Sunday, September 12, 2010

The Madura Experiment (more refined)

It’s been a bit of a busy month for me and I haven’t had time to post. After years now of reading, surveying, observing and thinking, we (meaning Madura) are finally putting together the pieces of our socioeconomic transformation strategy. We’re taking quite a leap from the run-of-the-mill microfinance, so we’re operating like a start-up again, which is fun. But, with profits to take some chances with, so that’s even more fun. We’re looking at a massive, for profit experiment in reengineering the socioeconomic system dynamics of our members - about half a million poor women in rural Tamil Nadu, moving rapidly to a million. This involves putting in place a large scale smart phone driven data collection system, a mobile phone rollout for our members that will support a host of applications in the future, and development of a cool cutting edge network analysis platform that will allow us to track the evolution of the structure and dynamics of our member network so that we can nudge it towards a more productive trajectory of evolution. So here’s the story, (a bit of a synthesis of many of my previous posts).

Since we’re a microfinance company, we have to start there. I realize microfinance has warmed people’s hearts on a global scale with pictures of women smiling broadly and waxing on about how great life has been since they bought that cow with their loan (All they need is a loan. Sob). I’ve met a bunch of them. But honestly, I have none of that warm fuzzy feeling because the truth is that the outcomes of microenterprise (and therefore microfinance) depress me. Granted many of them may rise up to make a few cents more a day, which pushes them over the arbitrarily drawn ‘poverty line’ (I personally find the poverty line a silly measure). Still, even after years, they rarely make the leap out of the subsistence context. And honestly, I find it hard to spin glory out of these stories. If that’s success, then we’ve set the bar too low and we’re not getting anywhere. So why can’t they make the leap?

I’m probably repeating myself on multiple counts but here is the fundamental problem – the rural poor are very insular in their social groups and fragmented as a larger network. As a consequence flow of information and particularly novel information is very poor. No human being in that kind of network can amount to much. You can’t do anything about ‘it’ unless you’ve heard about ‘it’. Social network researchers have shown in many ways now that the more links there are across diverse groups, the more the innovation and economic success (See for instance: Network Diversity and Economic Development by Nathan Eagle, Michael Macy and Rob Claxton which is described here for the layperson). Conversely, the more diverse your individual connections, the more you will hear about cool new stuff (opportunities, ideas, everything really..), and the more successful you will be economically. Our rural borrowers are exactly NOT this. It’s a small world for them, but not in the “Weird how I keep bumping into my business school classmates at Heathrow airport” way. They run home based businesses (if at all), sell primarily to their neighbours, rarely travel beyond a 5 km radius and have a whole lot of issues mixing with other caste groups.

So, the goal of our big undertaking is to map their market, mobility and communication networks, get some understanding of the dynamics of information diffusion and influence and use our micromarkets and microeducation products to drive changes in the network structure and dynamics. Our micromarkets products (which will evolve to a mobile accessible information platform with some built in intelligence) will drive more long range connections in general. However our goal is to identify and find clever ways to bridge ‘structural holes’ in the network, or parts of the network that are large in their own right but highly disconnected from each other. Our microeducation products will be used to drive productive behavior such as information seeking behavior across different social and economic groups. (Products is an operative word here, everything is designed to be revenue generating, profitable and scalable). In the process we also hope to gain considerably more insight into the mechanisms of propagation of different kinds of information and ideas, and their impact on innovation and enterprise. There are lots of elements that have to come together here, but they are starting to fall delightfully into place.

So, I’ll end here with a small pitch to readers. We’d love to hear from people who want to come down and be part of the experiment as short term volunteers and such (email our recruitment manager at Madura – you’ll find the link on our Careers page). We don’t have a formal program yet but we’re putting one in place. As we work it out we would love to hear your ideas for what would be fun and exciting to do in a volunteer context. We also want to hear about cool new mobile technologies and applications and network visualization and analytic tools other people are developing (or want to develop for us).


  1. Kindly refer the recently published book "How India Earns, Saves and Spends: Unmasking the Real India (published by Sage)", a scholarly book which maps the earning, saving and spending profiles of Indians in the post-liberalisation era.
    The book, based on data generated by the National Survey of Household Income and Expenditure, NSHIE, offers an opportunity to India's policy makers, marketers and researchers to evolve policies to engender meaningful inclusion in the national economic growth story.

    For more about this refer the interview titled :
    "The Indian consumer is a hydra-headed monster" in

    The above book will help Microfinance Institutions to implement their programs much effectively in India .

  2. Tara, thanks for sharing details of your work here. Really great stuff! I agree with you that most companies and microfinance programs are not very ambitious when it comes to "transforming" the lives of the poor... the impacts are definitely there but very gradual. I am really excited to read about this new initiative.

    I have spent the last year out of grad school working with a group of designers developing a commercialization strategy, business plan, models etc for a clean water invention - microfinance and franchises being a big part of the model.

    I am just wrapping up my work there, and very interested in finding out more about opportunities at Madura that you mention in the blog post. I will reach out through your website. Hope to start a conversation soon!

    - Ashmeet Kapoor