Social Performance and Source of funds

Is " For-profit Microfinance Institution" ethical? A completely new perspective on "What is the morally (read ethically) correct interest rate to be charged" has emerged ever since an increasing number of researchers have started looking at this aspect of Microfinance. However, as a friend recently commented – there are far more people out there looking to make a buck than in trying to make a difference. And more importantly, it seems quite fashionable to be involved in microfinance, in one way or the other. The moot question really is "Are we making a difference to the lives of the poor?" Is that one of the objectives, in the first place!

I just happened upon a document on the CGAP.org website which listed about eleven key principles of microfinance (http://www.cgap.org/gm/document-1.9.2746/donorguidelines.pdf) endorsed by the G8 countries. Key among the principles is one that reads:

Microfinance can pay for itself, and must do so if it is to reach very large numbers of poor people. Unless microfinance providers charge enough to cover their costs, they will always be limited by the scarce and uncertain supply of subsidies from donors and governments.

So, this is clearly a very overt statement that it is ethical and in fact very necessary to charge interest rates that will allow MFIs to cover their costs.

However, I think the more fundamental question is "Irrespective of the model, are we in any way alleviating poverty…or at least making progress in that direction". I think there are enough stories to provide evidence that microfinance has made a difference in the lives of many people. I think it is reasonable that given access to financial services (primarily credit), an industrious person will have the means to haul himself out of poverty…and on the road to progress. I don't have the data to suggest that a majority of the people do so. In fact, I think there has been so much emphasis on making this a commercially viable proposition, that there is more data collected on the number of outstanding loans, repayment rates, and amount of loan disbursed and other financial metrics that lends credence to the growth and profitability of microfinance institutions. There is far less data is available on current poverty levels, the extent of poverty alleviation that has actually happened or the number of people for whom this has become a means of sustainable livelihood. We do have recent surveys on Progress-out-of-Poverty Index (PPI), CERISE, and USAID coming up with social performance audits and means for tracking social performance. Nevertheless, I think that funding available to carry out such surveys in a more rigorous manner, as well as the initiative by MFIs to monitor progress of their social missions have been found wanting.

So, is there a role for Donor organizations in the face of increasing commercialization of Microfinance? Or should Microfinance be predominantly a donor-led activity to ensure that we do not drift away from our social missions? I would like to imagine that both can and should co-exist. In fact, the Key Principles of Microfinance lays out the roles very nicely:

Donor funds should complement private capital, not compete with it. Donors should use appropriate grant, loan, and equity instruments on a temporary basis to build the institutional capacity of financial providers, develop support infrastructure, and support experimental services and products.



When this is combined by strong government policy, which brings microfinance into the mainstream of financial policy, then we are likely to see overall development and growth. Donor funds will then be able to find its way into development and infrastructure-related projects – those that are in alignment with the Millennium Development Goals – especially in the area of health, education, low-cost housing and sanitation. When the basic infrastructure is in place, I think we will begin to see quantum leaps in social performance and poverty alleviation. In such a scenario we will see a clear distinction of use of funds based on the source of capital, and a harmonious coexistence of both forms of microfinance.

Is Content really King? Then Long Live Google!

At a recent discussion on Learning innovations, the favourite topic turned out to be eLearning.  What was interesting though was the attempt by more than one speaker to capture the classroom experience and bring it online.  The lecture was largely attended by lecturers – mostly the arts and science colleges.  It seemed like the whole discussion, for them, was zillions of miles away from their reality. 

In an era where the student is perhaps more clued in to what’s happening around the world, the teacher will look woefully out-dated.  They seem quite out of touch with the progress that’s happening in their own sphere of competence.  This is one instance where the old adage “Content is King” has been dethroned.  The new era demands that the teacher is able to reinvent himself and create pedagogical constructs that puts the content in the right context. 

“Koshwan Acharya” (The one with the book is the teacher) is out.  Google has replaced the book.  The teacher will have to become a facilitator – bringing the appropriate pedagogy into play to make the content relevant and transform it into knowledge. 

On a related note, ( pkmadhu's post) talks about the huge opportunity in the content development space.   For this to become a really huge opportunity, I think the learning context needs to change.  Can Kindle replace today’s textbooks?  Is that again the right approach.  IMHO, that again is just one more way of recreating the old paradigm in the new world. 

If the Gutenberg press was in a big way responsible for changing teaching methods, moving it away from the spoken word to the written and read medium, and in the process also making it available to the masses (and not restricted to the elite few), I wonder what will drive the next revolution in teaching.

Any bold predictions?

Technorati Tags: eLearning,Knowledge Management,Content Development,pkmadhu,KenQuest

In search of profitable motor insurance portfolios

"Motor insurers must manage their insurance portfolios in a sound, fair and sustainable way without resorting to pricing wars so as to ensure a profitable class of business." This seemed to be the refrain of industry leaders at the inaugural Asian Motor Insurance and Claims Management Conference, held last week in Singapore. 

How do you get insurers to agree when the market conditions do not permit premiums to have a direct correlation to the risk involved.  On the one hand there is a very powerful truck operators lobby which can influence premiums and on the other hand there is very lax traffic enforcement.  The absence of a handshake between traffic enforcement department and insurance companies leave both parties without sufficient data to make informed decisions on how to improve road safety and reduce accidents (reduce claims).

I think this has especially great relevance in India, where any initiative in this direction can have a huge impact, not just for the insurance company, but also for the overall economy itself! It may sound quite strange, but I am saying this more from the perspective of a road-user than that of an insurance company.

The basic premise for this, of course, is that traffic violation data (or rather the regulation of it) will have to be tightly integrated into insurance premium and claims. To start with, we will need to be able to integrate insurance data with traffic violations data. For example, if insurance companies had access to data on traffic violations, it would be possible to increase premiums for such vehicles / people. The stick of huge premiums has been successfully implemented as a deterrent elsewhere in the world, and can hopefully be emulated here too. At the same time, if may be required to offer the carrot to the enforces of traffic regulation, by offering them commissions for formally booking traffic offences so that we get a more realistic picture of the actual violations happening in the country.

It is also by strange coincidence that I came across two companies that were implementing some systems – one for insurance companies that provided data to the traffic police department (in Abu Dhabi) and the other which was implementing a system which would enable traffic regulators to identify vulnerable spots in the city where incidents of accidents were higher. This, I thought, was especially useful information that when integrated with insurance applications would enable the implementation of insurance-on-demand and pay-as-you-drive modes. For example, a vehicle that used a more accident-prone route was more likely to be charged with a higher deductible, as opposed to one who used less congested routes.

A combination of the two solutions would be a potent tool for increasing road safety. While one the one hand, it will likely reduce the number of accidents, on the other will increase revenues for insurance companies. A part of this revenue can actually be allocated to improving road conditions and implementing safety standards.

Unfortunately, in India (perhaps that is the case all over) traffic police departments are a state subject. It will be required to evolve a common standard for transfer of data so that irrespective of the systems being used, it will be possible for traffic departments and motor insurance companies to exchange data. It will probably work best if the regulator (IRDA, in this case) is entrusted with the responsibility of developing a standard for information exchange. This will ensure that both insurance companies and traffic departments can follow a standard method of exchanging data to enhance compliance.

I wonder if there is an existing model anywhere that can be adapted for Indian conditions!

Social Performance Indicators in Microfinance

In the last few days I have noticed quite a few blogs and tweets in defense of Microfinance. What started off essentially as a philanthropic activity has now gained momentum as a commercial venture and a lot of attention in reaching out to what has become famous as "the base of the pyramid". However, with scale and increasing activity, there is a great clamor for transparency in social performance of these microfinance institutions. CGAP has been working with Regulatory bodies in several countries, to make social audit an essential part of self-regulation for microfinance organizations. Some of these efforts have resulted in social performance frameworks and social performance indicators being developed. Grameen Bank's Progress Out of Poverty Index (PPI), Impact Reporting and Investment Standards from the Rockefeller Foundation are some of the social performance frameworks that have been developed to track and measure social performance.

I had the opportunity to meet Mr. Kalyanasundaram, Chief Executive, International Network of Alternative Financial Institutions (INAFI), a man who seemed very passionate to take a view that Microfinance ought to primarily focus on the social aspect, in alignment with the Millenium Development Goals. However, For-Profit organizations are bound to be driven by the pressures of quarter-on-quarter financial performance, thus making them more focused on increasing outreach without providing adequate and appropriate social infrastructure to ensure the success of their initiatives. So while in the short term, it may appear that a rosy picture is emerging, microfinance may only be beneficial to microfinance companies, and not for the people they intended to serve. For people who have lived a good part of their life in poverty, changes are unlikely to happen overnight. Overall social metrics will show meaningful changes only over a 10 or 12 year period. And unless, microfinance companies are in it for the long haul, I think the debate on whether Microfinance is just vicarious money-lending will continue.

Regulation is one method of making social performance audits mandatory. In India, the bill for regulating microfinance companies is likely to be passed in the winter session; one hopes to see NABARD being given the authority to ensure that social impact is not lost sight of, in the hunger to expand and create huge networks of Self-Help Groups. However, mere regulation alone is not going to solve this problem; the measures ought to be simple enough to implement. PPI is a step in the right direction, with some metrics that can be recorded by merely observing the living conditions of the microfinance customer. If we can make this easy-to-record and fairly unambiguous, then it is quite possible, that we will at least have some reliable benchmarks to start recording our measurements.

For making a really meaningful and long-lasting impact, microfinance will have to be strongly aided by creation of appropriate social infrastructure – education, health, insurance and housing. If these come together, we can be hopeful that the next generation of farmer will lead a life very different from his father. Microfinance would have definitely made an impact on his life.

I would be happy to receive inputs on social audits and / or social measurements that are already being practiced by microfinance companies today.

To Sir, with Love

What would it be like to become the Headmaster of one of Chennai's most famous institutions at the age of 27? An onerous responsibility for sure, but it would seem like an equally challenging opportunity to carve the destiny of a school. And that was exactly what Mr. Kuruvila Jacob did. As this school turns 175 years old, all old boys of MCC School will definitely salute this man, who made this school one of the most prestigious institutions in Tamil Nadu, probably even in India. For the students of MCC School who studied from 1932 through 1962, he was a powerful force who influenced them, and to put it in the words of more than one man of that time – "Made men out of boys". And we are talking of people who are doyens of Indian Politics and industry; but yet to hear them talking of their teacher is truly inspiring.

And so yet again, August 3^rd was a day when people from different walks of life gathered to pay tribute to one of India's finest teachers. What makes this gathering so unique is the manner in which they choose to pay tribute to someone who inspired them during their formative years. A group of students belonging to this era have come together to create a trust that goes by the name "The Kuruvila Jacob Initiative for Promoting Excellence in School Education". This has been formed with the objective of encouraging schools adopt a more holistic concept of education that allows students to develop a well-rounded personality. One of the key objectives is to act as a catalyst in aiding schools adopts innovative methods and techniques in the learning process. Towards this cause, they have launched an Education Leadership Program that provides senior teachers of various schools to gain exposure in advanced teaching methodology and training methods. The CII Institute of Quality and IIT Madras (whose director Dr. MS Ananth is an old student himself) have been largely instrumental in designing the TQM program and the web-based learning programs, while the Eduction Leadership program is being conducted in conjunction with CEMD, Delhi. They have been taking these educational methods to Government-run schools and supporting the teachers create a more effective mechanism for increasing attendance in schools and reducing drop-out rates. (http://www.kuruvilajacob.com/school.htm has more information about this)

The web-based learning project is yet another initiative that is set to transform the way teachers teach. In a move to make education more student-centric, there has been a lot of emphasis on creating an environment where the teacher is the facilitator and allows the student to explore and discover knowledge. In the collaborative environment that is the classroom, this knowledge is shared and discussed, thus creating new knowledge. Even in the days when the Guru was considered the sole resource person, our ancient texts said the knowledge was the cumulative process of combining the teaching of the guru with introspection, interaction and experience. Today's challenge is to make available the cumulative experience of the class so that the student's learning goes beyond the experience of just one individual. From that perspective, web-based education, rightly-harnessed will allow for greater collaboration among schools and in the process greater sharing of knowledge. It is hoped that this learning process will not duplicate a typical classroom learning experience, but harness the power of the internet to make the resource available in a manner that facilitates and encourages the student to explore and create his knowledge base.

"When I graduate, I'll probably have a job that doesn't exist today". This quite aptly sums up the challenges of the students of the Net generation. In his best-selling book "Grown up Digital", Don Tapscott talks about the this generation of learners thus: "They seek choice, customization, collaboration, fun, speed and innovation in their learning… they expect to learn how to learn, not what to learn." Students will use technologies in collaborative inquiry-based learning environments with teachers who are willing to assist them in transforming knowledge and skills into products, solutions, and new information. How well will our schools be able to transform themselves and adapt to the new pedagogy – the intersection of pedagogy, content, knowledge and technology?

As long as we have far-sighted teachers like Kuruvila Jacob, we can rest assured that schools will face up to this new challenge too.

Profit from Music…

I have just finished reading Grown Up Digital and have been trying to relate this with a lot of the changes that are happening with respect to how people are networking. From Sharad who has been looking at the mobile device as a means for recruiting people to Prabhu who has in fact been dabbling with this new revolution for quite some time, there is a paradigm shift in the way people are learning to reach out to what Don Tapscott calls the Net Generation.

So it came as no surprise when Prabhu introduced me to the latest gadget he has been working on "UTVatPlay". A user-customizable radio (called the UDIO) – something that one can configure in three simple steps: Add Music that you like, Add your voice, Save and Launch! So, what's exciting about this? This is an excellent adaptation of the social networking concept to the world of Music. Throw in the ability to customize and personalize your radio (an important criteria for the Net Geners) and I have a powerful medium to reach out to my social network. I have the ability to add my voice, so I can now host my own talk show, or share information with my friends. For example, having just returned from a vacation, I can now talk about how wonderful the holiday was, and why it must be a place that you must go to if you want a quiet holiday…far from the madding crowd. This, surely will have a lot of takers…especially like-minded friends who are looking to get away from the hustle and bustle of their daily hectic lives. So, this now becomes even more powerful than a status message which I put on facebook!

The second important aspect is the ability to bring together a group of people with like tastes and preferences. When I create a radio which contains music of my liking, it is quite likely that I will have some followers (quite similar to the followers of my blog) who will be keen on knowing what kind of music I listen to. More importantly, for someone who is looking at getting a target audience with similar interest profiles, it is quite possible that they will now have a profile of people who apart from belonging to a network have also similar taste in music. I'm sure that's something that is of immense value to someone who is looking for such a niche target market.

The third aspect is that this tends to grow just as any other Social Network. I will soon be linking up to friends and friends of friends who have got something interesting to talk about, or are playing music which I like. And soon enough we'll probably have a group that keeps close tabs on what each other are doing. More importantly, for someone who is tracking all this, it soon becomes quite evident the kind of music that is popular, the radios that have the highest audience, the time and duration that people listen to these radios each day. An advertiser can easily pick the sweet spot for placing his commercial in between songs.

I just hope Sharad gets to read this…for I'm sure he can come up with another million ideas of how to exploit this medium!

And while he does that I'm trying to figure out how this can be used in a knowledge management scenario…especially one that may benefit the microfinance sector!!! Any ideas….leave me a note.

Product demonstration – getting the act right!

Having arrived early for an appointment, I decided to window-shop at the Home Life furniture store. As I walked through the store, I actually found myself looking at how the furniture was arranged and mentally mapping this to a similar requirement at home. I did not find cots on sale – there were bedrooms for sale! Even a simple looking bedspread was looking regal amidst a chest of drawers, a grand mirror and a dressing table – the "room" dressed up in pastel shades!

The product presentation happened to be about a pre-press editing tool. The presenter was, I assumed someone who happened to know all the features of the product – obviously someone very passionate about the product, because soon after introducing herself she launched into a spiel on the product, using jargon which I'm sure none of the editors sitting in the audience could make head or tail of. And then she proceeded to type into the notes section "sldkfsld hfsh sdhfsldh fskld"!!! Here I am watching a product demonstration for a pre-press editing tool, and wondering what the author would make of such a note sent to him! This sadly, seems to be the favorite phrase of most software engineers who make product presentations. Even as I watched this product presentation, I could not help thinking about the neatly organized furniture just two floors below, which gave a wonderful sense of how the furniture would actually 'perform'!

I'm sure the company had done a lot of research on the requirements and had indeed developed a product that may cater to this audience. But somehow, sitting over there, I got the sense that she had lost her audience and was so consumed by the beauty of the product and was totally oblivious to customer perspective. Well, there was cocktail and dinner to follow, so they sat patiently waiting for her to complete before making a beeline to the food counter! I wonder if this lecture-cum-demonstration session yielded any results for this company.

Looking at the whole event in retrospect, I wonder how she might have reached to the audience better:

So what does the customer really want?

Quite often we get so carried away by the product features and its configurability, that we tend to forget what the customer really wants. Any customer would want to see in a product something that will help him in his work, something that fulfills a need – basic or hedonistic. Either way, the more easily he is able to relate to the pain area, the easier it is to get the product features across.

It may actually help to have a homogeneous audience so that you can focus on specific aspects. However, a quick poll should give you an idea of the heterogeneity of the audience, and their broad level of expectation. I believe you will have a good idea of this even before starting your presentation, and that should give you the ability to configure the presentation to meet the expectation of the audience.

A solution for it to be effective should be presented in its natural habitat. Just like the cot which looks completely in place in a bedroom. A bed is an intrinsic part of a bedroom, and therefore is inalienable from the context. And depending on what you want to highlight you can set the environment around it to highlight or make it a subliminal feature; for example, to highlight the feature that the bed may be stowed away, you would then make the bedroom look smaller to drive home the point. Similarly, if I was highlighting the ability to send a clarification request note to the author, I would actually type out something that looks like a clarification (in the context of the passage) which would actually give a better sense of what was actually possible; otherwise all you would be describing is a product feature – you have a text box which accepts 144 characters! Have you ever counted the number of characters when you send out a note to anyone?!! You write as much or as little as you think is necessary to get across your message.

How can I assemble or disassemble the cot? Is this a question I would ask myself when buying a cot? Not unless, I was someone who made a living assembling or disassembling cots. While this is an important feature by itself – it definitely will not be the primary reason for which I would go cot-shopping! Yes, I definitely would keep that on my checklist – How will I get this King-size bed into my bedroom through a 3'X7' door? Or I get kicked out by my landlord every six months, so I better get something that is easy to pack and move. But if these became my top considerations, then I probably would make do with a bedroll or a reed-mat, rather than trouble myself with a king-sized bed! And yet, we as software sellers launch right into these wonderful "master tables" that we have created that will allow you to store data of all shapes and sizes! And better still – can't find a table that meets your requirement – here's a table wizard…click and you are ready to store some more data!!!

I think being able to showcase the product in its natural setting – a business environment is half the battle won. I've seen some RFPs come up with detailed scripts, that it has really made me wonder at the amount of pain the customer has taken to explain his business blueprint! And yet, we ignore all of that and launch into our own spiel. Just getting the message across is half the battle won! Anyone who probably gets down to a detailed nuts-and-bolts analysis, will do so only after he is satisfied with the overall 'basic' requirements; besides someone who is looking at the nuts and bolts is probably a person after your own heart and will be interested in the architecture, platform, configuration capabilities, masters, tables, SQL…ad nauseum…and is also less likely to be the chief decision maker!!!

What else do you think is important for a product demonstration?

Technology and the learning framework

I found this article quite interesting as it has a lot to do with the current work I am engaged in. It also prompted me to write some of my thoughts on the subject and its specific influence in creating knowledge. (http://teachingthursday.org/2009/04/02/technology-and-pedagogy/)

The article talks about how technology can be used in the classroom from various perspectives – as a tool, a medium and a network. The concept of online learning has been gaining ground, especially in the corporate world, with technology playing an enabling role. However, perhaps the most significant aspect of this development is the complete rethinking of the concept of online learning. From trying to replicate a classroom environment, we have now learnt to harness the power of the medium in transforming the manner in which learning happens online. From a position of where content was king, and the classroom provided a mechanism for providing content, the new medium has significantly reduced the prominence we afforded to content. Google has rendered content ubiquitous; it brings to us a veritable cornucopia of content that we seek. In fact, perhaps a trifle too much! How often have we gone beyond the first page of search results that Google throws up?

To paraphrase a verse from one of an ancient Indian text, knowledge was:

Achaaryaath paadam aadatthe paadam sishya swamedhayaa paadam sa brahmachaaribhya sesham kaala kramena cha A fourth of knowledge is obtained from the teacher, a fourth due to the student's own intellect, a fourth from his friends and classmates, and the remaining fourth from experience.

 I think in the current context, we can translate that to the four perspectives of learning – knowledge handed down from scholars, knowledge obtained through study, knowledge obtained through interactions, knowledge gained from experience. Here, the knowledge through self-study comes to us from various sources – the content that is available online; the web 2.0 features are those that enable us interact with peers and classmates, which provide additional insight – blogs, chat, forums etc. The ability to consult the expert is one way of reaching out to scholars. However, perhaps one valuable knowledge that got passed down generations was the wisdom resident with the teachers. And the ability to harness that knowledge is perhaps the access to obtain knowledge from the teacher, and learn from the experience of someone else.

So, perhaps then, we can look at a model where learning becomes a medium for turning content into knowledge.

 As shown in the diagram above, Content gets abstracted into learning modules and through the process of learning, interactions and abstractions, help in generating knowledge. This knowledge goes back into the system as content which again goes through the process of abstraction, refinement and re-generation of knowledge. In each of these cycles, the new experience and learnings are put back into the repository thus creating fresh content, and thence new knowledge.

The ability to arrive at the right tools which will transform this content to learning will perhaps be the key to successful knowledge management systems – one which will not be viewed merely as huge electronic databases, but virtual gurukulams (schools) which will be the fountainhead for knowledge transformation. In the absence of such a process, we are more likely to end up with mere electronic databases which perhaps consume time and energy and result in KM being viewed as ineffective solutions for innovation.

Related article : http://knowledge.wharton.upenn.edu/article.cfm?articleid=1841)