No Silver Bullet for Women Entrepreneurs

Women’s entrepreneurship is a top regional concern in Asia, where women own more than half of the small and medium enterprises (SMEs) in some countries. Even where women are starting businesses at relatively high rates, however, their profits and growth are constrained relative to their male counterparts. In Cambodia, for example, less than 1 percent of businesses with more than 10 employees are owned by women, and women’s entrepreneurship rates in South Asia are among the lowest in the world, with less than one in 10 SMEs owned by women. What explains this persistent gender gap in entrepreneurship across the region, how can it be overcome, and does it matter?

First, it absolutely does matter. Asia and the Pacific stand to gain 70 percent in per capita income within roughly two generations by eliminating gender disparities in employment, including in the area of entrepreneurship. Increasing women’s entrepreneurship is good for national banks and citizens’ wallets alike.

But when it comes to how, the answer isn’t so simple. When researchers in the 1980s first began studying women’s entrepreneurship, their analyses hinged on comparisons between the individual characteristics of male and female entrepreneurs, attributes such as age, education, and attitudes that were assumed to explain why men appeared to be “naturally” more entrepreneurial than women and thus more successful in business. These studies were later criticized for committing the “individualistic fallacy,” assuming that individual outcomes are solely the result of individual characteristics while overlooking factors in the environment. More recent research has adopted the concept of an “entrepreneurial ecosystem,” which is the social and economic environment that fosters or frustrates entrepreneurial activity. The picture of women’s entrepreneurship shifts dramatically when socioeconomic factors like legal rights, access to education, national family-leave policies, and cultural and religious norms enter the equation. From this angle, the central question pivots from “what’s wrong with women” to “what’s wrong with the system?”

A growing body of research is now exposing how gender inequality is a ubiquitous feature of entrepreneurial ecosystems around the world. This is certainly the case across Asia, where women entrepreneurs in every country face multiple—and often very different—layers of gender-based barriers to starting and growing their own businesses. In a new report, Emerging Lessons on Women’s Entrepreneurship in Asia and the Pacific, the Asian Development Bank and The Asia Foundation examine the growing body of data and information to better guide governments, investors, NGOs, donors, and development partners to effectively support women’s entrepreneurship. It concludes by proposing eight areas for further research on women’s entrepreneurship.

Some of the challenges highlighted in the report, such as access to credit, seem almost universal, with women in virtually every country citing lack of financing as a key barrier to their success. But the remedies required are far from universal. A woman in the Pacific Islands may need to travel over a day to reach the nearest bank, while an aspiring female entrepreneur in Pakistan cannot apply for a loan without listing her father or husband’s name in the presence of a witness. Dramatically expanding mobile banking could be a game changer for women’s access to credit in the Pacific Islands, but it would have little effect on women’s entrepreneurship in Pakistan.

Though women comprise just under half of the total population in Bangladesh, their participation in the formal labor market lags far behind that of men, and the rates of business ownership by women are even lower. Photo/Geoffrey Hiller

This example illustrates a central argument of the report: to close the gender gap and open the door for significantly more women to pursue entrepreneurial ventures, we must better understand the diverse ecosystems in which they work. No single fix will erase the entrenched and often unconscious systems of gender bias across all of Asia—rather, there must be many fixes, tailored to the specific conditions that prevail in each country and each region. To achieve the nuanced understanding of these conditions that will lead to effective solutions, we need more data—data that is both sex-disaggregated and gender-sensitive.

Large global data sets now feature sex-disaggregated data, including Global Findex; Women, Business, and the Law; the Global Entrepreneurship Monitor; the Female Entrepreneurship Index; and the Global Women Entrepreneur Leaders Scorecard. These resources are helpful at a macro level, but more detailed data would give policymakers and practitioners more insight into the local contexts affecting women entrepreneurs. At a very micro level, for example, mixed-gender business associations in Cambodia have no data on women’s membership, which has contributed to a dearth of programs that respond to women’s priorities. At a larger scale, some central banks in the region have started to track, analyze, and publish data on entrepreneurship lending trends, reporting the numbers of men and women who access which financial products and in which industries.

Perhaps more importantly, increased availability of sex-disaggregated data is enabling the development of targets that can push existing boundaries toward necessary reforms. The Bangladesh Bank, for example, now requires all financial institutions to allot 15 percent of their funds to women entrepreneurs and report on their progress toward that goal. Regardless of their size and reach, institutions and programs promoting entrepreneurship, market access, and financial inclusion should automatically track, analyze, and report how their efforts are (or aren’t) serving the different needs of their male and female clients and members.

Women's Business Center in Mongolia

Women entrepreneurs receive training at the new Women’s Business Center. In the first two months of operation, a total of 721 services were provided.

While sex-disaggregated data will help improve how entrepreneurial ecosystems are evaluated, we still need more sophisticated methodologies for determining what to measure. At a very basic level, definitional challenges complicate our ability to even count the number of women entrepreneurs. The new report notes at the outset that there is no universally accepted definition of a “woman-owned” or “woman-led” business, much less a “woman entrepreneur.” Definitions matter when we’re trying to piece together such puzzles as why women tend to own smaller businesses. Is it because they actively choose slower growth, for example, or could it be that growth is typically accompanied by a loss of control to males, so that women’s businesses that do grow successfully get counted as men’s businesses?

Asia Foundation case studies from Mongolia and China, recounted in the report, also illustrate the current inadequacy of measures such as “success” and “empowerment” in the field of women’s entrepreneurship. Both studies demonstrate that business incubator services and networks can help women start their own enterprises. But even those women who didn’t start or grow a business as a result of the trainings often reported increased influence over household decision-making, improved social status, and higher self-esteem as a result of their participation. Developing more gender-sensitive indicators of success that extend beyond strict financial measures to capture the full impact of entrepreneurship on women’s lives will help ensure that we fully value and invest in policies and initiatives to create a holistic enabling environment in which women can turn their great ideas into successful businesses.

Kate Francis is coauthor of Emerging Lessons on Women’s Entrepreneurship in Asia and the Pacific and specializes in women’s empowerment, child protection, and business and human rights. She can be reached at kate.francis@asiafoundation.org. The views and opinions expressed here are those of the author, not those of The Asia Foundation.

Internet Inaccessibility Plagues “Social Media Capital of the World”

The Philippines has been called the social media capital of the world, as millions of Filipinos spend an average of almost four hours a day on social media sites, particularly Facebook, the highest social media use in the world. Filipinos are known to be early technology adopters and are internet savvy, especially when it comes to communicating online. Yet the country still lags behind its ASEAN neighbors and the rest of the world in terms of internet speed, cost, and accessibility. One reason for this lagging performance is the nation’s geography, an archipelago of 7,107 islands that poses a challenge for basic connectivity. But a new report from The Asia Foundation has found that outdated laws and policies have blocked the deployment of technologies that could bring the Philippines fully into the digital age.

According to the international wireless analyst OpenSignal, the Philippines’ 4G speed is the fourth slowest among 88 countries. Fixed broadband service costs 7.1 percent of Filipinos’ average monthly income, well above the 5 percent recommended by the International Telecommunications Union. While the densely populated urban areas have internet service, many poor, rural areas remain un- or underserved. Forty-five percent of the population of 103 million, and 74 percent of all public schools nationwide, are unconnected to the internet.

The internet is widely recognized as a key driver of economic growth and equal access to information, opportunities the Philippines is missing out on. SMEs cannot take full advantage of e-commerce, and BPOs—business process outsourcing companies—which generate local employment, also suffer from slow internet speeds.

There are promising technologies currently being tested and used in other countries that could significantly improve internet connectivity in the Philippines. On October 18, The Asia Foundation and the Better Broadband Alliance (BBA) released a new report, From Analog to Digital: Philippine Policy and Emerging internet Technologies, which assesses the feasibility of these new technologies in the Philippine policy context. Based on the assessment, three technologies seem appropriate for the Philippines:

1. Fiber to the premises with gigabit passive optical network (GPON). Already available in parts of the Philippines, GPON technology allows for inexpensive, high-speed fiber-optic connections directly to the end user, at a cost the report found could be cheaper than current telco offerings. GPON is the simplest and most cost-effective wired technology available for providing broadband services in densely populated areas.

2. Fixed mobile substitution with 5G. Enthusiastically supported by equipment vendors, network operators, and device manufacturers, 5G is a new mobile standard that could substitute for fixed connections to deliver high-speed internet access. The report notes, however, that 5G will require new radio spectrum and high-speed fiber to cell towers to meet faster speed requirements.

3. Low earth orbit satellite networks (LEO). Orbiting at just 400–900 kilometers above the earth, LEO satellites promise low latency, and LEO networks are the only satellite systems that provide complete coverage of the earth, including the north and south poles, making them a key area of innovation for achieving universal access.

These promising technologies are all being tested or deployed in other countries, but according to the report, they cannot easily penetrate the Philippines, due to analog-era laws and policies that are ill suited to the digital age.

Roadwork in the Philippines, with a sign reading "Slow down deep excavation"

Photo/Angelo-Niño-Gutierrez

Under the Public Telecommunications Policy Act of 1995, only a public telco with a congressional franchise and authority from the National Telecommunications Commission can build transmission and switching facilities, offer local landline service, or operate interexchange backbone service or an international gateway facility. Entities that wish to operate an international gateway or a mobile network are required to roll out local exchange services or landlines. This technology-centric policy has hampered competition in traditional telecom services and effectively bars new players such as internet service providers from building new, data-only networks, even in areas where the large telcos won’t go.

The Radio Control Law of 1931 requires a legislative franchise to build or operate a radio station, which has been interpreted to mean that only 60 percent Filipino-owned companies can use the radio spectrum. This law is still used to govern wireless internet technologies. It needs to be amended to allow value-added services such as internet service providers to deploy emerging wireless technologies without the need for a franchise.

The Public Service Act of 1936 provides that telcos be regulated as public utilities, which restricts foreign ownership to 40 percent. Amending the Act to loosen the restrictions on who can operate a network and allow foreign-owned companies to enter the market would spur investment and help expand both fixed and wired broadband services.

Considering the mismatch of analog-era policies and digital technologies, the report suggests reforms to allow providers to deploy the most appropriate technologies to improve internet connection in the Philippines. Recommendations include:

1. Amend the Public Telecommunications Policy Act of 1995 to remove landline installation as a requirement for entry into the telecommunications and broadband markets.

2. Amend the Public Service Act of 1936 to relax foreign ownership limits and encourage investment and competition by both domestic and foreign operators.

3. Pass the Open Access in Data Transmission bill to distinguish data-only services from basic telecommunications and remove the landline requirement, lowering regulatory barriers to entry; reform spectrum management; and establish rules for sharing infrastructure.

If these reforms are realized, the Philippines can finally join the rest of the modern world in the digital age.

From Analog to Digital: Philippine Policy and Emerging Internet Technologies was funded by Google.

Mari Chrys Pablo is senior program officer for economic reform and development entrepreneurship with The Asia Foundation in the Philippines. She can be reached at marichrys.pablo@asiafoundation.org. The views and opinions expressed here are those of the author and not those of The Asia Foundation.

Dismantling Pakistan’s Tribal Areas

On May 31, 2018, Pakistan’s Federally Administered Tribal Areas, or FATA, formally ceased to exist. Home to five million people, and covering more than 27,000 square kilometers, these seven tribal districts have attracted enormous international attention in the last two decades due to their shared border with war-torn Afghanistan. The government of Pakistan has now brought an end to FATA’s century-old special status by merging the tribal agencies with the neighboring province of Khyber Pakhtunkhwa (KP).

Prior to the merger with KP, FATA was governed by a special set of laws known as the Frontier Crimes Regulations, enacted in 1901 by the British Empire to confront Pashtun insurgents. Poor governance and decades of warfare in neighboring Afghanistan had rendered the region vulnerable to continuing insurgency and deprivation. This in turn had a spillover effect on health, education, and livelihoods and caused the dislocation of a substantial portion of the tribal population to other parts of the country. UNDP’s 2017 Human Development Report ranked FATA lowest in the country on its human development index (HDI). The merger of FATA with Khyber-Pakhtunkhwa represents an opportunity and a new hope for peace and prosperity.

Photo/FATA Development Authority

But there is still a long way to go.

The Supreme Court of Pakistan and the Peshawar High Court have extended their jurisdictions to the tribal districts, and a roadmap has been developed to construct courthouses and set up district and session courts, but persistent insecurity in the area will make this a challenging task. There is a sobering lesson to be drawn from the Provincially Administered Tribal Areas in KP province, where nonstate actors capitalized on the grievances of citizens who suffered delays in the legal system to introduce their own, competing system of justice.

Photo/FATA Development Authority

The other unresolved issue is the old policing system in FATA. The seven tribal agencies had a different policing system, run by the chief administrator—a representative of the president of Pakistan—and deferential to local Maliks (notables). There is an ongoing debate in KP: should the FATA police (known as Khasadars and Levies) be under the command of the Central Police Office in Peshawar, or should they operate directly from the provincial Home Department? The merger of Baluchistan Levies with the provincial police force cost the national exchequer billions of rupees with no tangible results on the ground, and as we know from bitter experience there, the merger of tribal police must be conducted tactfully, and an efficient criminal justice system must be established to gain the public trust. The KP government will also need to critically assess the strategic framework developed for the police in 2014 and evaluate the performance of the Central Police Office in Peshawar over the past five years in order to chalk out areas where improvement is needed.

Restoration of peace and the establishment of durable political structures are critical for governance and rule of law to be productive. The Election Commission of Pakistan (ECP) is committed to elections in 23 newly created constituencies in the region by July 2019, and the KP government plans to extend the provincial Local Government Regulations to tribal districts and conduct elections by May 2019, but the Election Commission has not yet begun to delimit the new constituencies. Moreover, there are approximately 338,000 temporarily dislocated persons from FATA, without whose participation the election of 23 provincial assemblies and local bodies cannot truly represent public aspirations in the region.

Representative political structures will enable the provincial government to pursue socioeconomic development in the region. Islamabad has adopted a 10-year plan to develop major infrastructure, establish industrial zones, set up modern urban hubs in all tribal districts, establish universities and medical colleges, develop the mineral and agriculture sectors, create job opportunities for youth, and most importantly, rehabilitate dislocated persons. The 10-year development plan will spend 30 percent of allocated funds on efforts to counter radicalization and transform local communities, and bringing local bodies on board at the grassroots level will be of critical importance.

Two major challenges are going to confront the implementation of the 10-year development plan.

First, the KP government has no binding agreement with the federal government or other provincial governments for the allocation of funding from the National Finance Commission. This apparently glaring omission reflects the continuing political dynamic among Pakistan’s provinces, which will be called upon to sacrifice a portion of their shares of federal revenue, and the eventual outcome has yet to be determined.

Second, transparent and accountable administration will be of critical importance. The KP government will need to assess the performance of its Civil Secretariat, especially in the northern and southern districts of the province, which are demographically similar to the tribal districts, and which have a history of heavy-handed misrule by public sector agencies. The northern districts of KP—Shangla, Kohistan, Torghar, and Upper Dir—currently have the lowest HDI ranking in the province, as highlighted in the UNDP’s 2017 Human Development Report.

Photo/FATA Development Authority

Finally, it will be crucial to avoid overlapping roles and responsibilities among institutions. Currently, FATA affairs are run by three agencies—the FATA Disaster Management Authority, the FATA Secretariat, and the FATA Development Authority. Administration of the region could be managed efficiently through a single agency, whose institutional capacity could be enhanced to promote speedy development, effective coordination, and better fiscal management. For maximum accountability and transparency, yearly third-party evaluations would be an essential tool, and a strict, merit-based system for the hiring and promoting of officials will also be a prerequisite.

Meanwhile, the merger of FATA with KP and the successful implementation of the 10-year development plan will depend on the security situation. Continued volatility and insecurity will make it extremely difficult for provincial government to achieve tangible results on the ground. The Pakistan Army’s role in de-escalating security threats will therefore be significant—and delicate, due to the long history of military conflict in the region.

The current scenario offers a moment of hope to the tribal population that a century of insurgency will at last be put to rest, and that the legacy of underdevelopment and deprivation will yield to effective programs and policies under the 10-year development plan. For this change to occur, the government of Pakistan needs to take a holistic approach to longstanding structural problems and provide an environment that is conducive to the participation of all stakeholders. A good start would be to establish durable political structures in all seven tribal districts to allow them to begin to shape their own socioeconomic and political destiny.

An earlier version of this article originally appeared in Hilal Magazine.

Farid Alam is director of programs for The Asia Foundation in Pakistan. He can be reached at farid.alam@asiafoundation.org. The views and opinions expressed here are those of the author, not those of the Asia Foundation.

ASEAN: Shaping the Future of Regional Development in Southeast Asia

Development cooperation is taking on new geopolitical significance. Earlier this month, the U.S. Congress passed legislation to create the U.S. International Development Finance Corporation, which is intended to help stimulate private-sector infrastructure investment in the developing world. Asia is one of the primary targets for this new institution, which will have $60 billion in new assistance funds. Also this month, Japanese Prime Minister Abe hosted the leaders of Thailand, Myanmar, Laos, Cambodia, and Vietnam, announcing a major new infrastructure initiative focused on Southeast Asia. And in September, the European Union announced a new strategy for connecting Europe and Asia with a framework for expanded development financing. These new initiatives are generally intended to provide alternative sources of development finance for countries that are currently involved in China’s Belt and Road Initiative.

Photo/Leandro Justen

The new Southeast Asia initiatives are entering an already crowded field. There are more than a dozen major regional development schemes in the Lower Mekong subregion alone. Traditionally, these initiatives have been led by a multilateral bank, like the Asian Development Bank. But there is now a trend towards more direct, bilateral cooperation, as donor governments such as China, South Korea, India, Japan, Australia, the European Union, and the United States seek to strengthen their ties with the region through development cooperation.

Clearly, this is an important new opportunity for Southeast Asian countries to fill major infrastructure gaps and meet other development needs. But there are also significant risks. Malaysia’s decision to cancel $23 billion of Belt and Road Initiative projects is a clear signal that ASEAN countries are concerned about these risks, particularly surging debt levels. Several other countries in the region will be under enormous debt burdens as a result of projects currently being developed or planned for the near future. Furthermore, the collapse of the dam in Champasak Province, Laos, in July is a clear reminder of the potential environmental and safety risks from the surge in infrastructure development. The quality of infrastructure currently being built will have a lasting impact on the region—for better or for worse—for decades to come, as governments are obliged to maintain and operate the new structures.

The context of development cooperation in Southeast Asia is also being transformed. In addition to the influx of new initiatives by major powers outside the region, ASEAN governments are becoming development assistance donors themselves. Half of ASEAN member-state governments are now donor countries, including Thailand, Indonesia, Singapore, Malaysia, and Brunei. While still a small percentage of overall development assistance funding, intra-ASEAN development cooperation is growing and gaining prominence.

Recent developments in the region indicate that governments are looking for new ways to shape development cooperation on a regional basis. Thailand recently reinvigorated the Ayeyawady-Chao Phraya-Mekong Economic Cooperation Strategy with the release of a new master plan and the announcement of a new fund for infrastructure and connectivity. The symbolism of this move cannot have gone unnoticed by policymakers and analysts tracking the region. It is a clear move for the governments of Thailand, Cambodia, Laos, Myanmar, and Vietnam to more directly shape development cooperation in their region by creating a locally led platform.

The Asia Foundation’s recently released report ASEAN as the Architect for Regional Development Cooperation argues that countries in the region have the interest and capacity to more directly shape regional development in Southeast Asia, but they currently lack the mechanism to do it. ASEAN has traditionally provided the architecture for collective engagement with major powers outside the region on political and security issues. The East Asia Summit, for example, has become the central platform for regional security cooperation, giving ASEAN member-state governments much greater influence than they would have acting bilaterally. In our report, we argue that ASEAN could play a similar role in regional development cooperation.

Photo/Leandro Justen

With Thailand taking over the ASEAN chair in 2019, there are strong prospects of ASEAN playing a more robust role on regional development cooperation. Thailand is one of the oldest and most significant development donors in ASEAN, and currently plays the lead role on sustainable development issues. The Thai Ministry of Foreign Affairs has been working with several development agencies, particularly the UNDP and UNESCAP, to analyze the complementarities between ASEAN’s development-related goals (as captured in the ASEAN 2025 vision statement), and the UN-led Sustainable Development Goals. Thailand is also planning to make sustainable development one of the central themes of its chairmanship, and it has announced its intention to open a new ASEAN Centre for Sustainable Development Studies and Dialogue.

There are some skeptics, however, who generally argue that ASEAN is not well suited to play a more significant role in regional development cooperation, and there are clearly some key challenges and practical constraints. First, most development assistance is bilateral—negotiated directly between the donor and the recipient government—and some national agencies involved in development may object to a stronger role for ASEAN. Second, ASEAN is primarily a government-to-government platform, which has made engagement with nonstate actors quite difficult. Third, the ASEAN Secretariat, with its already overextended staff (of less than 300 people) would find it difficult to step into a significant new role without added resources. In addition, critics would argue that ASEAN is highly siloed between different policy areas, making it very hard to work across sectors as is often needed for development cooperation.

Photo/Leandro Justen

Our report specifically addresses these concerns by trying to plot a practical and realistic path forward, citing examples of how ASEAN has already overcome some of these challenges in specific areas. Here are a few suggestions from the report on how to do this:

1. ASEAN Centrality and development. The concept of ASEAN Centrality should be adapted to include regional development cooperation. Given the geopolitical nature of the recent surge in regional development initiatives, it is clear that ASEAN countries would be better off engaging with donor nations as a collective.

2. An ASEAN framework for development assistance in Southeast Asia. ASEAN member states can shape development in the region by creating a regional framework that reflects ASEAN’s broad priorities and values. This would allow ASEAN to influence development programs throughout the region without playing a direct role in oversight and implementation.

3. ASEAN should focus on the strategic level, not the project level. Following the lead of the East Asia Summit, ASEAN should shape regional development assistance through strategic-level platforms for dialogue and coordination. While ASEAN should continue to be involved in some projects and initiatives, the expansion of ASEAN influence is unlikely to occur through a greater role in project implementation.

4. Find practical new ways to engage with nonstate development actors. The report includes several examples of how ASEAN sectoral bodies and policy centers have engaged more broadly with development actors such as INGOs, civil society, and the private sector. These examples are useful models for the rest of ASEAN.

5. Suggestions for the ASEAN Centre for Sustainable Development Study and Dialogue. The report provides several specific examples, building on lessons from past centers, of how the planned institution can have a positive impact.

6. Development actors need to change as well. Nonstate development actors can engage much more effectively with ASEAN if they understand the culture and processes and do not seek exceptions or shortcuts. Rather than seeking “buy-in” for one’s project or agenda, it’s much more effective to adapt one’s approach to support ASEAN-led initiatives.

The Asia Foundation is planning a series of discussion forums and launch events around its new report across Southeast Asia over the coming months, including in Bangkok (late November) and Jakarta (January). If you are interested in organizing a forum in your country, please let us know.

Thomas Parks is The Asia Foundation’s country representative in Thailand. He can be reached at thomas.parks@asiafoundation.org. The views and opinions expressed here are those of the author, not those of The Asia Foundation.

Nepal Human Rights: Too Many Cooks?

How many national human rights institutions (NHRIs) does it take to protect human rights? Are the rights of disparate groups better protected by multiple, specialized agencies, or is a single institution with a broad mandate more efficient and effective? The framers of Nepal’s 2015 Constitution opted overwhelmingly for multiple, specialized NHRIs. This institutional innovation was as much political as it was pragmatic, predicated on the nation’s checkered human rights record and the competing demands for redress of multiple vulnerable groups. Nepal now has eight human rights agencies, each with its own mandate, to protect the needs of women, indigenous nationalities such as Dalits, Muslims, Madhesis, and Tharus, people with disabilities, and other vulnerable and marginalized groups.

Founded on the notions of representativeness and self-organization, these commissions have been armed with a mandate to monitor human rights violations, assess Nepal’s compliance with international treaty obligations, and recommend changes to laws, policies, and practices that discriminate against or deny the rights of their designated constituencies. The vision, in principle, is to help the Nepal government foster a culture of diversity and inclusion as it navigates the transition to federalism. Ultimately, the performance of these new agencies, and the services they are able to provide to vulnerable groups, will serve as a litmus test of the credibility and effectiveness of the new constitutional order.

While a constitutional commitment is a positive step, however, not much else has been done, three years on, to engage key human rights actors to implement the new mechanism. The state is in a paradoxical position. On the one hand, it now has an institutional responsibility to protect the human rights of vulnerable groups. On the other hand, the state itself has too often been the violator of these rights. Specialized NHRIs can be an effective antidote to the failings of a monolithic state institution, but overheated advocacy can easily provoke interagency conflict, to the inevitable detriment of vulnerable groups. As the implementation of the Constitution’s institutional reforms has stalled, some activists have criticized Nepal’s specialized NHRIs as a divide-and-conquer strategy to weaken human rights.

In this light, it is imperative to reach a common understanding of the issues and challenges confronting human rights protection in Nepal, to identify areas of potential partnership among human rights actors and institutions, and to develop a consolidated strategy for the defense of vulnerable groups.

Issues and Challenges

First and foremost, a well-coordinated, multi-institutional mechanism that promotes pluralism and interagency cooperation requires a clear collaborative framework. The Constitution establishes the National Human Rights Commission (NHRC) and the seven other commissions as constitutional bodies—with varying and sometimes overlapping mandates—but there is nothing concrete in the Constitution or in any subsequent statutes or regulations formalizing their interrelationship. In this situation, the NHRIs may be tempted to leverage their constitutional status to secure more autonomy and power, while their overlapping mandates could reduce their effectiveness by wasting institutional resources through duplication of effort.

Nepal migrant laborers

Young laborers prepare to depart Kathmandu’s Tribhuvan International Airport. Photo/Conor Ashleigh

Lack of coordination among the commissions will inevitably undermine their credibility, creating confusion among those they are meant to protect, weakening the rule of law, and nurturing impunity. The violation of a Dalit woman’s human rights, for example, could fall under the jurisdiction of any of three different commissions: the NHRC, the National Women Commission, or the National Dalit Commission. Without a collaborative framework, these agencies could easily find themselves wrangling over jurisdictions or, more perversely, ducking their responsibility to act.

The Way Forward

The issue of one or several human rights institutions has been settled by the Constitution. The focus now must be on how to move forward. The internationally recognized Paris Principles establish benchmarks for the structure, legitimacy, and autonomy of NHRIs, and compliance with these principles should be a first priority. Policymakers must ensure that the NHRIs have both clearly laid-out competencies and responsibilities and substantial functional autonomy: though they are funded by the state, they are intended to work independently, forging relationships with both state and nonstate actors, advocating for policy reforms, and pressing the government to implement recommendations.

Unfortunately, recent legislation has not only fallen short of the Paris Principles, it has missed a golden opportunity to create a collaborative mechanism for the NHRIs. Nevertheless, even in the absence of legislative frameworks, partnership is still possible in the area of policy advice and treaty monitoring. There are demonstrated strategies for improving collaboration among national institutions, including memorandums of understanding and other, less formal interagency agreements to address overlapping competencies. An intercommission coordinating committee, with a membership representing all the NHRIs, would be a good way to inaugurate collaborative efforts. The commission might start by establishing some fundamental procedures: the initial screening of complaints and their subsequent referral to the appropriate agency; the transfer of cases between agencies; interagency dispute resolution; and a system for developing joint recommendations on cross-jurisdictional issues.

A joint monitoring and investigation mechanism could sidestep the problem of multiple agencies devoting limited resources to the same issue. A joint research plan could develop strategies that avoid jurisdictional overlap, ensure complementarity, and reinforce systematic approaches to human rights. A five-to-10-year, cross-sectoral strategic plan could be developed to institutionalize a consolidated vision of the defense of human rights in Nepal.

NHRIs are an important part of the national human rights machinery, but they are only one part. They must work alongside other bodies that also have human rights roles and responsibilities, including the courts, law enforcement agencies, the legislature, administrators, and civil society. Institutions across Nepal have been notoriously poor at communicating with the public, and a coherent communications strategy, aligned with a shared civic engagement mechanism, will be key to increasing the public legitimacy of NHRIs and persuading authorities to implement recommendations or prosecute human rights offenders.

Conclusion

Establishing a concerted strategic partnership among the NHRC and the NHRIs at the national and subnational levels will be a multifaceted challenge. Nepal’s approach to human rights policy should start by asking whose rights, who should be responsible for providing protection, and how. The answers to these questions must not get lost in political rivalries, bureaucratic resentments, or politicized appointments. The Constitution has decreed multiple human rights institutions. Now the state, the NHRIs, and civil society, which have little history of cooperation and which often harbor mutual suspicions and misperceptions, must pull together for the protection and promotion of human rights for all Nepalis, thereby contributing to the social, cultural, and institutional change that is part of the promise of the 2015 Constitution.

Namit Wagley is a program officer for The Asia Foundation in Nepal. He can be reached at namit.wagley@asiafoundation.org. The views and opinions expressed here are those of the author and not those of The Asia Foundation.

#Palukuat (Palu is Strong)

It was towards dusk on Saturday, September 28. At 6:02, four minutes after her father had picked her up from work, there were loud explosions. The world would later learn that a magnitude 7.4 earthquake had struck Palu, in Sulawesi, Indonesia, followed by a tsunami. For Yuni Amalia and her father, the explosions had no name. All they knew was their motorbike was jolted hard and began to move on its own. As they fell, the ground vibrated, as if shaken by a great power from beneath the earth. They saw cars and motorbikes move on their own, dragged by unknown forces. Panic followed confusion as people crawled on the ground, unable to stand. “Don’t panic, Yuni. Quiet. We will go home to find your mother and sister,” said her father as he hugged her tightly.

Yuni works for sejenakhening.com, a youth mental-health group, and volunteers at Malibu Inklusi, a collaborative forum promoting social inclusion. When they had overcome their initial terror and confusion, she and her father rushed to help relatives, neighbors, and the surrounding communities.

The condition of damaged houses in Palu, Indonesia a week after the earthquake and tsunami disaster. Photo/Herwin Bahar / Shutterstock.com

Nurlaela Lamasitudju was another whose life was spared by the catastrophe. She lost eleven members of her family. As relatives and friends from outside Palu frantically tried to contact her by phone and social media, there was no word from the normally media-savvy, plugged-in social activist. Then, three days later, on Tuesday, suddenly came a new post: #palukuat #ayogerak #poskorelawaninformasi (Palu is strong, let’s move, volunteer for the disaster information center). Nurlaela had not only survived, but just a day after the earthquake she and her husband had volunteered at the disaster information center, distributing news bulletins, raising donations, opening public kitchens, and spreading the spirit of encouragement and motivation to each other.

For years, Nurlaela’s civil society organization, Solidaritas Korban Pelanggaran HAM, or Solidarity for Victims of Human Rights Violations, has been an active voice for marginalized groups, including victims of human rights violations, people with disabilities, victims of gender-based violence, and other vulnerable groups in Palu, Donggala, and Sigi, the three areas most severely affected by the disaster. She quickly mobilized her network to provide support to those areas she knows intimately well, knowing their needs would be great.

Quick mobilization and rapid response are the story of Palu’s communities following the quake and tsunami. They put aside fear, fatigue, and trauma to mobilize for rescue and recovery.

Palu is indeed strong!

The disaster that hit Palu, Donggala, and Sigi has now claimed more than 2,000 lives and displaced nearly 90,000 people. The true scope of destruction of the region’s infrastructure is still being assessed. Electricity was out for a week. Emergency aid, especially food, clothing, and medicine, are still being delivered. To say that life is hard for those lucky enough to survive is a tragic understatement. Instead of lamenting, however, activists in Palu are invoking the spirit of reawakening and strength. As communications were restored, hashtags like Nurlaela’s began to proliferate: #Palukuat (Palu is strong) and #Palubangkit (Palu revived). Those outside Palu responded with #PelukPalu (Hug Palu), and it has spread throughout the country.

Residents’ houses were destroyed and fell apart in Palu City. Photo/Herwin Bahar / Shutterstock.com

Using the power of social media, friends of Palu are showing resiliency and positive spirit. While the news media were consumed with reports of looting as supplies grew desperately short on day two and three, activists on social media told stories of collaboration among local organizations, communities, and humanitarian agencies. Updates on what has been done, and what is still needed, continue. The face of Palu on their pages is the face of strength and humanity. The road ahead is steep, but Palu is not alone. The whole world #pelukpalu. The whole world hugs Palu and lends a hand.

Ade Siti Barokah is a program officer for The Asia Foundation in Indonesia. She can be reached at ade.siti@asiafoundation.org. The views and opinions expressed here are those of the author, not those of The Asia Foundation.

A Skilled Global Girls Workforce

October 11 marks the eighth annual celebration of the International Day of the Girl Child, established by the United Nations to address the challenges that continue to confront girls around the world. This year’s theme, With Her: A Skilled Girl Force, begins a year-long commitment by the global community to increase learning opportunities and build the skills of a new generation of girls preparing to enter adulthood and the global workforce.

On September 24, at the United Nations in New York, Secretary-General António Guterres unveiled Youth 2030: Working with and for Young People, the UN’s strategy for youth under the 2030 Sustainable Development Goals. There are 1.8 billion young people in the world today, the strategy document notes, close to 90 percent of them in developing countries, where they constitute a large proportion of the population and “a tremendous and essential asset worth investing in.”

At the same time, young people are also facing incredible challenges and even life-threatening risks, disproportionately carried by girls and young women in many parts of the world.

Historically and globally, this disproportionate risk reflects the continuing effects of gender inequality. Women and girls are too often subjected to violence and discrimination and denied fundamental rights such as access to adequate health care, quality education, and decent work.

Education itself is the single most important key to overcoming gender inequality. The higher a woman’s educational attainment, the more autonomy she has over her personal and professional decisions, even when gender norms are restrictive. In South Asia, where this author was born and raised, years-long efforts to achieve gender equality in basic education—efforts ranging from grants and scholarship programs to recruiting more qualified female teachers—have shown decisive results. A 2017 UNESCO study found that female literacy in South Asia has increased threefold in the last 50 years, from 27 percent to 86 percent, while the the UNDP reports that primary-school enrollment increased from 74 girls for every 100 boys in 1990 to parity in 2012.

Despite this encouraging progress, however, there are still many roadblocks for girls in education. In school, girls often face subtle discouragement from factors such as lack of female teachers, lack of appropriate sanitary facilities, and vulnerability to harassment and violence that society continues to subtly condone. This contributes to the fact that boys still complete primary school at higher rates than girls, and girls’ secondary-school enrollment and completion rates remain lower than boys in South Asia. Prevailing social norms devalue girl children, while sons are looked upon as providers and protectors of the family, leading parents to prioritize a son’s education over a daughter’s when resources are limited.

It is essential to recognize that educating girls and boys stops the intergenerational cycle of poverty, and that girls’ education especially leads to healthier and better-educated families. Closing the gender gap in education also fuels economic growth, in turn reducing poverty, as young girls who receive an education go on to more gainful employment and a higher standard of living.

Children at Sri Rahula vidyala. Rahula vidyalaya is a recipient of books from The Asia Foundation’s Book For Asia project. Photo/Gemunu Amarasinghe

In an era of rapid economic growth and rising aspirations, South Asia cannot afford to consign half its population to discrimination, ignorance, and dependency. Girls and women in South Asia must have the resources and tools to challenge stereotypes, realize the power of their voices, and achieve their highest social and personal potential. Women have their own experiences and unique perspectives to contribute to a thriving society. In the words of Meghan Markle, the duchess of Sussex, to the United Nations, “Girls with dreams become women with vision.”

As an only child in India, I was fortunate to have parents who dismissed outdated stereotypes and valued a girl’s potential. Education for young girls should be not a choice, but an inherent human right. Empowering them is not just an end, but a means to a better future for all of society. On this day, as we address the challenges and celebrate the successes of young girls, this awareness must be translated into collective action giving girls the opportunity to thrive and grow.

Pratyusha Sibal is an intern with The Asia Foundation’s Women’s Empowerment Program in Washington, DC. She can be reached at pratyusha.sibal@asiafoundation.org. The views and opinions expressed here are those of the author, not those of The Asia Foundation.

Myanmar: Women Breaking and Making the Rules

I was on the grounds of a textile factory an hour outside Mandalay, Myanmar. It was July 2017—peak monsoon season—and the combination of rain, heat, and an overnight bus ride from Yangon had left me soaked. I was sitting on a small rattan bench in the living room of Zarchi Win, surrounded by all the women in her family, who were all talking at once.

Zarchi, in her 40s, was wearing a hot-pink htamein top and skirt and traditional thanaka face paint on her cheeks. Through the window I spied her parked motorcycle, still an unusual possession for women in Myanmar.

Pyo Let Han, translator of Girl Power in Myanmar and founder of Rainfall, the first feminist magazine in Myanmar, in September 2017 shows illustrations from the book to visitors during an exhibition at Nawaday Tharlar Gallery in Yangon, Myanmar

There’s a popular idea, perpetuated by colonialists, Western travelers, and national historians, that women in Myanmar have long enjoyed status equal to men. I have heard this myself from Burma experts who didn’t understand why I, a gender policy specialist, wanted to go to Myanmar. But historian Tharaphi Than, author of Women in Modern Burma, has a different view. There have been a few powerful women in Myanmar, she argues, but their stories, told again and again, have crowded out the stories of the unequal majority.

Yet, as I was also beginning to learn, Myanmar has a rich history of women who refused to play by the rules—journalists who kept writing, artists who kept painting, and soldiers who kept serving their country even when they were attacked, dismissed, and demeaned. Which is why I was here in Mandalay, to gather those less-told stories of remarkable women, past and present, for a children’s book that would inspire a new generation of Myanmar girls to dream big.

Ilustration of Zarchi Win

Zarchi observed me looking around. “I grew up running around this factory,” she said. Her mother worked here for 40 years, and when she retired, Zarchi joined the factory, becoming, like many young women in Myanmar’s booming garment industry, her family’s principal earner, at age 18. “I liked being a factory worker,” she said.

But then the factory changed hands, and working conditions plummeted.

By 2016, Zarchi had had enough. With no political connections, no organizing experience, and everything to lose, she organized several hundred of her fellow workers to one of the longest-running industrial disputes in Myanmar’s garment and textiles sector. During the strike, she would take breaks between protests to breastfeed her six-month-old baby.

Eventually, she was fired—a common tactic of Myanmar employers—but Zarchi had become a union leader. She had used what she had—mostly her relentless drive—to challenge her situation and push for a fairer, brighter future.

Politics: Where are all the women?

The face of politics in Myanmar today is a woman—State Counsellor Aung San Suu Kyi—and the country has more women in elected positions of power than ever before. But those high-profile women can be misleading about the real statistics: just one-tenth of national MPs are women, the second fewest in ASEAN, and Suu Kyi herself is only the fourth woman with the rank of cabinet minister or above since 1920. Myanmar’s political parties are uniformly male dominated, women carry the extra burden of household duties, and society’s subtle message is everywhere that they’re not cut out for the job.

Local politics is even more male dominated. Of the nearly 17,000 ward and village-tract administrators in Myanmar, fewer than 100 are women. Incredibly, this represents about a 100 percent increase since the last election.

Than Kyi is one of those few female village leaders, and the only one in Kayah State, in eastern Myanmar.

Growing up in Kayah during years of armed conflict, she daydreamed about opening big grocery stores, with aisles and aisles of every food, drink, and sweet she had ever heard of.

She never opened her stores, but she did find other ways to support her village. She became a family mediator, and then the leader of the village—at the age of 45 and as a mother of six. Though she is the only woman in Kayah State to hold this position, Than Kyi is undaunted. “This is not a man’s job,” she told me matter-of-factly. “I am proof.”

Like Than Kyi, more and more women of all ages are getting involved in political organizing, running for office, and demanding seats at the peace-process table, but the political institutions themselves are still dominated by men. What kind of support do women breaking into all-male systems need? What norms, spoken or unspoken, are holding them back?

Confronting the arts head-on

I knew of painter Sandar Khine before I moved to Myanmar. She had been featured, with her large fluorescent nudes, in the New York Times as one of Myanmar’s once-banned artists. So I was surprised to learn, while looking for female illustrators, how male dominated Myanmar’s art world is.

When I met Sandar Khine last summer at her apartment and studio in northern Yangon, I was struck by how serene and soft-spoken this truly audacious artist is—the same artist who had cheekily foiled the censors by strategically placing black fabric over parts of her nudes. The story still brings her a mischievous smile.

Now widely respected as a pioneer in Myanmar’s contemporary art scene, Sandar Khine had struggled to break into the field. Models were hard to find and expensive to hire. She knew a group of male painters who split the cost and practiced weekly, but they refused to let a woman join. Only when a male friend in the group vouched for her talent was she allowed to participate, and it was there that she fell in love with painting the human form.

Ku Kue, one of the five illustrators of Girl Power in Myanmar, with her illustration of the Women’s Army of Burma

What I learned from Sandar Khine and my search for illustrators is that Myanmar, like many other countries, has no shortage of talented female artists; they’re just not always treated as “professionals” like their male counterparts. Sifting through artworks in Yangon’s galleries, it was far easier to find paintings where a woman was the subject than the artist. At the same time, I saw women like performance artist Ma Ei—who in one piece dressed as a man in traditional longyi and cooked noodles for her audience—creating work that challenges the expectations of women and men in Myanmar. I found myself wondering, with the opening of Myanmar, are these gender norms showing any signs of change?

One nun’s fight for equality

Each day, as I rode to work, the bus would fill with the neighborhood nuns as they completed their morning round of alms. I would tightly grip my coffee on those long, bumpy rides for fear of spilling on their bright, baby-pink robes.

The first nun I had a real conversation with was Ketu Mala. I was once again dripping with sweat and rain when we sat down together at a monastery in northern Yangon. She spoke quickly and passionately with her hands as she launched into the story of the first time she wasn’t allowed to do something the boys could do.

She was 13 years old and waiting excitedly at a temple in Mudon, in Mon State. It was a big day—her cousin and uncle were becoming monks.

When she tried to follow the boys and men into the ceremony, however, a female relative pointed to a sign that read “no women allowed.” “Why can the boys go, but not I?” she asked herself. “How are they different?”

In Myanmar, the concept of hpoun refers to an innate power that men are believed to possess. Because women are held to be “unclean,” they do not possess hpoun, but they can rob men of theirs. The concept is insidious, seeping into politics, the law, even how and where one’s laundry may be washed.

Hpoun also permeates religious beliefs and institutions. Nuns are barred from the same spaces that Ketu Mala was forbidden to enter, while monks, called hpoungyi—literally “great hpoun”—hold the highest social status in Myanmar. I remember noticing how people raced to give up their seats on the bus to monks, while nuns barely got a head turn. A colleague explained Myanmar’s social hierarchy this way: monks, men, women, and then nuns.

Ketu Mala rebelled against these ideas. She remembered hearing as a child that only women who are poor, without family, or sick become nuns, but she was educated and had means and a family that (eventually) supported her choice. Smart and ambitious, she became a nun because she cares about people and is devoted to her religion, but also to make a point. She actively sought out people like herself who believe that men and women are equal. Eventually she found her home at Pau-Auk Forest Monastery in Mawlamyine. There, both men and women can walk anywhere.

Like democratization, the road to gender equality in Myanmar is messy. As established norms and power structures conspire to keep them out, women are stepping up in historic ways and numbers, holding the powerful to account like Zarchi Win, growing into leadership roles like Than Kyi, challenging the status quo like Sandar Khine, and driving change from the inside like Ketu Mala.

Alyson Curro is a gender policy specialist and coauthor of the forthcoming book for children Girl Power in Myanmar. Then known as Alyson Neel, she was an Asia Foundation Luce Scholar in 2016–17. The views and opinions expressed here are those of the author, not those of The Asia Foundation.

School Science Labs for Rural Afghanistan

Science and mathematics are critical elements of a modern education. In most of Afghanistan, however, especially in rural areas, science is taught using outdated approaches and materials, by underqualified and inexperienced instructors, in classrooms equipped with nothing more than a simple blackboard and chalk. Most Afghan students do not currently have access to professionally qualified science teachers and properly equipped laboratories where theoretical science can be demonstrated through practical, hands-on experiments. As a result, most rural students shy away from science or show little interest in the subject, while teachers struggle to teach without modern tools or curriculum.

In response to this urgent educational need, and with international support, the Ministry of Education (MoE) and the General Directorate of Science and Educational Technology (GDSET) have developed an intensive, in-service training program to address the knowledge gap among science teachers and laboratory technicians and equip them to deliver an updated, modern science curriculum. Through the USAID-funded Strengthening Education in Afghanistan project (SEA II), the Asia Foundation has partnered with both MoE and GDSET to improve science education in Afghanistan.

Students at Makhfi Girls’ High School in Badakshan province conducting science experiment.

SEA II has provided in-depth, theoretical and practical trainings in science, mathematics, and computer literacy to teachers and lab technicians in over 120 schools, mostly located in traditionally underserved northern, northeastern, eastern, southeastern, and western provinces like Badakhshan, Balkh, Bamyan, Herat, Nangarhar, Laghman, Kandahar, Khost, Nuristan, Samangan, and Takhar. The project has equipped schools there with a full array of laboratory equipment and materials that afford students the opportunity to conduct practical science experiments. Quality science and mathematics education in these rural provinces also enhances students’ general academic performance and helps them prepare for the university entrance examinations (Kankor), the gateway to higher education.

Since 2014, the Foundation has helped train more than 1,860 teachers—1,092 men and 768 women—from selected schools to improve their scientific knowledge and teaching methods. These trainings have produced measurable results—a roughly 40 percent improvement in science knowledge according to post-training assessments—among teachers and lab technicians in each province.

During the ongoing second phase of project activities, eight regional GDSET-managed centers were established and have now have been upgraded to “centers of excellence,” fitted with internet service, LCD TVs, smartboards, and laboratory equipment to support the professional development of science teachers and GDSET academics. Through these centers, the Foundation and GDSET hope to build the capacity of teachers working in STEM fields as well as in English, computer literacy, and research. The overall objective is to enable the GDSET centers to provide modern, high-quality science instruction to both teachers and students.

GDSETtraining for Model School chemistry teachers in Badakhshan

The Foundation has also helped GDSET to organize a number of extracurricular activities in the provinces to cultivate interest in science, including science fairs and interscholastic science competitions that give students the opportunity to practice and showcase their scientific knowledge. Subsequent assessments of student academic performance have shown significant knowledge gains a year after the start of the project.

Faridullah Halim is a case in point. Now a medical student at Paktia University, he credits his science teacher and the support of the Foundation for preparing him for the Kankor. “I am very thankful to USAID and The Asia Foundation for providing such a unique opportunity for us to learn science and mathematics,” he says. Ms. Freshta, a physics teacher in Kandahar, is also grateful for the training she and her fellow science teachers received under SEA II. She “learned significantly about science” through the Foundation’s trainings, she says, and “conducting experiments left me more interested in the sciences and wanting to learn more so that I could teach my students better.”

Through SEA II, the Foundation, in direct collaboration with GDSET and MoE, has greatly expanded science trainings and is rapidly improving the overall quality of science education in Afghanistan. Teachers and students in some of the most rural areas of the country are now benefiting from modern science curricula, better teaching methods, and fully equipped science laboratories. The Foundation is committed to ensuring that all students in Afghanistan can benefit from a quality education, so that students like Faridullah Halim and teachers like Ms. Freshta can continue to explore their interest and passion for the sciences.

Mohammad Mustafa Kazemi is a program officer for The Asia Foundation in Afghanistan. He can be reached at mohammadmustafa.kazemi@asiafoundation.org. The views and opinions expressed here are those of the author, not those of The Asia Foundation.

“Faster Than Cash”: An Interview with ftcash’s Vaibhav Lodha

Last week, Mumbai social entrepreneur Vaibhav Lodha was in San Francisco trying to do Zeno one better by filling a finite schedule with an infinite number of appointments. A 2018 Asia Foundation Development Fellow, Lodha recently learned that his financial technology startup, ftcash, had been named the Asia-region winner for financial inclusion in MIT’s Inclusive Innovation Challenge. The regional winners will convene at MIT on November 8 for the awarding of four $250,000 grand prizes. On this day, we found him at The Asia Foundation’s San Francisco headquarters, participating in leadership training as part of his fellowship.

Photo/Amanda Bensel

Launched in Mumbai in mid-2015 by Lodha and two partners, ftcash (“faster than cash”) is a digital payment platform that allows micromerchants, long excluded from India’s banking and financial system, to manage their business transactions, establish their credit worthiness, and qualify for capital loans. The company was incubated by PayPal and is currently in a strategic partnership with MasterCard to provide merchant services globally. Lodha sat down with us to talk about his success.

When you founded ftcash in 2015, what was the problem you set out to solve?

I’ll give you an example. The newspaper vendor in my neighborhood has been trying to get a loan from a bank to grow his business for the last 25 years, but no one would give him a loan. And the reason the banks are not able to give a working-capital loan to someone like this newspaper vendor is, first, they don’t have enough data on him to figure out what his risk assessment looks like, and second, they’ve found it hard to acquire and service these kinds of really small micromerchants.

So, these people are “unbanked.”

Unbanked, yes. There are 60 million-plus of these micromerchants in India. Let me say that again: 60 million plus. We are trying to help them get access to capital and to provide them with a digital payment solution as well. When they use our payment platform, we get the data from their digital payment history, and based on that transaction history, we’re able to give them a capital loan, typically between $700 and $14,000. These are working-capital loans, so once they repay the first one they can get a larger-ticket loan the next time. The most critical part is that the repayment of these loans happens on the payment platform itself. They just need to make transactions on the payment platform, and the loan deductions happen automatically. So, it’s a seamless system, because they don’t have to think about repaying the loan on a daily basis.

How important are these small and medium enterprises in India’s economy?

They are the missing middle class in India’s economy, and we’re trying to make that middle class as big as possible so that they’re able to then live a much better life, because with financial inclusion comes also better nutrition, better healthcare, better education, and a sense of justice in the country as well.

How has adoption been so far?

We’ve been in operation for three years, and we’ve had phenomenal growth. More than 30,000 merchants are working with us. We are processing almost 72 million dollars a year in payment transactions. We have a 90-day delinquency rate of just 2 percent, which is much lower than the market standard, which varies from 5 to 10 percent in the segment, so we’ve been able to manage that risk really well. And apart from that, we have grown almost 30 percent month over month, which is a really good number. Now we are involved with a lot of international companies to expand globally as well, so that’s another option we’re trying to explore to see where we can go from there.

Is this a profitable business for ftcash?

Not yet.

But your plan is to become a bank, in effect?

A bank-without-being-a-bank. Our lending comes from financial institutions and banks. We do the acquisition of the merchant. We do the risk assessment, and we do the collections. So, the entire function of the loan is conducted by us. It’s just the disbursal to the merchant that we’re not doing: the financial institution transfers the money directly to the borrower. So, all the data is stored with us, and that’s the most critical part. We can see the transaction history before the loan is dispersed. We’re able to see a lot of data from the mobile phone. And when the collections are happening, we know how the merchant is performing, so we’re also able to keep a regular check on their financial health.

What has the MIT award meant for you?

We’re hoping that MIT can help us with artificial intelligence and machine learning for risk assessment, and we’re scheduling some meetings with professors and researchers to help us figure that out. Also, obviously, getting the recognition gives us a lot of validation that what we’re doing is on the right track.

What has it done for you to be an Asia Foundation Development Fellow?

It’s been an exciting journey. The most important part for me has been the leadership development: how do you convey a story and make sure that others relate and can connect with that story so that they become evangelists for your journey. I’ve seen so much support come in for our work over the last six months with the Development Fellowship. So many new opportunities have opened up. More importantly, I think as a cohort we have made friends for a lifetime.

Can you tell me another story about someone who benefited from using your technology?

Sure. There is one small vendor—he’s like a hawker on the street very close to where we work—and he was one of our first customers, three years back. He started using our payment system to get his cash flow to go better, because what used to happen was people would call him up and say, oh, I need these vegetables or fruits, please deliver them to my home. And typically, the household help would be at home and not the owner, and he would not get paid for a week, two weeks, sometimes even a month. When he started using our payment system he started telling his customers, okay, I’m sending you this digital payment link so please make a payment and then I’ll supply you this stuff. And not only did his cash flow improve, but his customer base became so large that he was eligible for a loan. And now he’s been able to grow his business to have an established shop and expand into other merchandise as well.

Vaibav Lodha is a 2018 Asia Foundation Development Fellow. The views and opinions expressed here are his own and not those of The Asia Foundation.