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Satyam rural BPO arm scouts for funds

K Rajani Kanth in Hyderabad | February 17, 2009 09:43 IST

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GramIT, rural business process outsourcing initiative of the Byrraju Foundation, is in talks with various funding agencies 'to expand the scope and presence of its rural BPO services,' said foundation's lead partner Verghese Jacob.

Byrraju Foundation is the NGO outfit formed by Satyam Computer Services [Get Quote] founder B Ramalinga Raju in his personal capacity.

"The initiative has so far received funding from Raju's personal wealth, while recurring costs were met through customer fees. But now to invest in our expansion, we are negotiating with funding agencies, which could pick up some equity or bring investments along with good customers," he told Business Standard.

Jacob said GramIT has put its two new BPO centres planned at Chindwara and Sausar in Madhya Pradesh on the backburner as they are yet to get clients. The two centres are expected to employ 200 people.

"Each centre requires an investment of about Rs 80 lakhs (Rs 8 million). Now that the funding from the Raju family has ceased, we want to expand only after we see a visible funding from the family again. If not, we will utilise the money raised from the funding agencies and commence operations at those two centres in the next three to six months," he said.

The foundation is in the process of registering GramIT as a separate entity under Section 25 of the Companies Act 1956 before April 2009 "to make it a more sustainable charitable social enterprise," Jacob said, adding the move, however, was no way related to the current Satyam crisis.

Under Section 25, any association that has been registered as a limited entity for promoting charity or other useful objectives can collect revenues, but with a clause that it should not add the words 'limited 'or private limited' to its name.

At present, GramIT operates four BPO centres -- one each at Jallikakinada in West Godavari and Kazipally in Guntur and two at Athreyapuram and Ethakota in East Godavari districts -- employing about 400 rural youth.

These centres currently service around five clients including providing back-end jobs like HR and accounting to Satyam. "The current Satyam crisis may impact our business a little as recruitments at the company have slowed down," he said.

Byrraju Foundation, set up in the memory of Ramalinga Raju's father Byrraju Satyanarayana Raju in July 2001, till recently received half of its annual funds worth Rs 30 crore (Rs 300 million) from the family members.

The foundation, which runs 45 different charitable programmes in over 200 villages across East and West Godavari, Krishna, Guntur, Ranga Reddy and Visakhapatnam districts in Andhra Pradesh, has so far received Rs 300 crore (Rs 3 billion) from the Rajus.

The foundation requires about Rs 20,000 per village per month to carry out healthcare, drinking water, education and livelihood programmes, among others. However, given the current situation, it recently changed some charity initiatives into 'nominal fee-based services' as 'there was a gap to be met'.

"Last month, we appealed to all the leaders in the foundation to act as 'social entrepreneurs' to sustain themselves and their teams, and address the needs of the programmes that they are taking care of by raising funds from potential donors," he added.

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