Despite being a "field RA," I don't usually spend much time in the field. Most of my time is spent in our office in Thanjavur, drawing maps like this:

[Terminology Used: Agents or Customer Service Points (CSPs) - Individuals, shops or other outlet points responsible for direct contact with clients. They open bank accounts, check Know Your Customer (KYC) requirements, carry out money transfers and transactions and in some cases, extend credit by linking the client to the base branch]

In our previous post, we discussed the general advantages of banks using Information and Communication Technology based business correspondents to fulfil the financial inclusion goals of the RBI. Yet, the model hasn’t been performing up to expectations so far and major concerns have been raised with respect to its financial sustainability for CSPs. Some major issues that have come up so far include:

(i)   Dormancy in No-Frills accounts (ii)  An asymmetry between agent/client needs, and operational procedures of BCs and Banks (iii) Issues over the financial viability of the model itself.

In this post, we’ll discuss the reasons for low usage patterns of No-Fril…

Today, we begin a series on the Business Correspondent (BC) model based on findings from CMFs on-going studies and external research on the sector. For starters, what are the particular advantages of using information and communications technology (ICT) based correspondents for banks in order to achieve the Financial Inclusion goals of the Reserve bank of India (RBI)? In rural areas, major inconveniences for the poor in accessing banking services include the cost of traveling long distances and waiting in long queues. These costs are significant when we account for the opportunity cost to daily wage earners. On top of this, they face problems filling bank forms coupled with the unwillingness of the bank staff to cooperate and provide the required level of assistance. All these factors serve as major deterrents to using formal banking services. Instead, they’re forced to use high risk informal savings mechanisms such as saving at home, with their friends/relatives, land lord, employer o…

Keeping the agenda of ‘financial inclusion’ in forefront, the Reserve Bank of India has constituted a high level Financial Inclusion Advisory Committee (FIAC) to spearhead the efforts towards the same. Here you can go to know more about the constitution of the committee and the assigned responsibility on them.  
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Well, this week has been festive not just as per the Indian calendar alone, the weather in Madras has been rather pleasant with consistent rainfall. However, consistent rainfall in India does have its share of problems that it brings - No, I am not referring to the roads that require repairing (surprisingly, one might say the roads are little better off this time, still requires work) - the problem I am talking about is the mosquito menace that gets intensified with the onset of monsoon rains. The television channels are doing their bit by using film stars in making promotional campaigns as to how curb the mosquito population. Every measure counts when it comes to this problem...
(Pic: Angolan children with a bednet in the background. Source: Wikimedia Commons)

It’s been ten exciting months at CMF for me so far and I feel I have learnt something new everyday.  One of the aspects that I like most about my job is the fact that I get to interact and meet so many different kinds of people as part of work and also on the field visits. Each of my interactions/experiences have been ones that I will always remember.

When I joined last December there were 3 Surveyors on our Project and 1 Project Assistant. We spent close to four months piloting before starting our main experiment.  We did four Pilots in order to understand how to make things work best for our project. Our Project involves conducting village meetings in all our 60 Study Villages. Initially this proved to be a bit of a challenge. The 5 of us - our 3 Surveyors, Project Assistant and I, would spend a lot of time particularly after our Pilots to see how we could improve things.  I will always have very fond memories of us sitting in an empty school in a village after classes were over and …

Very soon, we will be implementing our own evaluation of the government livelihood programs in the three states of Bihar, Chattisgarh, and Tamil Nadu. As experienced researchers in the field, its never a bad thing to read about the programs that have been implemented in the past to see what are some interesting questions that stimulate further research ideas. The writer in this opinion piece explores the possibility of government enacted guaranteed employment program causing higher inflationary pressures. The logic is that because rural poor are getting paid INR 120 per day for practically doing very less, this has created shortage in agricultural labor supply as work-seekers are getting attracted towards NREGA. They are moving out of farms where the work is supposedly more physically demanding. As a result, NREGA has actually forced agricultural land owners to buy labor at higher prices which has lead to the increase in the cost of supplying food products; thus hiking up food prices.…

'The following blog intends to familiarize our readers with the kind of partner organisation, CMF works with. The references of these articles have been taken from the HiH annual report'.
Picture Courtesy: Hand in Hand website

Hand in Hand India (HiH) is a registered Public Charitable Trust which was formed in 2002 with the objective of alleviating poverty through job creation and integrated community development. What began as a small effort in Kancheepuram, a small town in Tamil Nadu, to eliminate child labour has now diversified to address the multidimensional factors of poverty. The organisation’s flagship intervention— Self-Help Group & Microfinance Programme has so far created 1,211,606 jobs and is moving steadily towards its goal of creating 1.3 million jobs by 2013-14. Under the stewardship of Dr. Kalpana Sankar, HiH has evolved as one of the most reputed NGOs in India.

I have not taken any photos of any of my field experiences in Bihar, mostly due to an inexplicable sense of discomfort in taking photos of people and their surroundings (even when they’re not study respondents or have given permission). Our intern Samira Jain, a very talented design student, found a way around this. During the 2 weeks we spent in the field together, she effortlessly documented the landscape, faces, and events in a series of visual narratives (the above illustration is an example).

India’s public expenditure on agriculture is one of the highest in the Asian region; yet, agricultural productivity remains relatively low. The main policy instrument used for domestic agriculture seems to be focus on some form of a subsidy.  More than three-fourth (close to 80%) of public spending in agriculture has been on input subsidies such as fertilizers, electricity, and water; credit subsidies have also increasingly become a popular tool.  In 2006, the RBI enacted an interest subvention scheme that brought down interest rates on short-term crop loans to 7% from the market rate of 9%, with the government paying a 2% interest subsidy to banks.  In 2008, The Agricultural Debt Waiver and Debt Relief Scheme was implemented by the government in which 39 million farmers received state-supported relief for their defaulted farm loans.
At this point, the public discourse often turns towards a debate on whether subsidies had a proportional impact on productivity and income. But the bigge…

The previous blogabout the ongoing project in Satara, “Economics and Psychology of Long Term Savings and Pensions” was an introduction to why time-preference inconsistency is important and how it may manifest itself. The current blog will attempt to describe how such a characteristic can be measured in a survey and how it should be interpreted.
The classic survey methods to measure time inconsistency (for example, seeAshraf, Karlan and Yin, 2006) involve hypothetical questions where a respondent is asked to choose between a sum of money immediately and a slightly larger sum after a period of time. The horizon for both these choices is short term. The response is then compared with the same question asked with a longer time horizon (Table 1).

According to Malcolm Harper, “the loan waiver scheme is an expensive, populist device that won’t have much effect” (Eye on Microfinance, Volume 7).This was in response to the In March 2008 “Agricultural Debt Waiver and Debt Relief” scheme announced by Finance Minister P. Chidambaram.The scheme was an INR 600 billion package, offered to nearly 30 million farmers. Marginal farmers - with cultivation land less than 1 hectare, and small farmers - with cultivation land between 1 and 2.5 hectares, were given a complete waiver on loans disbursed up to March 31, 2007, which were overdue as of December 2007, and unpaid as of February 29, 2008. Other farmers - with cultivation land over 2.5 hectares, had 25% of their loan waived as long as they paid back the 75% of the loan (25% or INR 20,000 of the loan, which ever was higher) (AGRICULTURAL DEBT WAIVER AND DEBT RELIEF SCHEME (RBI), 2008).The scheme was introduced to alleviate the miseries farmers and address farmer suicides. However, there has…

Quite often, I come across this from some of my city-based friends, "Someday I would like to retire and get settled in a village and have a farm to myself, grow some vegetables and more ..." I do not know to what extent they are serious about it but I do wonder if they have ever actually thought about the inherent risks that come along with agriculture. How does one combat the costs involved? Agriculture should not only remind one of the amazing green canopy that it can provide, but also the difficulties which come along - ranging from pestilence, unpredictable weather patterns, irrigation and market prices as well. With so muck risk involved, it would be surprising to know how the rural folk have managed these risks. 
(Picture of a market in Gujarat. Photo Courtesy: Laila Vaziralli)

In Part I and Part II of this blog, we made a case for FE by making the modules concise, cost-efficient and effective for the clients. In this blog we discuss the observations from the field that add to existing reasons presented by the government for financial inclusion and financial literacy education (FE).

According to NSSO (59th Round) data, nearly 51% of the farmer families are excluded from both formal and informal sources of finance. Exclusion is most acute in Central, Eastern and North-Eastern regions. Among non-cultivating households nearly 80% do not have credit access from any source. Only 36% of Scheduled Tribe (ST) and 49% of the Scheduled Castes (SC) and Backward farmer households have access credit and that too mostly informal. The National Rural Financial Inclusion Program (NRFIP) aims to open No-Frills Account (NFA) using the private and public bank networks, and encourage the Financial Literacy Education (FE) campaigns to achieve financial inclusion goals. However, ou…

Ever wondered if the rural poor who took loans actually understood interest rates in the first place? Well, how often do most of us can say the same about ourselves in the first place? The term financial literacy has been a buzzword in social science research in recent times, however, the objective of this two-word mission as per many is to help enhance the financial well-being of people - especially those who hail from rural backgrounds or the poor in general ...
Financial literacy has been defined as the ability to process financial information and make informed decisions about personal finances. In the last few years, with increasing focus on access to finance as an important determinant of household-level economic development and its accompanying positive consequences for empowerment, financial literacy has become an important issue for practitioners and policymakers alike. A question that remains unanswered and perhaps will remain so is would the situation remain the same had the …

To make the mainstream banking services available to all, RBI and government have been outlining many initiatives that could accelerate efforts on this. The year 2005 and 2006 witnessed two key initiatives of RBI to reinforce the financial inclusion drive by introducing ‘no-frills’ account and ‘business correspondent model’ of banking respectively. Since the inception of BC model, a large number of organizations have begun working as BCs for many banks and thus offering ‘no-frills’ account to prospect clientele through their network.
However, while these organizations have been experiencing business growth in terms of client outreach and number of transactions, many are struggling to remain financially viable. Furthermore, BC’s appointed Customer Service Providers (CSPs) - the most important pillar of the model crucial to its success, are also struggling to meet costs and maintain business viability. As of now, only a few experiments have been undertaken to explore the feasibility of …

According to National Sample Survey Organization (NSSO) (59th Round) data, nearly 51% of the farmer families in India are excluded from both formal and informal sources of finance. Exclusion is most acute in Central, Eastern and North-Eastern regions. Among non-cultivating households nearly 80% do not have credit access from any source. Only 36% of Scheduled Tribe (ST) and 49% of the Scheduled Castes (SC) and Backward farmer households have access credit and that too mostly informal.

Author: Shahid Vaziralli


I spend a disturbingly high percentage of my time these days pretending to be a sardine in our office elevator, as it creeps down the ten floors towards the cafeteria. That, or standing in a succession of lines at airports. The line outside the airport to get in, the line after getting in but before the check in counter, the line at the check-in counter, the line at the bookshop, the line at security, the line to get in to the aircraft, the line for the loo on the plane, and the line to catch a cab (if you’ve managed to make it to city B in one piece). What I notice during my long bouts of ‘standing around and waiting’ is that there are young, energetic, working age people all over the place. If someone were to ask me what India’s population looked like, based on my visual experiences I would say that the country is just packed with people aged 20-40. A booming middle class of young, talented IT sector workers, right? The stacks of ‘India Shining’ themed manusc…

Authors: Samik Adhikari, Gautam Bastian, Lisa Nestor
Agriculture and allied activities continue to employ 52% of the Indian workforce and account for 17.2% of GDP. Average land holding size however remains very low, with 70% of the land held by farmers who own 2.47 acres (1 hectare) or less. As a result most farmers do not benefit from economies of scale, enjoying limited profitability even in the best of times. They are also particularly vulnerable to fluctuations in harvest time output prices. Even a 10% swing in prices can make the difference between stable consumption and food insecurity. The recent development of agricultural futures markets in India holds the promise of providing farmers with a tool to manage price fluctuation risk.

In Part 1 of this blog, we discussed some of the challenges related to implementing an FE intervention.  These include high costs related to providing FE in a classroom setting, logistics and material costs, building the capacity of the staff to run the FE sessions; limited evidence about the impact of FE; no benchmark on what FE should contain; and inability to parse the effects of FE vs. advertising (enthusiasm) effect that comes with introducing financial services in unbanked areas.
CMF has evaluated FINO’s FE program, and conducted FE for Sonata clients using the rigorous RCT approach; CMF has assessed FE programs provided by 20 institutions; and CMF is currently designing an FE program for EKO’s clients in 7 districts of Bihar; the program is being rigorously piloted in both Uttar Pradesh and Bihar. Based on this extensive experience, CMF aims to find ways to reduce the cost of the FE sessions, make the content more targeted and succinct, determining which key messages have the gr…

Qualitative Research: Something more than mere description






In our profession, we deploy both Quantitative and Qualitative research methodologies. While both the methods have their own unique uses, that have been widely documented, I have often observed that the former takes a preference in case of a conflict. This could lead to an impression (albeit a false one) in one’s mind that qualitative research is an amateur and less “fashionable” research method and that any research design other than a quantitative one is “non-experimental” and/or “weak”. In my opinion, this stereotyping is both erroneous and simplistic. In addition, I believe it can also discourage novice and budding researchers engaged in qualitative studies.

One of the reasons for this preference is simple enough - it is often easier to rely upon what can be measured as opposed to what can be proven. Another (and less obvious) reason is that while quantitative derivations use verifiable calculations, qualitative results ofte…