Following is the second of a Two-Part Series written by guest blogger Ryan Gunderson after a recent trip to rural Zambia.

Ryan is a business professional with Medtronic, the world's leading medical technology company.  He earned a bachelor's degree from Brigham Young University and an MBA from the University of Michigan's Ross School of Business. He writes about sustainable, scalable solutions to end global poverty on his blog Riches For Good and is actively pursuing his goal to help 1 million people out of poverty during his lifetime.

By Ryan Gunderson

I met Blessings and Francis in October 2008 when I visited the church they both attend in Lusaka, Zambia.  Although some 90 people were in attendance, Blessings and Francis stood out to me for the obvious reason that they were the only two speakers in the main meeting that day. Before Sunday school I introduced myself to all who were present, and I told them I was traveling with a non-governmental organization (NGO) and would be visiting rural farmers in Zambia to help them increase their incomes. 

Intrigued by the purpose of my trip, Francis invited me to his house after church, and I gladly accepted.  Blessings separately invited me to his house; the three of us traveled to Francis' house, where we spoke for about an hour.  I'm pictured below with Blessings (suit) and Francis, and several members of Francis' family.

I shared my goal to help 1 million people out of poverty and asked Blessings and Francis for any suggestions.  They each shared their opinion that many people have ideas for small businesses, but they lack startup capital. 

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Guest blogger Bree Olivari is a second-year MBA candidate at Thunderbird Global School of Management and is a leader of the Net Impact chapter. At Thunderbird, Bree integrates her interest in sustainable business with her degree in supply chain leadership. Her projects include mapping best practices of supplier codes of ethics, organizing Thunderbird's Sustainable Innovation Summit and greening procurement practices on campus.

During a recent internship Bree helped design the distribution of micronutrient sachets to undernourished children in Mexico.

By Bree Olivari

As I bit into an apple provided in my Net Impact lunch box, my mind wandered to the farm it came from and how this juicy treat related to a growing and global food crisis. It is expected that such a thought cross my mind especially since the details from the session I attended at the Net Impact National Conference hours earlier entitled "The Global Food Crisis: Business-Led Solutions to Alleviate Food Insecurity and Malnutrition" were still fresh.

Back to my thoughts of the apple farm. Much unlike the farms described in the session, which the world's poorest communities depend on, the apple farm probably uses technology developed over the past fifty years, can afford to use fertilizer and may even receive a subsidy from the US government. Furthermore, the apple farmer clearly has access to a reliable transportation infrastructure which affords her access to markets where she can make well-informed decisions on price and value for the customer.  

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Last July CGAP issued a new report about the main building blocks for any bank that is thinking about offering mobile phone financial services to its customers. (Shame on me for doing this post so late).

Banking on Mobiles: Why, How, for Whom? is, not surprisingly, very good report. After all, these are the people currently in the forefront of research efforts to understand and develop mobile phone banking and the place to go for anyone interested in this market. An additional point in their favor is that their reports are “waffle-free” and go straight to the point.

The report takes the perspective of a small/middle sized bank or microfinance institution in a developing country that wants to start offering mobile phone financial services, but does not really know how or where to start.

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The final day of last week's SoCap event was, for me, the best of the 3 days.  It was the chance to meet with lots of other participants, hear their ideas, and get actively involved in the things that I really cared about and wanted to discuss.  The "strategically unstructured" format of the day was SoCap’s way to take the informal discussions of the hallways and expand on them.  It was also the place to find the people that were in the sessions on Monday and Tuesday who you never found the time to have a chat with.

I attended only 2 sessions that day, the first on franchising as a tool for scale and the second on China and development, but I actually spent the entire day on-site chatting with new found friends, old-found friends, and a whole host of compelling ideas.  The franchising talk brought together seasoned members of the community from organizations like VisionSpring one of the early adopters of microfranchising, and those that were just starting to look at franchising such as Rubicon. 

I also learned of a really interesting mobile medical initiative in the US that was considering franchising ambulance services in the Midwest and had the chance to share some of the key findings from my own microfranchising research.

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Guest blogger Roxanne Miller is a 2nd-year MBA student at the Haas School of Business at UC Berkeley, focusing her studies on the intersection of international development, social enterprise and technology.  She spent this past summer interning at Unitus and working on an ICTD health care project in Uganda.  Prior to Haas, Roxanne was a Kiva Fellow in Tanzania and spent several years in marketing roles at Yahoo! and American Express.  She is a graduate of the University of Pennsylvania with a degree in Communications.

By Roxanne Miller

Kevin Jones recently said that "markets convene in conversations" and part of the impetus for SoCap08 was to foster a space for dialogue.  By the time Tuesday afternoon rolled around, the conversations were flowing.  As I tried to hurry between the afternoon sessions I had to squeeze past folks chatting in hallways, stairwells, restroom lines, even doorways with new acquaintances or old friends. 

I navigated my way into one of the few seats remaining in the "New African Capital" room and settled back to learn more about the equity funding models these African investors were pursuing to support local entrepreneurs. 

The panelist's background and approaches were quite varied and really highlighted a subset of the work being done.  Jo-Ann Pohl from Teba Bank, a South African community-owned bank that started by providing financial services to mineworkers, pitched in to moderate the session when Kojo Paris fell ill.  Pohl said that trying to meet the needs of Teba Bank's customers, mostly migrant laborers, has been the driving force behind the banks innovation in areas like cross-border transfers and reducing loan interest rates based on saving track records.   

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Guest blogger Charlene Chen is a 2nd-year MBA at the Haas School of Business at UC Berkeley, with a focus on international development through ICT and social entrepreneurship. She spent this past summer working in SME development at an internet services provider in Ghana. Prior to Haas, she worked at Deloitte Consulting and earned a B.S. in Computer Science and Psychology from Duke University.

By Charlene Chen

These may seem like depressing times, judging by the current economic crisis. Yet there were nothing but smiles at the Social Capital Markets conference, brought together dozens of organizations and hundreds of individuals reaffirming their commitment to investing in or sustaining social enterprises. I was particularly inspired by the variety of creative approaches to address capital market failures in developing countries.

On Tuesday afternoon, I attended the panel session entitled "Innovative Ways to Invest from Brazil to Kenya", moderated by John Duffy of Goodwell Investments, a social entrepreneur with experience ranging from the Peace Corps to Wall Street. The three panelists discussed different challenges in bringing innovative investment vehicles for social ventures in emerging markets.

The "Missing Middle": Small and medium-sized enterprises in west Africa

Linda Jenkinson is Managing Director and Founder of WOW Investments, which is a nonprofit social investment fund focused on women-based SME development in West Africa.

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With three weeks to go before the U.S. presidential election, it’s no surprise that there’s a lot of interest in democracy here at the Social Capital Markets conference.  Fortunately, the conversation has (thus far) steered clear of moose burgers and the Weather Underground.  After all, the democracy we’re discussing here at SoCap08 is actually related to democratic capital, not democratic governance.  

What is democratic capital, and why should the base of the pyramid community care?  Well, on a very basic level, the democratic capital panel is all about giving investors and borrowers the power to connect directly, without the intermediation of too many financial institutions.  This person-to-person connection takes the shape of four panelists and their social enterprises:

• Robert Chatwani, WorldofGood
• Mads Kjaer, MyC4
• Premal Shah, Kiva
• Tracey Pettingill-Turner, MicroPlace

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Every few weeks, members of the Silicon Valley Microfinance Network (SVMN) converge in the San Francisco Bay Area to learn about microfinance, microcredit, and related finance and economic topics. The last session, Fueling the Growth of Small and Medium Enterprises (SMES), was led and hosted by Google.org members Linda Segre and Swati Mylavarapu, who outlined why SMEs are so important and their plans on stimulating SME growth in developing economies.

In most economies, small and medium enterprises, generally employing between 10 and 250 workers, are the drivers of new job creation, innovation, and overall economic growth.  The World Bank estimates that SMEs contribute an average 51.5 percent of GDP in high income countries-but only 15.6 percent in low income countries. By contrast, the "informal" micro-enterprise sector accounts for an average 47.2 percent of GDP in low income countries, but just 13 percent in high income countries. 

Low-income countries typically have very large numbers of informal micro-enterprises and may also have a handful of larger firms-possibly ventures created by foreign investment, or family-controlled conglomerates built up over generations.

But they typically suffer from a "missing middle," with few SMEs in between, held back by perverse regulatory climates and poor access to inputs.

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"Open sourcing social solutions". I loved it since I first heard of it about 18 months ago while I was booking tickets, packing bags and spending long hours understanding "who was who" in this fascinating and rapidly changing base of the pyramid space.

I learned about it from Changemakers (most likely via NextBillion.net), an initiative of Ashoka whose idea competitions open the door for a very interesting dynamic of feedback and model refining between different stakeholders involved in this space.

After hosting competitions in areas as diverse as healthcare, water and tourism, Changemakers.net has naturally become an obliged stop for anyone interested in identifying, learning about and getting in contact with innovative and entrepreneurial solutions to social challenges. Previous competitions have been highlighted in NextBillion.net in the past, and this year's "Banking on Social Change - Seeking Financial Solutions for All" competition is no exception. Following is Changemakers and Citi's introduction to the competition.

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Want to lull me to sleep?  First, start your event at 6:30 and go until 8:00 in the evening; I get to work early, so I'm often exhausted by the end of the day.  Second, draw the blinds to keep out natural light; exacerbate the soporific effect by dimming the lights (so I can see the PowerPoint slides, sure).  Third, serve food – especially heavy, rich food like meat and cheese – before the presentation starts.  Between these three, you're guaranteed to have me – and at least 75 percent of your audience – asleep by the 20 minute mark.

Or not.  To my surprise, there's an antidote to this sedative trio – and his name is Nachiket Mor.  Last night, along with 150 or so others, I sat in rapt attention while Nachiket described his latest thinking on banking at the base of the pyramid in a talk entitled The Next Big Step: Revolutionizing Financial Services Distribution in Rural India.  Yes, the event started at 6:30, and they served delicious (but heavy) hors d'oeuvres.  And since the auditorium was bright in the late-day sun, the organizers drew the blinds and dimmed the lights.  But for the duration of Nachiket's presentation and through the Q&A, the entire audience sat and stood at attention.  It was that good.

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