Coming out of our first class, I felt like I had a much better understanding of the gravity of the commitment and the real chance to make an impact. I was worried that this work would not really serve anyone but ourselves, deepening our knowledge and our skillset. While I am confident that I will come out of this experience with a wide new range of skills and a much deeper knowledge of business in India, after our first class I feel much more responsible for making an impact on the companies that we are working with as well. I think that this kind of a study is very necessary in order to make that kind of a law actually have the kind of results that the Indian government probably wanted to see.
The panel discussed the real business of performing research on site. Although I will not be able to travel to India to conduct this research, I think having this perspective really made me think of this project as much more than a class. It is a chance to conduct meaningful research and learn about gathering, organizing, and publishing effective research.
My passion for this work comes from a topic that we discussed in class but that I had also learned about before. When I was in Belgium this summer, I took a global marketing class in which we learned about reverse innovation. I had heard about microfinance before, but this is really where I began to think of it as the career path for me. We read about the ways in which microfinance implements reverse innovation in order to give customers in emerging economies the kind of financial tools that they need. It requires looking at these markets in an entirely new way with a thorough understanding of the culture, not just taking a concept that has worked in the west an assuming you can adapt it to foreign economies.
We learned about an example of microfinance in which loans were given out to people in groups, and then it was up to the group to pay it back. This model would be unpopular in a individualistic society like the United States, but in collectivist cultures, this model solves many of the problems that can arise when trying to implement a traditional western financial model in less developed economies. I fell in love with the idea of effective cultural understandings creating market potential that has not yet been realized. This is especially needed in finance, because foreign direct investment can create a culture of dependence that can harm countries in their economic development.
Since then I have done some of my own research on the topic. I’ve learned about the reassessment of traditional risk models because in new cultures, different individual traits can have different implications for financial risk. I’ve learned about new ways of assessing financial metrics in order to evaluate performance in the impact investing space. I think most importantly I’ve learned that this space is still very young with a lot of potential. As an economics and marketing major, I want to be involved in the kind of consumer research necessary to create these new and more effective financial products that can help bring impoverished peoples out of poverty with opportunities made possible with new forms of loans.
So how does this relate to the research in Indian corporate social responsibility? First, microfinance is still largely considered charitable. While I hope that one day it can be looked at as a viable investment option for profit, there is lots of opportunity for companies to build out corporate social responsibility through microfinance. I think that this could be an exciting option for companies, because until microfinance becomes realistically profitable, companies can invest in building out loan options for the poor, and then one day it may become a profitable business venture. Until then, they can use this portion of their profits to do good and observe best practices.
Another way that this research relates to a future career in social research, hopefully in microfinance, is that I want to develop my statistical skills in the space of human based research. I also want to learn effective business practices in businesses that are looking to aid a cause. I am really passionate about learning about all economic policies and practices that can aid the financial standing of the poor, and India is a very exciting place to do this research because of the allocation of wealth throughout the country.