The Project

Thought that I'd give some background on where we are and what exactly we are trying to do.  I started my trip by flying into Chennai, marked by B on this map.  That is were the IFMR is based, although they do most of their research/field work, and we have been/will be working, in Thanjavur, marked by A

Here is a map of Chennai.  The office that we are working at is very new--construction is still going on, elevators keep going out, etc.  The office is at A.  For the first week we stayed at the Crescent Park hotel in Nungambakkam, a district in Chennai, marked B on this map.  Google maps tells me that the commute is 12.1 kilometers, which I believe.  It also says that it should take 20 minutes.  This is bullshit. Maybe, just maybe, if you managed to remove all of the other people from the city except for one rickshaw driver and then made sure he had a full tank of gas and new tires, you might be able to do it, but he would probably end up getting lost and/or taking you on a wild goose chase around town so that he could try and charge you more.  An hour later, you would get to the office.

Here is Thanjavur.  As you can see, it is much smaller than Chennai.  Supposedly it has a population of around 200,000, but it definitely doesn't seem that way.  The Indians we work with always laugh when we mention this, reminding us that in India, 200,000 is nothing.  Our guest house is at A, which is a ways from the center of town, but not by much--it is like a 10 minute bus ride from the train station in bad conditions.  Much longer than that if you get on the wrong bus and drive around in circles, but still.

In terms of what we are doing.  Our team is working on developing an educational loan for higher education for the Thanjavur region, mostly focusing on the truly rural areas surrounding the city (town?).  Over this last week we did a pilot project, going around to schools and interviewing people and trying to figure out feasibility and any issues that we are going to have.  We went to high schools, various higher education institutions, a bank, and interacted with some local government officials over the three days we were actually in the field, which I think was pretty damn good.  We stuck to the town more or less during the pilot for timing reasons, so hopefully we will get farther afield in the coming weeks.  My team--me and Katherine and Priyanka, went to an engineering college and some high schools.  We interviewed people and talked about how they get into schools, how they pay for it, etc. Other groups did other high schools, other colleges and universities, etc.

What we found:

From the people that we talked to, the picture seems much less bleak than I was expecting.  Everyone seemed to want to go on to higher education, the government programs were pretty good, and people seemed to be able to finance what they needed.  The biggest issue that there seemed to be is that people in villages either were not interested in higher education, stopped their children from doing it for social reasons (ie married their children off early, etc) or needed them at home for financial reasons, although these were very infrequent given what we heard.  There is also a significant problem in that many of the rural students do not know how to work the system.  Banks here are required by the government to offer everyone in a designated region an education loan, but most of the student do not know this.  So from what we have seen very briefly, it seems like another loan product is not the answer--the banks are forced to operate at a loss, and the advantage that microfinance has is that it has a higher repayment rate so it allows banks to give loans to those who otherwise would have no access to capital at all.  To my eyes it seems like it would be dumb to enter the market where that advantage is wiped out by governmental mandates that traditional banks provide the service, especially since IFMR is trying to be fiscally sustainable and the default rate for student loans in the Thanjavur area is near 50%.  It would be much smarter to just inform the villagers of these programs, and help them take advantage of the programs that already exist.

Unfortunately our employers, or some powerful subset of them, disagree with this.  They really want to supply a product, and dont seem to understand the economic arguments that we are making--not surprising given that the people who disagree with us the most are a psychology researcher and a psych/agriculture major.  Plus it seems that the organization in general is very tied to the prospect of microfinance solving all of the problems which they encounter, whereas I think that our team has a more policy-based background/thinking.  Favorite quote from a recent meeting: "we need to be questioning all of our assumptions.  We know that there is a demand for this product..."  But we will see, we might start to agree with them more once we have gone into the really rural areas, and it does seem that some of the IFMR people were understanding and agreeing with our issues.  

Answer to the dilemma:  More data.  We go back out into the field on Monday or Tuesday, returning to Thanjavur.  More interviews, more banks, more cows and goats and chickens, more spicy spicy indian food, more dust, less cars and internet and office cubicles and horns and toxic fumes that do make the sunsets pretty interesting but otherwise are a pain in the ass.  Altogether a pretty good deal.