Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd Logo
Upload

Welcome to Scribd!

  • 19 views

    Echoupals: A Study On The Financial Sustainability of Village Internet Centers in Rural Madhya Pradesh

    Uploaded by

    Ank Saga
    This document discusses the eChoupals project in rural Madhya Pradesh, India, which aimed to increase the financial sustainability of village internet centers. It established internet kiosks that provided farmers with information on commodity prices and weather, allowing them to sell crops directly to procurement centers and bypassing middlemen. This reduced transaction costs for farmers. Analysis of 16 months of financial data found that the project saved costs through improved quality and transactions, and would recover its investment within 3.9 to 5.8 years, showing it was not only sustainable but could become profitable over time. The document considers some possibilities for expanding the model in the future.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd

    Echoupals: A Study On The Financial Sustainability of Village Internet Centers in Rural Madhya Pradesh

    Uploaded by

    Ank Saga
    19 views11 pages
    This document discusses the eChoupals project in rural Madhya Pradesh, India, which aimed to increase the financial sustainability of village internet centers. It established internet kiosks that provided farmers with information on commodity prices and weather, allowing them to sell crops directly to procurement centers and bypassing middlemen. This reduced transaction costs for farmers. Analysis of 16 months of financial data found that the project saved costs through improved quality and transactions, and would recover its investment within 3.9 to 5.8 years, showing it was not only sustainable but could become profitable over time. The document considers some possibilities for expanding the model in the future.

    Original Description:

    ITC eChoupal

    Original Title

    eChoupal

    Copyright

    © © All Rights Reserved

    Available Formats

    PPT, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document discusses the eChoupals project in rural Madhya Pradesh, India, which aimed to increase the financial sustainability of village internet centers. It established internet kiosks that provided farmers with information on commodity prices and weather, allowing them to sell crops directly to procurement centers and bypassing middlemen. This reduced transaction costs for farmers. Analysis of 16 months of financial data found that the project saved costs through improved quality and transactions, and would recover its investment within 3.9 to 5.8 years, showing it was not only sustainable but could become profitable over time. The document considers some possibilities for expanding the model in the future.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    19 views11 pages

    Echoupals: A Study On The Financial Sustainability of Village Internet Centers in Rural Madhya Pradesh

    Uploaded by

    Ank Saga
    This document discusses the eChoupals project in rural Madhya Pradesh, India, which aimed to increase the financial sustainability of village internet centers. It established internet kiosks that provided farmers with information on commodity prices and weather, allowing them to sell crops directly to procurement centers and bypassing middlemen. This reduced transaction costs for farmers. Analysis of 16 months of financial data found that the project saved costs through improved quality and transactions, and would recover its investment within 3.9 to 5.8 years, showing it was not only sustainable but could become profitable over time. The document considers some possibilities for expanding the model in the future.

    Copyright:

    © All Rights Reserved
    Download as PPT, PDF, TXT or read online from Scribd
    Download as ppt, pdf, or txt
    You are on page 1of 11

    eChoupals

    A Study on the Financial Sustainability of


    Village Internet Centers in Rural Madhya
    Pradesh

    ICTs and Sustainability


    Author focuses on financial sustainability b/c without
    financial sustainability project will not survive
    Large funding agencies typically fund the incubation period

    Indias largest commercial ICT project ITC - IBD


    eChoupal
    Ability to recover investment of ICT infrastructure through a
    more efficient agricultural supply chain

    Before eChoupal (Mandi)


    Farmers in trolleys -> Mandi -> auction to Agents
    Necessity of Mandi / Commision Agents
    Lack of physical infrastructure (distances, small sized farmers)
    Responsibility / risk of dealing with large number of farmers

    Costs to farmer

    Transportation Cost
    Cost of weighing produce
    Labor charges moving product from Mandi to warehouse
    Price fluctuations based on quality of product -> traders mix product
    & sell for profit
    Paid in installments (few days to few months)

    eChoupal
    Set up agri supply chain that reaches farmers (like Mandi)
    Set up to increase soybean quality, decrease procurement cost

    Soybean Procurement
    Farmers come directly to one of 9 warehouses
    Spends less per ton of produce

    No commission / transaction costs to middlemen

    Crop tested for quality


    Crop weighed on automatic scale (people dont calibrate the
    instruments)

    eChoupal Operational Model


    Find an entrepreneur
    Farmer w/ medium sized operation in a village to become agent of
    change
    To receive .05% of every rupee sold through Choupal (incentive)

    ITC pays start-up costs


    Computer & printer / solar panels / UPS with battery / optional
    VSAT (internet)
    No rent b/c using sanchalaks
    Entrepreneur pays electricity / telephone / travel to office

    eChaupal vs Mundi
    eChaupal Advantages to Farmers
    Provides futures price information to farmers
    They can know when to come to sell crops

    Bypass middlemen by selling directly to ITC


    Reimbursement to farmers for transport costs
    No payment to for bagging / weighing
    Pay farmers full payment at time of transaction
    Farmers save Rs 270 / ton

    Only reaches middle-sized farms

    Reduction of Transaction Costs

    eChoupal Sustainability over 16 months


    Primarily used for soybean procurement
    Choupals: 461 in Year 1 -> 796 Year 2
    133 K tons of soybean product purchased through
    eChoupals
    Saved Rs 25.8 million in transaction costs (2% of produce)
    Rs 194 Rs / Ton savings
    15.9 Million savings through improved quality (No Mixing)

    Total Savings = Rs 41.7 Million


    Total Investment = Rs 75.7 Million

    eChoupal Financial Analysis


    Extrapolation of 16 months of financial data to 7
    years
    Variables
    20% to 50% failure rate of crop from lack of rainfall
    6% to 15% - Lost opportunity cost (vs. investment in bonds,
    etc.)
    15% to 20% cash depreciation

    Would recover its costs within 3.9 to 5.8 years

    Payback Period

    Not only sustainable, but eventually profitable

    Future Stories?
    Mobile Phones vs. Computers?
    Information exchange between the farmer & the
    eChoupal?
    eChoupal used as distribution of other products /
    services?
    Reach into poorer and more remote parts of India?
    Dissemination of agricultural best practices?

    You might also like