Winners and Losers this week

This week 2 articles in my twitter feed caught my attention -
1) India's oldest microfinance firm on the verge of closure
2) Flipkart set to raise $150M from General Atlantic at $1B valuation


The first article is a truly sad reflection of the mess India's microfinance industry is in today because of poor policy, short sighted politicians as well as a lesson in why it is crucial to diverse your risk. Basix, one of India's oldest pioneering microfinance institution, is collapsing under the burden of bad loans after repayments dropped to 10% in Andhra Pradesh with the passage of the new microfinance law in that state.

The second article talks about the stratospheric valuation of Flipkart (India's Amazon). The article highlights that the company currently makes $6 million a month in revenue, but nowhere does it talk about profitability. And from the types of deals I see on Flipkart, I can't imagine their margins being that attractive either.

While I'm happy to see Indian companies getting $1B valuations, it is heart breaking to see a Basix's proven business model  fold because of a one time extreme event of bad political risk. Too bad the new RBI microfiance legislation won't be passed in time to rescue Basix.

Back after a break

We got back from Kuwait yesterday. Kuwait reminded me of all the conveniences I'm now living without. But I'm still happy that I'm back in India. Bangalore has a lot to do with; the weather here is so pleasant (specially after the oppressive 50C desert heat).

Today was a day of errands. Shopping for food and paying off my electricity bill. The Bangalore Electricity Board is right behind my place so I decided to walk over and pay off the bill. It was surprisingly easy. I still had this image of serpentine queues at public utility companies. Thankfully, didn't have to deal with any of that.

The one lingering problem we still have in Bangalore is transport. Haven't got my own car yet, and dealing with brash auto rickshaw drivers who charge your arbitrary amounts is a hassle. It's also impossible to call a cab during peak hours. Need to get a car soon so that we can be independently mobile!

Exploring South India - Part 1 of many more to come

For our first weekend in Bangalore, we decided to get out of the city and explore South India. We had initially planned on going to Mysore to visit family, but due to scheduling conflicts that had to be postponed. A few google searches later we decided on heading to Hassan, a town along the Bangalore-Mangalore highway. Unfortunately, we couldn't find a reasonable hotel that had rooms for the night, and on a recommendation we changed destinations to Saklehspur, which is 230km from Bangalore (a 5 hour drive). The weekend, like most things in India, had it's ups and downs. Lets start with the ups

The Ups

Sakleshpur is at the foothills of the Sahaydri's (Western Ghats). We stayed at The Hills, a tiny resort, which is nestled amidst coffee plantations with incredible views of tropical green hills enveloped in clouds. While we had to move rooms, because our first room didn't come with an A/C, both rooms we got were clean and pretty luxurious.

The drive to The Hills itself was a bit tedious, the last 30 km was down a windy single lane road, where I had to maneuver around oncoming trucks.

We had plans of checking out the surrounding areas, but instead we chose to just laze around and enjoy the downtime. For the more active, the area had promising treks to explore. We did have to deal with a bunch of boisterous kids along with some very out of place Robert Miles like music during meal times, but on the whole it was very relaxing.

To get to the hills you have to take NH 4 coming out of Bangalore and then switch to NH 48 headed towards Mangalore. NH 48 becomes a 2 lane highway and it winds through beautiful coffee plantations as you get closer to Sakleshpur. It would have been fun to tour one of these coffee plantations (image to the left); something for our next visit.







The Downs
The weekend wasn't without it's share of adventure. 30 mins into the drive to Sakleshpur we got a flat. Thankfully our rental had a spare and after wrestling with the jack I successfully dealt with my very first flat tire.

I didn't realize this was just the beginning. On our way back, a passenger auto rickshaw rear ended our car. Basically destroyed the bumper and damaged the trunk. He hit the car and veered off into the trees at the side of the road. Thankfully no one was hurt in either vehicle. As with all accidents, we quickly attracted a crowd. Since I speak no Kannada, the on lookers helped translate between me and rickshaw driver. I insisted he pay me for the damage, but he just got into his rickshaw and drove off.
Sympathetic bystanders took me and and my wife to the nearest police station. I wasn't all too excited to deal with the police here, but since the car was a rental, I figured I needed to lodge a complaint in case insurance would need it. I'm not sure what I expected, but I didn't think that they wouldn't register my complaint. The cops explained that if I was going to file a complaint I would have to leave the car overnight. There was no way I was going to leave this car 150km away from Bangalore overnight. Why they couldn't just take pictures of my damaged car and let me go escapes me. In the end no complaint was filed. It just wasn't worth it.
The final installment of the weekend comes when we were barely 15 mins away from home. I apparently missed a sign that said no 4 wheelers allowed down this road and I promptly got a ticket for this oversight. Not really much of an oversight, because when I asked the traffic cop about the sign he told me that it was written in Kannada. A little unfair that there were no accompanying signs in English of Hindi.

At the end of the day, India is a little bit unfair. Sometimes that works in your favor, and other times you just have to suck it up.

Considering Airtel for broadband internet service? Think again

Getting broadband set up at home has been a trial over the past couple of weeks. It feels like a scene out of the Money Pit. 2 more days turns into a week and a half long affair... and the ordeal is still not over. 

It was 2 weeks of dealing with technical issues. Every promise to get the service set up was met with another promise of setting up the service the next day. Customer service is extremely unhelpful. All they offer to do is take down my complaint and give me a complaint number. Ask to speak to a manager and you're put on hold until the phone line gets disconnected. To add insult to injury, the last time I tried calling customer support from my cell phone the message I got was "support has been withdrawn for this line, please dial customer support from your land line". Ironic because I was calling about how they hadn't set up the land line yet!

But the cherry on this sundae has to be the fact that we were told the broadband service was "unlimited" when we signed up. Airtel failed to mention the fact that the download speed degrades to 256 kbps after the first 8GB of data. Interesting how they omitted this key piece of information. When you bring up this issue with Airtel, all I get is "but sir, it is unlimited - you can download at 256 kbps as much as you would like".

Perhaps it's common knowledge that there are no unlimited Airtel plans without degradation available for home connections here in Bangalore, but one would hope that something like this would be mentioned on the the brochure that Airtel provided us with. Seems like Bangalore operates on a "buyer beware" paradigm. Lesson learned.

I've come to terms with the fact that their sales staff screwed up and that there are frankly few other options for people like me. So I'm just going to have to suck it up and continue dealing with Airtel. (I'm not willing to just cancel the service and deal with another 2 weeks of no internet). What is the equivalent of a Better Business Bureau here in India? I need more options besides tweeting or blogging about how frustrating this experience has been.

Returning Home

Scribbles on the Margins has been dormant for the last 2 years; it sort of got left behind in the rush of the last couple of years in grad school. Now that I'm back in India (for good) I'm going to attempt to resuscitate this blog.

I've been in Bangalore for just a few days, basically trying to settle in. The move from NYC was fairly painless, thanks to a very helpful Pakistani cab driver who broke a number of traffic regulations to get me to Newark on time (no more Holland tunnel traffic for me). On the other hand, I think I'll be grateful if cabbies in Bangalore adhered to traffic regulations once in a while.

We're still struggling to get broadband access at home, we've been told it'll get done in the next 2 days. But then again, that's what we were told 10 days ago. So keeping my fingers crossed on that one.

I'll end this post with what my very friendly Pakistani cab driver told me when he found out I was returning home for good. The beauty is lost in the translation to English, but in essence he said that we immigrant desi's are like fresh water fish now - we die when we go back into the salty ocean.

Here's to hoping that I'm not allergic to salt!

Thoughts

Had this big dinner last night with a bunch of Ruks' friends over and was talking about my "time off" in India.

Last year, I always thought of myself as someone who needed to work 80 hours a week. I needed to always be occupied/productive. Work was life for me, and I liked it.

But Delhi showed me, that was just how I defined myself. I can just as easily be the guy who can work 40 hours a week and enjoy life. Doing something completely different helped me see that I can do anything I want. I don't need to be the person who has to work 80 hours. I can choose to be that, or choose to be someone who never has to see the inside of a cubical again.

Now I have a choice.

Chinese miracle or mirage?

I recently added Marginal Revolution to my "blogs I follow" list and read a post on "Totally false and ridiculous claims about Chinese bubbles".

It refers to an article on China's Bubble. A few quotes -

Finally, China can force government-owned corporate entities to borrow and spend, and spend quickly itself. This isn't some slow-moving, touchy-feely democracy. If the Chinese government decides to build a highway, it simply draws a straight line on the map...

...But don't confuse fast growth with sustainable growth. Much of China's growth over the past decade has come from lending to the United States. The country suffers from real overcapacity. And now growth comes from borrowing -- and hundreds of billion-dollar decisions made on the fly don't inspire a lot of confidence. For example, a nearly completed, 13-story building in Shanghai collapsed in June due to the poor quality of its construction.

This growth will result in a huge pile of bad debt -- as forced lending is bad lending. The list of negative consequences is very long, but the bottom line is simple: There is no miracle in the Chinese miracle growth, and China will pay a price. The only question is when and how much.

What do you guys think? I really like the Lucent illustration in the article.

Something else that this article sparked. There is this consistent "price of democracy" that India pays and the reason we lag our bigger neighbor. Is that really accurate? Why is democracy treated as a governor on the Indian engine? How did Western Europe flourish under democracy leaving Eastern Europe behind in the dust?