Entrepreneurship | Of Mind and Money


Shakti Rising

Posted on March 27, 2013 by Tara Thiagarajan in Movies. Comments Off on Shakti Rising

Shakti Rising is a two hour feature film about the human drama of entrepreneurship set in the context of a village. The film forms part of a video based course on entrepreneurship – the MBE or Microbusiness Education Certificate offered to microentrepreneurs – and is where it gets most of its audience. Currently in Tamil it will soon be dubbed in multiple South Indian languages and reshot in Hindi.  Subtitled in English it was a selected feature of the South Asian Theater and Literary Arts Festival at the Smithsonian in Washington DC and various Asian film festivals from Florida to California. For more information visit the film website at www.shaktirising.in

Micro-entrepreneurship: Engaging in job creation

Posted on March 27, 2013 by Tara Thiagarajan in Inside Out, Writing. Comments Off on Micro-entrepreneurship: Engaging in job creation

Less than 50 million people are employed in the formal economy. That’s less than 5 percent of India’s population. What this means is that most of the country operates in the informal economy and most are by definition ‘poor’.

When we speak of the formal economy, which accounts for almost all of our GDP, we often throw around terms like value creation, entrepreneurship and job creation and the like. But when it comes to the majority of India’s populace, we flip the paradigm to ‘income generation’ and ‘livelihood creation’ and use this interchangeably with micro-entrepreneurship, which it is not.

It may seem logical, that after all, poverty is the lack of income and most of India has little of that. So, it is best to rush out to generate some income to feed yourself. Except that it’s not.

Value creation
The wealth of a … Read More »

The Microentrepreneurs

Posted on June 27, 2012 by Tara Thiagarajan in Microfinance, OpEds. Comments Off on The Microentrepreneurs

In a country like India, where over half the population scratches out a living in a manner that could be called ‘self-employed’, access to loans was going to be the magic bullet that was going to catapult them to greater economic gain. Microfinance for microentrepreneurs. Never mind that in the end most who borrowed never spent the money on a real business. What about those who did?

Gauging potential
In any other realm of entrepreneurship, investors and lenders do extensive due diligence on past financial records and make laboured assessments of business plans and management teams. In the case of the microentrepreneur, every transaction is in cash, accounts are rarely recorded and there is hardly any reliable evidence available of their past success or data with which to assess their future potential. Furthermore, most ‘microenterprises’ are not profitable when you factor in … Read More »

Microfinance: Time to move towards financial inclusion

Posted on February 9, 2012 by Tara Thiagarajan in Microfinance, OpEds, Writing. 2 comments

The numbers that describe India’s economy are mindboggling. Just one-tenth of the population participates in the formal economy. Of these, only about 35 million pay taxes. That’s less than 3%.

No wonder then that our economy produced a GDP of only $1.42 trillion at last count, about the same as that of the city of Tokyo which has a population of 35 million. There are simply too few producing value and wealth in India and so there is not enough to go around.

The financial inclusion agenda so far has been largely focused on redistribution of wealth while what is required is inclusion in the creation of wealth. Financial inclusion so far has meant debt distribution and nofrills bank accounts.

Microfinance has been one major channel of debt distribution to the poor. While the original assumption was that these loans were for investment … Read More »

The Picture of Poverty

Posted on October 27, 2011 by Tara Thiagarajan in OpEds, Writing. Comments Off on The Picture of Poverty

What is poverty? Having less money, living on less than Rs.90 a day or not being able to afford basic human needs?. Look at it this way and money is the problem. Solution: financial inclusion, microfinance, guaranteed employment schemes. But is it? Really?

In India, distribution of income differs from the popular imagery of a pyramid. With only 4% citizens paying taxes and only 10% employed by the formal economy, the prospects of solving this problem through simple redistribution schemes are abysmal. But perhaps it is not about money at all!

The more I encounter poverty, the more I realize that it is actually about the lack of power to change one’s circumstance. If tomorrow I lose all material wealth, no one will call me poor because I am empowered to do something about it.

Generally, you draw your power from the knowledge … Read More »

Physics of Poverty at YourStory.in

Posted on December 19, 2010 by Tara Thiagarajan in Blog, Microfinance, Writing. 4 comments

I am now writing a weekly column for YourStory (www.yourstory.in), also called Physics of Poverty that will post every Monday. Some things taken from what I have already written here but also some new stuff. I will start posting the column here as well. Here is the first post that appeared last week.

What is the question?

Physics of Poverty series by Dr. Tara Thiagarajan, chairperson, Madura Microfinance Ltd.

Alright, I’ll come right out and say it. Microfinance has done very little to alleviate poverty. Practically speaking, even after five loan cycles, virtually all of our borrowers are still poor—poor enough to be eligible for yet another microfinance loan.

The premise of microfinance has been that giving poor people a loan is all they need in order to get out of poverty. This presumes that simply giving someone money will first turn them into … Read More »

A network view of entrepreneurship

Posted on May 5, 2010 by Tara Thiagarajan in Blog, Writing. 1 Comment

Here is a definition of entrepreneurship that I came across in another one of Mark Granovetter‘s articles called The Impact of Social Structure on Economic Outcomes. He writes:

Schumpeter defined entrepreneurship as the creation of new opportunities by pulling together previously unconnected resources for a new economic purpose.

Granovetter goes on to say:

One reason resources may be unconnected is that they reside in separated networks of individuals or transactions. Thus, the actor who sits astride structural holes in networks (as described in Burt, 1992) is well placed to innovate. The Norwegian anthropologist Fredrik Barth (1967) paid special attention to situations where goods traded against one another only in restricted circuits of exchange. He defined “entrepreneurship” as the ability to derive profit from breaching such previously separated spheres of exchange.

Schumpeter’s is an interesting definition and now ranks as the one I like best. … Read More »