Enhancing Rural Microfinance through Technology

1. Resolving User Contradictions through Fieldwork Kentaro Toyama Microsoft Research India IJCAI Tutorial on ICT for Development January 6, 2007, Hyderabad

2. Interdisciplinary Research Aishwarya Lakshmi Ratan – Public Administration and International Development Society Jonathan Donner – Communications Nimmi Rangaswamy – Social Anthropology Group Impact Impact Understanding Understanding Rajesh Veeraraghavan Computer Science and Economics – Individual Indrani Medhi Design – Kentaro Toyama – Computer Science Technology Randy Wang Innovation Innovation – Computer Science Udai Singh Pawar – Physics

3. Rural Microfinance and IT Rural Kiosk Entrepreneurs Sample Projects Can computers help existing structures for rural microfinance? Study on the challenges and uniqueness of rural kiosk entrepreneurs MSR India: Technology for Emerging Markets Aishwarya Lakshmi Ratan Associate Researcher Nimmi Rangaswamy Associate Researcher Multimouse for Education Computers in Agriculture Digital Study Hall Experiments with computing and communication systems in agriculture DVD exchange over postal service and TVs as display for rural education Multiple mice to multiply the value of PCs in schools. Udai Singh Pawar Assistant Researcher Rajesh Veeraraghavan Associate Researcher Randy Wang Researcher Text-Free UI Government and Kiosks IT and Microentrepreneurs UIs without text for users who are illliterate and may never have seen a computer before The state’s role in rural kiosk projects, with a focus on Kerala and Andhra Information ecology of small businesses in developing markets Indrani Medhi Assistant Researcher Jonathan Donner Researcher Renee Kuriyan Research Intern

4. Importance of Fieldwork … to resolve contradictory issues: • Resistance to new technology • But computers have glamour • Poverty systemic and multi-dimensional • But households functional • Stark lack of money • But willing to spend • Information critical… • But rarely the bottleneck • Computing needs are minimal • But there are opportunities!

5. Resistance to Technology… Many factors inhibit use of technology: • High cost • Reluctance to depart from habits and traditions • Fear of breaking technology • Lack of awareness of technology’s functional value • Barriers of education or literacy A child trying to explain to her mother what is on a laptop screen.

6. But, Computers have Glamour Examples of interest in computing technology: • Retention rates at schools rise when the school has PCs. • Rural PC kiosk owners see a rise in their confidence and status in community. • Office service staff eager to learn about PCs and how to use them. These examples have little to do with computer function. A kiosk operator running a near Tiruvallur, Tamil Nadu

7. Poverty is Systemic… Stable system makes escape difficult: • Lack of money means lack of time to do anything other than survive. • Lack of time means less time for education. • Lack of education means fewer job opportunities. • Lack of job opportunities means lack of money. “Shocks” to household create downward spiral, and there are always shocks: • Health problem requires loan • Loan incurs interest • Interest payments prevent capital accumulation A government-sponsored mid-day meal in a Tamil Nadu school.

8. But, Households still Functional “Good enough” solutions exist: • Credit: All kinds of loans available • Healthcare: Traditional medicines, primary healthcare services • Agriculture information: agriculture extension, word of mouth, salesmen A kiosk operator running a near Tiruvallur, Tamil Nadu

9. Persistent Lack of Money… Bangalore guideline for 45 minutes of housework a day: Rs. 150 (US$3)… per month! Typical daily wage for agricultural labor: Rs. 60 per day (US$1.33; Rs. 30 for women) Public-school teacher’s salary varies from Rs. 3000 to Rs. 8000 (US$67-178) per month. Teachers on a school trip in Karnataka

10. But, Willingness to Spend Luxury and aspirational consumption not unusual: • Weddings costing Rs. 1 lakh (US$2200) in rural villages not infrequent (cf., avg. per capita GDP of ~US$700) • Mobile phone ring tones popular even at Rs. 10 (US$0.20) per song • Photography services to “enhance” photos popular. Cost range from Rs. 100 to Rs. 600 (US$2-12) A Photoshop’ed photo of a village bride (Maharashtra)

11. Information is Critical… General lack of information hampers quality of life: • Hygiene and healthcare knowledge shallow or superstitious • Poor fundamental and vocational education impedes career growth • Very practical knowledge not readily available: • Government schemes for the poor • Job information • Value of savings and investment A 12-year-old enrolled in typing lessons at a rural PC kiosk

12. But, Information not the Bottleneck Access to information not the problem: • Physical transfer of goods/cash often required. Transport infrastructure is poor. • Levels of formal education very low, even with literacy. Education required to distinguish good information from bad. • Other factors… • No faith in information source • Lack of time or money • Rigid mindsets A petty shop owner in Tamil Nadu

13. Computing Needs Minimal… Information processing rarely required… • Little use of documents, charts, spreadsheets. • Paper , pen, and manual calculation difficult to out-do: • Low cost • Lightweight, durable • Additional training not required

14. But, Technology can Help! To draw interest of community. To process and analyze aggregate data. To streamline or improve existing processes. Focus group on a potential technology-for-agriculture project

15. Conclusions Removal of preconceptions is the primary value of fieldwork. General lessons are difficult to draw; contradictions abound. Fieldwork helps to identify the specific constraints that apply to a given domain or application. School boys near Bhopal, Madhya Pradesh