Roshan Vikas

Last week I sat on the floor with a task force we’ve formed at Roshan Vikas and led a discussion on business development. Anyone could see I stuck out like a sore thumb in this group – I’m not a woman, I don’t wear a burqa, my Hindi is about as good as the average 2^nd grader in India, and I use terms such as “business development.” Still – using a lot of smiles and head nods (doesn’t matter which way – they all mean “yes” here) I was able to facilitate a productive meeting to debate solutions to help Roshan Vikas improve its loan collection process.

This is a far cry from the days when I’d sit in endless meetings pretending to take notes on a potential multimillion dollar preferred structure convertible-debt transaction. This is better. The meetings are still endless and I honestly cannot find a way to sit comfortably on the floor – but at the end of the day, the difference is I’m not pretending about anything here. I do care. We’re discussing the very survival of my NGO and I’m thrilled to play a role in helping shape the groundwork for Roshan Vikas to continue improving the livelihoods of urban Muslim women in Hyderabad’s slums.

To backtrack a bit – my NGO, Roshan Vikas provides this ultra-marginalized community with access to financial services, skills development, and other livelihood promotion activities. To achieve this vision RV had adopted a set of guiding principles that I felt were best expressed in this funnel line object rather than in straightforward bullet form (it’s the former investment banker in me):

While women's empowerment is nothing unique in the NGO world, the other two aspects are key differences between Roshan Vikas and most other microfinance organizations.  Most microfinance organizations focus almost exclusively on providing loans and other financial products.  RV has a slightly different tact in that it wants to promote savings or “capital formation” as a prerequisite to lending.  Encouraging the poor to save seems like an obvious thing to do, but it’s shocking (actually alarming) how many microfinance outfits (especially the for-profit ones) seem to forget this and became obsessed with “selling” loans to individuals that may or may not necessarily need them (another “subprime mortgage crisis” in the making?).

The second aspect – community ownership – is also unique because it means that RV is actually owned by its membership.  RV has a thrift cooperative ownership structure in which the women that RV focuses on lending to actually manage the organization. The capital to operate the organization and extend loans is also contributed by this membership base of women who are all organized into self-help groups that meet weekly. I won’t get into too much detail about how this works structurally but what it does mean is that Roshan Vikas is a very flat organization where all decision making is consensus based (very democratic, but also very painfully slow).  

I should mention that in addition to providing loans, Roshan Vikas is also involved in artisan’s crafts skills development.  Essentially we form groups of local artisans and provide training and access to distribution channels for their goods.  I’m not really all that involved with that part of the organization since it involves creativity and artistic talent and I’m more of an excel kind of guy.

Anyhow, back to me.  So Roshan Vikas has been around for about 5 years now and has been growing dramatically during that period.  It went from 0 to 19,000 members very rapidly and is now running into growth problems that are preventing the organization from making the next jump in scale to ~40,000 members by 2010. RV stopped turning a profit recently and is beginning to suffer from very classic growth related issues that most small businesses face.  There are hundreds of small issues – but the essence of the problem is that RV is now losing money despite an expanding membership base (i.e. we have more customers, but we are making less money per customer).

I’ve only been here a short while, but my perspective is that the organization has grown so quickly that controls, human skills, technology, and other resources have not kept up and this is acting as a bottleneck to further growth. My role is to coordinate an “intervention” to identify where the bottlenecks are, what can be done about them, and then execute – all by March (our target month for turning a profit).  I work closely with a “core group” that includes Roshan Vikas’s CEO, an external turnaround specialist management consultant, auditing firms, a few key staff members, and other experts as needed. When I first started my NGO mentor asked me to serve as a “change agent” because of my unique status as a foreigner with a private-sector business background. I still have no idea how to be a “change agent”, but I have quickly learned that my outsider status really does give me certain privileges (and challenges) that allow me to propose and execute new ideas far easier than the more entrenched staff.

Progress can be slow – and sometimes it’s very easy to lose hope. I’ve struggled a lot with the defeatist attitude of so many of the staff who are very good at presenting me with problems, but tend to shrug their shoulders when I ask about solutions. Still, we are already starting to see some encouraging results. Our repayment rate has climbed from 81% to 97% this past week and I know there is still plenty of room for improvement.

How much experience do I have in NGO turnarounds? Absolutely none. My background is in PowerPoint presentation and mind numbing Excel models, not microfinance consulting. This used to worry me a lot, but I’ve come to realize that 40% of my role is simply common sense. The other 60% is persistence. I’m here to accelerate change and that simply won’t happen unless someone is constantly hammering for it. In other words, I’ve come half way around the world to be a pest. My parents would agree – I’m the right man for the job.

Wish me luck.

Posted by Sanjay Sharma