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I have been in Kathmandu for a few weeks now on vacation and already very attuned to familiar small talk at family gatherings. It usually starts with a mundane, almost reflexive “chiyaa khaayou”? Thereafter, it speeds up suddenly and takes a sharp turn onto the very personal with a “biha garne hoina aba”? After that it slows down a little and makes a pit stop at the professional/academic: Padhai kahan pugyo, Phd garne hoina?

Before I share my answer to that question, let me take you through my career path. I finished my Master’s Degree in International Business almost seven years ago and have been lucky to find a line of work that balances a multitude of my needs – intellectual challenge, personal satisfaction, work-life balance. I have been working in the field of microfinance, or financial inclusion more broadly, at an investment management company based in Washington DC in the United States.

Financial inclusion is an industry, a global movement if you will, undertaken collectively by an array of public, quasi-public and private institutions to broaden access to financial products among those lacking. The movement’s central aim is to provide financial products such as loans, savings, insurance for the low-income population, particularly in developing countries. As a private company, our firm’s founding mission is to channel private investor capital in this area with the idea that private capital, as opposed to grants and donations, makes this sector more scalable, self-sustainable and accountable to all its stakeholders. Our loans to microfinance banks in developing countries allow them to on-lend to small entrepreneurs and businesses in their communities.

On a day-to-day basis, my job is to understand and analyze the economic, regulatory and political contexts of countries we work in through research and interviews; performing rigorous financial analyses on potential partners. The best part of the job is going on field visits to interview the staff and management of microfinance banks we work with in order to gain a more holistic understanding of the risks and opportunities presented by these potential investments. On each visit, I also get to talk to the end clients, the small businesses – be it a handicraft maker in a small town in Cambodia; a hair saloon owner in the capital city of Bosnia; or a owner of a small restaurant in a provincial town in China – and see firsthand the positive effects on their lives that this industry has collectively had.

However, I never set out with this particular career in mind. In fact, during my high school and university days, I had no way of knowing that this career even existed. Like most things in life, my path to this career came about through a lot of luck and a little bit of design. I majored in Economics as an undergraduate and worked for three years on Wall Street, at a credit rating agency. I learned a lot as one is wont to do at a new job, particularly the first one after college. However, after three years, despite a lucrative salary, I left to explore opportunities to apply the financial analysis skills I had learned in an area that was much closer to my heart – development, and developing countries. I chose a graduate program that was a hybrid of a traditional business program and public policy/development (Masters’s in International Business). I interned for a summer at my current firm in between the two years of my graduate program and was lucky to be hired full time afterwards. And I have been there since.

There are many reasons I have found this sector to be personally gratifying. At a core intellectual level, the central thesis of this sector that broadening financial access is integral to socio-economic development is one I strongly believe in. It has long been understood that a robust and deep financial services system is necessary for economic development. The primary role that a financial system plays in an economy is that it takes excess capital (deposit savings from people or investor capital) and steers it towards investments by businesses and individuals, allowing them to invest in their economic progress and security. This basic mechanism, done well at a macro level — with the right balance of regulation, incentives and risk-taking — fosters socio-economic development in the long run.

People in the developed world take this type of access to financial products – loans, credit cards, savings, mortgages etc. — for granted. On the other hand, low-income people in developing countries, who run their livelihoods by running a small family enterprise, be it a neighborhood restaurant, a corner convenience store or a smallholder family farm do not have access to even the most basic of these products, a simple loan. Almost universally, banks will not lend or are not allowed to lend to unregistered small businesses or households who can’t provide hard collateral – like land or buildings. In the lack of formal institutions that lend to them, this segment of the population either can’t borrow at all; or often turns to informal money lenders in their communities leaving them very vulnerable to exploitation.

On the surface, a woman in an Indian village paying an annual rate of 25 percent for her 50 thousand rupees microfinance loan may seem a bit high to those with the luxury of credit cards that come at a low- teens rate. However, if the same woman goes to the village moneylender who lends her 50 thousand today and asks for say 55 thousand back in two months, that’s an effective annual interest of sixty percent! The financial inclusion movement is not only about providing access to loans but also doing so through formal, regulated channels so that the vulnerable, low-income people are not grotesquely exploited.

A small loan, by itself, does not propel this woman onto a higher socio-economic bracket. A whole host of other things, public infrastructure like roads, schools, hospitals chief among them, are needed; and even with those, it only happens over a period of time. But over a period of five or ten years, if she keeps building up her credit profile by repaying old loans and borrowing more, she can continually invest in her family’s future. This access to a simple loan provided by a microfinance bank we support can very well catalyze her socio-economic upliftment. Perhaps with her first loan, she expands her kirana shop; with her second loan, she buys a sewing machine to do embroidery work and sell in local markets. With her third loan of 1 lakh rupees, perhaps, she can build a weather-proof roof for her house so that her family can can sleep more soundly and her children can study more securely; they can then aim for higher studies and jobs like you and I. Socio-economic development does not come about through a single intervention like a single, small loan. Rather, it’s a long process, an inter connected chain of personal choice and hard work, public policy, infrastructure, and private investments. By working in this sector, I feel like I am able to be a part of this chain and contribute in a small way.

I’ve been with my current firm for seven years, the longest I have done anything. If I were to dial back the time to seven years ago when I had to make the same career decision, or even ten years ago when I was trying to choose a graduate program, I think I would still make the same choices. I count myself really lucky to be able to say that.

In my mind, taking a break from my career at this point to pursue a PhD degree is not even worth considering in any real way. Yet, it doesn’t stop my relatives, and occasionally even my immediate family, from asking: Padhai continue nagarne? Phd samma ta garnai parchha hai aajkal… Lately, I have found a handy response to this question. I tell my family that if I pursue a Phd now, I will make no money for the next five to six years. And that usually makes them go, oh, in that case, there’s no use.

What I have been driving towards all along is that when it comes to career, yes, one should listen to others’ advice and experiences. However, it is also equally important to be self-assured and not necessarily go down the familiar, beaten path. It is okay not to know what our goals and aims are, particularly in our twenties. Our society is so focused on defining us from an early age, doctors, engineers, businessmen etc. I, for one, never had any such ambitions. It’s okay not to be fixated on a rigid goal. It’s okay to just swim along in open water and see which shores you come across so long as you have a good internal compass. In fact, that might be how you stumble onto the exciting career that you haven’t even heard of today.

 

Cover Photograph: Ramro Nepal

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