedicated team and resources.

Weavers Livelihood Programme is supporting livelihood of 100 weavers in two clusters in Bhagalpur.
Farmers Livelihood Programme is supporting livelihoods of 1500 farmers in three blocks of Aurangabad district.
Bamboo Livelihood Programme is supporting livelihoods of 500 SHG members and 200 Bamboo growers in Kahalgaon Bhagalpur.

BDT is providing institution building, bank linkage, credit linkage, technical training, technology transfer, governance and accountability training, marketing linkage ,infrastructure development welfare work etc through these livelihood programmes with grant and loan received by it from various donors and lenders. These programmes will support 3000 families this year.

We are repositioning BDT as a livelihood promotion institution with direct implementation. BDT is promoting a sustainable model in which founder entrepreneurs, producers, employees, investors have win-win relationship. All the stakeholders will be given proportionate shareholding in private limited company. The producer will be organised and registered into various legal entities which can own share in the proposed private limited marketing company. The concept is that producer focus on production which they know best and we focus on marketing linkage and branding in which we are gaining strength day by day. We are limiting our focus to weavers, farmer and bamboo based livelihood and scaling it up. For this only, BDT has been awarded as one of the winner in Development Marketplace 2011 organised by The World Bank, IFC & The World Bank Institute.

We have a new look of our website www.bihardev.org and would request you to visit it to know more about our model and work.

This year BDT balance sheet size is Rs.2.29 crore with a micro finance loan outstanding portfolio of Rs. 1.15 crore and revenue of Rs.82 lakh and while it received grant support of Rs.16 lakh approximately which was spent as per objective of grants.

BDT is well linked to buyers and has more demand that it can meet for bamboo sticks, stoles, fabrics, vermicompost etc. BDT need working capital support to grow these programmes through internal accruals and surpluses. Besides, those connected to donors/lenders circuit can help BDT by lending it loan for working capital purpose of Rs. 10 Million this year. We have viable business plan for each of livelihood programmes and these can be shared to interested people. These loans will support livelihood of 3000 producer families through wage, purchase of raw materials and finished goods and surplus sharing.

Appeal for Donations:
For these initiatives to grow and support more and more livelihoods, BDT needs financial support from you. Each one of you can support livelihood of one weavers , farmers or SHG members by contributing 10,000 rupees towards vermicompost pit construction for a farmer, bamboo processing slicing machine for a SHG group or improving the hand looms for a weavers. You will be linked to one producer which will receive your support and interact with him over phone and his/her story will be updated on website.

BDT has been supported by AIACA, SDTT, AIF, NABARD,FWWB, BASIX, RGVN, TMN,FORD FOUNDATION,SBI, PNB,INDIAN BANK,SIDBI, Union Bank, Ananya Finance and many more over last four year. BDT is very grateful to these donors and lending agencies for their support.

BDT epitomises the spirit of a survivor and has been live example of the phrase '' what does not kill you makes you stronger''. Over the last four year, we have grown stronger and stronger with the support of your wishes. We wish to hear back from you. Please write back to us on bihardev@gmail.com.

With Best Wishes

Dr. Ravi Chandra
Managing Trustee & Chief Finance Officer
9771438191

At a monday morning, I am thinking about the last three years of Bihar Development Trust . It has been a whirlwind drive , a roller coaster ride. Starting with no idea except development of Bihar to finally a diversified group with interest in Microfinance, Textile, Agribusiness. Starting with two people to a 30 people team working in various programmes. Somehow, a shape is being visible far away. Either we emerge as an INFOSYS or TATA Group, it has to be seen. As there are 4 indepenedent promoters from 2 to start with and whose number will keep on increasing as we need manpower and money, we seem to be following INFOSYS model. INFOSYS is a group of 7 people leading a team of more than a lakh professionals. We may be same as Infosys. But, our domain is not single one. We are already in 3 verticals and trying to consolidate that. Then, wwe will increasing our verticals as Bihar need power, many more factories of production and services. We may be building power plants albeit from renewable sources for rural electrification . We may be building biggest decentralised handloom production system of textile in Bhagalpur. We may be building food processing factories as well as creating Kisan Sewa Kendra and rural godowns.
Activity wise, we are following TATA model with BDT becoming a holding trust for Microfinance, Textile and Agribusiness and many other initiative.

I do not know when and how we throught 20 billion dollar dream for Bihar. But, as we are growing through struggle, the convictions seems on getting stronger and stronger. All 4 promoters now believe strongly that a 20 billion dollar enterprise is possible in Bihar. The journey started with 2 promoters with 5000 rupees. The journey has reached to a balance sheet size of 2 crores in three years. It took three months to open a bank account. Now, banks are requesting to open accounts in their branches.

Over the last 3 years, we have been able to reach 3000 families and providing them some services. This is a miniscule fraction of 10 lakh families that we seek to reach. But, we have started and journey continues.

This is a long journey and we are just started walking. We know that we have to keep walking........................... Keep Walking........................

A positive Story on Bihar in WALL STREET JOURNAL

APRIL 10, 2009 India Defies Slump, Powered by Growth in Poor Rural States Article
By PETER WONACOTT
DEV KULI VILLAGE, India -- This country's path out of the global economic turmoil may start here, among a community of outcastes who dine on rats.

In Bihar, India's poorest and least literate major state, the Mushahar are the poorest and least literate. Most are farm laborers. About one in 10 can read. So impoverished is this group that they hunt field rats to supplement a deprived diet. Mushahar is Hindi for "rat eater."

But the outlook for the state's two million Mushahar has brightened in the past year. Thanks to government aid programs, more Mushahar children are attending school. Increased state investment in roads and local factories has put their parents to work. Demand for laborers has pushed up wages for field work.

Bouncing Up From the Bottom Rung
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Peter Wonacott/The Wall Street Journal
The one-room primary school for Mushahar children at Bihar's Dev Kuli village, where several hundred of the low-caste Mushahar families live.
In a sign of the times, a government proposal to promote rat farming was ridiculed by the Mushahar, the very group of untouchables, or Dalits, it was supposed to benefit. They worried it would pull their children out of school and extend a social stigma to the next generation. Some protested on the streets of Bihar's capital, Patna, shouting: "We want to learn to use a computer mouse, not catch mice."

The Mushahar in Bihar are part of a political and economic shift that is building across the Indian countryside. The transformation, largely driven by development spending by national and state policy makers, will be put to a test starting next week. The world's largest democracy kicks off a month of polling April 16 in which many of the leaders behind these experiments are seeking re-election.

Growth has slowed in the new India of technology outsourcing, property development and securities trade. But old India -- the rural sector that is home to 700 million of the country's billion-plus people -- shows signs it can pick up the slack. The rural awakening helps explain why India continues to grow even as the U.S. recession drags on the world economy.

The change is largely political. In years past, many state leaders rode to power with vows to give voice to lower-caste voters. But after failing for the most part to lift living standards, these officials have been replaced in many cases by leaders who have. In poor and largely rural states from Orissa in the east to Rajasthan in the west, many new leaders have invested in health, education and infrastructure. That has set the stage for the creation of industry and consumer markets and enabled upward mobility.

It's unclear whether development spending in rural India will spark longer-term expansion. "Up till now, a lot of our growth has been bubble growth," says Nandan Nilekani, co-chairman of Infosys Technologies Ltd., a software and outsourcing company. "That makes the internal reforms even more important now, so we create momentum for future growth."

Teaching India's Untouchables
3:18
India's lowest castes, the Dalits, are known for their illiteracy and deep poverty. But in rural India, something remarkable is happening: Dalit children are attending elementary school. Peter Wonacott reports from India.
The rural economic rise is recent, with few figures yet available for 2008. In the five-year period ending in 2007, rural Indians' consumer spending grew faster than that of city dwellers, according to Indian brokerage IIFL. Rural India has surpassed urban centers in the number of households earning $2,000 a year, above which families begin to have disposable income.

Companies from Coca-Cola Co. to telecom provider Reliance Communications India Ltd. say rising sales in once-spurned rural areas are driving their India growth. The Indian unit of LG Electronics, which sells low-voltage appliances for power-deprived areas, expects rural areas to account for 45% of its Indian sales this year, up from 35% last year. Mahindra & Mahindra Ltd., a car and tractor maker, says it couldn't keep up with orders for its new Xylo, a cross between a minivan and SUV, in part because of surprising rural demand.

"If any one part of the economy is decoupled from the global crisis, it is India's rural sector," says Anand Mahindra, vice chairman of auto maker's parent company, Mahindra Group.

Tariff Barriers
The countryside's strength comes in part from a trade policy that free-market economists say may hurt India in the long run. Tariffs on agricultural imports are among the world's highest and may have deterred investment in rural India. But these tariffs have also sheltered swaths of the country. An estimated 88% of India's rural incomes are tied to activities inside those markets, according to IIFL.

Even slight improvements here are significant, economists say, because they build on a base of practically zero. "For so long, these states were a drag on our economy," says Surjit Bhalla, head of Oxus Research & Investments, an advisory firm in New Delhi. "Now larger rural populations can become a fillip to growth."

India's economy has held up better than most, in spite of slowing tech sales and falling real-estate and stock markets. The International Monetary Fund projects India will grow 5.1% in 2009, faster than Brazil (1.8%) and Russia (-0.7%). India is also closing the gap on China, whose 6.7% projected growth for 2009 marks a sharp decline from recent double-digit gains.

Bihar, which borders Nepal, was once a breadbasket of eastern India. But it largely missed out on the economic miracle of the last decade. In the 1990s, as India's economy expanded about 5% a year, Bihar barely grew.

Infrastructure was poor. Farm goods often rotted before reaching the market. Amid corruption and rampant crime, the state was branded India's "kidnap capital." The young left to seek education and jobs.

More than half Bihar's 83 million residents live below the international poverty line of about $1 dollar a day. Fewer than half are literate. The state attracted $167 million in foreign direct investment between 1994 and 2004, a period when India as a whole attracted $29 billion.

Government Open House
In recent years, political candidates won elections with promises to empower to lower-caste voters. But education, health and infrastructure projects were often neglected, presenting opportunity for opponents. In late 2005, a former railways minister from a low-caste background, Nitish Kumar, became chief minister, the leader of Bihar state.

Breaking from the torpid bureaucracy of his predecessors, the 58-year-old Mr. Kumar has tried to prod the government machinery into action. He hosts Monday open houses at his residence, where ministers and department secretaries are required to field public complaints. Bureaucrats must also accompany him to town-hall meetings in far corners of the state, where they pitch tents in fields. His critics say the exercises simply aim to drum up votes; Mr. Kumar says an open government serves the people and the economy.

"My message is that democracy should provide solutions to the problems," he said in an interview at his residence, where he wore traditional white linen trousers and shirt.

With an alliance led by his ruling Janata Dal (United) party, Mr. Kumar has built thousands of miles of roads. He has hired 200,000 schoolteachers and is recruiting 100,000 more. He has lured private-clinic doctors back to public hospitals.

Development projects and strong harvests have helped Bihar's economy close the gap with the national average. The state is growing at an annual rate of about 5.5%, and that is expected to accelerate, according to the Asian Development Research Institute. The number of people migrating out dropped 27% in the 2006-08 period compared with 2001-03, according to the Bihar Institute of Economic Studies, a local think tank.

Homes in a Gully
One of Mr. Kumar's toughest challenges is improving the lot of the Mushahar in places like Dev Kuli village.

Home to about 10,000 people, Dev Kuli is surrounded by farming hamlets and abuts a two-lane highway where long-haul trucks blast their air horns as they rumble toward New Delhi. The lives of all residents, from low caste to high, have long revolved around the rice and wheat harvests.


Special Coverage: India Elections
See news, analysis and opinion from The Wall Street Journal on India's elections.
Several hundred village families are outcaste Mushahar, who live among goats, pigs and swarms of flies in a dried-out gully. The government began to build brick houses but left them without windows or doors.

As a caste the government has identified as "extremely backward," the Mushahar will be eligible for a $57 million government program that will provide families with a water supply, toilets, radios and educational support, according to Vijoy Prakash, the principal secretary for two government departments dedicated to low-caste assistance.

On Mr. Prakash's desk sits a stuffed rat, a reminder of who such programs aim to help. Yet he says past efforts have failed in part because only 9% of the Mushahar can read. "This is the group that has remained excluded from India's growth," he says.

As the sun came up on a recent day, a group of Mushahar gathered round a water pump to wash clothes. Later in the morning a long line of Mushahar children made their way up a mud embankment and, in a profound departure from community tradition, headed to primary school.

Parents complain that their children face discrimination even at Dev Kuli's one-room school for Mushahar children, the name of which translates as "Slum People's Primary School." Children from other castes attend a school nearby.

The government has repaired the school's roof in recent months, hired a new teacher and added an extra bathroom to provide privacy for girls. Even so, the school doesn't have chairs or desks, so students sit on empty grain bags and write on a cement floor covered with dirt.

Each day, a group of government-hired Mushahar, known as "motivators," roust children from their homes and escort them to class. Motivator Phulwanti Devi, a recent and rare Mushahar college graduate, says she battles parents almost every morning to release their children from farm work.

"We tell them, 'It will improve their future,'" says Ms. Devi, 25 years old.

"They reply, 'We don't see that you have such a good job.' I tell them: 'I have a diploma, and so I can get a better job. What about you?'"

Still, Ms. Devi and other motivators say attendance at the school has grown. Teachers say about 150 children are enrolled. On a recent day, the motivators rounded up about half that many.

There are other challenges. Some motivators say they haven't been paid their salaries of 2,000 rupees a month, about $40. Local officials occasionally tell teachers to skip class to conduct government work, such as counting votes at election time.

Mr. Prakash, the secretary for lower castes, says the motivators will soon be paid from funds his department has set aside. Bihar's education secretary, Anjani Kumar Singh, says a Bihar court has ruled that teachers can't skip class for government work, but admitted the order could be hard to enforce at election time.

Spicy Masala
Generating genuine business activity among a largely illiterate community hasn't been easy, either, judging by Mr. Prakash's rat-farming initiative. He estimated that three million people in the state would welcome a stable supply of the protein-rich meat.

Many Mushahar say they enjoy the meat, typically barbecued or cooked with a spicy masala, and believe it keeps their hair dark. But many resented being pushed into farming them. "If we get involved in rat farming, our children will also get involved," says Ms. Devi.

After some Mushahar protested in Patna late last summer, Mr. Kumar, the chief minister, shelved the proposal.

Yet Dev Kuli's economy has improved. The infrastructure push has created jobs building and repairing roads. That has helped bring factories to the area, say locals, including a steel mill and a cola-bottling plant. Those jobs have boosted farm wages to the point where the Mushahar won't work in the fields for less than about $2 a day, says Raj Ballabh Raji, a local farmer from a different caste.

Mr. Raji, who now works his six acres with a new tractor, notes one more sign of prosperity. "You can now find a petrol pump within a mile of here," he says in a tone of pleasant surprise. "The economy is changing."

—Manoj Chaurasia in Patna and Vibhuti Agarwal in New Delhi contributed to this article.
Write to Peter Wonacott at peter.wonacott@wsj.com

Entrepreneurship fund raising travails

Dear Friends,

Greetings!!!

I would like to know about fund raising methods employed by member organisation when they were start up.

Bihar Development Trust is an emerging MFI in Bihar. It has been promoted by young IRMA graduates of 2006 batch. We are spread up in 50 villages, 6 blocks, two districts ( Bhagalpur & Patna). We are following grameen model.

As usual we started with our own money and friends, well wishers money. With effort, we were able to get funding from FWWB, RGVN, BASIX & Trust Microfin Network, Lucknow.

Then, the India macro economic scenario got worse and government and RBI panicking about inflation and started absorbing excess money from market. Interest rates are rising and credit squeeze are happening.

In this scenario, small fledgling organisation like us are suffering credit drought. I am moving around all banks and funding agencies.

The basic bottleneck faced by us is 3000 members and 3 year experience. On one side, sector is devoid of professionally promoted & managed microfinance organisation , on the other side, if some professionally qualified person begins its entrepreneurial journey, he is encouraged only by words but not by deeds of funding agencies or agencies like SIDBI, Indian Bank, NABARD etc.

We are one of the rare breeds of professionally qualified individuals slugging out in Bihar. We are feeling like players of roman collossium who are destined to die with all funding agencies and support organisation watching and getting their thrill of our fight. If we die, then also you will clap and cheer and if we survive, then also all funding agencies and support agencies officials will clap and cheers.

Every professional and consultant worth its salt will harp on robust system processes and control system. Even, if some one does not understand how does these processes translates during implementation, these shallow consultants go on harping their jargons about system and processes.

I am getting fed up with all gyan given by these funding agencies and so called capacity building and support organisation who just jump on any new organisation to sell their so called systems and processes.

The issue is that professionally qualified professionals from IRMA/IIM/TISS/IIFM etc are trying to slug out in eastern part of india. They are facing chicken or egg first problem. Funding agencies ask them to attain size but dont give money to grow to that size.

So, how start up like us grow if no fund is made availble to them?

I would like some members who have gone through this experience and made it big share their story. I would like members who are going through the ordeal also to share their story.

I am thankful to all my friends, well wishers and funding agencies for helping us to growing to this stage and understanding the challenges associated with entrepreneurship.

Regards

Ravi Chandra

Funding support required for Bihar Development Trust

Dear Friends,



Greetings!



Bihar Development Trust is going through growth pains. We are growing rapidly. We have disbursed more than Rs.900,000 to more than 160 women borrowers and hope to cross Rs.1000,000 mile stone in this week. More than 160 women borrowers are returning Rs.20,000 every week also.



You all have supported us all through. You are witnessing a home grown enterprise growing up in Bihar. This organisation has not been started by some Ambanis or money bags that you found in abundance in Bihar. You are learning about Bihar Development Trust regularly through e mails. This organisation has been started by two middle class youngsters who faced social and family and professional resistance but did it. Bihar Development Trust can be the next TATA but rooted in Bihar. We have survived for 14 months and determined to survive for all times to come.



You are aware of our financial and moral integrity through blogs and websites like www.bihardev.pbwiki,com , www.bihardev.org.in , www.bihardev.blogspot.com . You can visit our photos http://picasaweb.google.com/rchandra1231/



The crux of the arguement is that you need to support us financially. We are willing to accept highest level of scrutiny from you. You can ask people who have supported us financially. They are part of this group. You can mail to the group enquiring about credential of Bihar Development Trust . People who have supported us will reply to you.



You all agree that Bihar needs investment on multiple front be it health, education, water and sanitation or microfinance. We believe that people are capable of taking care of themsleves once they get access to credit and market. We are working on giving them access to credit and market so that income levels of people go up.



Bihar is witnessing a silent revolution by enterpreneurs like us whom Indian diaspora & citizens and in particular Bihari diaspora, citizens should support.



Discussing on Bihar will not help bihar much. You need to put money where your mouth is. You were looking for an honest initiative that cuts the clutter of corruption. Bihar Development Trust is here. You need to believe in us and our vision.



We are getting institutional funding support but we need individual support to maintain the overhead cost. After all, providing benefits to people entails some cost. You people need to rise up to support us.



We are competing for your financial support. You appraise our potential and put your money where you get the highest social return of your investments.



Waiting for your queries and brickbats



Regards



Ravi Chandra