India 2012: Answering the Call to Use Business Tools for Good

5:30am, maybe five hours sleep, and its time to get in the car to embark on a two-day field visit with our consulting project client, SKS Microfinance. Four hours later we are over the Andra Pradesh state line into Karnataka, and the historic town of Bidar. 

 

We hop out the car and are escorted up these concrete steps to a third-story room to find a group of 20 women sitting on the floor in a circle, with bundles of white booklets with the SKS logo on them.

This was a Center Meeting, a crucial element of the SKS Microfinance model that provides over 5 million women across India with capital required to start or expand their own business enterprise. Based on collective responsibility, transparency, and building financial discipline, each center is made up of between four and ten groups of five members. Center Meetings happen once a week, every week, same time and place, and is where the power of microfinance model can be seen, and felt.

First, a pledge was read out by the members, challenging some to read but reminding all of the reasons why they are agreeing to take out loans, and why they are doing it together. Next, the leaders of each group of five women brings their group’s loan repayment collection for the week to the Center Leader, who counts it. The one SKS staff member, the Center Leader, is there to collect the weekly repayments, disburse new loans, take new loan applications, and facilitate the group dynamic. Everything is done in the open, where all who form the circle can see. The Center Leader, who is first and foremost a member herself, has the responsibility of collecting and counting the money, collecting the members’ passbooks for updating, recommending other women to join groups and centers, and keeping the center’s minute books.

What struck me first when I walked in that room was the age range of the women there – some looked barely 25, while others appeared to be in their early 50s. That Center had been operating for the past seven years, and the Center Leader had recently begun her second business operation. The third thing I learned was the kinds of businesses microfinance lends itself to – fruit sellers, grocery stores, milking operations – enterprises that had a fast cash flow cycle, so they can make weekly loan repayments. Why weekly? Because many rural poor cannot access the banking system, so their business takings are often stashed at home. Imagine a month’s worth of business revenue storing up, and the discipline it requires to budget its expenditure. Agricultural operations would also struggle due to their much longer, seasonal cycles.

 I also noticed just how huge this is from the point of view of women’s empowerment. These women are not completely literate yet they understand business mechanics. The enterprises they run are generating enough revenue to pay back the loans, and it is the highest hope that with each loan they expand their business to the point it increases their net income. And when a women earns a higher income, statistically speaking she will spend a higher percentage of it on clothes, books, and other items that benefit the whole family, than will men. I found myself in a room full of business experts, and I was once again the student. 

Now back in Hyderabad gearing up for presentations on our findings from the field, I am compelled to do right by the women I was able to meet, and to treat others with the respect and openness with which they treated me. 

Social Enterprise field trip to India Dec 10-22

Today is Monday Dec 10 2012. I arrived in Hyderabad, India at 2am this morning, got to my dorm room at the Institute of Management and Technology (IMT) just after 3, slept like a baby until 9am. We are about 8 hours behind NZ local time.

The weather is amazing - Winter in Hyderabad is like December at home - 27 degrees and not a cloud in the sky. So good to be warm again. Highs in Portland right now are barely getting over 10. And I say 'in Hyderabad' because India is just way too large a place to generalize. Different climates, different customs, different cultures, different languages in almost every one of India's 35 states and territories spanning over 3.2 million sq km. (NZ is 270,000 sq km). Its all about context.

People are friendly as here. From the moment I stepped off the plane people have been smiling, waving, and offering to help. Inquisitive, too, of course. This morning when I awoke I walked across the yard to the campus, stumbled into the mess hall and was greeted by a guy who said 'you want breakfast?' Best boiled eggs I've had all week. 

I had lunch with a couple IMT students and got a good lay of the land. Hyderabad is the capital of the state of Andra Pradesh, near the top of the southern part of India. Not sure what the altitude here is. Massive diversity and disparity. Villages just a couple miles from the IMT's campus are without power much of the day. My lunch mates told me about different parts of this city having different customs, different dress codes, different languages. There are no general rules of thumb here, its all about the context you're in. Everything is here from bejeweled decadence to squalor, and everything in between. Hyderabad is a hub for India's IT sector, and it is growing. A quick search here tells me that all the big names are here, and not just for tech support any more either. For example, Microsoft's largest R&D campus outside the US resides here. The students I sat with were not from Hyderabad, but chose to come here precisely because they want to leverage that growth for their careers. 

To sum up, my first impression of India is that of a living breathing encyclopedia of 200 years of globalization. And if I look really hard, I will see legacies of empires, cultures civilizations and gods that have been around for many thousands of years longer.

India is also becoming a hub for people and organizations who want to harness entrepreneurship and other elements of the business world into initiatives that have a real positive social impact. These are referred to as Social Innovation (products and services that have clear societal benefits), Social Enterprise (businesses with social mission), or Social Entrepreneurship (people doing social innovation and/or enterprise). That is why I'm in India - a two-week study abroad program as part of my Portland State MBA to learn and practice social enterprise. You can follow along here.

So, tonight I will meet a guy at the station and with him jump on an air conditioned train for a 6 hour ride to a village called Bhimavaram, where I will meet up with the other seven students and two instructors from Portland, and our hosts from the Byrraju Foundation.