Business from eyes of a ‘Marwadi’

Written by Rahul Khambete, Ahmedabad

The other day I was on a train on my way to Vadodara, I got into a chat with a Marwadi business man. A skinny man in his late 30’s, gave me some ‘guru mantras’ about business in few minutes. It started with a question that I asked him that how a Marwadi does a business. At first he gave me a common answer that every entrepreneur will give. He said that you must start small. Agreed. But that was not the answer I wanted to hear. So I modified my question a bit. I asked that how a Marwadi starts a business? With this question he opened up and then I sat back into listening mode. He said that the answer lies in the question itself.
Seeing me confused at this answer he said that the answer is in word ‘Marwadi’. Marwadis are known for business as a community, not as individual achievers.He told me that even if you have to start small, you need to have capital. Now the Marwadi twist to solve this problem is that the community supports an aspiring entrepreneur to follow his dream of being his own boss. To be specific, community provides a 0% interest loan to that aspiring entrepreneur for let say 5 years. Bingo isn’t it? But there is something more. If you are not able to repay, they give you extension again without a single penny as interest.

These loan provider could be a community temple, relatives, association or anything that is a community grouping. So with such a leverage that aspiring entrepreneur will start his small shop with confidence that even if he fails, his own community is standing by him.

This whole episode brings me to a very important idea. Idea is that this entire community exercise is based on trust. Trust on a person belonging to my community. And even if there is a breach of this trust, the community people are not very far away. Now how Marwadi community does it? I feel it is rooted in the culture. Business lessons passed on from generation to generation, not just in family, but in community. All western business education of we are very
fond, will never teach trust. They will talk about leadership, initiative, communication, but they will never talk about trust, grouping, family, help, etc. A stark example will be that all these big investment bankers, huge fund owners, hedge fund managers who graduated from big names like Harvard, Wharton etc, were not able to stop that financial crisis. Because nobody told them what trust is and what are the consequences of greed.

A simple skinny man I met on that train who has got more business wisdom then these people graduated from institutes with big names in business education. I am never going to forget this pure
Indian way of looking at business.

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