Microfinance: Good or Bad

The problem with case studies is that they can powerfully portray certain things that are exceptions rather than being the general fact. That makes it important for any critic to study evidence that can be called “significant” in the statistical sense. Documentaries like the one on france24 (http://www.france24.com/en/20080404-bangladesh-burden-microcredit-caring-grameen-bank-mohammed-yunnus) may serve political constituencies, but are of little help as far as advancing facts is concerned.

The concept of lending involves taking money back which in itself may be construed as coercive. Let me explain - even if a lender charges no interest, she still has to collect the principal. She is likely to apply some pressure such as sending reminders that repayments have become due, making visits etc. If there was absolutely no pressure on borrowers to repay, I suspect a vast majority of them would be intelligent enough not to repay. A look at the performance of numerous development credit programs which did not have a system of adequate follow-up on disbursed loans will reveal that they could not be sustained and their outcomes were mixed at best.

Having said this, I believe information asymmetry and a lack of transparency in a capitalistic setting results in exploitation of poor clients. This happens even when the law of the land seeks to protect the poor.

Here is an example:

In the Indian context, there are strict restrictions on Non Banking Financial Companies (NBFC) taking savings from the public. Many NBFC-MFIs sought to get around this little problem by forming private trusts which were used to take members contributions. These contributions were then invested in the equity of the NBFC MFI. I wonder how many MFIs told their clients of the risks involved in such investments. I also wonder how many of them would share/have shared the upside that may translate on such investments?

In a lighter vein

Its not often that one senses unambiguous accomplishment. I had this feeling today – I felt I had conquered the final frontier. I had successfully prepared my own breakfast.

Well, almost. The credit goes to my cook who incidentally is on leave. I hope the leave does him some good. He showers me with great respect and makes me feel like an unleashed alsatian with his reactions.

Cooking, though, is not rocket science. Its closer in complexity to conditional probabilities.

Archimedes discovered buoyancy in the bath tub. Have you ever wondered where Murphy figured out his law? I am quite convinced he did it in his kitchen.

Hans Rosling: No more boring data

This one is for those who find statistics or development talk boring. AWESOME!!

Hans Rosling was born 1948 in Uppsala, Sweden. He is a Professor of International Health at Karolinska Institutet and Director of the Gapminder Foundation, which developed the Trendalyzer software system, used in the presentation above. Some components of the Trendalyzer software, particularly the Flash-based Motion Chart gadget, have become available for public use as part of the Google Visualizations. Try the spreadsheet application in Google docs. Its fun.

Rosling has studied statistics and medicine at Uppsala University, and public health at St John's Medical College, Bangalore.

Useful links:

http://www.gapminder.org/

http://www.roslingsblogger.blogspot.com/

http://en.wikipedia.org/wiki/Hans_Rosling

http://twitter.com/hansro

Accessing wlefare programs of the Government

When I see a beggar in Delhi, what do I do? Am I aware of all the recourses this poor person has to be reasonably sure that begging in her/his case is a choice? In case it is a question of access to opportunities that may enable her/him to live a more dignified life, how can I help her/him? These are some of the questions that keep cropping up in my head and have got me to explore the headline welfare programs of the government. While I will post my observations gradually, I intend to follow the following framework:

1. Program details and origin

2. Agencies involved

3. Eligibility and conditions

4. Processes involved

a. Enrollment

b. Participation

c. Payment, remittance

5. Risks and mitigation

6. Recommendations

7. Present status

8. How can I help a poor person benefit from this program?

I welcome any suggestion on this framework.

Government Sponsored Rural Development Programmes in India

The headline rural development programmes in India are:

1. National Rural Employment Guarantee Act (NREGA) – Wage employment
2. Swarnjayanti Gram Swarozgar Yojana (SGSY) – Rural self employment
3. National Social Assistance Programme (NSAP) – Social security for the poor
4. Bharat Nirmaan – Rural infrastructure such as drinking water, electricity, housing, irrigation and road
5. Council for Advancement of People’s Action and Rural Technology (CAPART) – Skill building
6. Prime Minister Gram Sadak Yojna (PMGSY) – Rural roads

Tracing the evolution these programmes is an interesting study of the emerging development paradigm in India.

Steve Jobs' 2005 Stanford Commencement Address

Inspiring stuff! It helps to remember that we live the choices we make.

Just to complete Steve's story, Apple granted him ESOPs in 2001. These options apparently were granted at a strike price lower than what the price should have been. If this is true, Steve Jobs would have under-reported his income. An internal Apple investigation has cleared Jobs of the charges reporting that he had returned his options without exercising them in 2003. Apple's board remains under investigation for alleged securities fraud.

Source:

http://en.wikipedia.org/wiki/Steve_Jobs