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Tag Archives: microfinance

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Hey Everyone

My name is Ilya Sabnani. I am currently a sophomore at Princeton majoring in Economics with certificates in Environmental Studies and South Asia Studies. I’m guest blogging about social and economic change in India. This past fall, I had the opportunity to spend 3 months in Hyderabad working for a microfinance institution, BASIX. I ended up doing research on improving the livelihoods of handloom weavers living in a rural area not far from the city. During my time abroad, I was exposed to both the cosmopolitan and developing aspects of Indian culture. From this, I’m going to provide an outsider’s view on change happening in India. I hope my experiences abroad can help you understand the problems facing many people around the world. Hope you like what I have to say and will post a comment or question.

Is India’s Change Really Happening?

Apparently, it is. As soon as I stepped out of Rajeev Gandhi Airport in Hyderabad, I thought I was at a country club. The lawns were perfectly manicured, the cars were neatly lined up in a large parking lot, and more importantly, there was NO SMOG. I could breathe! The last time I was in India in 2003, I was grasping for whatever oxygen was left in the air because there was so much pollution. With plenty of autorickshaws and cars that still run on diesel, urbanized areas of India are prone to heavy pollution. As i soon discovered, driving around Hyderabad ended up becoming one pf the most time consuming activities during my stay. The more I saw the city, the more I realized how much change had seemingly occurred. Practically everyone had a cell phone and there were wireless internet cafes that made technology accessible to those who could afford it.

However, the deeper I thought about it, the more I realized how difficult life is for people who are at the bottom of the social and economic pyramid. In India, urban life can be especially taxing for the poor. For some, their main livelihood is begging at traffic intersections. For others, it’s working at hotels as dishwashers and sending money back to their families in villages nearby. At the end of the day, these people are struggling to make ends meet and are trapped in a cycle of the rich getting richer and the poor getting poorer.

Delhi is hosting the Commonwealth Games in November. Even though this is a huge honor, the city is faced with what to do about the slums in the city. Instead of creating temporary housing, they are covering up the slums with bamboo walls. This temporary solution proves how governments simply don’t know what to do with the massive influx of people living in slums. How do you think this problem should be best addressed in the long run? Are more social services for Indian citizens necessary for substantial change to occur?

This is a part of a series on Change in India. More to come.

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Listening to a recent segment of Marketplace.org (1/15.2010), I heard about microinsurance. The concept sounds like win/win for everyone.

With more resilient structures, Haitians can purchase microinsurance policies that cost $1 to $2 a day. Correspondingly, a Lloyd’s report cited Bolivian health insurance being sold for $5 a month.

For low income individuals, microinsurance represents risk protection for structures, businesses, and health catastrophes.
For insurance companies, it means new markets, new customers, new products, and billions of dollars of new revenue.
www.microinsurancecentre.org/UI/DocAbstractDetails.aspx?DocID=753

It is a pleasure to see new markets and profits for large insurance firms potentially doing good.

Comments? What am I missing?

The Economic Life:
Bangladesh Nobel prize winning (2005) economist Muhammad Yunus has been called a microfinance missionary. Through microfinance, very small loans are making a very big difference. Being able to borrow small sums has enabled poor entrepreneurs in developing nations to start and sustain businesses.

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