Innovation Can Lower Transaction Cost


    Can you elaborate the role CKS has been playing in rural India?
    If you look at the way the government has been giving healthcare service, then we wondered how to improve it. Bihar Innovation Lab was an answer to that, saying that you can have a public-private partnership. The programme involved working with district officials, state level officials, Taloka level officials to identify the challenges and then to prospose technology and innovation solution. It goes beyond; we go as far as meeting villagers. There are four various activities we are focused on in Bihar innovation Lab, three of them related to Vaccine delivery service and other to institutionalize birth by trying to create something like digital pathograph, which will be a level tracking, which giving advice to mothers while approaching labour to avoid adverse situation.
    Another is village health nutrition day, in which villagers learn about communicable diseases, childhood diseases, use of contraceptive in one day every month, this is a scheme developed by the government of Bihar.

    Kindly shed some light on your partnerships with other to enhance rural India.
    The area where there is a lot interesting things are happening is the early stage reading. The quality of Indian reading skill is really poor. But the focus during the last decade has been all about getting children to school, but the quality of teacher hasn’t been the focus, nor the quality of curriculum. We realized there is a potential for using mobile technology platform. Children should  get into a society of reading. USAID has partnered with us to implement a $3.2 million initiative, READ (Read – Engage – Achieve – Dream) Alliance, to help improve the reading skills of millions of primary school age children.  As the ability to read is the most basic building block of learning. This partnership is one among the many we have under taken.

    What more do you think should be done to address the concerns in rural India? Say banking.
    Create new products and new partnerships. If we use what we have been selling in metropolitan India then it isn’t going to sell in rural India. The banking rate is just double digit.  A huge proportion isn’t using financial service, and they are using informal financial institution, even the cost of micro finance is unreasonably high , 22% to 26 %  are the rates available to the poor, compare to someone in the metros where one can get at 19%  on our credit card. Why this prevails, because of the inefficiency. But if you have process innovation in such way the transaction cost can be lower, more interesting innovation can be made available.

    On CKS’s partnership with Grameen Foundation.
    It won’t focus only on mobile banking, it will have multiple dimensions. Learning suggests that there is need for regulation, so we could focus on regulatory recommendation to improve the efficiency of MFIs, relaxation required in obtaining loans, this is one direction in which our research is focused, another direction could be utilizing technology, not necessarily mobile, could be tablet technology. It could also be the product, designed products, say loans.



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