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).