Every kirana shop in India has one thing you will never see in a “how to build a business” article. A fat, oil stained notebook under the counter. Everyone just calls it the khata.
Rambabu runs the shop on our street. He will hand you milk, atta, biscuits today. And just write your name in that notebook instead of taking money. No app. No paperwork. No interest. No due date. Just your name, the amount, and the date, in his handwriting.
What he is doing has a fancy name in every business school. He just never charged anyone to learn it.
He is basically running a small credit business. He just never called it that.
Think about how he actually does it.
He does not check your salary slip. He checks how long your family has lived on this street. And whether your father used to pay on time. That is it. That is his whole system. And somehow it works better than apps that ask for ten documents before giving you a loan. Because he actually knows you. Not just your phone number and your PAN card.
He does not punish you for buying on credit either. There is no extra charge. The “interest” is that you keep coming back to his shop instead of walking to the bigger store that is slightly cheaper. He is not making money off your debt. He is making money off you staying loyal.
He does not need a recovery agent either. If you do not pay, the whole street finds out on its own. And that is worse for you than any call from a bank. The mohalla does his collections for him. Nobody even realises they are doing it.
Here is the part people miss. He never fully cuts anyone off. Even the slow payers still get small things on credit. Because someone who owes you money is someone who is coming back. Someone who owes you nothing has no reason to walk past your shop again.
Now think about every “buy now pay later” app. Every subscription company that begs you not to cancel. Every startup trying to figure out how much to trust a customer before it turns into a loss. They are all trying to build Rambabu’s notebook. Just with a server instead of a pen.
And most of them do it worse than him. Because they swapped “I know this family, I know this street” for a score from an app that has never met you. It is just guessing, dressed up to look certain.
Here is the one thing Rambabu has that no app can copy. When he is wrong about someone, he finds out slowly. A little at a time. In a notebook he can see with his own eyes. He never lets it get big enough to hurt him. Most companies only find out they were wrong all at once, when it is already too late to fix.
I think about this every time I trust someone before they have earned it. A new hire I have not tested yet. A partner I have just met. A customer I am giving a longer rope than usual.
If I cannot say, in one line, why that person earned it, I am not really trusting them. I am just hoping, and calling it a decision.
Keep your own khata before you borrow someone else’s spreadsheet.
~Vazhi
P.S. This is the first post on Vazhi. Real jugaad from Indian shops, streets and small businesses, and what they have been quietly teaching us all along. Subscribe if you want the next one.