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Apr. 6, 2006, Delhi, IndiaI've been thinking a lot about C.K. Prahalad and his theories on the bottom of the pyramid. He made a powerful contribution to the world in providing a new framework for thinking about the poor. At the same time, simply selling goods to the poor will not change poverty on a large scale. We must link not only consumption to the poor but also savings, investments, and income, for there are no other real ways to get at problems of poverty on a large-scale basis.
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On the way back to the hotel, we sit in traffic in Delhi in front of the five-star hotels. Every day in cities across India, beggars approach cars. Sometimes there will be three or four at a single stoplight. A woman approaches us with a tiny baby attached to her withered breast. She just stands there with the child suckling...in the afternoon heat. I think of the philosopher from Princeton who claims that we would help someone if they were right in front of us, and I think even more of my friend Jim, who is thinking of doing a film about Mother Teresa.
We've had long conversations about her and what compassion means, what it means to live a life of compassion. I do nothing to help the woman, just look her straight in the eye and say, "I'm sorry. I'm sorry." Right behind this woman is another and then another; after she sees in my eyes that I will not give her anything, she walks over to her friend and they start laughing... I know that begging in Bombay is a business with beggarmasters, hierarchies, assigned territories. Mother Teresa's contribution was in providing comfort to those she touched. Maybe even more so, the mark she left on the world was in the many whom she inspired to do more, be more. She also brought visibility to people the world didn't want to see. In our own way, that is what Acumen Fund is trying to do—by starting with trying to understand who poor people are and what their concerns are, and then building solutions from that perspective and not simply our own.Apr. 5, 2006, Delhi, IndiaSatyan is a real-deal entrepreneur. [Internet kiosk company] Drishtee is his life. It is all he thinks about, he can discuss it all day long, and he is going to make it work. Satyan is neither shy nor recalcitrant. He is a man on a mission. In the past year, he has learned a great deal about how best to roll out the product. The problem with too many rollout schemes, he tells us, is that they are top-down and not focused on customer needs. Consequently, Drishtee is establishing a new product-services company called Quiver, which will focus on the design, development, and delivery of services that will be layered onto the Drishtee platform. As part of Satyan's commitment to Quiver and to a customer-centered approach to service delivery in rural India, he is moving to his own village for three months, where he will live among villagers and mostly listen to them, to what they need, what they will pay for, what they aspire to, and who they want to be.
His current rollout scheme is inspired by knowing who people are. Drishtee goes into a community where it has residents sell Drishtee services for a specified period of time. The top salesperson is offered the opportunity to purchase a franchise given that he or she not only has proven marketing skills and understanding of the product, but also hungers [to use them]—and he or she comes with an initial customer base....
I ask Satyan for a profile of the kiosk operators. He says they have two common qualities. First, they really know the communities and are respected by people there. This is key to the enterprise's success. Second, they have fire in their bellies and will do what it takes to succeed. His challenge? To work with more women franchisees and poor people, for both groups are the hungriest. According to Satyan, women also are more likely than men to open the kiosks early and keep them open later. The problem is that women are typically undocumented and can't get loans.Apr. 13, 2006, Lahore, PakistanStill, the work is hard. It can take a year for Kashf [an Acumen-sponsored microfinance institution] just to get its feet wet when moving into a new area or village. For the poor, borrowing is a particularly risky proposition—and so any organization needs to take time to build trust and help people understand the risks they are taking. Some communities initially fear that Kashf will kidnap their daughters. Communities also don't repay at first, testing whether Kashf is more a charity or a bank. We ask Sadaffe [Abid, Kashf CEO] how Kashf handles this. "We tell them that we'll just wait for the repayment. Sometimes we just sit with them, even up until 10 or 11 o'clock at night, and finally, always, they end up finding the money. And then they know."
Regarding Islamic lending practices, Kashf structures repayments with fees and interest computed into the biweekly payments. They tell the women that there is no interest but a service cost added to every loan. Over time in every village, women come to understand, and to accept, the 20% "service charge," as it is so much lower than what the local moneylenders would charge....
This work inevitably is about changing behavior and long-entrenched patterns. It is about coming into communities, often as outsiders, and asking people to take risks when the upside is not always immediately apparent. Offering a 20% loan as opposed to a 300% one or selling a $15 drip irrigation system that can quadruple income levels sounds like a no-brainer, but it is anything but that. It means asking people to change what they know, to go out on a limb.
Suffering comes from what we lose, and the prospect of loss is especially frightening when you have everything to lose. We have to get better at understanding the arc of building businesses for the poor—how long and how expensive R&D and prototyping stages are, what typical marketing costs are, and what it takes to get people to be first movers.