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

[Edward Cherlin]

On Fri, Oct 31, 2008 at 9:43 PM, K. K. Subramaniam <subbukk at gmail.com> wrote:
> 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.

What is wrong with using a $188 computer as collateral for the loan to
buy it? What about the economic opportunities that it opens up for
families, even before their children go through school? I want
computers for preschoolers, to be paid back out of the economic growth
of the entire community.

> 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.

You are assuming that computers for schoolchildren have no economic
value. This turns out not to be the case. Elementary school children
have been found to be doing agricultural research for their families
on the Internet. Anybody who makes anything that can be sold outside
the community, such as art, music, clothing, crafts, and much more,
can get into e-commerce on sites such as Overstock.com, Shopping.com,
eBay.com, and others. People in microfinance programs connected with
e-commerce have been known to go from an income of $1/day to $6/hour.

> Subbu

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