Last Week of BRIC - Delhi, India
Delhi, India
Saturday morning began with a meeting that I had set up with Shikhar Micro-Finance, a local Delhi based NGO. I met with a finance executive, the CFO, and a CPA who was living in India and working for Shikhar from Nebraska. Over the course of an hour, all three were able to explain thoroughly to me how Shikhar operated and functioned. I set up a further meeting with the founder and CEO of Shikhar, who also sat on the board of Opportunity International, a huge Micro Finance NGO similar in nature to Kiva with around 5,000,000 lenders, yet operating exclusively in South East Asia. I also set up a field visit for Thursday morning, so that I could witness live repayments and disbursements on the ground done by Shikhar's loan officers. Some background information on what prompted me to meet with a micro finance organization; last semester, I founded a micro finance club at Babson along with several other students. We were looking to have a domestic impact as well as an international impact, while simultaneously bringing in speakers to educate the Babson community about how powerful the micro finance model is for socio-economic improvement in poverty stricken areas. I spent my entire spring semester skyping MFI’s (micro finance institutions) in Rwanda, getting in touch with Kiva representatives in Kigali and other cities within Rwanda, and working with the Babson-Rwanda center for entrepreneurship. I eventually found a small MFI called Amasezerano that was willing to partner with us; the difficulty in finding a partnership coming from our demands for a separate loan product, combined with a small amount of initial capital (around $5,000). After hashing out all the contracts and getting funding approved by our undergraduate dean of students at the time, we were several weeks away from transferring the money and initiating our first loans administered by Amasezerano when things took a turn for the worse. Our undergraduate dean, who was set to leave July 1st, was replaced with a new dean right around the time Amasezerano’s website got hacked. The deal was re-negged, and the funding was revoked pending a more legitimate partnership. Around this time I was busy 9-9 with pre-BRIC coursework and could not find time to meet with the new dean and work things out. When my plane for China took off in late August, it took off with me inside understanding that in order to make the Babson Micro Finance Initiative work I would need to find a different partnership.
After my meeting with Shikhar, I had an 11 AM meeting with Amir Reza, the director of Babson’s Glavin Office of Multi-cultural and international education. Amir was joining us for the last week and interviewing everyone on the BRIC program as research for his dissertation on multi-destination study abroad programs. After the interview with Amir, I zipped off to the Taj lunch buffet before coming back and shooting off several summer internship applications. At 4:00 I had a meeting with the owner of the hotel; an aside on the hotel we have been staying at for the past 3 weeks; in terms of infrastructure, the physical accommodations themselves have been great, in terms of all other aspects relating to service and services provided it has been an absolute disaster. My meeting with the owner was to step forth as a group representative and assert our situation in order to receive reparations (room service credits, free laundry, etc.). Just to give you a sense of some of the things which had gone wrong…I awoke one morning after showering to a blood stain on my towel, other students had experienced blood stained sheets, and a blood stained pillowcase after their room was cleaned. My roommate Graham had fallen down two flights in an elevator when it broke, had gone up to the front reception after having to pry the doors open from the basement level, and was met with several Indian head nods and an "everything is fine with the elevator sir." The wifi which was advertised as being exemplary all over websites and promotional materials was practically non-existent. We had had cold water in our room for the past 2 weeks, and had complained about it almost every day….yet nothing had changed. The laundry had ruined my roommate’s $100 pair of pants by somehow ironing-in ink stains which had not previously been there, they had lost his shirt, and they had overcharged me by 1000 rupees for things which I simply did not have (they claimed I ordered 9 shorts cleaned when I only brought 6 pairs of shorts total on the trip). One of the students on our program had gotten food sickness from their room service (he had only eaten room service that day) and when we ordered room service the staff would often times leave items off the bill, go across the street to buy things at a cheaper restaurant or store, and then upsell them to us, pocketing the difference as profit. It was literally one thing after another in this hotel, and I was fed up.
Prior to the meeting I had scheduled with the owner, I had met with the manager, who had then gone and called our program director, as well as our partner organization’s director, letting them know that I had complained and in his opinion how inappropriate it was to ask for reparations. Our program director, who is not too fond of conflict in general, tried to downplay the situation by remaining neutral, while the director of IES (who was American) asked for a meeting with me Friday to address the issues. When I stepped into the meeting with IES on Friday, the director met me with a stance that what I was arguing for was out of place. I responded by telling her that I, along with everyone else, were a guest in this hotel paying $60 a night, we were unsatisfied with the service that we had been receiving, and that we had every right to complain given how constant and unrelenting the problems had been. I also encouraged her to speak to other students on the program and suggested she be more aligned with the students whom she was supposed to be acting as an agent for and representing. She then replied with a “This is India, look around, we have a wall of problems” to which I replied “and this is a brick in the wall, so why wouldn’t you try to punch out one of the bricks by demanding the problems in this hotel be fixed?” Here she paused, clearly never having been challenged like this before, and responded with a “you have to pick and choose your battles here.” I responded with “so what battles would you be choosing by completely ignoring the problems we have been experiencing with this hotel?” She had no response for me, and simply muttered something along the lines of business students being a different breed (besides us, she only deals with liberal arts/ humanities students), before highly suggesting that I ignore the problems. At this point I was pretty outraged with her response, and told her exactly how I felt, leaving the meeting moments later.
Fast forward to Saturday and my 4:00 meeting with the hotel’s owner. I started the meeting by asserting to the owner the complaints we as a group had, and then asked for reparations, letting him know that there were 26 of us staying in his hotel, and the cost of having 26 negative yet honest reviews on travel websites would be 100 times greater than meeting us halfway with free laundry. The negotiation was successful, and for the rest of our trip, our group would have free laundry in addition to the owner paying my roommate for his pants. The owner thanked me in depth as the meeting was wrapping up for making him aware of all these problems so that he could now go and fix them. We joked around for about 15 minutes, and I left the meeting with the owner telling me “anytime you are in Delhi, my house is your house.”
What frustrates me to no end about this situation is the complacency and lack of assertiveness shown by the people who were supposed to be representing us. I was completely in the right to bring these problems to the attention of the hotel, and to be discouraged to do so by someone simply because they have no conflict management skills was something I had to find my Buddha place to let go.
With the hotel problem out of the way, Sunday progressed as a day of work, where I re-visited the Sufi temple I had been to earlier in the week, in order to further complete my ethnography project. After hanging around the Sufi shrine and talking to / interacting with people for about two hours, I met up with several students on the program, as well as a friend of ours Basu, who we had met at Bal Ashram, the orphanage just outside of Jaipur. We grabbed dinner at a place called Karim, which was an outside dining complex of 4 different buildings with open air kitchens that had been awarded tons of food awards from western magazines.
Monday we had our final world religions course followed by an entire free afternoon to work on our projects and study for our exam Tuesday. My friend Ben and I, who had already pretty much completed all of our work the day prior, decided to take the opportunity to visit BBA (Bachpan Bachao Andolan, which literally means free the children) and Basu in the organization’s headquarters located in Delhi. BBA as an organization focuses on freeing children who have been sold by their families into child labor. Once these children are freed via BBA sponsored police raids, they are set up in an ashram not too far from Delhi until the legal components of the raid can be ironed out. From there, they are sent back to their family in their local community of origin…BBA’s second main focus is rehabilitation, and in many of these communities they have set up schools, and other skill-development schemes, having one BBA “activist” check in on each community every month or so. Our goal of the visit was to somehow orchestrate a Babson BRIC-BBA partnership, where we as a group could somehow give back to BBA for showing us such incredible hospitality at Bal Ashram. After sitting down with the chairman of the organization, the director, as well as the founder for over 4 hours, we both had tons of ideas in our heads to think about….initially we were thinking about providing some form of fund to pay off some of the debts families in rural regions had to prevent debt bondage and further child enslavement, but after speaking with the director we learned that after BBA raids on companies or communities, the perpetrator who was benefiting from the bondage is typically arrested, and his “slaves” are rightly set free on the basis of ill-enforced government legislation. After tossing around several other ides we finally came up with the idea of a “rotating fund” which would basically be a regenerative microfinance fund for some of the communities BBA sends their freed children back to live in. This was met with enthusiasm from the Director of BBA, and we left the meeting agreeing to stay in touch over the next couple of days in order to iron out details and test the group consensus on our end.
After our meeting wrapped up I headed off to my meeting with the founder of Shikhar to iron out further details about a potential partnership with Babson Micro Finance Initiative. Both areas, the Babson BBA partnership and the micro finance initiative, were beginning to get blurred in my mind as they began to take on such a similar nature, and finding each idea their own unique space conceptually to grow definitely took some time. After getting to know the founder of Shikhar and eating a quick dinner in the office, I finally came up with the idea to have Shikhar gather applications for business ideas on our club’s behalf in local communities, send them into us, and then oversee the loans we chose to grant. Because Shikhar gets 80% of its funding from large Indian banks, their cost of borrowing hovers around 14%. If you tack on their operating costs of around 11%, they end up offering 26-29% loans to their customers (this interest rate may shock some of you as high, as it did for me the first time I heard it, but trust me that in India this is incredibly low, and their 99% repayment rate illustrates exactly that). The founder explained to me that Shikhar was looking to experiment with some of their loan products, as well as receive more funding from charitable donations….we as a club would offer the money at 6% (India’s current inflation rate) instead of 14% so that the loans could be pushed out at around 17% instead of 27%. We would then ideally be looking for the borrowers we select to re-invest the 1000 basis point savings back into their businesses to facilitate faster growth. Shikhar would use our partnership as a pilot program for lower interest rate charitably funded products, and expressed a willingness to work with us when it came to further creative products (one of the things I was thinking about for a second cycle loan for the same borrowers would be an option to wave interest completely, re-invest that money in the business instead, and pay us a percent of their total revenue 12-18 months into the tenure of the loan). As the meeting was wrapping up, I asked to sit down at one of their computers and quickly check their books; balance sheet, income statement etc. which the founder agreed to allow me to do. After about 10 or 15 minutes I was satisfied with their reporting, and was confident in the way their numbers checked out. The meeting ended incredibly well, and I couldn’t wait for my field visit to take place Thursday.
Tuesday morning everyone on the program got up and headed to a high school about 50 km’s outside of Delhi which was funded by the Shiv Nadar Foundation. Shiv Nadar is an Indian IT magnate, with a personal fortune of close to $10 billion USD. He had constructed a school for children aged 6-18 which was only open to kids with disadvantaged backgrounds and was entirely free of charge. To give you a sense of the school’s selectivity, they received over 60,000 applications a year, and only accepted around 400 of those applicants. We as a group were truly dealing with the best and brightest of India’s rural poor. For our visit to the school, we had set up an exercise to teach the kids about entrepreneurship. We had been in contact with the principal of the school prior to our visit, and asked for 200 students in the 12-14 year old age-range. When we arrived everyone was completely organized and fully attentive. We broke down the larger group into separate groups of 20, which were then further broken down into 4 groups of 5, each grouping of 20 kids having 2 Babson students to act as teachers (essentially meaning I and another student on the program were responsible for 5 groups of 4 children). We then began the exercise we had planned for them after a quick round of ice-breakers. As a team of two teachers we were responsible for bringing in 5 different items beforehand and distributing one to each group. The Items I chose to bring in were; the broken half of beats headphones, a multi-vitamin, several golf tees, a pink non-branded bar of soap, and a string of non-worded prayer flags. The children’s task was to take those item’s and brainstorm a list of 10 possible uses for the items they had been given. From there, we directed them to pick their two best ideas, before coming to a consensus on only one of them based on the” 4 P’s framework” (product, price, placement, and promotion) and keeping in mind that they would have to attempt to sell the product they were brainstorming about. After each group had chosen their best idea, we had them work in their teams to build information on each of the 4 P’s. We then taught them the fundamentals of rocket pitches, had them practice, and then put them in front of the larger group of 20 to decide via a voting system who would be our group representative to the greater group of 200.
While doing this exercise, some hilarious moments came up. The group who was given the golf tees, had no idea what golf tees were, and decided to use them as phones. They pitched their idea as phones, but recommended we as a group “act now to receive a 25% discount that would expire in 60 seconds.” I felt very pressured to buy their phone product, which they labelled the Samsung 4000, had I only had enough rupees in my pocket (they were asking for 10,000 and going after the “ultra-ultra high end consumers.” The next group used the headphones they were given as a form of dog collar, the smallest student in their group designated as the dog for their rocket pitch and barking around incessantly during the entire thing. Oh and the bar of soap? That was actually a cell-phone / TV remote/ Car starter. The whole exercise ended up being an absolute blast, and we ended the morning after some brief suggestions and feedback to the students with great takeaways. That afternoon, we visited HCL’s headquarters; Shiv Nadar’s company, and the largest IT company in India. We were lucky enough to have Shiv Nadar’s son-in-law, who is a Babson alumni, join us for our tour, which ended with a pretty cool video tele-presence call between the two halves of our group (HCL designed and licensed out Cisco Systems tele-presence product). Later that night, I and another student on the program, had a professional Bollywood dance instructor come back for the second time to give us another 2 hour dance lesson….the finished product can be viewed on this youtube link: http://www.youtube.com/watch?v=IP5KrxU7 2vk&feature=youtu.be
The next day we had an AM exam, followed by an entire free afternoon to work on our final ethnography project and an additional capstone project for our cross cultural encounters course. Being ahead on work again, I took the day with three other students to visit a company called Sukam, which my buddy Karan had set-up. Basically what Sukam does, is supply over 100 different kinds of power related products including generators, inverters, and solar power solutions. Sukam currently has revenues of around $500 million USD, growing at 30% a year, and with 20% profit margins. Sukam was started in the 1980’s by Kunwer Sachdev who managed to invent a practical Indian inverter for middle-income households. In India, power voltage coming into houses will often times surge from below 80 Kilowatts to over 350, frying any batteries or appliances that happen to be plugged into your sockets (as a comparison, the US power grid operates with a consistent 140 Kilowatt influx). The inverter that Kunwer invented stabilized the power coming into house, so that anything over 180 KW’s would recharge a battery which would then be tapped when power dipped below 80 KW’s (something that is incredibly common in India). Sukam sold all different sizes of inverters, in addition to surge protectors which would automatically switch off your plug system if voltage surpassed 200 KW’s. Their products had completely pioneered the industry, the company owning over 150 patents, and they still offered the best quality products on the market. They are the only company with products currently on the market that are child-proof, preventing a surprising amount of injuries and deaths. We were lucky enough to be shown around their headquarters by Kunwer’s son Khanav, who was a close family friend of my buddy Karan’s. The weekend prior to the visit, Graham and I had also been fortunate enough to meet Kunwer Sachdev in person at his private birthday party in Delhi. Khanav told us during the visit that if their intellectual property had been strictly enforced by the Indian government, they would be sitting on a multi-billion dollar company right now….something that was completely believable considering that every other company in the market, including US based ones, had copied their products. Khanav showed us a hilarious demonstration where he took a Belkin “surge protector” which looked like a power bar, and ran voltage through it….to our amazement, the thing did not switch off, even as voltage approached 500 KW’s. What Belkin had done, is sell a power bar, not a surge protector, to Indian dealers with such loose sales agreements, that the dealers were able to blatantly lie and sell the Belkin power bar as a Belkin surge protector. Khanav informed us that a surge protector sells for 900 rupees versus a regular power bar which sells for 300. Belkin had intentionally done this so dealers would push their product to the market over other competing products with the incentive coming from gaining higher margins via the price mark-up. The painful thing too is the fact that Belkin carries such a superior “western” brand image, so Indian’s who can afford it are more apt to purchase one…when their iphone batteries fry, they then call apple in desperation instead of even thinking that it was their falsely sold Belkin surge protector. Incredibly sneaky, and incredibly frustrating, especially if you are in Sukam’s position. Sukam had also just invented (they have an R&D unit of over 150 employees) a solar lamp which was set to retail for around $50 USD and something which I could see revolutionizing rural villages around the world. Sukam sold their products to 71 different countries, and for a company which sells such a seemingly simple and boring product such as an inverter, it was actually one of my favorite company visits on the BRIC program so far.
Around this time the tirtha happened. In jainism, there is a word we learned which is called tirtha, or a place where the living are closer to the holy. Singing or chanting in a place of worship could create a tirtha,presence of water, or some other form of touch or prayer...basically anywhere where the path from earth to heaven is less. Graham and I's tirtha in this case however, happened to be in our hotel bathroom. I had been complaining (as I mentioned earlier) about our lack of hot water for going on 3 weeks now. Finally someone in the hotel decided to get their act together and check the pipes....well....the pipes completely burst when this happened, flooding our entire bathroom with about a solid inch of water. We now had our own personal tirtha. Me remaining in my buddha place, did not get upset at the hotel, but rather embraced the episode as something that was not worth fighting over with only 2 days left in Delhi. Thursday morning I, along with one other student and my professor woke up at 7 AM and headed off to a Delhi slum about 20 miles away to partake in the Shikhar field visit that I had set up on Monday. The field visit was fantastic. All three of us, along with two representatives from Shikhar and a translator / loan officer crammed into a small shanty house that was about 75 square feet. We were given small plastic chairs to sit in, and were joined by five women inside who were the beneficiaries of Shikhar’s loans. We sat inside for about half an hour asking questions, and found out that this was Shikhar’s very first group of women. In Shikhar’s model, the 5 women are responsible for each other’s loans, so if one woman defaults on her loan, the other 4 then become responsible for paying the money back. This model has functioned, like I mentioned earlier, with a 99% repayment rate, the other 1% of the time supposedly as a result of Shikhar’s failure in the underwriting process, not due to women defaulting on loans. The group of women we were speaking with were on their 5th loan cycle (meaning they had all already paid back 4 loans in full) and were eagerly asking the Shikhar representatives for larger loans to start larger businesses. One woman, named Kanta, who spoke with the conviction of a prime minister, wanted a 50,000 rupee ($800) loan to start a cosmetics store. Another woman wanted a similar sized loan to renovate and then rent out a piece of her property. We visited with 2 other groups of women afterwards, and it was truly an inspiring experience to see such drive and self-confidence present in even the poorest of locations. These women were poor, but they were not desperate; they were proud, and enterprising, success stories in their respective community circle.
After the field visit I finalized the details of both the BRIC BBA rotating fund, as well as the Shikhar-Babson Micro Finance Initiative partnership in my mind, and was finally able to draw closure to my thoughts that had been accompanying me all week. The BRIC BBA rotating fund would look like this; at the end of the program this year, each student on BRIC would donate $40 to the fund. This money would then go to BBA to set up a fund in one of the villages where they repatriate the children they rescue, in the hopes of inhibiting further child trafficking due to economic necessity. 24 of us all contributing $40 would lead to $1000 USD, and be enough money to set up around 5 loans; the structure would be similar to Shikhar and how they organized women into groups of 5, and the loans would be administered by BBA “activists” who check up on the village about once every month like I mentioned earlier. In the spring when everyone from the BRIC program is back on campus, there would be an awareness / fundraising event for BBA, with the proceeds going into the following year’s contribution to the rotating fund. The event would be held and organized by this year’s BRIC program, in addition to next year’s BRIC students, so it’s purpose would be twofold; spreading awareness and raising funds for BBA, while also acting as a social mixer for previous BRIC students to interact and give advice to future BRIC participants. Fast forward to next fall and next year’s BRIC program would then be able to go to the village where the loans were being administered, see the women who had taken the loans, meet them, and potentially give them advice, turning the encounter into a day-long interactive visit. At the end of next year’s program, everyone would donate another $40, combining with our year’s contribution which would just be getting paid back, and our spring event’s fundraiser money, to increase the size of the fund. Whether the fund granted a 2nd cycle to the same women, or gave new women a chance at a 1st cycle loan would be up to that year’s BRIC program…allowing the vision of the fund to change hands after every year’s program and allowing each one to impart their own ideas and visions to the fund.
The Shikhar Babson Micro-Finance Initiative would work like this; we as a club would ask Shikhar to gather applications for people who wanted to start business with a special offer of lower interest rate financing. We as a club would then scan the applications, picking out the 5 we think have the most potential. Those loans would then be given and administered with quarterly reports and check-ups passed along to the group. In the meantime, we would be bringing in guest speakers to educate the Babson community about micro finance, in addition to attempting to gain funding from Babson’s innovation fund to start up our domestic lending arm of the club. After the first cycle of loans are repaid by our chosen entrepreneurs (about 12 months later) we would then be in the position to experiment with more creative loan products, in addition to pulling in alumni matching funds to beef-up the fund. I was truly excited about both the BRIC-BBA partnership and the Shikhar-BMI partnership, and as BRIC’s last day started to wind down, I finally had peace knowing I had figured things out in my head.
Thursday afternoon culminated with our end of BRIC dinner banquet. I presented a slideshow of everyone I had taken pictures of sleeping on the trip, in addition to my Bollywood dance again, and finally unveiled what I had come up with for the creation of the BRIC fund, bringing several other students up to the stage with me to present on the idea. The idea was a unanimous success, and everyone through their support behind it….I was exuberant. The banquet finished up with slide shows of pictures and memories, and a good-bye session of hugs (the girls were crying) for around 45 minutes where no one wanted to be the first one to leave. After the banquet, I e-mailed Basu to let him know that everyone was on board, started to pack up my things, and said my goodbyes to the people who had become my family for the past 3 months. BRIC had been an experience beyond words…I will leave it to my next blog to recap, but if I were to limit it only to one word I would use “life changing.”