Information and Communication Technologies for Development

Monday, March 10, 2008 at 1:30 PM EST
Attendees: Elisabeth, Esmeralda, Annie, Vendita, Leo, Sangita, Ranjani, Beatrice, and Leigh

For Leigh’s trip to India (tentative March 20th-March 29th):
Availability of key villagers:
Principal of the India School Fund school- will not be around due to Holi
Vandita’s uncle and other influential villagers will be in the village
Goal of the trip:
Assess market opportunities
-survey conducted to understand villagers assets
Assessment of village
-what do villagers do?
-what are the ages of the villagers?
-what type of income and how much do villagers earn?
Intermediary
-ask questions about loans: comfort, etc
-ask whether they want to start businesses
Care must be taken when questions are asked so as not to promise the villagers anything prematurely.
-perhaps lending could begin with loans for family business
-loans for a business start-up: shouldn’t raise expectations (you aren’t giving money away)
-understand what the villagers would like to get out of taking a loan
Discussions with Microfinance Institutions (MFIs)
-understand the typical process
-wealth of data
-STS: before they entered a new village, what did they need to see?
What was their starting success
-what type of technology is available in India?
-schedule with MFI’s (SKS)
Lending Tree Model:
-platform (loan: looked for activity, background, etc)
-one person in charge: giving villagers a quote
MFI considerations:
-takes a few years to get MFI’s up to speed
-market may not be big enough for multiple banks (MFIs)
-MFIs disinterested because it takes a lot of work on their end
Our solution seeks to: -help MFIs operate more efficiently without the upfront costs
-decrease the risks for MFIs because Smart Microloans will help
set up the villages
Sense that villagers don’t want to take loans
-10-50 families have taken loans from nearby banks at a rate of 10-15% per annum
Possible MFI contacts:
-Eko: looking at moving into rural areas
-ICICI foundation: related to the ICICI bank, but just an entity
-SKS
Credit loss services
-Financial loss services
-good entrepreneurial guidance (perhaps through the school)
-costs of these services: relayed to the banks
Annie will forward the info in the survey conducted on Rajugela’s villagers
Banks/MFI’s attitude toward individual approach vs. group
-how do we balance the risks (ISF collateral?, group?)
Typical situation in the village
Loans from Money Lender with usurious interest rates
-villagers don’t understand the concept of interest and principal
-often times generation after generation are indebted after one loan
Monetary situation of the Villagers
-No savings, no agricultural land in the village, operate on a bater system
-everyone needs money: they either take a loan or send a family member to the city to
work as a driver
-most villagers work on their own fields/ or the fields of others
-have the bare minimum to survive
-one family owns/operates a dairy
-one family has taken a loan for a tractor for their fields (without collateral: need to use a moneylender)
Typical assets of villagers
-one motor bike (for dowry)
-prior to a flood that decimated their land, the villagers grew rice, pulses, and sugar cane
-after the flood, the villagers can only grow rice, wheat, and potatoes
-most villagers have such small plots of land that they are only capable of growing enough
food for their families, no excess
-have the villagers thought of cooperative farming to harness economies of scale?
Is the village self sustaining?
-has one shop which sells biscuits, cigarettes, matches
-most of the village economy is based on barter (exchange)
-no vegetable consumption: just potatoes, eat lots of chapatti
-there are 12 castes within the village (some meat eaters/too poor to eat meat however)
Possible economic opportunities
-process and sell wheat under a village brand (pride in their productsself sustaining)
-the villagers are resistant to change
-the villagers haven’t seen what they are missing, nor are they dying of hunger
The typical Family in Rajugela
Are all the family members working, or are there some that aren’t employed?
-typical family has 7 members: 5 children with approximately 1 year between each of them
-woman are typically home cooking: if not the wife the eldest daughter will do the cooking
-5, 6, 7 year old male children typically work with their fathers
-the men of the house typically work 14 hours a day
-if woman work outside the house its typically for 4-5 hours/day
-employ woman by bring work to their homes
Demographics of the villagers
-average age of villagers: woman typically live for 90 years
-woman are generally fit and active into their 60’s
-children 14+, cannot enter school
-approximately 300-350 woman can work
Situation of the village:
-9 villages in a 4 km radius
-common marketplace/tourist area, doctors: 20 km away
-a nurse comes every 15 days
Technology
-cell phone access
-dial-up internet (wifi- tata intercom) (lay a separate line down for the village/ISF)
-technology is not a set back
-each family has a cell phone: show as though things are ok (show-off)
-tv
-motorbike
-music system
-cell phones
-illegal electricity
Possible opportunities
-set up their own shops (but they are against new things)
-spending more requires earning more
-swap bread: couldn’t be sold (25km)
-fruit: can’t afford
Earning potential/education
-6000 rupees earned by drivers/month
-all 3rd-8th grade drop outs
-if children don’t drop out at 3rd grade their enrollment/attendance rate much lower