Ludi Joseph
IFC Corporate Relations
I recently spent three weeks in India with a film production team to "shoot" a video series based on selected IFC projects in Chennai, Hyderabad, and Delhi.
Delhi: The Hole in the Wall Project
Our first stop was the National Institute of Information Technology’s "Hole in the Wall" experimental project in Delhi where IFC’s loan is providing education to underprivileged children by promoting computer literacy. The project involves installing touch-screen computers in kiosks (or "holes") in walls to see how poor children adapt to IT. More than 100 kiosks are being set up in urban slums as well as in rural areas. The project was conceived by Dr. Sugata Mitra, Senior Vice President at NIIT, who would like to see "hole in the wall" replicated all over India. On the day we visited the Kalkaji computer, the 120-degree heat caused a meltdown "in the motherboard"; the children crowded around us, clamoring for it to be fixed so they could go back to surfing the Net and playing computer games.
Chennai: Sundaram Housing Finance and Spyrance.com
We then moved to Chennai and Sundaram Housing Finance, the recipient of IFC’s first local currency (rupee) loan in India. We followed the Sundaram bus to the temple town of Kanchipuram, 90 km from Chennai. The bus, which is equipped like an office, goes into the interior regions processing loans rapidly and efficiently. We visited a bank employee who had built his home with a Sundaram loan as well as a woman who owned a “chai” (tea) shop. They were all very satisfied and found it convenient to have the Sundaram bus come to them with the loans rather than have to go to an office several miles away. According to Sundaram, there is a 95-97 percent rate of return on loans. To own a house in India is so significant -- few people would want to jeopardize that, said Nitin Palany, Sundaram's Managing Director.
Spryance.com in Chennai provides Web-based medical transcription services for doctors and hospitals in the U.S. IFC’s investment helped the company build additional capacity. Most transcribers work from home, a concept that has had a positive effect on metro areas like Mumbai where people can spend over three hours commuting. The business has attracted many women workers who earn between Ind. Rs. 6,000 to 35,000 a month, depending on their output. We visited the homes of two women who worked as medical transcribers. According to Rajiv Shetye, Vice President Operations at Spryance.com, their transcribers are both office-based and home-based, the ratio being 60 to 40. Training takes about 3 to 4 months. He added that 10 percent of the $10 billion transcription work worldwide comes to India.
Hyderabad: BASIX, Mahindra Finance, and DataQuest
In Hyderabad, we drove 70 km to Sultanpur village where BASIX has used its IFC loan to provide microfinance to tiny,
mostly women-owned, businesses: tomato and onion vendors, basket weavers, and bangle sellers. We met a vegetable vendor and a basket weaver at their homes and then followed them to the market at Pargi. According to Ms. Vasundhari of BASIX, the women can use the loans to make improvements on their homes, pay debts, get their daughters married, and so forth -- as long as they make their payments on time. For those who cannot make their payments, BASIX works with them to change the terms instead of penalizing them. The women rarely default; it's a matter of pride. Viswanatha Prasad, Chief Operating Officer of BASIX told us that, unlike other providers of microfinance, BASIX is run like a bank or a cooperative.
Next, we traveled 60 km outside Hyderabad to Vitti Nagulapalli village in Moinabad district to the home of Rama Reddy, a farmer. We spoke to him in his cottage and then followed him out to his fields to look at the tractor he had purchased with a loan from Mahindra Finance, an IFC client that provides financing for agricultural equipment and tractors. Because of the drought and the fields lying fallow, the tractor was not of much use on Reddy’s fields. So he rents it out -- for a fee -- to other farmers who have irrigation and can use the tractor. So far, Reddy has made all his payments on time and is optimistic that the monsoon rains will be plentiful this year. We also talked to Mahindra Area Manager, Ajay Yalamanchi, who said that IFC's loan had enabled the farmer to "improve his livelihood".
From vegetable vendors and tractors to 3D animation. Hyderabad is also home to DataQuest, an animation company, which provides outsourced animation and multimedia services to North American and European film production houses. The company has used IFC’s financing to break into the 3D animation market. DataQuest is working on serials, such as, "Patates et Dragons" and "Wings" at offices in Banjara Hills and I was able to see the entire animation process from rough sketch drawings to the final product. The company is headed by Tapas Chakravarti, an entrepreneur from Bengal, who is delighted to partner with IFC. He feels that India has tremendous potential to tap global opportunities in animation because of its talent, culture, and language.
Back to Delhi: Cosmo Films and Moser Baer
We then headed back to Delhi and to Cosmo Films. Cosmo posted a 127 percent jump in net profits in the last fiscal year, attributed in part by its Deputy General Manager, Atul Mittal, to IFC’s loan, according to an article in Business Line. The company makes polypropylene films (BOPP), used to package consumer products such as biscuits and soap. We visited the Parle Biscuits factory in Bahadurgarh, Haryana, 50 km outside Delhi. Parle prints the film and uses it to package biscuits. The company manufactures 30,000 tonnes per month of what it calls “the cheapest biscuit in the world” (Parle-G) at 2 cents per 100 gm. Mr. S.S. Shivraim, Parle’s General Manager, told us that the company switched its packaging from paper to polypropylene film (purchased from Cosmo) – “because it is protects against moisture, is biodegradable, and because children like the bright colors.
Another hi-tech project filmed was Moser Baer India Limited in Delhi, which makes compact disk recordables (CD-Rs) and digital versatile disks (DVDs) at a modern, state-of-the-art facility. Much to the surprise of people who associate the country only with software, this project has put India firmly on the world map for the manufacture of high quality optical media. The company has used IFC’s financing to become one of the lowest cost CD-R manufacturers in the world and is said to have captured one-third the world market in CD-Rs and DVDs. Their products are exported to several countries, including the U.S.
IFC and India
We also talked to IFC Director Dimitris Tsitsiragos, Manager Vipul Prakash, and Strategist Neil Gregory about the state of the Indian private sector and how it has been affected by globalization and the global economic downturn. They spoke about IFC creating economic opportunity in India and were very upbeat about IFC's role in building the Indian private sector, the importance of India continuing with the economic reform process, as well as continuing to attract more foreign investment. They were also very pleased with the amount of business IFC has done in the country this year and with IFC reaching the billion-dollar mark in its held portfolio in India.
We still have wrap-up interviews to do in the U.S. (with IFC Chief Peter Woicke and Vice President Farida Khambata as well as get independent views on the Indian private sector from Dr. Jagdish Bhagwati of Columbia University, and others) and are excited about getting the video series on the air -- both in India and the U.S. --
