Current Venture: The Rural BPO Co-investment Venture

The co-investment venture that Profits for People is currently working on is a rural back office services venture providing high quality back offiice process and data services, such as data entry, digitization and scanning, data clean-up and OCR correction, among many others.

According to the National Association of Software Service Companies (NASSCOM), an industry body for the Indian Information Technology (IT) sector, the BPO services sector grew by 36 percent, to reach revenues of US$ 7.2 billion in 2006. Data entry and conversion services make up 10% or 720 million of the revenues. The market is expected to grow rapidly in the near future with expected revenues of over $25 billion by year 2010. The relevance of this sector in the global economy, its expected growth rate, and the availability of skilled rural youth, make it an ideal business opportunity for Profits for People.

The co-investors for this venture are college rural educated youth who are currently unemployed/under-employed. The proposed co-investment venture is being set-up in the Trichy District of the south Indian state of Tamil Nadu, which has a well built infrastructure, including availability of secured Internet lines. The key clients being pursued include both larger BPO firms in urban India and academic institutions and businesses in United States.

With the rapid growth in recent years, the large back office services firms in urban India have faced significant challenges.

  1. Rising wages have led to increased labor costs
  2. Other low cost budding locations around the world have dramatically increased competition
  3. Employment of often over-qualified people has led to high attrition rates, increasing costs and directly impacting the bottom line

By tapping the talent in rural India, Profits for People offers a unique value proposition that effectively addresses the current industry challenges. Engaging educated rural youth as co-investors with a vested interest in the success of the venture, enables Profits for People to have higher employee retention rates and lower costs by 40 to 50%.

By creating well-paying jobs that give people the opportunity to work in the communities where they live rather than migrating to the cities, Profits for People will generate 12 dollars of social return for every dollar invested.