One of the advantages of the System Design and Management Program is exploring all that MIT has to offer. This past spring, I had the chance to take a class offered by MIT’s Media Lab called Design Lab: Information and Communication Technologies for Development. Although I’ve never worked in the information or communication technologies sector (I hold a master’s degree in chemical engineering), I took the class to learn the strategies involved in implementing such technologies in the developing world.
I joined SDM to transition from a career in process development to one in management consulting/strategy,
and this class offered me the chance to get hands-on experience. This experience perfectly illustrated the value of SDM’s systems approach. By listening directly to customers and gaining an appreciation of their context, I learned why it’s not enough simply to develop new technologies. Harsh reality is the final determinant of what is possible and what is not.
|Leigh Gautreau, SDM ’08, got an up close and|
personal view of the needs of villagers during her visit
to Rajugela in Uttar Pradesh, India. Gautreau was
investigating the village’s communication
technology needs for her Design Lab class.
Design Lab began with presentations on prospective projects, after which the class was split up according to
preference. Each team worked on a prescribed project in a developing country with the aid of a nongovernmental organization. I was teamed with three other SDM students (Leonard Francis, Sangita Subramanian, and Kenneth Liu), and we worked closely with representatives of the India School Fund, an organization founded in 2005 to establish a school in the village of Rajugela in Uttar Pradesh, India. The goal was to leverage the strength of the newly opened school to start a microfinance program in Rajugela. Our team, Smart Microloans, was charged with helping villagers gain access to microloans at competitive interest rates by employing a LendingTree-like methodology.
Our original plan was for an honest agent employed by the India School Fund to enter villagers’ data into a web-enabled loan application database. Banks and microfinance institutions could then assess villagers’ financial data (i.e. loan applications) without having to travel to the village. Villagers could shop for the best loan terms and interest rates, shifting bargaining power from the banks to the villagers. The hope was that villagers would use small loans to finance microbusinesses set up with guidance from the India School Fund.
The proposition seemed solid from our perspective in Cambridge, so I traveled to Rajugela for two weeks
between the spring and summer terms to assess whether the program we had devised would work. While there, I had the honor (and sometimes the discomfort) of full immersion: I slept outside on a cot under a mosquito net, and I ate food cooked atop a buffalo dung fire.
|This school in Rajugela was founded by the India School|
Fund. Leigh Gautreau, SDM ’08, worked with
representatives from the fund on her India project.
I faced a number of challenges in Rajugela that I could never have anticipated, not least of which was the unwillingness of banks to use a one-off, outside developed computer program. In addition, the India School Fund’s local representative was concerned about the risk of having too many loans in the village. Another major hurdle was women’s economic inequality and the reluctance of village men to allow for their empowerment. All of these challenges were unearthed in interviews aimed at assessing villager needs. Overcoming these challenges and retrofitting our program offering required brainstorming.
I was able to identify one institution, the Indian Overseas Bank, that was willing to offer loans to self-help groups (groups of 10-20 villagers who obtain loans from banks collectively) within the village at interest rates of 10 percent, with very flexible repayment schedules. So, instead of developing information technology for the loan application process, we could help villagers manage their loan repayments and track credit history.
The risk associated with having a lot of loans could be mitigated by having villagers with a common goal get
together around one loan. For instance, women capable of sewing could borrow money for materials and then give garments to a textile reseller on credit. The textile reseller would compensate the women after the sale, taking a small profit for himself.
Setting up producer groups could also mitigate the risk associated with overborrowing. Villagers would benefit from economies of scale, pooling resources to gain bargaining power in price negotiations. Information and communication technology could be employed to manage the membership in a producer group (i.e. what share of produce a particular villager has contributed and therefore the share of the proceeds he/she is entitled to) and to facilitate supply chain management.
Unfortunately, many of the ideas I formulated required women to play an integral role, and I learned quickly that this might not be possible because of the local attitude about women. While the initial project—implementing a web-based loan application program—seems infeasible, our team did come up with a solid alternative. However, even this alternative did have local impediments to overcome.
Overall, I certainly learned a great deal about the “total system” approach. I better understand what the villagers need and what possible solutions could be implemented to serve those needs. In a way, my experiences with the actual customers and their environment in India helped me further appreciate what I had learned all semester in SDM’s Product Design and Development class. Thanks to SDM, I was also able to interview the villagers more effectively, focusing their attention on their problems rather than prying them for possible solutions. Through surveys and focus group discussions, I developed a needs assessment that can be used to evaluate future concepts.