In the Interest of the Poor.......

On one of my recent visits to a microfinance institution (MFI) for an assignment, this incident set me thinking.
This NGO was very worried about competition from other financial service providers in the area due to which they were in fear of losing their market very rapidly. The competitors were providing much better quality services at a much lower price, and providing much better customer service than the current NGO.
Now, it was very recently (about 1.5-2 years) that the NGO had started its microfinance operations, otherwise it used to work on other development issues like health, education, advocacy, gender issues etc. They started out with a concern that poor people do not have access to good quality financial services and they started their microfinance operations to address the same. Ofcourse they were not starting microfinance operations to earn money or because it was the latest fashion and everyone else was doing it!!! They were doing it out of their concern for the poor.
After these couple of years, the development activities have taken a backseat and microfinance is their major activity. With the entry of new players in the market and banks lending directly to a section of their clients, they are fast losing their market share. This organisation also realised that all these organisations had deep pockets and can afford to provide better services to the clients than themselves, and they would not be able to match the same even with their best efforts in quite some time to come. This has them worried. They just wished that these players were not there in the market. And this has me perplexed.
If, as the organisation claimed, it was only concerned with the clients getting access to quality financial services, why would they wish that the other players were not there in the market? When these players are providing services better than themselves? When they know they cannot match the other players services for a very long time. Why do they want their clients to still get these services at a lower quality, higher price as long as they take it from them?
Is it not better that the organisation go back and do the development stuff that they did earlier? Now that the reason why they had started microfinance operations were fulfilled? But the organisation did not seem the least interested in going back to the development activities, neither were the staff.
Paisa kamana hai isliye microfinance kar rahe ho, to aisa bolo na yaar.......why this garb of charity???
God save the poor from these "development" organisations.

Being Professional is Hazardous for the Society, We Need Unprofessional Organisations

At last there is some motivation. Some hurdle on the way.
I had earlier applied in my state to be registered as an NGO and there were a few problems that had been coming up from time to time. So, this Saturday, I went to the Registrar's office, to try and convince the officials there that microfinance indeed is a development activity. I cannot believe that with so much of hype around the sector, I still have to convince people about it, that too to the government officials, whose work is to deal with development organisations, day in and day out.
Anyway, the first shock that awaited me (actually, I found it extremely amusing), was that my application had been rejected, on grounds that the organisation I wanted to start was going to be a 'professional' one. Can you beat that? They rejected it because they thought it was going to be professional. They want unprofessional organisations only here. Well......I could have understood had they said commercial, but 'professional'........Though it is very frustrating, I find it quite funny, but I am game for the fight.

P.S. - I tried talking to the 'high' official who had finally rejected my application, and he was downright rude to me. 'I have written whatever I had to say in the letter of rejection that I have given you. I do not have so much time to sit down and discuss this with you. If you have to say something, give my office a written reply to this, then we will see what can be done,' was what he told me. All this while he was sitting leisurely in his office and sipping chai and having sprouted chana from his tiffin box. As for the written reply, his secretary told me it was not worth it as he is never going to even read it, let alone take action. This when I had to juggle my plans so much to be in that place for that one day. When I had waited in his office in this summer heat without a fan for 4 hours to meet him. And this, to sacrifice a settled job to come and do something meaningful for the society. I guess that hardly makes a difference. These people have been given tremendous authority and they are rulers of their fiefdoms who can do anything within that and no one can challenge the, As public servants, they are not even supposed to be as much as polite to the public, who they consider to be unwanted intrusions in their 'busy' lives, busy with coming to office at 11 am and leaving at 5, and in between have endless rounds of tea, paan, gossip, telephone conversations with long lost friends and the like. If they sometimes do move some files, you can be rest assured that either there is a pull from some one in power higher than their own, or the power of the moolah.
So, if you are a professional, move over, they need no change, sorry, things need to move the way they have always done........inculcate some unprofessionalism, they will be happy to oblige you, just do not forget the green bucks.

Attrition Blues

Any organisation I see today, is plagued by the problem of attrition among staff. However hard they try to retain their staff, the staff, especially the younger ones, move out to look for better opportunities. The funny thing in the microfinance sector is that, since the sector is so small, people move in circles in the same organisations. So, for example, if an employee from organisation A is leaving it to join organisation B, another employee from organisation B leaves it to join A. Both leave for better opportunities. Now, if an organisation is not good enough for one, how does it become better for another person?
And the timing of someone leaving the job is amazingly predictable. Going by trends, most people leave the organisation in a period of 10 - 14 months of joining it, and they do it every 10 - 14 months. This is soon starting to become the 'one year itch'. Looking at this phenomena, I once jokingly told my friends that our educational system is to blame for this. We move from one class to the next higher class every year, and if we do not, it means there is a failure. We have grown up with that psyche. So, even in the jobs, we try moving after a year. Does not make much sense, but the only reason I can see why people would be so desperate to leave their jobs after a one year stint.
Probably also the times we are living in plays a factor. So many options and choices for everything we do, so many television channels, so many entertainment options, our attention spans are getting lesser and lesser. We cannot focus on one channel in a TV for more than a few seconds. We get bored too soon and too often. We all need change more than the previous generations ever did. Also, the pace of life has gone so high, we burn out sooner. The pressure of work, untimely shifts and then equally exhausting and physically draining ways of partying, means we work and party in one year what the earlier generations would probably have done in three. So, we get bored of our jobs and need a change.
One more reason I see is that in these days, loyalty to an organisation pays much lower rewards than shifting continuously. You will see that you get your normal increments every year when you stick to one organisation, whereas when an offer is made, you negotiate and bargain a much better deal. Organisations also offer much higher packages and profiles to people who they are trying to poach from others than what they would pay to their own existing employees.
Times are changing.
In the earlier generations, people would join a job after college, and then retire from that job. This was pretty much the norm. At that time, it was strange for people to quit and switch jobs, sometimes even scandalous. Nowadays its just the opposite. Even when a person is perfectly happy with a job and is with a good organisation, it is common for his friends to ask him, so, how long do you plan to stick in this place, or, What? You are still with the same organisation? Its more than a year man, whats wrong? ..........
I have not added here the various other internal institutional factors that are there why people switch their jobs so frequently. There are many. But probably you all know all that already. Just though I will add on a few of my own points.

Looking Out for Fools

A leading consultant once told me, when you start a business, you should not invest only your money in that, even if you have it. Remember the 3 F source of start up funding, family, friends and fools.
I remembered that well. Now that I am starting on my own microfinance venture, my family and friends have refused, so I am now on the lookout for fools.

Waise Ghalib ne kaha bhi hai ki duniya mein bewakoofon ki kami nahi hai, eik dhoondho hazaar milte hain.....

Anyone around????

Identity Crisis

"What do you do?"
This is the most difficult question that I need to answer.
Working in the microfinance sector, I find it very difficult to answer this question to people who are from outside the sector. Just telling them that you work in the development sector does not help. They want to know more. You say, I work in microfinance. Now, what is that? And then you start explaining. They do not understand, but nod their heads as if they do. After you have finished, they will end up asking something or making a comment which makes you realise that they got nothing of what you had said.
The other day, my landlord told me to help him out with his financial investments. I was happy to offer advise. But then he told me that this must be my daily routine explaining people financial investments. I was surprised. I said no, that is not what I do. My landlord was miffed and said that while taking the house you had told me that you work for a consultancy firm which worked in finance??? This is after I had explained to him in great details what I do while I was taking the house on rent.
The task is a little easier these days after Dr. Mohammad Yunus has won the Nobel Prize. You can just say that I do the same thing that he does. People would nod in agreement. Again, while Dr. Yunus' award has given a lot more visibility to the sector, it still is not understood by many people, and people just pretend that they know and do not ask more questions. It would show their ignorance otherwise that they do not even know about a nobel laureate.
Similar problems when you are to say which organisation you work for. It is easy to explain if you work for the TATAs, Birla's, Reliance, Infosys, Satyam, ICICI, SBI, HDFC. Even McKinsey and Goldman Sachs are now known names in India. But as soon as I said Friends of Women's World Banking, people would say, OHH, World Bank!!!! After that, however you explain them, they would understand it to be World Bank, or at best, some Indian wing of the same. And my current organisation, MicroSave, always becomes Microsoft. Sometimes, even Microwave........
I am suffering from a major identity crisis.......

Bureaucratic Tales

Microfinance has now been accepted as a proven tool for poverty alleviation. It has been found to be more effective then most other development initiatives that were grant driven and government sponsored. Even though this has become a globally accepted fact, somehow, the registrar of societies office of my state does not seem to understand this.

When I went with the required documents to register my microfinance institution as a society (society can be formed only for not for profit purposes, and is registered as an NGO), the registrar’s office told me I would have to make quite a few changes in my memorandum of association and bye laws to be able to register as an NGO. They had high objections to the terms used in the documents, like microfinance ‘business’ and charging of interest for meeting the organisation’s expenses. They asked me to have it changed. While I did not want to, I still made a few changes so that atleast the organisation could get registered.

After submitting the papers and while coming back, there was a phone call from the office saying that my organisation could not be registered as it was not for charitable purposes. Trying to convince him of the same was to no avail. For the next few days I tried my best to convince all officers in the office. I told them how this was a social activity, how it was a global phenomena and that the organisation, as a society, was not going to make any profits. The strange replies to all my arguments were many. In this state we do not give license to societies to carry out any activities of finance. I cited examples of other organisations in the same state doing the activity. The answer to that was equally funny. “Do you think that if we have made some mistakes in the past, we are going to keep making them?” They even told me to register my society in some other state, and carry out my activities in my own state, they would have no problems with that. Strange!

There was also this very strong point of theirs that if the society was charging interest to its clients, its not a charitable society. First I tried to explain them the concept of microfinance, which they did not buy. Then I told them that this was not an interest being charged, but service fee to meet the expenses of the organisation. They said no, you cannot even charge that, a society cannot earn even to meet its own expenses. I do not understand, do they want our social institutions always to be grant based? Do they want to keep the begging bowl always in our hands? What would the organisation do when the donors stop giving funds? With the amount of money that is required for microfinance, will grants suffice? Also, from the point of view of the poor, do we never want them to become clients rather than beneficiaries? Should we never let them hold their heads high and demand services but always ask them to beg for alms? I do not understand why these people do not get this simple point.

What is more frustrating is the fact that these are the people who are given the responsibility of registering the institutions for social activities. They are the ones who should know and understand all these nuances, should be sensitive and be up to date with all the development sector trends throughout the world. But they still live in their own cocoons, their authority over the people who try to do something for the poor making them high on power, which they have got addicted to and treat the place as their fiefdom.

In the meanwhile, I fight on against the bureaucracy and ignorance. I have a meeting with a senior official in the same office next week. Wish me luck.