Californian non-profit United Prosperity developed a new twist to social lending - it is a peer to peer guarantee website. Instead of lending money directly and thus needing to transfer it internationally the “social guarantor” provides a cash collateral. This enables the small entrepreneur in the developing country to get a loan from a local [...]

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Continue reading → Unitedprosperity.org - guarantee a microloan to small entrepreneur in India

This week the new social lending service Veecus.com launched. Veecus is a peer-to-peer microfinance network. It allows microentrepreneurs from all over the world to access funds to develop their projects. Lenders can select projects, invest and take part in economic development.
Microfinance institutions (MFIs) supply the loan listings and set the interest rates. Currently there are [...]

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Continue reading → Veecus launches peer to peer microfinance

Indian non-profit RangDe.org attempts to bridge the gap between the developed and the developing India. To fight poverty it wants to make microcredit available to everyone at affordable rates. Individual lenders (investors) can lend as little as 1,000 Indian Rupees (approx. 21 US$).
Lenders can select a borrower by browsing profiles. RangDe’s field partners receive and [...]

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Continue reading → RangDe - social lending in India

DhanaX.com introduces p2p lending to India. Lenders can loan to borrowers that a screened by an "agent". The agents typically are small microfinance organisations, rural technology centers or non goverment organizations. One current example is the SOS Family Strength Organisation of Dr. Hermann Gmeiner. Since there is no established credit rating system in India, agents [...]

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Continue reading → DhanaX brings p2p lending to India

Some news from p2p lending in Asian markets:
Chinese PPdai.com (see earlier coverage) says it has received a first round of funding from Essentia Private equity. The amount was not disclosed.
On February 27th, Zopa's managing director Giles Andrews mentioned in a webchat "I have also been spending time in Asia and hope that we will launch [...]

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Continue reading → P2P lending Asia

Globefunder announced the launch of Globefunder India, which it claims is the first p2p lending service in India.
GlobeFunder India is now up and running, making us the first online lending marketplace to establish operations there. If you are a lender in India, the good news is that you will soon have a way to capitalize [...]

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Continue reading → Globefunder announces launch of peer to peer lending in India

H-1B Visas: Problems All Around
Its old news that this year the annual quota for H-1B visas filled twice over in just two days (Link to CNN story). This has given rise to all kinds of discussion on whether H-1B cap should be raised; whether H-1B should even exist and what effect does H-1B has on wage levels in US. There is a bipartisan bill on table in congress that is expected to make matters worse.

Among all the noise, there is one group of people who are finding themselves in the middle of the crossfire - International students in US Universities. The H-1B visas are no longer available for students who will graduate at the end of the current academic year. Most of them have job offers with US companies, provided that they are get their H-1B visa. This really is a double whammy for them - first of all - employment opportunities for international students are severely limited in US. Here in Ross School of Business, University of Michigan, during the past internship season for the MBA class of 2008, only 255 of the total 490 job listings accepted applications from international students. On top of that, even these jobs are in jeopardy because of visa restrictions. Just to be sure - these are students from one of the top MBA programs in the world and any country/company should welcome them with open arms as they will script the future of the business world tomorrow - and here they are rebuffed and rejected.

Increasingly US universities are looking abroad to get qualified students. In most top MBA programs, international students make up more than one third of the student body. These students pay higher out of state tuition and take huge loans (more than $120K) and are willing to legally pay taxes and contribute to the US society and economy - there is no reason to not allow them to work and prosper in US.

Update: International PhD students that take up a job with a US University are not counted as part of the usual H-1B limit. This is good news for all aspiring faculty members like me! (More information available at Carnegie Mellon’s excellent page on the subject.)

US Competitiveness: Auto Industry

Already many people including Bill Gates and Harvard Crimson have raised their voices. Bloggers have even suggested that restricting companies from hiring foreign workers will actually lead them to go to the source of talent and outsource more work. In the middle of these, New York Times has written an excellent piece on increasing skill levels of outsourcing firms in India. Combine this with excellent engineering innovation like the sub-$2,500 car I mentioned in my last post - and the indicators are not good for long term competitiveness of the US economy.

If someone really needs some hard data after all this, here are the latest automobile sales figures for US market for March 2007 (market share means share among the producers mentions, not total market share, sales mean unit sales not dollar sales). Look at how the Detroit Three are doing against the Asian Three:

Since I live in Michigan, the auto industry is always top of the mind - and the figures above are so disappointing for any true fan of Detroit’s auto history. Not only are GM, Ford and Chrysler losing market share, they are doing worse even in their supposedly strong area - trucks and SUVs. In cars its not even a competition anymore - its a rout! Toyota is already the largest car maker in US and is third if we include both cars and trucks. With gas prices and emission requirements pushing the market towards smaller and more efficient Toyotas and Hondas, its only a matter of time before Toyota and Honda take the leadership position in US auto market from GM and Ford.

Toyota and Honda are both excellent value with forward PE in 13.50 range. I own Honda as I am slightly concerned with Toyota’s ability to sustain growth with the large base that it has. Plus I expect Honda to take back the green leadership that it seems to have lost to Toyota Prius.

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Continue reading → H-1B, International Students and US Auto Industry

I had written before about the growing wind energy capacity in India (Link: Wind Energy Powering India). Wind energy has continued to expand at a phenomenal pace in India. In year 2006, wind energy capacity in India increased by 41.5% amounting to 1,840 MW of new capacity. India was third in the world in new capacity additions (after US and China) and fourth in the world in total installed capacity (after Germany, Spain and US). The table below shows the distribution of installed wind power capacity in the leading countries:

Fast growth in US was expected because of recent tax concessions and the large suitable area and energy demand. China’s emergence as the second largest capacity addition in 2006 is more of a surprise. Till few years back China did not really cared about alternative energy. China’s ability to quickly ramp up is admirable though.

Things are moving in the right direction. Wind energy is the cleanest renewable energy source available and even though it had problems of high capital cost and non-optimal load distribution, its good to see rapid growth in wind energy capacity. This is one positive impact of the rise in oil prices - the renewable energy sources are now looking more and more attracting in comparison. I will continue to follow growth in wind and other renewable energy resources.

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Continue reading → Wind Energy *Continues* to Power India

Cricket World Cup 2007

The cricket world cup is going on in West Indies. Till now it has been a disaster - India and Pakistan, with a combined population of 1.2 billion and a cricket media market worth many billions went out of the contention in the first round itself. Billions of dollars were lost, billions of people were utterly devastated (for those who know the influence of cricket on lives of ordinary Indians and Pakistanis - they know how deep the hurt it) and the Pakistan team coach was even murdered.

Within all this turmoil, the Sri Lankan team has emerged as a bright silver lining. The small island country of 20 million or so with a deeply unstable political and social environment has produced a team that is holding the Asian flag high. The team itself is so unorthodox and quaint - it even has three players that won the world cup 11 years ago!! In the age of world’s fascination with youth and everything skin deep, they bring a depth of skill that gives you reason to continue believing. Mukul Kesavan has captured the essence of Sri Lankan team in his blog on CricInfo. The blog post and the ensuing discussion is highly recommended for all with any interest in cricket.

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Continue reading → Cricket World Cup - Billions Lost, Billions Devastated, One Silver Lining

I feel like charts and numbers today. I have been following India’s development progress for a while and want to draw attention to some macro level data that illustrate the direction and magnitude of this progress. All the data used in this post are public and you can find them at the India page of the CIA World Factbook. You can also find previous years data and a lot many charts at the IndexMundi Country Facts website. I have borrowed the charts from there - though they are all based on public information. All the text, interpretation and analysis is original.

1. Population Growth: Lets start with something broad and basic - Population. India’s large population and predictions for India crossing China as world’s most populous country by 2025 or something is well known. I agree with the assertion that India *does* have a population problem and India’s large population is an impediment to growth and higher standards of living. Now - the good news. India is seeing significant improvement in population growth rates - look at the chart below:
   Chart 1: India’s Annual Population Growth Rates, Year 2000 - 2005.

   The chart shows *consistent* and reasonably rapid reduction in India’s population growth rates. Its almost constant rate of change: reduction by 0.04% points per year. Keep going at this rate and soon India will have annual growth rates of less than 1% - very manageable! Though India’s growth rate is still significantly higher than that of China (0.58% in 2005), it should be remembered that India is reducing her population growth rate in a peaceful, democratic way without any coercion.

2. Birth Rates: Just so that its clear - India’s population growth rate is not coming down because of epidemics and illnesses! India’s birth rates are declining - again consistently and significantly. Here is the graph to prove it:
   Chart 2: India’s Birth Rate (No of births per 1000 population), Year 2000 - 2006

   What makes me happy is not the decline - but the persistent and consistent decline. Again - almost at a uniform rate. This shows that this is a *systemic* phenomenon and not the result of some one-off policy, epidemic, whatever.

3. Fertility Rate: As can be expected, the decline in birth rate shown above is because of women in India are having less number of babies. There is a special point here - look at the fertility rate trend below:
   Chart 3: India’s Fertility Rate, Year 2000 - 2005

   Here is the point: to me, year 2002 is a landmark year. For the first time in India’s history, fetility rate (defined as number of babies for every mother) fell below 3 in 2002. Anybody familiar with India’s middle class ethos would understand how big a deal it is. Not long ago the ideal family size used to be 5 0r 6 persons (parents and 3 or 4 children). Now, the average family size is less than 5. That means the *ideal* family size is moving towards nuclear families of parents and two kids - which BTW is the replacement level!! Fertility rates have continued to fall in the same consistent manner as other charts above - and its so very encouraging!

4. Infant Mortality Rates: So the population growth rate is coming down and people are having less kids - but what about standard of living? Here is the answer - Infant mortality rate (how many kids out of every 1000 die by the age of 5) in India has, again, been declining consistently over the years. This indicates an improving healthcare system and improving availability of medicines and nutrition.
   Chart 4: India’s Infant Mortality Rate, Year 2000 - 2005

   Not that 56 kids out of every 1000 dying by the age of 5 is no tragedy - it is and its deplorable. But - there is a ray of light. Its coming down and coming down every year. For a country as large and diverse as India, being able to maintain a secular improving trend in all the demographic parameters is commendable.

5. Life Expectancy: The last chart - what is happening to overall standard of living of people in India. One of the broadest standard of living measure is the life expectancy - the average expected lifespan of an Indian. Here is the data:
   Chart 5: India’s Life Expectancy, Year 2000 - 2005

   Same story - the average age to which an Indian can expect to live is increasing every year. The increase is consistent and almost uniform. We can broadly conclude that the standard of living in India is improving - consistently.

Okay - now that I have shown all the charts and data that I wanted to - the question is - what is the message? Well - the message is simple. India, in spite of all the chaos and problems, is developing consistently and rapidly. It might seem like a redundant message with all the media attention on India these days - but I feel that true measures of a country’s development are not economic but social. India’s economic growth is well known - but there is a social side to development as well and I am very happy and reassured by the strides made by India in this field over the years. There is still a long way to go but at least the trend is positive, consistently positive, consistently and uniformly positive. The future looks bright from where I am standing!

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Continue reading → India: Facts and Figures on Development

Business Process Outsourcing (BPO) has been on a center of a lot of debate and controversy. However, the fact remains that it is here to stay, it will continue to grow and it benefits both sides. Important thing to note through is that the nature of BPO and hence the potential benefits of BPO as well as the capabilities needed to successfully compete in the BPO marketplace have evolved significantly in past few years. This evolving nature of BPO and associated issues have been part of my recent research focus. Here is one picture that explains my view of the evolution of BPO:

The figure above says many things - so needs a little explanation. The left axis represents the main driver of BPO in a particular BPO evolution stage. The right axis represents the ideal role that a vendor should play (or a client should establish) for a BPO evolution stage. The x axis represents the three stages of evolution of BPO. The main body of the graph depicts the core activity or work that is outsourced for a BPO evolution stage. This framework was presented by Prof M S Krishnan (my doctoral advisor and dissertation chair) at the Global BPO Forum organized by the CGRL:India in New York. Prof Krishnan and I both attended the forum.

This framework is helpful in understanding the future direction of BPO. We will increasingly be moving towards the third generation BPO - BPO 3.0 - high value added, knowledge intensive BPO work. This will require vendors to change their focus from cost (predominant focus right now) and quality (emerging focus among top players) to innovation. Clients, on their side, would need to make sure that they do not use the old and outdated mechanisms (efficiency oriented SLAs, restricted collaboration…) to engage with their vendors. They will have to enter into strategic partnership with their BPO vendors to co-create value for both sides of the transaction. This is of course easier said than done - but there are many leading indicators to suggest that this is happening and growing. We (as in researchers at Ross, Michigan) have documented instances of BPO 3.0 in our case studies, analyzed them in our ongoing research and I plan to investigate this phenomenon further in my dissertation.

From a research point of view, the most interesting question to be asked is: on a broad level, what are the antecedents of a successful BPO 3.0 engagement? What kind of contracting, engagement structuring, engagement monitoring, HR policies, process selection etc needs to be done to leverage the “innovation” aspect of BPO 3.0. BPO vendors and clients have more of less perfected the art of an “efficient” BPO engagement with main focus on cost reduction. Many have acquired sufficient mastery over running an “effective” BPO operation with main focus on quality improvement. However, based on my interactions, most companies are still looking for directions on how to successfully leverage an “innovation” oriented BPO engagement where an efficiency or effective oriented policies might not only be ineffective, they may even be critically detrimental to the success of the engagement. I hope to throw more light on the subject through my ongoing dissertation research.

To end, an image I have found quite effective in breaking the ice when teaching any BPO related topic:

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Continue reading → Evolution of Business Process Outsourcing

I have written before about growing wind power capacity in India and also leadership roles of Indian wind power companies like Suzlon. Since that post in April 2006, the growth has only accelerated. Here are the numbers updated up to June 2006 (source).

Figure: Wind Power Capacity in June 2006

Growth of wind power in India is quite remarkable. In fact, preliminary sources indicates that wind power capacity has reached 6018 MW in India as of Sept 2006. The wind power story is now getting attention of popular press as well. Following is an excerpt from the article in New York Times:

Suzlon has expanded rapidly as global demand for wind energy has taken off. Its sales and earnings tripled in the quarter ended June 30, as the company earned the equivalent of $41.6 million on sales of $202.4 million.

The demand for wind turbines has particularly accelerated in India, where installations rose nearly 48 percent last year, and in China, where they rose 65 percent, although from a lower base. Wind farms are starting to dot the coastline of east-central China and the southern tip of India, as well as scattered mesas and hills across central India and even Inner Mongolia.

As oil prices stay high, renewable energy sources are becoming more competitive. For this reason, I am not too concerned about oil reaches $100 or beyond - that will only be helpful in the long run as it will focus our attention on developing renewable energy sources like Wind.

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Continue reading → Wind Energy Powering India

I am a teaching assistant for BIT 582 - Enterprise Systems Strategy course at Ross. During last class the class discussion went towards a remarkable analysis - which countries has more people looking for information about cutting edge technology . After all, tomorrow’s technology leadership will be decided by how many people in which country are knowledgeable about advanced technologies. So here are some startling information from Google Trends, which tracks origins of search requests for popular search terms.

So, to start, lets pick a popular and generic advanced technology: Nanotechnology. There is no doubt that Nanotechnology will be exceedingly important in future. So - which cities have most people looking for information in Nanotechnology? Google trends provides the answer:

Chart 1: Searching for Nanotechnology: Top Cities (from Google Trends)

Whoa! Look there - of the top ten cities, none are in developed countries, six are in India and all ten are in Asia! May be top cities is not capturing the full information - lets look at the same data by Countries, rather than Cities.

Chart 2: Searching for Nanotechnology: Top Countries (from Google Trends)

This is definitive now - Developing countries are the one most important in finding out more about cutting edge technologies. US comes 8th in the list - quite troublesome, considering that its current “adversary” Iran is at the 2nd spot. BTW - this is not happening just because developing countries have more people than the developed world. While overall population is surely bigger, the number of people with Internet access is developing world is smaller than that in developed world.

Just for fun, lets take something from manufacturing, say “Lean Manufacturing” - very effective and well known concept. Which countries are looking for information on Lean Manufacturing? Lets also look at something more specific, say “Service Oriented Architecture”. Google Trends provides the the following information:

Chart 3: Searching for Lean Manufacturing: Top Countries (from Google Trends)

Chart 4: Searching for Service Oriented Architecture: Top Countries (from Google Trends)

The trend is consistent - Developing countries are more inquisitive about technology then developed countries. India seems to be right on top on every technology search. Is this a cause of concern for developed countries? I think so. These kind of things are the leading indicators, the weak signals that portends a structural shift in balance of technology leadership. A few more years of this and we will have a developing world well versed in technology and a developed world ignorant of the same. What makes it even more striking is the fact that *all* advanced education and technology facilities are in developed countries and even then we have this disparity. As developing world improves their education systems and builds technology facilities, this gap will only increase and the trend will get even more momentum.

Some caveats are in order too: Google is mostly used by the English speaking world - that’s why China is conspicuously absent from all the charts above. I am quite sure it will be neck-to-neck with India (or even above) if all search engines are taken together.

My take on this: the four billion poor people of the world have finally information at their disposal (Thank You Internet!) and they are voraciously consuming all this information. The knowledge barrier that kept them down has vanished - and they will be down no longer. We are looking at the emergence of a global knowledge base - that will further feed globalization, and the developed countries are looking at strong (and knowledgeable) competition for tomorrow’s technology leadership.

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Continue reading → Future of Technology Leadership