[OLPC India] India Digest, Vol 23, Issue 11

[K. K. Subramaniam]

On Friday 31 Oct 2008 8:05:57 am Edward Cherlin wrote:
> On Wed, Oct 22, 2008 at 9:39 AM, K. K. Subramaniam <subbukk at gmail.com> 
wrote:
> > On Wednesday 22 Oct 2008 4:50:45 pm Satish Jha wrote:
> >> So please spread the word, create proposals for schools, seek funding,
> >> ask the banks to finance as an educational loan payable after 10 years,
> >
> > You must be kidding :-). I don't know of any bank that would lend money
> > to primary school children (and out of school children) to purchase
> > computers.
>
> Never been done, therefore can't be done? Where would we be if our
> scientists, inventors, and religious leaders had thought like that? Or
> Muhammad Yunus?
I didn't say it can't be done. I just pointed out that no such infrastructure 
exists today and filling the gap is not trivial due to economic realities. 
Grameen Bank is very different case because it deals with *economically 
productive* people not having access to *short term* loans.

Consider:

1.  Banks only lend against collaterals. For many children and their families 
in the hinterlands, education is their first "asset". They have nothing to 
use as collateral. The cycle is usually broken by NGOs who raise funds to 
help communities raise the quality of education for their children. Many NGOs 
target children at high school and above because the payback period is 
shorter. Very few work at primary level (because of the huge numbers, high 
overheads and long payback period). IMHO, "asset formation" should be done 
for 6-12 age group because drop out is more than 45% at this stage.

2. INR 15,000 is a huge amount for most people. Capital is expensive in India 
and educational loans would cost upwards of 11%. Over a decade the loan 
amount would triple. An XO would depreciate long before a decade.

Subbu