Adventures in Microfinance

October 27th, 2007

As I type this I see that MS Word doesn’t recognize the word microfinance – something which will change very shortly the way things are going.  I’m sure it won’t be long before everyone is at least familiar with the concept of Microfinance and the complexities of micro-lending. 

I just spent three days in Microfinance immersion – 2 solid days visiting rural towns to see the impact that small scale lending to the traditionally “credit un-worthy” has had on the livelihoods and quality of living of thousands of people to date.

Microfinancing is the process of lending money to people with no collateral.  I was first introduced to this fascinating concept from Nobel Prize winner Mohammad Yunnus’ book – Banker to the Poor.  He started the Grameen banking movement in Bangladesh as a solution to poverty.  Of course it is not in itself a full solution, but it is pretty damn impressive.  I’ve been obsessed with this business model ever since I read the book, and I finally got to see a small sliver of the work with my own eyes.  I’m know I have barely seen anything yet, but I am so impressed with what I did see.

Over the past few decades several organizations have been puzzling with the issues of poverty eradication.  There are over 250 million working poor in India.  Because they have no collateral- a home, a vehicle, jewelry, etc. that they can use as collateral, they are unable to access any of the benefits that those of us in middle class sectors completely take for granted.  Forget about swiping a credit card and paying for something in installments.  Daily wage earners face a problem of being unable to amass a large sum of money at once to purchase their daily household goods.  This means that rice, oil, dhals – the daily commodities, need to be purchased frequently in small commodities.  Anyone who has ever shopped at Costco or has bought a 10kg bag of rice  knows that as you buy more, the overall cost per unit goes down.  Because daily consumption goods and livelihood maintenance drains most of their capital, the working poor rarely have savings to draw on in case of sickness or holiday needs or a wedding.  The problem of poverty in India seems so huge and overwhelming it seems impossible to tackle.

            Basix is an organization based in Hyderabad that has certainly made remarkable strides in addressing some of these issues.  They have found that extending credit to the poor at a higher interest rate than regular banks (24% is the going rate) they are able to provide capital at a lower rate than village moneylenders- who are often extortionists that trap people into life-long debt at rates as high as 430% or 360%.  Mobilizing a fleet of field workers placed in rural areas throughout the country they provide banking services at peoples’ doorsteps – from educating people about what they can do with credit and the automatic life and health insurance benefits, informing them about reasonably priced insurance policies to protect their livestock and against crop failure, agricultural business development services to improve their crop production or learn new skills and developments in their trade, these people form the pillar of the Basix outreach programs.        

            In my field visit I saw many people utilizing small scale loans to drastically change their lives. Basix customers are able to start a business selling flowers, fruits, or slippers.  Some open small stores close to their homes or learn skills to embroider saris and use their loans to buy beads and raw materials.  Some take loans to buy buffaloes, whose milk they sell for about rs. 75-80 per day.  These are the people who we hear about surviving on less than $2.00 per day.  Life is definitely hard for them, but Basix is working to alleviate some of the strain and uncertainty of their daily livelihoods. 

            One of the strategies is to encourage people to create a savings account.  Even depositing a small amount each day – 10 to 20 ruppees (25-50 cents) can make a huge impact over time.  Once these customers have maintained 100 consecutive days of deposits they are eligible to take out a loan of 1.3 times their savings.  As many of us know, it is hard to get into the habit of saving regularly, especially when the daily needs are always so high.  So to encourage people to get into this habit street bankers go from door to door, vendor to vendor every single day to collect a small deposit amount from their customers.  Using a hand-held input device they access each customers’ account and note the deposit amount, and issue a receipt.  Each customer also maintains a meticulous passbook- another motivational tool to help them see how their savings grow.  We met people with 6000-8000 ruppess in their accounts, the product of months and months of 20 ruppee deposits.  Yet another innovative service is the mobile bank- a van that roams about deeper rural areas where walking to a local bank would be impossible for those interested in banking.  The mobile bank makes 14 stops across several villages and is promoting the ability of rural villagers to empower their own lives.

            I’m used to seeing dysfunction and chaos amidst the workings of NGOs providing a service to the poor.  In sharp contrast, Basix workers balance a social consciousness about the difficulty for the poor to access finances with a strong business sense about the importance of turning a profit.  Every one of the Basix business sectors aims to operate on a profit basis, enabling their organization to function largely independently, giving them the opportunity to strive for innovative financial products, services, and delivery mechanisms.

            I was shocked at the power of cooperation in some of the projects I saw.  Basix also works to create market linkages- enabling their customers to secure a fair price for their goods without being extorted by those in power.  One such example we saw was in the village of Atmakoor.  Buffalo owners typically make rs.7 per liter of milk they pour, which they must take to market and find buyers for.  An average farmer with 4 buffalos might get 10 liters of milk per day, meaning they would make 70 ruppees.  Basix created a link with Reliance milk factories – a Reliance worker now goes to the Buffalo owner’s house and collects their milk.  A device is used to measure the quantity and fat quality of the milk.  They are paid about 20 rupees per liter of milk.  The milk is then taken to a Reliance chilling center in the main town, and collected late each night by truck, to be taken to a factory for processing and packaging.  In this way these dairy farmers almost tripled their income.  Using new learnings from the Basix Ag-BDS services they are further enabled to improve the feed and fertility of their cattle, further securing them.  Basix makes a small amount of money from each transaction, but not much.  But as the value of the buffalos grow and customers find themselves with more cash on hand, they can borrow more money to purchase more buffaloes,  or diversify their income generating activities, or even make capital improvements on their homes.

            In one village we asked what the social indicators of the groups’ financial success was. 

“Well,” they said, “everyone in this village has a color tv, a two wheeler, all of our children have been moved from government schools to private schools… we have health insurance and life insurance.  We no longer have to pray each day that we will have enough food.”

I am sure they have their own internal struggles and growing pains.  But the work of this organization is truly remarkable and touching.  This will be a trip I won’t forget for a long time to come.

How Ganesha Stole my Internet

October 23rd, 2007

We recently celebrated Ganesha Chaturthi in Hyderabad, the festival in honor of Lord Ganesha. It is said that on this day Ganesha comes down to earth from the heavens to bless his devotees. Because we’re in a country where the economy is absolutely driven by festivals, every festival pulls vendors out of the gulleys and side-shops onto the main footpaths. Everywhere you look someone is pedaling turmeric, incense, oil lamps, betel nuts, betel leaves and of course, the main ingredient in any Hindu ritual, coconuts in neat hairy clumps of 3 or 6. Everything is lit up and decorated. The festive spirit gets even the most non-pious people excited enough to over-buy and over-spend, and maybe splurge on a new outfit or gold chain, because wouldn’t Ganesha would want them to have some bling to celebrate his big day? Okay, so now we’ve juiced up the economy and created more waste. Where’s the story? Almost there. Just one more piece of background.

In many places kids come around asking for donations for a clay idol of Ganesha to be installed in the neighborhood. No one wants a Ganesha in the neighborhood, but you look like a real jerk if you don’t fork up a few rupees, so everyone pitches in and by the end of the week a large Ganesh idol shows up in the street. For the 10 days of the Ganesha celebration people (meaning lazy guys with nothing else to do) hang out by this statue, drink, and BLAST music (not necessarily devotional) until 10 at night. Again, no one likes it, but you look like an un-pious jerk if you make a fuss. So in the way of the Indians, we all sigh, shake our heads, and turn up the volume on our tvs to try to drown out the b-rate celebration going on outside. The big clencher is the last day of the festival, when Ganesha is immersed in water.

People doing this in their homes will perform the immersion in a bucket- not too ceremonious, but it gets the job done. The clay idol dissolves leaving some dirty water, which is thrown into an environmentally friendly water recycling repository where the water is cleaned, filtered and used to irrigate the fields. Ha ha- just kidding. This is Hyderabad, not Berkeley, CA. People throw the muddy water into the street where it leaves a big clumpy toxic mess from the cheap paint residue. But you can’t immerse the neighborhood Ganeshas in a bucket. The one in our colony was about 15 feet tall. Ganesha is hoisted up onto a truck and moved to the Hussain Sagar, a dam in the middle of the city. Ganesha ImmersionHe waits in line with hundreds of other Ganeshas to be lifted by a crane off the lorry and released into water. He sinks and begins to dissolve with his brother idols until around midnight, when Goondas (a great term for one ‘who is up to no good’) fish him back out and strip him for iron, which they sell. I don’t know if it’s cool to rob Ganesha, but at least they’re recycling.

So in order to make way for Ganesha to roll down my street, the power and cable lines were cut. The power came back on in 8 hours. I know what you’re thinking- no one in the US would have stood for this. I mean, it wasn’t even a weekend! But in India, we just shake our heads and light a candle and swap ridiculously petty stories about our neighbors. For eight hours.

While the current came back on at the end of hour number 8, the internet did not. And this opened up our saga with Tata-Indicom, the worst customer service providers in the WORLD! Let me preface all this by saying much of my happiness here depends on the Internet. I felt very irritated by the loss of my Internet, because at that very moment I was in the process of illegally downloading season 1 of Sex in the City, enjoying the lack of Internet policing in India. Obviously this was going to impact how long I would have to wait to watch Carrie and her Jimmy Choos.

What ensued thereafter is tiring even to think about. In the next 8 days we called Tata Indicom to report our lack of service and ask them to come fix it no less than 37 times. You might be asking- why would you call so often? Because! Because each time we were promised - nay assured - nay guaranteed, that the internet would be back up in exactly one hour, or first thing in the morning, or that Suresh Babu was on his way to our house at that very moment to restore the connection. And it turned out that all but 36 of these times were just out-right lies. How do you like that? We threatened to cancel our service with them, but they really didn’t care. Finally Suresh Babu did turn up. After investigation he reported that our cables had been cut by Goondas who had stripped the iron out to sell.

I wonder if Lord Ganesha is really the god of the Goondas, and orchestrated this whole holiday to put some extra change in their pocket.

Why Smaller is Better: Two heads are not always better than one!

October 23rd, 2007

Many organizations think that the more employees, the more branches, the more contracts, the more clients… the better.  But my experience working with groups of people tells me that when a group of people working together grows beyond a critical point, say 4 people, efficiencies between that group start to go down.  We spend more time in meetings talking about what needs to be done, hashing out ideas, arguing one way vs. another, that there isn’t enough time to get anything done.

When I worked for a large pharmaceutical company, I started out having several small accounts.  I worked these accounts on my own- because they were small it was considered feasible that one person could handle 3 accounts on their own.  It was great- I designed my sales presentations in the way I thought best matched my buyer’s learning style, controlled all the data that went into the presentations, and managed my time so that I never was at the office before 10 or after 5, and I had huge success with my buyers.  So what comes after success?  The corporatizing of success!  This means I was moved onto a large national account with a team of 6 others.  It meant they took the best thinkers in our department- thought leaders, industrious workers, creative problem solvers, and shoved us all into a room together and expected us to make a lot of money for the company.  Well productivity dropped, efficiency dropped, creativity dropped.  Amount of time in meetings soared.  Amount of times I checked my watch or made lists of how many times someone said “um” in a meeting went up.  My feeling of listlessness, productive-lessness, and misery went way up.  So the moral of the story? 

Well, I learned that I work better in a small group, where each person has a designated role and function.  But also, I learned that most of us work better that way.  Too many people working on a project together becomes a competition to have the winning idea, instead of to find the winning idea.  It becomes a visibility game for who is noticed by the higher ups in the company, getting face time, making speeches and using flashy lingo.  It is a situation that just doesn’t bring out the best in people.


            What does bring out the best in people then?  Well, for one thing, every meeting must be facilitated with care and intention.  There must be process- a well planned agenda, defined goals and outcomes, and for god’s sake- time limits for each topic!  When creating the agenda the facilitator must pre-decide what outcomes are reasonable in this time limit, and what types of outcomes would be better handled out of the meeting by a smaller group of people assigned as an action item.  Outside facilitators are great because they can just watch process and play a neutral role, but since it’s not always feasible to have an outside person present, every person on a team should have some basic facilitation skills and some process tools. 


            Process tools are some ways a person can run a brainstorming session, a vision building session, getting consensus on an action steps, hearing everyone’s voice in the room, allowing everyone an equal chance to share and talk… when these things aren’t provided for we end up with the monkey sessions of people falling over each other to talk, no one listening, someone going on and on and on about something irrelevant, half the group unsure of what’s irrelevant and what’s not… I am relieved to be able to report that all of this can be addressed with a little careful intention to facilitation.  A well facilitated meeting makes all the difference between your energy when you walk out of a meeting- do you feel exhausted and worn out, or inspired, energized, and full of ideas.  More importantly, if it is your company, or your business, how do you want your employees to leave a meeting?  Which way do you think would result in better results for the company?

October Hyderabad Digest

October 18th, 2007

I know you’ve all been awaiting an update from Hyderabad, so here’s the latest on what’s going on in the Land of the Nizam.

Things are great here.  I’m 3 months in to our 6 month experiment to live in Hyderabad, India.  The rains have ended and we’re back to super heat by 9:30 AM.  They say things will get pretty cold around November-December, but I don’t see anyone buying wool coat or a scarf…

We just returned from a 4-day trip to Ponnur, where most of Akbar’s family live.  The last


 time I was there was during our wedding, when I was hot, dehydrated, and wearing a 70 pound bridal sari - I kind of hated it.  This time was much different.  It was amazing.  I loved hanging out with Akbar’s cousins and aunts and uncles.  By far my favorite person was Akbar’s grandmother, whom we all call Nanni.  She came into the house telling a story of how she had just received news that a woman who had cheated her out of 9000 rupees was now blind in both eyes- another testament to the glory of Allah.  Gotta love the pious in India.

 We were there for the ceremony of my sister-in-law’s sons’ first hair cut.  He’s 9 months me-and-bannu.jpgold, and has a head of nice long hair.  We love to try out different hairstyles using my mini-claw clips.  The first hair cut is a 100%

  balding of the baby, done in a way guaranteed to freak out any kid.




Our two families descended on Bapatla beach, only to find thousands of drunk young


guys running around in their underwear.  Not swimming shorts, but straight up underwear - the tight skimpy kind that leave nothing to the imagination.  People here don’t waste money on extra clothes for special once-in-a-while things.   While the guys were in-sand.jpgrunning about just shy of naked, the women were all fully clothed from head to foot in multiple layers and plenty of fancy gold jewelry.  So first we (meaning everyone but me) made a stove by lighting a fire, surrounding it with bricks, and placing a pot on top.  In this we (again, using this inclusive word loosely) made kheer - a sweet made only on stove.jpgsuper-special occasions.  Then someone made two boats using a wireboat.jpg frame, in which they suspended a coconut, a lit wax candle and some other fruit.  They let these go in the water, for prosperity I suppose.  Of course they both sank to the bottom immediately.  Then the hair cutting - during which the poor kid was so freaked out he screamed his lungs out.  Finally the hair was let go in the water as well.  So if you’re ever swimming in Bapatla beach (which connects to the Bay of Bengal- fyi), and get a mouth-full of hair, please think of me.



Ponnur is a small town and a village.  As you move away from the center it is filled with




fields, farms, and rice paddies.  Many people farm shrimp and fish


here.  We traveled to a


remote shrimp farm to buy 6 KGs of huge, fresh shrimp (which is a LOT) for 300 rupees ($7.50). The drive there was just beautiful.  Full of open fields in this


bright green color.  Oxen carts and bicycles replaced tractors and cars.  The sound of birds instead of traffic and pollution.  It was a great break from the big city.  The pace of life is much slower here, but people who work these fields work long and hard.  You won’t find a single fat person.  They’re all strong, thin and wiry.  Interesting contrast to the US.

Okay I have to share one story.  The people who live downstairs from us are Lambaddis.  It’s a family and the mother-in-law, who looks like a witch to me.  These are the tribal people of this region (kind of like the Native Americans).  Due to lack of income and opportunities, most Lambaddis are uneducated and receive many subsidies and grants from the government – a half-hearted effort to bring up this group.  That part is just an interesting aside – it has nothing to do with my story.  Here’s the story.  Lambaddis are known for maize rotis, as opposed to the wheat chapattis that we usually eat.  My sister-in-law, who is the social butterfly of our apartment complex, told the mother in law she wanted to eat a Maize roti once.  So one day the older lady approached her and said “Where have you been?  I’ve been looking for you!  I snuck you a roti, but I couldn’t find you.  I’ve been hiding it here in my armpit and roaming the apartment looking for you!”  Then she proceeded to remove a folded up maize roti from her armpit and hand it to my sister-in-law.  True story.  You can’t make this stuff up.  I don’t think she ate it.

Special Note: This post is dedicated to my father, who appreciates a funny story that he is not the subject of a funny story.

Memorable phrases of Hyderabad

August 29th, 2007

I thought I should make a note of the juicy quotes I’ve collected so far, should a day come when I can no longer remember them.. This may seem mean but I have decided that this is okay because I’m sure everyone makes fun of me as soon as I leave the room.

“I got a son, no?” - Padmaja, Arena

“After fixing teeth she is getting toooo many marriage proposals.  It’s woorking!”  - Orbitz commercial

“They’re coming out like earthworms.” - Asha while removing blackheads from Akbar’s nose

“The text box tool creates a text on the main stage… the text box tool… the text box tool… the… text box… tool… creates a text… creates a text…” (in monotone voice) - Venkatesh sir, Arena

“You are overweight so take the massage package.” - nutritionist, Talwalkar gym

“frats” “blurps” “forths” - unnamable at Akbar’s request

To Be Continued…

Midnight’s Children

August 28th, 2007

midnights-children.jpgAs I find myself sitting around with nothing much going on, I am devouring the books.  I’m reading Salma n Rushdie’s Midnight’s Children, and it is INCREDIBLE.  I just finished re-reading the Harry Potter series, and I must say, with no offense to Harry, that this has to be some of the best writing I have ever had the pleasure to read.  The twisting style of writing and the imaginative story-line of this book are incredible.

So far, my favorite quote from the book is something like “in a country where they use the same word for yesterday and tomorrow, you have to expect they will have issues with time.”

Our first Pilgrimage: Tirupathi

August 28th, 2007

On August 17th we embarked on our first trip- the holy hills of Tirumala, where Lord Balaji lives. This temple is one of the most famous temples in South India. Thousands of people make pilgrimages to this place every day, donating gold, diamonds, money … in the hopes of being blessed with a good life.

train1.jpg Here’s Akbar and his mom on the sleeper train. This is just before we bust out some chapattis and alu curry. Yum yum.



Akbar and I climbed the mountain to the top where the temple is. Here we are before we begin the big climb.


Along the 5 hour climb to the top, some people put kum kum or light a flame with camphor on every single step. There are about 6000 steps! People also pile rocks on top of eachother - it is said that doing this will fulfill your wishes. Clearly people come here with lots of wishes.  We were so sweaty and tired on this climb, but it was worth it.