Gone are the days when summer was a “slow time” when everyone disappeared on leave and didn’t return phone calls. Now everyone takes a pad or iphone along so we can keep up with the latest developments in our high paced jobs. This has the advantage of allowing us to return from our vacations more exhausted and stressed out than when we left. Not that I am on vacation. That is still a week and half away, with the prospect of an always action packed retreat with the High Command of FINCA standing squarely between me and the rockbound coast ‘a Maine.
We had visit from Vijay Mahajan, CEO of Basix, which has always been one of the most effective and innovative microfinance companies in India and the world. Today, when you are looking to see who has come up with new things that are working in the development sphere, you look to the Southern Hemisphere, not the Northern. Vijay was kind enough to host a team from FINCA (as was SEWA) whose mission was to come up with new ideas for our “FINCA Plus” initiative wherein we pilot new projects to help our clients find more value added investments or become less vulnerable to reverses in areas like health. The team learned more than will fit in this brief blog, but perhaps the greatest insight is that solutions need to be based on the needs of the communities, which may not be uniform across the client base and hence lend themselves to “scalable” interventions in the sense that microfinance has proven to be. Still, as Vijay counseled us, there may be some “principles” that are relevant to all or most of these efforts.
Probably the most important principle is that incremental interventions that result in efficiencies on the cost side and increased productivity on the revenue side and build on existing productive activities are often more effective that big, bold, paradigm shifting efforts. Vijay and I shared a laugh in that we both, early in our careers, on opposite sides of the planet, had once looked into persuading our clients to grow mushrooms. While highly profitable (assuming the mushrooms don’t die, which they often do in the tropics), building below ground, air-conditioned beds is a monumental undertaking, especially in a poor village. With time, Vijay scaled back his ambitions, and discovered that selling anti-parasite medication for raising goats could be undertaken for a few cents a month per animal and result in 20% weight gains. Likewise, economies of scale could be achieved in communities if the farmers could organize themselves into coops and jointly purchase inputs and transport and market their production in ways that conferred upon them market power.
Thank you, Vijay, for sharing your wisdom and experience!