First Interviews

Today was the first day of actual field work for Yavor and I – and shockingly it went quite well. The few days of last minute preparations were somewhat hectic, with lots of last minute changes, so we were not entirely sure what to expect today. But largely thanks to SRFS officials, the day went perfectly. We met with three groups in Attibele, a district in Bangalore West. Attibele is certainly not what we would call urban, but it is close enough to Bangalore (35km) to be affected by economic activity there.

The first interview was with a group of around 15 women (many of whom left midway since they work in the government factory nearby and it was a workday). This group was 6 years old and had taken three loans from SRFS. The women primarily used the loans for education for their children, housing repairs, and investment in their silk sari business. To some degree it was discouraging that so many of the loans were not used for livelihood activities; on the other hand, it can hardly be argued that improvements in education and housing do not directly relate to improvements in overall standard of living. After the group interview, we interviewed two of the women individually. There were some problems with cross communication – unfortunately it is very difficult to draw one woman aside individually, so the individual interviews were held in a group setting. One used her loans primarily for house repairs, the other showed us the looms she bought to weave the silk for the saris with the loan.

The second group, or individual as it were, was particularly fascinating. We had specifically asked SRFS to see groups that were considered “non-performing assets” – groups in default. This interview made me incredibly glad that we did. The group disbanded a year ago, so we were only able to interview one woman. This group had given 50% of their loan funds to one woman, which she used to purchase a vehicle to transport produce to the market. The vehicle unfortunately got in an accident, at which point that woman found herself unable to repay, and because she held so much of the group’s liability, the group subsequently fell into default. She is currently trying to make enough profits via other ventures to repay the loan to SRFS, but is having little success. The main dynamic that we found interesting from this interview was that the group decided to give such a large proportion of the loan to one woman. We were later informed by the Operations Manager that this dynamic of dominant membership can be found in about three quarters of defaulting groups.

 

The final group for the day was a relatively successful and very well organized group. They were almost all literate, which is quite surprising for a Self Help Group, and the main focus of their loans seemed to be education. In fact, one woman used the loan to pay for her son to attend medical school. The leader of the group was the wife of their equivalent of the mayor of the town, and the group as a whole seemed to be quite driven and collected. They described quite detailed processes of how they deal with late or defaulting members, etc – which we had not found in either of the two previous groups.

Tomorrow will be another day of interviewing, followed by a day off and then the trip to Mysore! 

Preparing For The Next Steps

Looking back on this first week, it really has been a steep learning curve, both in terms of the research and India in general. Meeting up with Adi this weekend, it became painfully obvious that we probably amused lots of waiters, salespeople, and people at our firm this week with our complete lack of understanding. But we're settling into a routine pretty quickly. Every morning now there is a little girl who meets Yavor and I outside our apartment buildings to share our breakfast (I think most of Bangalore has figured out we're complete suckers at this point....especially the salespeople). And we've figured out which streets to walk down on the way to work that smell least like cow dung. And we've figured out how to differentiate between the Hindu and Muslim restaurants, and what and how to order at each.


More importantly, we're starting to figure the research out. In fact, with the help of the firm and their patience through many different revisions, we have a largely concrete schedule for the next two weeks. We start our interviews of both SHG  (self help group) leaders and clients this Wednesday. We had hoped to start tomorrow, but SRFS is in the middle of a loan collection period, meaning that the loan officers aren't free to act as interpreters until the period is over. The extra time will probably be useful - we can firm up details and practice the interviews so we aren't going in cold. On Wednesday, we will start interviews in the Bangalore West region, starting with Attibele and Anekal. After that we will spend about a week in the Mysore region, doing interviews in Mysore, Udaygiri, and HD Kote, before meeting Adi and his sister to go ride and wash elephants at the elephant park outside Mysore. If all goes according to plan, we will be interviewing 3 groups with about 5 interviews in each group a day, which might be overambitious, but we can always adjust as we go. The loan officers will be interpreting as well as transporting us place to place on the back of their motorcycles. So as long as plans don't change, which they seem to do quite a bit at this point, we are ready to fully delve into the research.


But for now, I'm quite enjoying Adi's dismay at the Bangalore Royal Challengers beating the Chennai Super Kings (even though watching Dhoni lose is always sad) and making pizza with chicken tikka and paneer as well as lassi - not a bad end to the weekend in Bangalore. 

The First Week: "Solpa Adjust Maadi"

Everything in India takes a few extra steps. After a few days at my service apartment, I finally was informed that I had no hot water because there was a boiler that also needed to be turned on. While I'm used to generally just finding a hotel within my price range, here finding a place to stay involved several days of phone calls (thank God for my friend and his dad who took care of that for me) and negotiations to agree on the rate for a two month stay. And that was all before we decided that air conditioning really was necessary for an Alaskan to live in Bangalore. Which brings us to the first lesson of India: "Solpa adjust maadi." In Kannada, the language predominately spoken in Karnataka, this roughly translates to "Please adjust a little, sir."

To some degree, this phrase highlights the difference between the Indian mentality and our Western expectations. My research partner, Yavor Danailov, and Bangalore native friend and guide, Adithya Manohar, got into a long debate (not surprising since we are all members of the debate team) over whether it was better to have a society structure by rules and regulations, or a society that was willing to "adjust a little." There is a Sanskrit saying that goes "Na shreyo niyamam vina" or "No progress without rules and regulations.”  To someone from a Western culture, this seems self evident. Rules and regulations promote a system of equality, justice, and order. But there is also some chaotic beauty in a society that can recognize that life does not always fit into these boundaries and requires adjustment.

One of the first things to adjust once we got here (after a weekend of drinking coconuts, eating shark, watching the monsoon rains, and inadvertently fondling cockroaches) was our project. Sanghamithra, it turns out, is quite unique as microfinance institutions (MFIs) go. As we knew going in, it is a non-profit organization. But it is also entirely financially self-sufficient and despite not having profit motivation has actually made surpluses consistently for several years. Even more interestingly, SRFS does not lend to individuals. It exclusively lends to Self Help Groups, a group of 15-20 individuals who have been saving and lending internally for around 6 months to a year. The SHG can approach SRFS for a loan, and if it receives it, it is free to distribute the loan money as it sees fit among its members. This creates an entirely new dynamic in the project, as we were initially planning to study the impact of the MFI’s financial structure on the individual clients. This to some degree creates a middle man. On the other hand, it also opens a world of opportunities. After two days of reading background materials on SRFS, looking and its financials, and reading impact studies carried out by other researchers, Yavor and I adjusted the project to fit the new structure. We will be visiting SHGs (hopefully one per day, even though the projects are rural which makes travel a problem). In addition to the client interviews we came prepared to do, we will be interviewing the leaders of the SHG with a different set of questions regarding the nature of the SHG itself. In this way, we will have three levels of study: the impact of firm decisions (particularly regarding financial matters) on the SHG, the relationship of the SHG both with SRFS and its members, and the ultimate impact on the members’ livelihood.

Hopefully today we will have a more concrete plan as to what SHGs we will visit and how we are going to get there, but for now this is a beautiful morning in Bangalore and it’s time to get to work. 

स्वागत!

Greetings!

This is a blog of my experiences, observations, and perceptions during a two month stay in Bangalore, India. I will be interning at Sanghamitra Rural Financial Services (SRFS), a non-profit microfinance institute aiming to raise clients out of poverty by offering microloans and other financial services. I will also be conducting independent research on the profit structures of microfinance firms and its effect on the social and income impacts it has on its clients. To this end, I will be using SRFS's financial data, which they have been kind enough to share with me, as well as the data from other firms gathered off of the MIX Market database. In addition, we will be interviewing clients from the firm to gather their insights into the impact of microfinance, their standard of living, and their perceptions of microfinance.

This blog will include stories, pictures, insights from the interviews, as well as updates on the progress of the research. I would love any and all feedback, suggestions for the research, and stories of your own!

Becky Smith