Microfinance for Beggars?

Yesterday at SCU's event "Transformative Changes Through Science and Technology: The Role for Social Benefit Entrepreneurs" honoring the 2008 Tech Laureates I heard something new. It has made me change my mind. (In the interest of full disclosure, I hereby state that not much changes my mind these days).
Here is the story: I am just back in the US after six weeks in India. A common sight in India is women and children at stop lights- begging. There used to be a time when I would give some change but I have stopped doing it now; doesn't giving them money encourage them? Not much has changed over the years except now they often carry tissue boxes, balloons, magazines, hats, toys etc. to sell. Where did they get the money to buy the stuff? Some tiny children offer entertainment in the from of headstands or juggling or something. "The goods must be stolen; they are just an excuse for begging - whatever" I think. I look away. I can do nothing about this. I feel rotten for a while till I get over it.
Yesterday, I heard Mohammed Yunus talk about Grameen's new program in Dhaka, Bangladesh - "loans to beggars". He thought - why not do something for the beggar? and that's how the program started. They find a beggar and ask one question - at what time in your life did you become a beggar? And then they gave him/her an idea - continue begging, but why not carry some small article to sell- give their "customer" a choice - so as to speak - buy or give charity. If the beggar agreed, they gave an interest free loan with no time set for repayment. Whenever they are read to repay, they can come back to repay. That he said was key. Enablement- a person who tries cannot fail. In fact, they said - take your time to repay. To keep their own costs low, Grameen provides no other service, just trusting the person to come back. Loan amount is $15 flat. So far there is $100K in the program and 11,000 people are not begging anymore. Most others are only part-time beggars and some are successful entrepreneurs.
So next time I am stopped at a light in New Delhi - I will roll down my car window. I may not be in a position to start a loan program but I can buy a box of tissues. Who knows? It might make a difference. Why had I never thought about this before? Why did I assume the goods were stolen? The kids wanted to trick me?
Why? Becuse I still have a lot to learn.

The Future of Social Enterprise: Harvard Business Review

I had a "duh" moment yesterday. The Kasturi Rangan, Herman Leonard, Susan McDonald HBS working paper has helped me crystallise what my blog is about- yes, I admit it- at least till I change my mind. They examine the "confluence of forces that is shaping the field of social enterprise" and propose three scenarios for how this sector might evolve (full text here):
1. Consolidation: In this scenario, funding will keep growing in a gradual, linear fashion and organizations will compete for resources by demonstrating performance. The sector will consolidate, with some efficient organizations gaining scale, some merging and then growing, and some failing to achieve either scale or efficiency and eventually shutting down.
2. Entrepreneurial: In a more optimistic future, existing and new enterprises will apply strategies to achieve and demonstrate performance, improving efficiency and effectiveness and attracting new funding sources. More organizations will enter a reformed, competitive field of social change with new entrepreneurial models, established traditional organizations, and innovative funding strategies fueling widespread success.
3. Expressive: Rather than focusing exclusively on performance, funders and organizations may view their investment as an expressive civic activity. As much value is placed on participating in a cause as on employing concrete measures of impact or efficiency. In this scenario, funding will flow as social entrepreneurs experiment with new models based on a range of individual priorities and relationships.

I am not satisfied with item 1 - too slow and more of the same. Item 3 is okay but business scales much faster than pure social activity. So here I am: My blog is promoting (creating mind share, providing links and just plain evangelizing) the entrepreneurial scenario (#2) leveraging technical innovation - much like what has fuelled the growth of silicon valley. What would you say?

Business School with a difference

The Maan Deshi Udyogini Business School for rural women, founded by economist and farmer Chetna Gala Sinha last December, is gradually becoming a symbol of empowerment for women at the bottom of the economic pyramid. Situated in the dry region enveloping Mhaswad and Vaduj villages, 270 miles (430 kilometers) from Mumbai, the school is targeted at school dropouts and women without formal education. Today the school offers 19 skill-development courses, including computer training, bag making, English-language training, and financial literacy instruction.
http://www.businessweek.com/bschools/content/jul2007/bs20070716_428181.htm
And the cost is not the thousands of dollars that a standard B-School charges- but the equivalent of $2.50 for the entire course.
- from netika