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Archive for the ‘Social Enterpreneurship’ Category

CRTI Social Innovation Fellowship Program

Six Kellogg students spend experience the Indian Summer working with NGOs and Social Enterprises in India.

 

Kellogg’s Center for Research in Technology and Innovation (CRTI) offers a unique opportunity for MBA students to bring not only their academic expertise but also their sense of social responsibility to India’s underserved sectors. CRTI awards $150,000 in funding for innovation fellowships that help students engage with start-ups and socially-minded organizations in developing nations and that have a positive social impact. In 2011, for example, six Kellogg fellows spent ten weeks in India working with non-governmental organizations and social enterprises that use technology in creative and innovative ways to improve education, health, and livelihood.  Prior to 2011, in the midst of the economic downturn, CRTI provided $250,000 in funding to 35 Kellogg MBA students for innovation internships. The Center was founded in 2001 by Professor Mohan Sawhney, McCormick Tribune Professor of Technology at the Kellogg School of Management.

 

At the heart of CRTI’s mission and goals lie three pillars that define the Center’s work – advance the knowledge in technology and innovation through independent research, collaborate with corporations, and engage in productive dialogue with subject-matter experts, share the knowledge through global innovation and technology networks and partnerships with innovation-driven organizations, and transform the knowledge into intellectual capital and business value for all through books, articles, and case studies. The CRTI fellowships in social innovation are one vehicle through which CRTI seeks to fulfill this mission. These fellowships build individual competencies for Kellogg students that wish to take on the challenge of working in a largely unknown, diverse and global setting.

 

CRTI’s implementation partner for the Social Innovation Fellowships in India is SevaYatra, a social business with a US-India presence that focuses on developing custom “voluntourism” and volunteerism programs for universities and companies.  “The CRTI Social Innovation Fellowships offer a unique opportunity to MBA students to gain experience by working in a global setting, interacting with culturally and economically diverse population, while utilizing their business skills in a productive manner that benefits the social enterprises they work with,” says Sejal Desai, Founder and CEO of SevaYatra. “This 10-week experience is not only a once in a life time opportunity for many but also prepares them well for what is today a very different and very global work environment.”

 

The fellowship program focuses on the application of technology to catalyze change rather the development of the technology itself. The fellowship comprises both an academic as well as an experiential component. The academic component is marked by seminars with leaders in the technology and development sectors in India while the experiential part comprises internships with NGOs and other social institutions that work to improve governance (increasing citizen interaction with government), health care (telemedicine and access to treatment via mobile phones) and promote education (such as distance learning) for vast numbers of India’s marginalized citizenry. Kellogg Fellows are based in New Delhi and address the defined needs of the host organizations. This year, eight students will travel to India as CRTI fellows and attempt to bring new ideas and solutions to various organizations that serve to make a difference for people at the bottom of the social spectrum.

 

A unique feature of the program is the opportunity for Kellogg fellows to partner and interact with students from a local business school, the Institute of Management Technology (IMT) in Ghaziabad, situated a few miles from New Delhi. IMT selects an equal number of its students to serve as “buddies” that are matched with Kellogg fellows and largely serve as field guides while playing a valuable supporting role in providing local and cultural context for Kellogg fellows.

For the 2012 summer program, the fellowship seeks to better involve Kellogg alumni by using them as mentors for the fellows. Fellows will have opportunities for interactions with the Kellogg alumni network through formal and informal networking events. Alumni will serve not only as unofficial advisors but also as valuable connectors to industry experts, academics, and stalwarts in technology and innovation.

 

CRTI has established academic requirements for fellowship recipients. Fellows must prepare a comprehensive case study or write a white paper detailing the project they worked on, its objectives, the steps they took to accomplish the objectives, the impact of their work on the company and lessons learned during their summer experience. Last year, each of the 2011 fellows presented their papers at a retreat in the Kellogg School of Management in September.

 

India’s growing numbers of social enterprises often seek top-tier scholars who can inject fresh ideas and bring new solutions and perspectives on the work these enterprises do. In the past, Kellogg fellows have worked with organizations such as Drishtee, I-Farms, America India Foundation, and D-Light to name a few. These organizations articulate a specific project that the fellow can apply his unique set of skills to and assign a supervisor to guide the fellow during his or her ten-week tenure. In addition to seminars and discussions with corporate and government leaders, the project typically involves various field trips to rural areas for research-related work.

 

Many Kellogg students agree that they come to Kellogg with high expectations of a career-changing, if not life-changing, MBA experience. CRTI’s India fellowship offers such an experience for students interested in gaining a first-hand understanding and real world experience of the issues and challenges that plague India’s development. The opportunity for Kellogg fellows is to bring their business acumen to solving some of the business problems faced by their host organizations and offering innovative solutions that allow them to leave at the end of their tenure with a positive social impact. Fellows will come away with a clearer understanding of how organizations are using new business models to effect change and improve lives, and thus making a difference in the realms of economic development and poverty elevation.

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Ravi Kuchimanchi is the founder of Association for India’s Development (AID), a chapter that was started with a motive to improve the standard of living of people in rural India. AID currently supports grassroots organizations in India and promotes sustainable, equitable and just development through active volunteering. Since AID was founded in 1991, Ravi has been instrumental in brainstorming and putting forth several ideas to help the underprivileged receive electricity, to create a livelihood for women thereby promoting women’s empowerment among other kinds of development. Ravi’s initiatives with the Narmada Bachao Andolan inspired the Bollywood film Swades (2005) that became a symbol for Non-Resident Indians interested in India’s development.
AID today has matured into a volunteer movement for sustainable, holistic development with 50 chapters in USA, Australia and India. It brings highly skilled professionals such as the Non-Resident Indian community, to partner with the poor, and underprivileged so that there is a deeper understanding of causes beyond the mere symptoms of poverty.
Ravi holds a B.Tech in Civil Engineering from the Indian Institute of Technology, Bombay and a PhD in Physics from the University of Maryland. He has published several papers in international physics journals including Physical Review Letters and obtained a US patent for a toy-puzzle that was featured by NY Times and several Television channels in USA.

What inspired you to start worrying about the rural development in India and start the organization?

When I founded AID in the year 1991, I was a graduate student at University of Maryland. I had a group of very closely knit friends, who also expressed interest in India’s development. Although we were graduate students in the States, we felt always felt that our minds went back to the causes of India and people of India. And each time there was a burning issue addressed in India, we wanted to do something for our country. There was always a discussion of what has to be done to improve the living conditions, but there was no proper channel by which the Indian community in the US could relate to the real India – “rural India”, where about 70% of the population lives. I sent out the first email to a group of friends in the year 1991 with the sole purpose of creating an active channel. The email was intended to raise funds for adopting a village in India, which doesn’t have a school, for example, and find a teacher and build a school to promote education in rural areas. Channelize the energy and interests of the NRI community raising funds/knowledge inputs/volunteering.
In the first AID meeting, my friends and I realized there would be a big learning curve. Many of us did not come from the villages. I knew that we had to first visit various villages to learn and understand their practices and problems that they are facing, which could be specific to each village. Being a physics student, I had the understanding that something would either grow exponentially or come down exponentially. With the use of feedback, there is always room for improvement. In India, I realize problems are interconnected. So instead of just thinking about the problems, I came to a conclusion that solutions should also be interconnected. Success in one field would imply success in another field, which would in turn give a non-linear growth.

Can you talk about the Swades connection?

Mr. Ashutosh Gowrinker, the producer of “Swades” personally met up with me to discuss and understand the NRI perspective of returning back to India. At that time, I was involved in developing pedal power generator to light remote, off-the-grid village schools. The ongoing struggle against Sardar Sarovar dam in the Narmada River valley compelled me to pool AIDs resources with People’s School of Energy and emerged with the idea of a micro hydro project from a small 10 m waterfall to light up an entire Bilgaon village.

Why the decision to leave a bright future, your passion in physics and how did that happen?

There were many issues that required attention and I felt if I have to contribute effectively, both money and time is important. I did not leave everything; I still have my family with me. It’s just a country that I left, the world is connected, it doesn’t matter where you are, but the aim is to work for the humanity, work for sustainable and equitable development. There is a section of the world that is using a lot of resources and also violating the lives of underprivileged, while another section goes to bed hungry. It was actually a difficult decision to make. I am very passionate about science and physics; it was a hard decision to choose to work for humanity. Then I realized that there are many scientists in this world who were equally interested to contribute to the world of Physics. I wanted to make a difference and bigger impact. I also keep telling my other friends that while doing any profession, we should also spend time equally on meaningful things. We need to focus on causes that are environmentally friendly, look at yourself beyond your family.

What are some of the new initiatives you are focusing on?

We are involved in diverse issues facing the country. Our current priority is to fix the various agricultural crisis faced by farmers. A group of AID members have been working with farmers in rural India to train them on eco-friendly farming techniques and organic farming. After the Tsunamis that hit Tamil Nadu, a few have been part of the disaster recovery team that helped land reclamation in south-eastern coast of India. We have another group that is working to ensure all children of rural Tamil Nadu have access to basic education. In fact, in 2005, top priority for AID was our support to the NREGA (National Rural Employment Guarantee Act) and RTI. Apart from these, I am currently focusing on implementing scientific technology for rural development by way of electrification, water purification and drainage systems.
As an example, last year we came up with the idea of using the traditional hay box, a low cost cooker made out straw, for Indian villages. .The “Easy Cooker” that is both made and sold in Indian villages, conserves about 50% less energy and creates livelihoods for bamboo artisans and women. It saves about 0.5 kg in carbon-di-oxide emissions per use compared to electric rice cooker. The hay box is not only a great initiative in the alternative energy area, but is also affordable to be owned by the household in rural India.
Our aim is to pick up new areas, where new initiatives are absolute necessity and also continue working on already existing projects, by way of taking feedback from current performance and improvising in order to make it more effective and efficient.

AID has had an enviable growth for any NGO, but do you think AID has been able to make an impact?

No change is too small. In fact small changes have a cascading effect and lead to big changes. Some of these ideas are showcased and are actually being referred by the government for initiating new projects. Small models that are successful in one village get replicated in another village with similar facilities. Often times, solutions are also replicated. Eventually the hope is that the government will look at some of these successes and replicate it in a mass scale.

What is Indian Government’s role in the development?

We consider the government to be the biggest NGO, responsible to safeguard the lives of people. It is the government’s responsibility to make sure every Indian gets the basic amenities of life. NGOs are not meant to simply replicate what the government does and run another government parallel. Instead, the idea is to influence the democratic processes, by way of greater accountability and transparency. Models that succeed in various fields, would they be picked up? Or will you build something that will not really help the common people. This is the challenge to the government. In fact, governments are aware of the good work done by various NGOs and these are even referenced in some of the government initiated projects. Recently we have had our environment minister, Mr. Jairam Ramesh, who denied the entry of genetically modified crops into the country. It is very refreshing to see that he is very sensitive to environmental issues in the country. Glimmers of hope from people in power are very encouraging.

How can someone reading this article get involved in AID?

People who are interested in getting to know the specifics of the kind of projects we are involved in can visit our website http://aidindia.org/. There is opportunity to contribute to the association either monetarily or by volunteering. There are opportunities to volunteer both in the US as well as in India. One can join one of the several chapters across the world and participate in weekly meetings to discuss upcoming projects and plan fund raising.

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Shukla Bose spoke to the India@Kellogg team, about the driving forces behind her professional career to date. Emerging from a successful career in the corporate world and in the non-profit sector is a central idea of leading with compassion.

Shukla Bose is the Founder-CEO of the Parikrma Humanity Foundation, an NGO that runs four schools and one junior college that provides quality English medium education to 1200 orphaned, abandoned, slum and street children. Parikrma has also partnered with Bangaluru Municaipal Corporation to enhance the quality of education of 18 government schools.

Prior to Parikrma, Shukla gained extensive corporate experience in the hospitality industry.  She joined the Oberoi group and held various positions in Marketing before joining RCI, a multinational world leader in vacations, and was responsible for starting the new concept in the country, as the first MD. She was there for 10 years and was responsible for making it a profitable and a well-known hospitality brand. In 2000 she gave up her high profile corporate position and started the India operations of a multinational NGO working with children. Her experience with slum and street children greatly encouraged her to make the development of under-served children her mission in life and led her to create Parikrma.

Shukla is the recipient of many national and international awards.  She was awarded the Entrepreneur of the Year Award in 1995, the Bharat Gaurav Award in 1996 and the Woman of the Year award in 2000. She has a Bachelors degree in English and Education, an MA in Comparative Literature and an MBA specializing in Marketing.

What were the driving forces behind the development of your corporate career at the Oberoi and RCI?

 I grew up in a middle-class family, not wealthy by most standards, but where I was encouraged and supported to get a good education. I attended good schools and my mother brought me up with the belief that I could do anything. This led me to work hard and perform extremely well academically, which in turn gave me exposure to interact with students from more privileged backgrounds and with different views of the world. The initial academic success I experienced paved the way initially to business school, where I was among very few women at the time, and ultimately to the business world. At this time, being a businesswoman in India was a somewhat novelty, which in part helped drive my career upwards.

At the peak of your career, as one of few female CEOs in the Indian business world and having received broad recognition as business leader, you decided to make a sharp professional turn. What caused this shift that eventually resulted in the creation on Parikrma?

While it may seem as a sudden shift, the decision to start Parikrma was triggered gradually over many years. For instance, when I was younger I volunteered for Mother Teresa over a period of 7 years, so I always had a desire to help others and I was comfortable working under difficult conditions in the Indian slums. Additionally, in 1999 I started doing something unusual – I started reading obituaries and the accounts of their contributions to society. I had already spent a good part of my life growing a career, but it made me ask myself what my contribution was going to be?

My daughter, then an undergraduate student at a US college, aware that, shifting my career to the non-profit sector would require her to support her own education, wholeheartedly supported me, as did my husband. I convinced an American non-profit to make an expansion in India and ran that division of the organization, gaining useful skills in financial planning and distribution for non-profits.

Please tell us about the early years of Parikrma

I felt strongly, that there was a strong need to look at human beings not as numbers or targets but as individuals and this is central to the idea behind Parikrma – we do not want to play a numbers game, but want to consider each child individually.

I then took the decision to start Parikrma while sitting at my kitchen table. I was naturally anxious of whether people would have faith in my aspirations. With my husband, we decided to empty our bank accounts, and take a deep personal risk by investing ourselves wholly in this project. I knew it was vital for us to make Parikrma a success, using our own financial assets, before asking for financial contributions from others.

I gathered a 5-member team in March 2003 and together we started walking through the slums of Bangalore to identify schools. We were ambitious, and insistent of creating English medium schools, based on the demanding ICSE curriculum. Throughout this difficult, early process it was important that we acted with clarity, conviction, commitment, and courage and most importantly with compassion. Our efforts paid off and only 3 months later, we had set up the schools and indentified the teachers and children.

How do the challenges and opportunities you faced in the corporate world relate to those you experienced at Parikrma?

The main challenge and opportunity, whatever your professional standpoint, is the ability to change people’s mindsets and influence outcomes. This is particularly important, when you are selling lifestyle products that are not essential consumption products – as was the case when I was head of RCI (a time share company). It still holds true today as I need to communicate why it is valuable to help educate children in Bangalore.

Parting advice for women in business schools about to embark on another chapter of their professional careers

I would encourage them to be uninhibited by doubts on what they are able to achieve and pursue a definition of success that goes beyond personal gratification. This does not mean that you need to quit business life, but simply that you display compassion towards the world around you and find your own way to make a meaningful contribution.

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Ketki Parikh is an entrepreneur who established Vachikam in 1995 with the goal of sharing her experiences at theatre in India with her friends and the greater Indian community in America. While her first passion was theatre, she also had notable experiences in radio, television, dance, and poetry. During the past decade, Vachikam has met this goal and gone beyond to provide many enriching experiences for audiences across the United States and Canada. By promoting performances of the highest quality, Vachikam has benefited from the loyalty of audiences, artists, and local promoters alike.

Ketki is also a strong and active supporter of the Indian community. She serves as a board member of Apna Ghar, a domestic violence shelter in Chicago serving primarily Asian women and children . She also donates her expertise and time to plan fundraising events for other non-profit organizations, most notably India Development Service.

What was your source of inspiration in starting Vachikam?

Vachikam is an organization which I started in 1995 to promote high caliber theater from India in the US.  In this capacity, I also collaborated with local theaters as well as those from all over the US to bring awareness about Indian theater, the level at which it is progressing and how it truly works.

Vachikam is committed to presenting the most accomplished artists in high-caliber drama, dance, and musical performances. We strive to present audiences with experiences that showcase the richness of Indian culture and inspire the human spirit.  As a national and local promoter, Vachikam showcases the rich and diverse mosaic of Indian theatre by promoting accomplished artists in high-caliber drama, dance, and musical performances. Vachikam also draws upon its extensive network of artists to orchestrate special social occasions for the Indian-American community.

Our target audiences certainly include Indians, however our shows are mainstream and several performances are in English and Hindi.  As a result, we are hoping to draw an audience comprising of first and second generation Indians, Americans, and various ethnicities.

Vachikam has also worked with various universities where we organize actors as key note speakers.  For example, we took Sonu Nigam to Harvard at the Presidential Inauguration in 2007.

The key focus is awareness through the medium of Art.  Our most recent goal is to introduce Indian theater to second generation Indians.  Lately, we see a lot of young Indians attending our events and we are hopeful that they spread this awareness among a larger number of them.

Can you tell us about ‘Apna Ghar’

Before Apna Ghar, I was on the Board of India Development Service, for ~10 years,.  where I supported grassroots level activities for rural India specifically fund raising events.That’s when, Apna Ghar requested me to join their board.  Under the umbrella of Apna Ghar, I organized many events including chairing one where President Obama was the key note speaker, and other celebrities like Nandita Das and Malika Sarabhai were also present.

2 years ago as the chair of the event committee, I decided to take time off from Vachikam, to organize a new event, ‘Taste for Life,’ which required significantly more time and effort.  We were entering an entirely new space as it was never done before.  From the event to the venue, everything was very unique.  We were organizing a celebrity chef event, with the venue of the event as the River East Arts Station.  This turned out to be a very creative event as a cooking event was conducted at a station!  After receiving a lot of positive feedback, we chose Union Station as the venue for the event last year and this year it will be held at the Navy Pier.  Under my leadership, we have designed and created the entire event.  The core idea is that fundraising should be fun where the attendees are not just sitting and listening to long speeches.  We also don’t feel the need to twist people’s arms to come and attend the event. Now this has become the signature event for Apna Ghar that provides 30% of the funds the organization raises every year.

How do you ensure that Vachikam produces quality work ?

Vachikam would like to promote and represent high caliber artists.  This does not mean that the artists have to be celebrities.  For example, Shekhar Sen was not a known name until Vachikam brought him to the US.  His performances are called Kabir, Vivekanand and Tulsi.  Fortunately, Vachikam has cultivated the audience that appreciates the art and not just the star power.  On the other hand, a lot of actors like Shabana Azmi, Anupam Kher like to use Vachikam as their platform and work with this organization even though they have other options.  This is because they are very happy with the way the shows are handled, quality of work, etc.  It is very important how shows are promoted and organized throughout the country and Vachikam does this in a very professional and well planned manner.

What are some key challenges that you face with your organizations?

Some of the issues we face are related to budgets.  The projects that Vachikam brings to the US are geared to quality.  Sometimes they are not financially viable as well as are not for mass but for class because they are message oriented and not just for entertainment.  In addition, our profit margin is very low but at the same time costs remain high, due to travel and promotion.  Often, there is no budget remaining for promotion.  Very few vendors understand that quality audience would come and enjoy the event however it has always been tough getting sponsors for projects.

As a result, we don’t have a lot of staff.  I am a one-woman-army!  Fortunately, after all these years I have managed to create a great network of organizations and individuals who have been very helpful.

In addition, majority of the shows are also given to not for profit organizations to raise funds.  This also means that we have low profit margins so they can use this event and raise funds for their particular organizations.  We also work with different universities where there is limited budget.

However, we work closely with local organizer throughout the process and it has been a rewarding experience

How do you balance your personal and professional life?

My children were very small when I started Vachikam. At the same time, I was also in school full time for diagnostic medical sonography.  I managed my family, school, Vachikam, Apna Ghar all at the same time.  .  To juggle between so many things, you have to almost compartmentalize your life and learn to   just concentrate on what you are doing.  I am super organized and that is the key reason why I have succeeded in balancing so many different activities at the same time.

What are your future plans?

In Oct 2010 as its Executive Director, I started the Chicago South Asian Film Festival (www.csaff.org).  Chicago lacked a South Asian Film Festival.  As a result, I found a team and interestingly, except me everyone else is a second generation Indian.   This event was very successful with 2000 attendees.  It is not for profit and we are making it into an art council.

Our film and theater fraternity in India is also growing by leaps and bounds.  I have been getting a request to collaborate with actors especially South Asian actors both, from India and the US to organize performances throughout the country.  Our current goal is to promote second generation South Asians to attend these events.  Lastly, we are also looking to promote cross over films, art films, and parallel cinema.

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Micro finance institutions (MFIs) have in recent times been a hot topic when discussing how to provide the right resources and opportunities for the poor to escape poverty. These organizations have come a long way since Nobel Prize Winner, Muhammad Yunus, pioneered the microfinance concept in 1976.  A multitude of MFIs have sprung up in recent decades, some of which have developed into larger, sophisticated financial institutions. Most notably, SKS Finance, India’s largest MFI, made headlines in July 2010 by going public.  In recent months, the MFI debate in India has again intensified following reports of coercive recovery practices from lenders.

India@Kellogg recently caught up with Rangan Varadan, CEO of MicroGraam, a recently launched Bangalore based MFI. We talked to him about MicroGraam, the changing role of microfinance, whether it can truly help alleviate poverty, and the delicate balance of running a for-profit entity that has social change as its main objective.

Could you start by telling us a bit about MicroGraam?

We founded MicroGraam in 2009 with a vision to provide microcredit to the financially excluded at an affordable price. The living standard for the Indian middle class has improved significantly over the past 20 years, aided in part by the development of the banking sector.  We are excited about the challenge to replicate this success for lower income groups by offering them access to low-cost credit.

It was our experience that the existing suppliers of credit to the poor, primarily banks and smaller moneylenders, were unable to offer neither widespread nor fair service.  Banks were only able to reach a small proportion of the target population, while moneylenders were unscrupulous and often charged very high rates – from 50% up to 100%.  MFIs have since appeared and addressed the gap in the market, but we felt that we could offer loans at lower cost to the borrower.

How are you able to bring down costs for the borrower?

We wanted to be able to reach out to the remotest of places without sacrificing on costs – the following 3 initiatives allows us to do that.

Peer-to-peer technology platform

We have developed a peer-to-peer technology platform, which links individual borrowers directly with lenders. This platform cuts costs by decreasing the involvement required from other actors in the supply chain. As the first MFI, we are currently adding a GPRS mobile element to the platform, which would essentially allow lenders and borrower to check the real-time status of their loans, payment and repayment schedules from their cell phone.

Leveraging existing channels

On the demand side, our strategy is to leverage existing channels and partner with grass roots organizations, similar to the model followed by Kiva. We developed our own rating system to rank the credibility of the potential NGO partners, and have been successful in developing close relationships with the NGOs, that we have chosen to work with.

Extending the concept of microfinance

A key differentiating factor for Micrograam is the concept of “Microventure”, that allows social investors to invest in complete business ventures, such as artisan business or dairy farming. Providing a loan for a Microventure allows the lenders to invest in whole business ideas.

Can microfinance really help alleviate poverty?

The MFI activity has focused heavily on providing short-term credit, often at high cost, and less on building capacity and skills for the future.  Our focus from the beginning has been on providing low cost loans (at 18% interest rate or less), which will continue to be a cornerstone of our business model. However, it is becoming increasingly clear to us that we can also provide significant impact through long-term capacity building through the same channels that we offer credit. Capacity building is essential to making sustainable quality of life improvements.

There are different ways to do this. For instance, we are looking at expanding the role of the field officer from simply an information provider to a role model and teacher, who can provide practical lessons in microenterprise, marketing and management. The facilitation of microloans for educational purposes is another way make long-term impact. We recently raised social investment that will provide financial support for 31 students taking a graduate course at Vidyaposhak, a Karnataka-based educational NGO. The graduate course has a historic 100% job placement rate, hence carrying a high potential for improving their living standard and for repaying the loan with interest.

Do the recent events in Andhra Pradesh call for increased regulation of MFIs?

In answering this question, it is worth distinguishing between broadly two types of MFIs. The first group, the so-called non-banking finance companies (NBFCs, MicroGraam included) are well regulated by the Reserve Bank of India (RBI). The other group consists of NGOs focused on microcredit that are not registered as NBFCs.

The recent developments have shone a light on the importance of regulating the latter group and there has already been discussion around the National Bank for Agriculture and Rural Development, a subsidiary of RBI, taking a greater role in regulation.

The monitoring undertaken by the RBI is, however, of a generic nature not targeted at MFIs. There is also a need for an independent regulatory body tailored specifically towards the microfinance activities of both NBFCs and non-NBFCs.

How is the appetite for social lending in India?

Though there is a willingness to help those who are disadvantaged, individuals are still hesitant of making social investments.  This is in part because social investing is still a relatively new phenomenon within India and few have had exposure to it so far. We are trying to create greater awareness and trust around the concept of social investing through the creation of MicroGraam “Chapters” in the major Indian cities. The chapters will essentially be run by volunteers who want to take a greater role in the work of MicroGraam than simply making the investment.

Can you comment on the balance of running a for-profit business with a social objective?

We think that, in order to be successful in this field, we need to operate on a for-profit model. However, for-profit can mean anything between normal profit to excessive profit. At MicroGraam, our goal is that the interest cost cannot be higher than a certain level – currently averaging at 15%, though we expect the cost to go down in the future – and in keeping the profit level sustainable. MicroGraam currently charges 1%-2% on the loan amount, but we are aiming to get this down to 0% and are looking at alternate revenue sources, including online ad revenue, to make that happen.

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