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Program helping poor in India become better informed buyers, sellers

Mark Reutter, Business & Law Editor

Released 3/19/2007

beggars outside a train station
Click photo to enlarge
Photo by Diana Yates
Providing opportunities Educational programs developed by Madhu Viswanathan, a marketing professor in the College of Business, could improve the economic opportunities of Indian women who cannot read or write, such as these beggars outside a train station at Agra in the state of Uttar Pradesh.

CHAMPAIGN, Ill. — A University of Illinois professor has started a grassroots program to help poor people in India improve their consumer and business skills.

Madhu Viswanathan, a professor in the College of Business, directs the Marketplace Literary Project and has developed educational programs for adults who cannot read or write. “Our approach uses teaching methods such as picture sortings, group discussion and role playing,” he said.

Teaching the poor how to become better-informed buyers and sellers will complement other efforts to combat poverty, such as microfinance, or supplying small loans for low-income households, according to Viswanathan. “We enable deeper understanding of marketplaces by leveraging the social skills that participants bring to the program and relating educational content back to their lived experiences,” he said.

The training program is the outgrowth of Viswanathan’s research on subsistence economies in Tamil Nadu, a state on the southeast tip of India. Working with non-governmental organizations over the last six years, the Illinois professor interviewed low-literate, low-income people about their buying and selling habits.

Madhu Viswannathan
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Photo by L. Brian Stauffer
Madhu Viswanathan, a professor in the College of Business, directs the Marketplace Literary Project and has developed educational programs for adults who cannot read or write.

His sample included a range of rural and urban poor whose incomes were spent on such necessities as food (mostly rice, lentils, vegetables, and spices) and clothing. Interviews were conducted in Tamil, the language spoken locally, which also was the native language of Viswanathan and his two associates in India, S. Gajendiran and R. Venkatesan.

One of the findings of his research was the level of “functional literacy,” or ability to conduct everyday functions through social interactions, among the poor. He gave an example of a woman with no formal education who, forced to be her family’s breadwinner, bought utensils from stores and then resold them to residents of her community.

Scorned Hindu woman
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Photo by Diana Yates
Scorned Hindu widows, such as this woman in Vrindivan, are sometimes turned out of their homes and have few economic options other than begging for an ashram.

Managing interactions among her customers was one of the most difficult tasks she had to master because her conversations were rarely private. This meant that she constantly had to deal with the tension between following general procedures and demands by buyers for special treatment.

Despite having almost no experience as a seller and minimal experience as a customer, she was able to run a successful enterprise and take care of her family.

Women in Chennai
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Photo by Madhu Viswanathan
Learning to buy and sell Women in Chennai, on India’s southeast coast, take a class on marketplace literacy. Madhu Viswanathan’s assistants, R. Venkatesan, left, and S. Gajendiran, teach the class in the native language.

Another interesting aspect of economic life among India’s poor was the prevalence of very small roadside vendors. The most successful retailers maintained personal relationships with their customers and sometimes acted as their bankers, keeping customers’ money from thieves or an irresponsible husband.

Looking at how subsistence markets work is a neglected area of mainstream academic research, according to Viswanathan. “There has been a lot of work in the social sciences on literate, relatively resource-rich individuals and societies. But what happens when we cross the literary barrier and when we cross the resource barrier?”

Personal shopping
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Photo by DIana Yates
Personal shopping The prevalence of very small vendors is a characteristic of subsistence markets in India. The most successful retailers maintain personal relationships with their customers and sometimes act as their bankers. This indoor market is in Pune, a city in southwest India.

To educate himself in subsistence markets, Viswanathan concentrated on in-depth interviews and close observation. Almost immediately after his research began, “I started thinking of grassroots educational programs to help people as buyers and sellers. Rather than a one-size-fits-all approach, the aim here was to combine relevant business principles with localized research.”

In 2003, he formed the Marketplace Literary Project, a non-profit organization to advance social initiatives stemming from his research. The educational program in India is being expanded by an organization that reaches hundreds of villages. Other potential avenues of growth include the use of computer kiosks in rural areas as hubs for learning.

“A lot of what we’re conveying is about choice,” he said. “We emphasize the importance of checking on a product and making inquiries at several shops before purchasing. We set up shops in the classroom and cheat people. We try to enable skills, self-confidence and awareness of rights.”

Another aspect of Viswanathan’s program is to help people who cannot read or write to start their own business. Lessons include how to choose a business, how to evaluate consumer needs, how to promote a product and how to use customer feedback to make appropriate stocking decisions.

Viswanathan, Gajendiran and Venkatesan have completed a book, “Enabling Consumer and Entrepreneurial Literary in Subsistence Marketplaces: Research-Based Education Across Literary and Resource Barriers,” forthcoming from Springer Publishing Co.

Viswanathan’s research has been funded by the National Science Foundation and the Center for International Business and Education Research (CIBER) at Illinois.