Life has changed dramatically for Malan Mane in the past two years. The 50-year-old wicker basket weaver was once considered unintelligent and was often disregarded by her fellow villagers. Today, Mane manages her cash flow efficiently, has a grip on market dynamics and trades with panache. Her income has increased from US$30 a month in 2010 to US$100 at present.
Mane still makes baskets out of bamboo — the woody grass that grows in the tropics — but now saves on raw material cost by buying directly from the farmers instead of through a middleman. Encouraged by her success and her growing respect in the community, Mane’s husband, who earlier used to stealthily sell her baskets to buy liquor, now helps her in the business. This has enabled Mane, who lives in Vaduj village in Satara district, 270 miles from Mumbai, to supply her goods to a larger customer base of vegetable vendors and store keepers. She can now also reach out to neighboring villages.
With the increase in sales, Mane is able to save US$10 every month. She has taken two microloans totaling US$150 from the local Mann Deshi Mahila Sahakari Bank, a co-operative bank run by women for women. Mane used the first loan to attach a tin roof to the family hut. She also bought a television. With the second loan, she wants to build a shed to stock her baskets and raw materials. "People who used to call me names, now respect me," she says.
Mane didn’t become business savvy overnight. She’s a product of the Mann Deshi Business School (MDBS), a unique business school for unlettered women. Set up in 2006, MDBS, which has its main center in Mhaswad in the western Indian state of Maharashtra, is a symbol of empowerment for rural women. Over the past six years, it has set up four branches in Maharashtra and one in the southern state of Karnataka and has transformed over 40,000 women into successful entrepreneurs.
Like Mane, the other women who have been educated at MDBS have little in common with the well-heeled students in MBA programs around the world. They are an eclectic mix of ages ranging from 19 to 50. They include a potter, a spice and noodle maker, a seamstress, a goat and sheep herder, a farmer, a homemaker and a bangle vendor. Most of the women come from families that earn less than a dollar a day. And in most cases, the women are the sole breadwinners trying to make ends meet.
"Most women came to us for loans to either start a new business or scale up their existing ones. That’s when we decided to start the b-school," according to 53-year-old Chetna Gala Sinha, founder of the Mann Deshi Bank and MDBS. "We didn’t want to provide [the women] just business capital. We wanted to also offer skills, knowledge and motivation to run their enterprises." Sinha, who is married to a farmer in Mhaswad, adds that MDBS is probably the world’s first — and so far only — business management school of its kind.
All the MDBS branches are co-located with the Mann Deshi Bank, except in the district of Satara where the classes are conducted in any available space, be it a field, ground, temple or a student’s house. In Mhaswad, MDBS has acquired an 18,000 square-foot plot and is currently constructing a three-story building, which will house the Mann Deshi Bank, four classrooms — with a total seating capacity of 200 for MDBS, and also a small guest house. By 2015, Sinha aims to have nine branches of MDBS, four mobile B-schools and reach 100,000 women.
Ajit Rangnekar, dean of the Hyderabad-based Indian School of Business, points out that India’s education needs are huge and extremely diverse, from global top leadership to dairy farmers, and one will have to try out many different models to meet those needs. "Some of these ideas will succeed, some may evolve, while others may fail," he says. "The real challenge in India is not about doing these experiments, but about codifying the learning from such initiatives, and scaling the successful ones rapidly so that the growth can be shared across the society."
It was in 1997 that Sinha, an economist, first set up the Mann Deshi Bank to provide microloans to day laborers working on farms so that they could purchase and sell fruits and vegetables. The objective was to draw the women out of a day-to-day existence and nudge them to consider other enterprises. The business school was a logical extension of the bank. "The capital provided by the bank goes hand-in-hand with the women’s business goals," Sinha notes. "The bank is a patient investor and the b-school provides mentorship and grooms women to become entrepreneurs."
Vishal Kapoor, portfolio associate at Dasra, a Mumbai-based nonprofit organization, says the microloan and business school enterprises are a good fit. "Most microfinance institutions focus on providing loans without the backend education piece, which is important to ensure that the loans are used [effectively] for business purposes," he notes. Dasra came on board in 2009 to enhance MDBS’s product delivery and help it scale up, build systems and processes, and manage growth.
MDBS is funded primarily by grants from various partners including HSBC Bank, Godfrey Phillips, the Gibraltar-based Bonita Trust, Accenture and the British Asian Trust. The grants have grown from Rs. 7 lakhs (around US$13,500 at the current exchange rate of US$1 = Rs. 51) in 2006 and are expected to touch Rs. 2 crore (US$ 387,000) this year. "For the past several years, Mann Deshi has proven that poor women are bankable," according to Naina Lal Kidwai, country head for HSBC India and director of HSBC Asia-Pacific. "The B-school has helped the women to be creative, resourceful and business savvy, enabling the mainstreaming of a significant number of women into India’s economy."
HSBC became a sponsor of MDBS in 2006. At that time, the company had offered the Mann Deshi Bank a microfinance-loan at 9% interest as part of its mandatory priority sector lending obligation laid down by the Reserve Bank of India. When Sinha requested HSBC to step in as the founding sponsor of the business school, the firm obliged. After an initial seed funding in 2006, HSBC now gives an annual grant of around US$100,000 to MDBS.
A Five-Day MBA
At present, MDBS offers a menu of 25 courses, largely developed in-house. These include classes in financial and marketing management, and also vocational skills like computer training, dress designing and English language instruction. Typically, the women start by learning a skill at MDBS and then go on to take a management course before embarking on an entrepreneurial enterprise. A five-day homegrown MBA program introduced in 2010 and branded Deshi MBA educates entrepreneurs on branding, advertising, packaging and marketing their products. It also provides market access and visits to big and small business entities. "The women are exposed to concepts like sourcing and the benefits of purchasing raw material in advance so as not to go through price volatility," says Dasra’s Kapoor. A Deshi MBA student is also provided with a mentor for a year.
Last year staff at Accion, an American nonprofit organization, developed teaching modules on cash management and self-management for the Deshi MBA program.Accion trained 19 MDBS coordinators in these new modules and also helped then to become more interactive in their teaching. "Earlier, they did not have a professional approach to training methodology. For instance, financial literacy was taught with savings as a means to an end," notes Usha Gopinath, director for client education at Accion.
The women who come to MDBS undergo a free counseling session to gauge their skillsets and interests to help them choose courses. For a nominal fee ranging from less than US three cents to US$6, a woman can enroll in MDBS at any time, irrespective of her age or educational background. The duration of the different courses vary from a day to around three months. Vanita Shinde, chief administrative officer at MDBS, says that since most of the women are farm laborers or housewives, classes are scheduled to suit them — between 11a.m. and 3 p.m. The trainers are handpicked by Sinha and her team. They earn a nominal salary of US$60 a month, plus 50% of the fees paid by each of their students. The rest of the fee amount goes to MDBS. "This structure motivates trainers to bring more students to the school," saysRekha Kulkarni, CEO of the bank.
In order to expand MDBS’ reach, in 2007, Sinha got Sycamore Networks’ Gururaj ‘Desh’ Deshpande to sponsor a mobile school in his hometown of Hubli in Karnataka. The interiors of the bus are designed like classrooms to offer courses including computer training, fashion design and tailoring. Electricity is provided by an eight-hour battery back-up. The MDBS mobile school also offers financial products like savings accounts, loans, pensions and insurance backed by financial literacy training. "The women cannot afford to come to us, so we go to the people," Sinha notes. Another mobile school caters to women in the villages surrounding Mhaswad.
Attracting more students is important not just for MDBS, but for the country as a whole. In the drought-prone Mhaswad village alone, nearly three-quarters of the population live below the poverty line. Around 65% of the women are illiterate and lack access to education and job opportunities. This is a longstanding issue across India. According to UNICEF India, 90 million women in the country are illiterate and 20% of children between the ages of 6 and 14 are not in school. The government’s inability to solve this problem has spurred social entrepreneurs like Sinha take on the responsibility to educate women at the bottom of the pyramid. Abha Thorat-Shah, director at the British Asian Trust, the London-based social fund that supports high impact charities in education, enterprise and health in South Asia, says her organization doesn’t typically fund hybrid businesses, "but Mann Deshi is an exception. I love the fact that it’s rural, training and skilling people in the state, and not promoting migration."
The gradual rise of the semi-literate housewife Vanita Pise, who has become the public face of Mann Deshi, is an interesting example of the impact that MDBS can have. In 2006, when avian flu destroyed her family’s poultry business, Pise, who reared buffaloes and also ran a small tailoring class in her house, became the main earner. She wanted to boost her income and approached the Mann Deshi Bank. When Sinha suggested she take up the manufacturing of disposable paper cups, Pise defied her family and approached the bank for a loan to buy a machine to kick off the new business. Though she mastered the art of manufacturing cups, Pise had no clue about marketing. So she joined the business school. Armed with her new knowledge, she expanded into disposable plates, and saw an exponential growth in business. Pise now owns 12 machines to make cups and plates, and earns US$300 a month. She is also looking at further expanding into making cardboard folders and spice powder.
Pise’s grit and entrepreneurial skills secured her a seat on the Mann Deshi Bank Board in 2011. "The eighth grade-educated Vanita now handles demand drafts and check clearances. She is definitely a role model for our women," Kulkarni notes.
Challenges Ahead
But the road ahead for MDBS is not without roadblocks. Pointing out that the school aims to serve 100,000 women by 2015, HSBC’s Kidwai says: "The biggest challenge for the organization is to be able to extend its reach to remote geographical areas and reach out to a greater number of underserved women without compromising on the quality of services currently offered. As the organization expands its base and scales up its operations, it will also need to ensure that it has a viable model in place for the school to be financially sustainable in the long run." ISB’s Rangnekar notes that there is an important role in India for micro and small firms. "Such initiatives [like MDBS] will hopefully further foster and boost the development of small entrepreneurs. [The organization’s] challenge will be geographic growth, and evolving the program over time," he states.
Rangnekar makes another point. "The students of Mann Deshi b-school may initially require more support than their urban counterparts, and the institution is right in recognizing this and providing the support, but it must be careful not to directly or indirectly subsidize these ventures." According to Rangnekar, business schools have to recognize that students must take responsibility for their actions. "A school can guide and support students in their initiatives, but cannot take over the primary responsibility for their success," he adds.
There is also another issue. Some observers note that the entire organization is centered on the founder, Sinha. She does not agree though. She points out that efforts are already underway to gradually project Pise as the face of Mann Deshi. Other women are also being mentored to take over key operations. "People knew only Chetna [Sinha] earlier, now they know the Mann Deshi brand," Sinha says. "As a big organization evolves, you develop a brand."
