From the Economist: Identifying a billion Indians. About UIUD is being implemented and what are the potential implications of the system. Didn’t know that UIUD is an open standard (open APIs). Nandan Nilenkani is a real rockstar. Really really praying this gets implemented right ! Really, I should start subscribing to the Economist now. Beginning to see a lot of interesting articles from there.
Interesting debate on the comments section as well including this criticism and this counter
I hate this shit….sometimes, it’s enough for me to go completely cynical on any kind of change that could be possible in this country. Sometimes, even off capitalism
Read this: India Microcredit Faces Collapse From Defaults
Basically, microfinance organizations (as usual, the middlemen who take money from banks and distribute it to the poor) get too aggressive on loans, distribute too much money without adequate checks on whether the borrower can make the payments, charge ridiculously exorbitant rates which add to the inability of the borrowers to pay up, and then use coercive means to try and get the payments back which basically drags the poor into even more wretched poverty which they were trying to escape in the first place. And then people flee or commit suicide because they can’t pay up. Add politicians to this ultra-aggressive capitalistic, money-grabbing clusterfuck who encourage borrowers not to repay the loans since apparently, the terms of the loan were absolutely unacceptable and the people who suffer are the banks who tried to enter the microfinance in the first place. Jesus Christ dickheads ! If the same model of loan sanctioning which you used in the urban areas worked amongst the rural poor, don’t you think they would have taken the loans a long time before. SHGs is a design of the solution, not the concept. You still need to lend to people with the power and the propensity to pay it back.If you keep adding middlemen in your structure without them undertaking any risk, understanding any shred of the original concept or basically looking at the business as a way to grab whatever they can with minimum intervention, this is what you get.
If you read Mohammed Yunus’ book on the original concept of microfinance, you know how far we have come from there. In the wrong direction. This is not to say, it’s not a viable business. Or that an 18% interest is too large. It’s about building a business which is sustainable. For the banks. For the microfinance partners. And for the borrowers. So that’s just one thing: Are you giving a loan that people can pay back? In terms of either volume of loans or rate of interest? And the lack of that concept in the retail loans industry seems to be the only thing that seems to be well-reflected in this industry.
That’s why I love Kiva.org. It works. Not only do people lend directly to the borrower (The actual process is of repaying the microfinance organization for the loan that it gave the borrower. The details are here) which makes the microfinance organization, adopt a more facilitating role as well, but also they award fellowships to students who volunteer to work with various microfinance partners around the world. This allows Kiva to keep its ears on the ground. Simple. Brilliant. Ethical. Profitable. The best part of Kiva I love? None of the loans given to a borrower go into covering Kiva’s operational expenses. For that, they ask for a separate donation. Which keeps their operational expenses really really lean. The point? You want to make money from the poor? Change your model….you cant sell a business loan to a rural poor person the way you sell a car loan to me.
I wonder if getting the UID thing to scale will solve that solution. I’ll probably do a brain dump on that in a subsequent post
Yep ! The document is here ! Dammit! If you guys can’t even keep the document secure, what level of confidence are you inspiring in people to keep their identities secure. The scare is partly due to security issues that is keeping the data from the prying eyes of hackers and due to big brother issues which I mentioned here. But I’m still optimistic about this project. Frankly, it HAS to work.
I’ve been quite interested in this project ever since Nandan Nilenkani stepped down as co-Chairman of Infosys to take on the quite formidable challenge of taking charge of the unique ID project. As per CIOL, the unique id project is described as:
A project in which every Indian citizen would have one unique identification number that will identify him/her. It would not just help the government track down individuals as is highlighted by the media, but would make life far easier for citizens as they would not have to submit so many documents each time they want to avail a new service—private or government
What makes the whole thing mind-blowing is that we can now do away with multiple proofs of addresses and identity. There would be only one single identity for each citizen from “birth to death”. Obviously, this makes it much easier to track and monitor cases with “disproportionate assets” as well.
Further from CIOL:
It would also serve as the basis for many e-governance services incorporating online verification of a person’s identity. UID would enable the government to ensure that benefits under various welfare programmes reach the intended beneficiaries, prevent cornering of benefits by a few people and minimize frauds. It would enable financial institutions to exchange information regarding defaulters and encourage responsible borrower behaviour.
What I wonder is what if we could generate a standard protocol for generating UIDs for all living citizens. I know that Sri Lanka already has a concept of NIC along with 55 other countries. If we were to able to integrate these various ID’s on a global level, can you imagine what redundancies we could eliminate: Unnecessary immigration stamps, visas, hell, even to an extreme even passports.
Further, this helps me create an incredibly vivid profile if they consolidated various people’s profiles into some sort of villages profile, village profiles fall into district profiles and so on. The ability to create some incredibly what-if scenarios could be performed. For example, if Vidharba is suffering from drought, how many farmers are going to suffer? That would be based on what percentage of farmers grow crops which require significant amount of water? Secondly, what percentage of say Pabal have farmers who are insured and how many are covered by the drought. If by some hook or crook, the government (What am i saying? I obviously mean only Nandan Nilekani’s team) could integrate data from various insurance companies, banks and other financial institution, it could automatically decide the cost-benefit analysis of any steps it takes. For example, let’s say the government decides on deploying Rs. XX crore for investments in irrigation facilities, it could be based on the following factors:
1. Which areas have been consistently having droughts
2. Where are the maximum farmer suicides in areas with drought (this is can be interpreted as reducing the political embaressment of farmer suicides)
3. Where has investments constantly be made and what was the result?
4. Which areas are dominated by farmers that grow crops which require large amounts of water (as mentioned above)
I agree to any person who says “That’s going to be incredibly tough and way too futuristic.Hell,it’s probably impractical” I agree. But this is the only chance we have. The only chance to actually track the investments made by the government, whether it be in food distributed through PDS, loans forgiven, agricultural subsidies, what have you?
Cons:
1. Big Brother anybody? Privacy would be the main issue
2. The government may not have the capability to do something this huge?
3. How do we control modification of profiles? A farmer who actually grows a low rain crop like wheat might demand irrigation facilities saying that he grows rice?
4. Every and I mean, every single person has to be profiled. This system will not work with exceptions. Given the number of Indian citizens who don’t even have birth certificates, this is going to be an almighty challenge. A quote from the CEO of Logic Designers says it all: “Our field engineers had to carry the PCs from place to place, especially in remote villages, where a UPS was a must because of the uncertainty of load shedding. But now the availability of laptops and PDA and hand-held biometric devices will make data collection more convenient.”
Other interesting links on the UID project:
UID project: A tough task ahead for Nilekani
UID to benefit poor and marginalized: Nilekani
All about Nilekani’s UID project
India Development Blog
