Satyan knew what he was talking about when he spoke of rural villages; he had grown up in one himself in Bihar, one of India's poorest states. His focus on understanding his customer base, moreover, was so fierce that he typically spent a month or so each year living in his home village so he could listen directly to the people to gain a better understanding of their needs. As a potential partner, he urged me to visit that village with him.
At that point, we'd invested $1 million in equity in the company and loaned it $600,000 to help it expand. About a year later, I visited with one of our founding board members, Cate Muther. By then, the number of kiosks had more than doubled, but we noticed that most of the local franchisees were men and wondered where the women were. Satyan explained that women were actually his most successful franchisees, but they had no access to financing because so many of them had never been registered for birth certificates when they were born (as opposed to their brothers, who were expected to get real jobs and places in society and therefore needed official documents).
We asked why women performed better than men.
"Women come to work early and they stay late," he said. "They are very serious about what they do and I think they work harder to succeed. Apart from that, most of a dollar earned by a woman goes right to the family. It's not the same for men. So everyone benefits when we support more women to do this work."
Cate and I brainstormed on how to raise the financing to extend to women. I called Maria Eitel, who ran the Nike Foundation, because that organization focuses specifically on women's economic situations, just as Cate's own foundation, Three Guineas Fund, does. Nike Foundation approved a $250,000 grant and Cate began spending many hours with the Acumen team and Drishtee to establish a larger lending capability to women that she herself would help finance.
Drishtee began to grow exponentially. By 2007, the enterprise was established in nearly 2,000 villages. Satyan invited me to visit his home village in Bihar. After an all-night delayed flight from New York to London, hours spent in Heathrow waiting, and another all-night flight to Delhi, I met two Acumen Fund team members, Ann MacDougall, our new general counsel, and Biju Mohandas, a former military doctor who knew India's rural areas. From Delhi, we took the 2-hour plane ride to Patna, the state's capital, and then started driving, this time on dirt roads riddled with potholes and covered with belching trucks and oxen carts, rickshaws, bicycles, and skinny men carrying enormous sacks.
Just outside Patna, the stench of garbage piled along the streets carried for miles. The refuse of civilization-paper, rotten fruit and plastic bags and cans-became part of the landscape, turning green fields into abstract paintings of blues and whites and browns more like a dirty moonscape than pastoral earth. We drove for 5 or 6 long, hot, and bumpy hours, and finally arrived at our tiny hotel, where we fell into our beds and then woke at dawn to drive another 2 hours to reach Satyan's village near Madhubani.
India is a contradiction of extreme wealth and extreme poverty living side by side. In Bombay, one of India's biggest billionaires was constructing a 27-floor mansion with parking for 168 cars, three helipads on the roof, and a staff of 600-all at a cost of a billion dollars. At the same time, 300 million people lived on less than a dollar a day. Bridging that gap and giving to India's poor, who represent a third of the world's people living in poverty, must become a priority for the nation's future. For Acumen Fund, it meant working harder with social entrepreneurs like Satyan to create the models that could help pave the way.
We had entered another world. Oxcarts and rickshaws moved slowly cutting through endless dirt roads bordering emerald fields. Women walked to the wells and holy men sat in front of temples, preparing for a religious festival. Only the very rich had electric generators, and even those who went to school told us the teachers never showed up.
When Ann asked one of the village women if she could use the bathroom, the woman led her to her backyard. The woman was by no means destitute. She lived in a brick house with separate bedrooms and her own walled yard. Ann told me she looked around to see where the out house was and it took her a moment to realize that there wasn't one. She looked back at the woman, who was happily waving her arm in a sweeping gesture to let Ann know that the entire yard was hers as a revered guest. She could squat in whichever part best suited her.
If this is what the better-off villagers did, Ann asked, how do the poorest ones take care of their hygiene? A doctor friend of Satyan's replied that open defecation was one of the biggest public health issues the area faced, reminding us that some health investments are best undertaken through effective awareness campaigns, not through medicines or direct services.
Against this backdrop, we sat in a circle under tall green trees outside Satyan's childhood home, cows lolling in the distance. Satyan pulled out his computer to show us the work he was doing to establish a business processing outsourcing (BPO) unit here. Already, he'd secured wireless, and sure enough, in this tiny village so far away from everything, we were able to check my e-mail and read the New York Times. Inside a small house, six young men sat inputting data for a bank in Delhi, all earning more than they had ever dreamed they could. A 17-year-old, too young to work at the BPO, introduced himself and showed us the Web site he had built.
Satyan took us to meet one of the kiosk entrepreneurs, a young man with a small face and pointed chin who greeted us with great warmth despite our arriving an hour and a half later than expected. The roads had flooded, and most were impassable. This wasn't a hindrance to his business, he informed us, because most people walked to his kiosk, where he sold photographs and computer services. He was bringing in more computers due to the high demand and had a phone to enable people to call whomever they wanted to. He also wanted to take us to a nearby town to see some of the art he sold through Drishtee Haat, the company's online crafts store.
As the sun was setting, we drove to meet some of the artists. Soon it was pitch-dark and impossible to see houses, let alone paintings, but we managed to fumble our way to one of the artists' homes. She came out with a scroll of paintings and two candles. The darkness alone made doing business impossible, and I felt a surge of frustration that something as simple as a single lightbulb could make all the difference yet be so inaccessible.
All of us, Satyan included, had an urge to try to fix every problem in the community. The children needed schools, and their mothers needed even more general education about health, hygiene, and nutrition. The farmers needed some form of health insurance so they could weather the inevitable catastrophes that befall a poor family and keep them in poverty forever. Satyan and I both are big dreamers. We can't help ourselves. But the conversation eventually turned to remembering what he was trying to do and what it would take to do it.
If Satyan was to succeed in creating a network of connections by having the tele-kiosks in even 10,000 villages, let alone 30,000 or each of the 650,000 villages across India, then his enterprise had to remain focused on one thing and do it better than anyone else. It required discipline and the humility to recognize that no single person can do everything. But if he did it, he had a chance to reach millions of people and change their lives fundamentally by helping them to help themselves, a goal worth focusing on and fighting for.
In 2008, Drishtee began expanding more quickly than Starbucks did in its early years, opening about four kiosks a day. By fall, the company was operating in more than 4,000 villages, creating more than 5,300 jobs and serving 7.5 million. What thrills me just as much is that the company is building a powerful distribution system through which it ultimately will be able to sell a multitude of products that can improve a low-income person's ability to change his or her own life. Acumen Fund's patient capital enabled Satyan to take great risks, experiment, and innovate in the early years. And we know that despite his enterprise's rapid growth, he is just getting started.
And so are we.
CHAPTER 14
BUILDING BRICK BY BRICK
Go to the people: live with
them, learn from them love them start with what they know build with what they have.
But of the best leaders, when the job is done, the task accomplished, the people will say: "We have done it ourselves."
-LAO TZU
n India it wasn't a surprise to find entrepreneurs with enormous talent and drive focused on bringing basic services like health care, housing, and water to the poor. With more than a billion people, some of the best universities in the world, a powerful diaspora community, and a highly innovative health care industry, India seems to breed social entrepreneurs. I was far less certain of what we would find in Pakistan, an Islamic country characterized by the media as chaotic and overrun by terrorists and fundamentalists. I didn't expect to fall in love with the country. But life has a funny way of surprising you.
After a long week spent working in India with Acumen Fund, I was on my way to Karachi, Pakistan. As I sat in the Bombay airport thinking, writing, and waiting for my delayed flight, a Bohri woman abruptly walked over and sat down beside me, so close that part of her big thigh was almost on top of mine. The Bohris are an entrepreneurial group within the Muslim community who do a lot of business in Pakistan and India as well as East Africa. The women wear large capes with veils covering their hair, reminding me of Catholic nuns, though the Bohris seem to favor pastels or bright designs, often with lace around the edges. Their skirts are gathered and full. The older Bohri women often wear black shoes, reminding me even more of the nuns I knew as a young girl.
Why was this woman sitting so close to me when the airport was virtually empty? All around me were seats just waiting to be filled. The Bohri woman's face was eager and broad, the kind that makes you smile. She wore wire-rimmed glasses that could not hide twinkling eyes the color of honey. She was completely toothless. Though I wished for solitude, I had a hard time ignoring that face.
She talked a blue streak, leaving no room for idle chitchat. Her first sentence made me nearly laugh aloud. With no introduction, she asked, "Tell me, what do you do? Are you married? Do you have children?"
Though I didn't even know her name, I answered, "No, never married. No children."
"Ah." She clapped her hands together and smiled even more broadly. "I never married, either. But I could see that you are deeply happy sitting there all alone, but not lonely. I could see that you are one of the happiest people, the ones who serve the world."
I looked at her and said thank you.
"I am so happy, too, though I never married. You know, there are so many paths in a life. But the best are the ones where you are living the truth and searching for good and giving to others. Maybe that is what you are finding."
I was stunned. Maybe that is what I was finding. Maybe I just needed someone to remind me.
When our flight was finally called, my new friend walked up to the security woman and lifted her arms to the skies, ready to be patted down in full sight. Her cape lifted to reveal a shirt of green and white gingham-like the uniform of the blue bakery I had started in Kigali so many years ago-tucked into a big green and white skirt gathered at the waist that hit the tops of clunky, black lace-up shoes. Now she really reminded me of a nun, and I found myself grinning a silly, Cheshire-cat smile not unlike hers. It felt as if someone from the heavens had come to me, even if this toothless Bohri woman wasn't exactly whom I'd pictured as my guardian angel.
We'd been working in Pakistan because we felt it was the most geopolitically important nation on earth and because of our assumption that building civil society institutions that enabled people to have greater freedom and choice was critical to the country's long-term success-to any country's success. In 2002, just around the time Wall Street journal reporter Danny Pearl was kidnapped and beheaded, we went to Pakistan and determined that the most compelling opportunities were in two areas in which Acumen had not previously been involved: microfinance and housing.
Roshaneh Zafar, founder and CEO of Kashf, now one of Pakistan's largest microfinance institutions, became our partner in bringing financial services to Pakistan's poor. Roshaneh is an extraordinary, indomitable leader with long, black hair and penetrating eyes, a slender frame, and fingers adorned with oversize rings. She is elegance, beauty, and fierce intelligence personified.
Her father told the story of how Roshaneh had started Kashf despite the odds. With a degree from the University of Pennsylvania's Wharton business school in hand, she'd been working in Washington, DC, at the World Bank when she called to tell him about her idea to start a microfinance organization to lend to women in Pakistan.
"Is this a call for advice?" he asked his daughter, "or just for information?"
He knew the answer to his own question. He also knew there'd be no convincing her not to do it.
She started in 1996 and soon hired her partner, Sadaffe Abid. Over the course of a decade they built an institution serving more than 350,000 women, earning Roshaneh the highest civilian award for service in Pakistan. But the road wasn't without its bumps. In their first year, it cost Kashf $8 to loan $1. The organization needed time to learn, and the funders needed to trust the leadership and have the patience to learn with them. Today it costs the institution less than 8 cents to loan a dollar to the world's poorest.
By 2002, 6 years after its inception, Kashf was serving 12,000 women and moving toward operational self-sufficiency. Acumen Fund supported the organization's growth with a long-term loan priced below marketpatient capital. Recently, Citibank led a $32 million round of financing for Kashf; and Acumen Fund invested $1.5 million in Kashf's holding company as it has now created a commercial bank for the poor. Kashf now lends to more than 320,000 clients, and Pakistan can boast of a model microfinance institution that is setting a standard for the world.
Microfinance's success rests on the ability of low-income women to borrow and pay back small amounts of money in a short period of time. Housing is a more challenging issue. Half the people in Karachi, a city of 15 million people, live as squatters, usually paying rent to slumlords. At the same time, due to the growth of the cities, land speculation is rampant, which leaves little that is affordable for low-income and even middle-class people. Even if a poor person has an opportunity to purchase a home, he or she has no access to a mortgage; in fact, many commercial banks view low-income areas as "no-go zones."
The question was whether you could structure housing finance and development to make it affordable and accessible to all people, not just the very rich. There was also the question of trust: Even when housing schemes were made available, developers too often failed to deliver on promises to bring real housing to low-income areas. And the poor were always hurt the most.
A few rare individuals, such as Tasneem Siddiqui, experimented with different approaches to low-cost housing.
During my first visit in 2002, he explained the philosophy of his organization, Saiban: "We go to the people and live with them, build on what they know, listen to them, and help them do things for themselves."
In his tiny office in his first development, Khuda-Ki-Busti, or City of God, about 18 kilometers outside Karachi, the air was sweltering, but Tasneem didn't seem to notice. Balding at the crown, with longish white hair, Tasneem, in his wrinkled pants with oversize glasses framing intelligent eyes, reminded me of an absent-minded professor.
But this man was a true activist: "I learned incremental housing through 30 years of trial and error," he said, "first in East Pakistan (now Bangladesh) until the war in 1971, and then back in Pakistan."
The concept of incremental housing was based on Tasneem's knowledge about the buying decisions of very low-income individuals. "People in the slums are market oriented, but they usually can't afford to construct the entire house at once. The people gain dignity by doing things for themselves, and our job is to make it possible."
Saiban encourages people to start small with what they can afford. Over time they can expand their houses.
"When we started, we knew the biggest challenge would be to confront people's f
ear that we might swindle them. All of the rules for Saiban are written on the exterior walls of our offices. Everything is transparent so that everyone, buyer or not, knows our rules. There are no surprises."
He walked me outside in the blazing heat and pointed to the blue writing on the wall of the office building. The Urdu script was large and beautiful, easy to read, and apparently easy to understand.
"But how does it all work?" I asked.
He chuckled and gently shook his head. "It wasn't easy in the beginning. We had to work hard to find our first buyers. We were asking people to live in a new place with no services, a fair distance from their jobs and communities. But there were brave souls willing to take a risk. They would pay $170 up front for the land, and then we required them to live in the courtyard for 10 days. Usually, they would come with some basic covering to protect themselves, but their willingness to sacrifice helped us differentiate the real prospective home owners from the speculators who wanted to buy and then flip the houses. You see, you can't just ask a person if they are poor enough to qualify for a house, but we could learn a lot about their commitment."
"And the hardest part?" I asked.
"Trust. In addition to being transparent with the rules, our manager has lived here among the people since the beginning. He helps resolve disputes 24 hours a day. We listen to the people and let them choose the kind of house they want to build. The poor want a roof over their head, a feeling of safety, services they can rely on. We didn't bring it overnight-it is why we call this incremental housing. In time, this has become a beautiful community."
Today, more than 20,000 live in Khuda-Ki-Busti, and dozens of viable businesses have sprung up to serve it. Churches coexist with mosques and a Hindu temple. A bus service runs into town regularly at an affordable price. Saiban is a model for change.
The Blue Sweater: Bridging the Gap Between Rich and Poor in an Interconnected World Page 28
