30 Dollar Finance

We are launching 30 Dollar Finance on 26th Oct 2009. It is obligatory to write something very basic about 30DF. E.g. Origin of the idea? Why the name? ... etc. So, doing that....

The most fundamental way to find an effective solution is to find the cause of the problem. It is not difficult to understand that most of the ineffective initiatives targeted towards social change suffer from following two problems:

• Sustainability
• Lack of Impact
  

When 'Plebeian' team (yes, that is what we used to call ourselves.....but not anymore!! I will explain why later in this entry) was brainstorming the potential idea of creating an effective social enterprise, we filtered the choices(?) based on sustainability problems and impact-less-ness. We said big NO to 'donation' based ideas...there are no points in guessing that they cannot become self-sustainable. Idea of micro-credit was appealing because as it has proven in many developing countries, it can become sustainable and impact-ful if executed properly.

Unlike Kiva management, 30DF thought that the same will be welcomed in ultra-poor community of India who do not have access to formal banking. Following diagram will depict what 30df is trying to do:


The image above is very blurry. For better image, please click on the it

Why did we choose the name like we did? During Inception, we operated under the name - Plebeian. One of our team member - Darpan presented the then Plebeian to Dr. Emerson, a Professor at Carnegie Mellon. The first thing he advised us is to change the name from Plebeian to something simpler and that portrays what we are trying to do. 30D seems like an appropriate name - $30 states small (microcredit) amount and Finance states money.

Why would 30 Dollar Finance work?"

I have been asked this question repeatedly and I felt obligated to provide a simplistic answer to the question.

One should read Martin Fisher, founder of KickStart who explains how cash based economy can be a viable and sustainable solution to poverty. 30DF second that – we say, raising income is a solution to poverty :). 30DF is one such attempt to progress towards a cash based economy. Now the just question is why and how 30DF will become sustainable. This can be answered through two perspectives: one that revolves around the model itself and another involves stakeholders – the 30DF management team.

Concept: The ability of the idea to pool very small amount (e.g. $15) from social investors to create impact at the bottom of the pyramid is the selling point of 30DF. Unlike any other social enterprise 30DF will bring investor’s money back to him/her. We expect them to re-invest the returns. Imagine your one time social donation cum investment to create impact on more than one person/family over the period of time – good feeling, isn’t it? 30DF believes that there are people around the globe wanting to help but are skeptical of the fact that the money usually doesn’t reach the needy and get eaten away by parasites. 30DF provides the transparency about how your money is being used and it’s status report every month.

People: Results drives business, results will drive 30DF. The 30DF team is committed to produce ephemeral results once we engage our initial investors. The result shall comprise of – the repayment of the money, and successful execution of the entrepreneur’s informal business. In order to achieve this, we are constantly in touch with our field partners and addressing problems that we think are problems to our success (e.g. screening genuine entrepreneurs and, defining and constantly improving a process for the same).

Momentum

Tremendous momentum was never Plebeian's expectation, but the progress is quite close to being noteworthy.

The technical team have managed to set the infrastructure and start the implementation of the system. Few screen shots:







There have been more than one roadblocks in the registration process, but India team have managed to get around them and soon we will be official. The name decided is '30 dollar finance'.

Visit to Chaitanya (Gramin Mahila Swayamsidha Sangh), Rajguru Nagar (Khed), Pune

I drove to Khed from Pune city on the 4th afternoon. Khed is a small Taluka place and everybody seems to know everyone else. It wasn't difficult to spot the office (even though it is small) for how famous Chaitanya is.

First, I met with 2 members of technical staff - Tushar and Deepak. They seem to have a very good understanding of their operations and numbers, and answered all my questions without blinking. Later, the CEO, Ms. Kaushalya joined and I gave an informal presentation of Plebeian - the model and management team. She was more interested in the people who are going to run the show.

Ms. Kaushalya liked the idea, and showed interest to be a part of the Plebeian system. I look at thier williness for partnering with Plebeain as an important milestone. She had certain concerns though, including:
- How and who will collect the requirements
- Chainanya has around 16000 clients, do we want to have all of them in the system?
- How and why the Plebeian website will gain popularity
- How Plebeian itself will operate ;) because the Plebeian team is distributed.
..etc (mostly related to the business requirements and not questioning our presence or ability)


She expected us to extend a proposal that will include the responsibilities of both the parties in the partnership. Before that, she would like to know the whereabout of Plebeian (Team, registered office, nature of the org etc), because she candidly said that she never heard about it, and we cant blame her, can we!!! ;) She also expects to have some sort of interface which should be more than communicating over a telephone line - our analyst needs to go on site, learn their operations and collect requirements.

Currently, they are not using any MIS for accounting purpose but a plain MS excel. I wonder how they manage to put 16K clients information into such a volatile storage utility.