Business Case Study # 1: What should the Indian Farmer do?

· Wribhu Tyagi

Indian FarmerWas on a road-trip when I came across a possible biz dilema that is faced by most mid-sized Indian farmers.

– Our man-HariRam has been able to save enough to either buy some more land or a tractor

– Hari like most other farmers is not sure about credit- either the rates are too high or the micro-credit firms have not really reached his village yet- This means that he cannot really buy both the tractor amp; the plot at the same time

– HariRam’s current plot size doesnt really need him to buy a tractor

– If he decides to buy land- he will have to stretch himself really hard for 2-3 years before he can afford a tractor.

– if Hari buys the tractor-he sees a high rate of depreciation on his asset which will not see full scale utilization

What do u think the Indian Farmer should do?

I suggested Hari to find a few other such farmers in his community & then

– Either pool the money amp; buy a common tractor

– Or buy a tractor & start lending/leasing to these other needy guys also. He rejected my 2nd idea rightaway- saying “If i start making money by lending tractors to others- these other guys will also buy it &  I would not see the ROI on my investment”.

So put on your strategic mgmt caps & tell Hari what he should be doing.

Wribhu Tyagi has spent 25 years at the intersection of technology and retail finance, across banks, card networks and startups. He writes about technology, finance and what he is learning along the way. About · LinkedIn