Feature

April 23, 2009

From Chicago to Chennai: Policymaking on a Backpacker's Budget

Elizabeth Vivirito, MPP'10, spent her spring break in India, traveling and helping coordinate a development finance forum as part of an internship with ShoreCap Exchange. This is the first article in a three-part online series.

We must first learn from what has already been done-on the ground, not just in the classroom.

"International development" has long been an important topic in economics departments, including within the very notable University of Chicago's under Milton Friedman. But while development theories battled in academia during the latter-half of the twentieth century, on-the-ground work in one very important area-the field of microfinance-was just beginning.

This spring break I took my grounding in University of Chicago economics training to the field to study microfinance in its biggest and most promising market: India.

Microfinance organizations provide financial services to poor or low-income clients, and the movement so far has focused on the developing world. In Asia and Africa, where many individuals and businesses have no credit histories and little or no access to traditional financial services, microfinance has become an important tool to reach their vast, un-served and underserved populations. Globally, microfinance has become part of a much broader "development finance" or "inclusive finance" movement to help the poor out of poverty by rewarding an entrepreneurial spirit and teaching good banking practices.

With a deep interest in the field, I jumped at the opportunity to attend a development finance forum in Chennai, India, with the company for which I intern, ShoreCap Exchange. As an added bonus, I spent the week before the conference on a very quick, six-day tour of northern India-Delhi, Agra, and Kashmir-before heading south for the conference.

Upon arrival in Delhi, I found that it smelled exactly the way I had imagined-Indian food and smog. I spent only one day in the capital city, rushing from park to palace to temple and was at once struck by the intense noises, odors, and colors of the city. Women in beautiful saris walked against a backdrop of greenery and vibrant temples while incessant beeping from the overcrowded streets drowned out other sounds of city life.

Driving through the northern region of Uttar Pradesh on my way to the Taj Mahal in Agra, I was not surprised at the rural poverty of the countryside. The landscape is lined with brick walls, homes, and fabric-making factories. Children on bicycles, tractors towing oversized loads, auto rickshaws (3-wheeled tuk-tuks), and large semi trucks share the highways-all traveling at dangerously different speeds. Loads of hay, seed, and other crops burst periodically across the highway, too, completely shutting down traffic in one direction or another.

This is the uneven pace of development in India.

I realize as I drive through the countryside that few here must know about, let alone use, microfinance despite its large prevalence in this part of the world. Although India has over 280 microfinance institutions with over 10.8 million borrowers, this makes up just 1 percent of the country's population. But still I am hopeful for this beautiful, brilliant place. I am reminded daily that I am in the midst of one billion people, that it will take some time to develop this incredible India.

Read the second article.

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