Lauren Abendschein's blog

Leaders in the Field Weigh in on the Future of Microfinance (II)

Lauren Abendschein — Thu, 01 Feb 2007 14:57:27 -0500

This is the second post on CGD’s event – check out yesterday’s post to read more.

At the Eyes Beyond the Prize event yesterday several major themes emerged: how to keep the spirit of microfinance present as it grows and incorporates external forces like governments, investors, and development agencies; how to promote efficiency, improve distribution channels, offer more diverse services, and increase transparency and regulation; which business models should be built upon and which are outdated; how to promote growth rather than just improving quality of life.

(This post continues past the break; click "Read More" to continue)

Leaders in the Field Weigh in on the Future of Microfinance (I)

Lauren Abendschein — Wed, 31 Jan 2007 15:04:37 -0500

The Center for Global Development’s (CGD) event this morning, Eyes beyond the Prize: Envisioning the Next Thirty Years of Microfinance, offered diverse and fascinating perspectives on the future of microfinance. This post will be done in installments to capture the wide breadth of ideas broached at the event.

Elizabeth Littlefield - CEO, Consultative Group to Assist the Poor (CGAP) – started things off by describing four powerful trends that the microfinance industry will have to face in the next thirty years:

Demographics. In the next decade over 2.5 billion young people in developing countries will be looking for jobs. They will be mobile, urban, and informed. This has major implications for community lending models, remittances, and development of SMEs.
Wireless technology. As NextBillion readers know well, wireless tech has seen enormous growth at the bottom of the pyramid. Cell phones and other technology have the potential to reduce transaction costs and reach remote clients. At the same time it should not distract us from continuing to engage with groups that have not yet been reached by wireless technology.

(This post continues past the break; click "Read More" to continue)

Making Low Cost PCs Work for SMEs

Lauren Abendschein — Tue, 30 Jan 2007 13:52:04 -0500

Mobile phone companies have found innovative ways to give consumers at the bottom of the pyramid the services they need in a cheap, barebones way that takes few resources or knowledge to use. Despite efforts to tailor designs to the BOP in a similar way, the makers of cheap PCs are far from penetrating the market with the depth of cell phone technology. Novatium has recently rolled out a server-based PC that offers an answer somewhere in-between the two – the question is: how to reach the BOP?

Nova netPC is a network computer, designed on a completely new hardware platform without using any of the typical PC or thin client components. Check out “Novatium unveils pilot of low-cost PC” in the newsroom for more info.

The technology addresses a number of important issues for SMEs in emerging markets:

(This post continues past the break; click "Read More" to continue)

Event: Microfinance in the Next Thirty Years

Lauren Abendschein — Fri, 26 Jan 2007 13:08:23 -0500

The Center for Global Development (CGD) is hosting an event next Wednesday entitled Eyes beyond the Prize: Envisioning the Next Thirty Years of Microfinance. The talk will look at critical issues for microfinance institutions including: What changes will technology bring? Which new products ought to be pursued, and for whom? How great is the threat of backlash against high interest rates?

The discussion promises to be quite interesting, featuring speakers:

Alex Counts - Founder, President, and CEO, Grameen Foundation
Elizabeth Littlefield - CEO, Consultative Group to Assist the Poor
Elisabeth Rhyne - Senior Vice President, ACCION International
Damian von Stauffenberg - Founder and CEO, MicroRate
Moderated by David Roodman - Research Fellow, Center for Global Development

(This post continues past the break; click "Read More" to continue)

Fewer Celebrities, More BOP at Davos

Lauren Abendschein — Thu, 25 Jan 2007 13:26:31 -0500

The news from the start of the World Economic Forum this year is full of stories from climate change to hedge funds to a dearth of celebrities- interspersed with the occasional obligatory discussion of poverty. Yet hints that the world’s economic and political powerhouses are starting to take the BOP markets seriously have crept in.

Of particular interest is an interview with Hector Ruiz, CEO of AMD, posted on the World Economic Forum website. Ruiz has excellent insights on how the alignment of social and business goals produce value. When asked about prospects for global growth, he pointed out the potential of reaching underserved markets:

First, we must understand that the way to unleash growth in high-growth markets is to focus on precisely how people and organizations in those markets think about and use technology…There are places in Africa, for example, where the power of a computer is limited by the viability of the local electrical grid. So we need to understand these differences and develop new devices and new business models tailored to a variety of different needs, tastes, economic conditions and cultures.

(This post continues past the break; click "Read More" to continue)

Upcoming Conference: Business with Four Billion: Creating Mutual Value at the Base of the Pyramid

Lauren Abendschein — Wed, 24 Jan 2007 13:41:41 -0500

The William Davidson Institute at the University of Michigan and the Center for Sustainable Global Enterprise at Cornell University will be hosting a conference entitled “Business with Four Billion: Creating Mutual Value at the Base of the Pyramid.” The conference brings together BOP business managers, policy makers, social entrepreneurs, academics, and non-profit leaders. The main conference topics are: understanding the landscape of the base of the pyramid; evaluating the development implications of enterprise-based approaches to poverty alleviation; and exploring the capabilities organizations need to develop successful BOP-oriented ventures.

The conference has a solid lineup of speakers, including some big names like Amartya Sen on the invited list (cross your fingers). Some of those near to Nextbillion’s heart include Al Hammond, Stuart Hart, and C.K. Prahalad. If the recent publications and research by these figures is any indication, conference attendees can expect to hear topics such as “Exploring the best leverage points for employing enterprise-based approaches and social entrepreneurship at the BoP” addressed with solid empirical analysis and excellent insights.

The bad news is that it won’t be held until September 2007 (although you can register now). If you’re feeling impatient in the mean time you can always read this or this.

Rockefeller and InnoCentive Partner to Bring Scientists to the BOP

Lauren Abendschein — Thu, 18 Jan 2007 14:08:06 -0500

The Rockefeller Foundation is partnering with InnoCentive to offer an innovative way of solving the science and technology challenges faced by the world’s poorest citizens.

InnoCentive is a privately-held company that provides a web-based service to Fortune 500 companies to tap into a global community of scientists for solving R&D problems. From the “seeker,” InnoCentive collects an annual service fee for the use of its platform and also for posted questions. In addition, InnoCentive receives a commission on awards made by the “seeker” to the “problem solver.” So, for a relatively modest fee and comparatively minor effort (to formulate the R&D question and vet solutions), “seekers” significantly increase their research capacity.

(This post continues past the break; click "Read More" to continue)

A Condominium for Squatters - Land Reform in Sri Lanka

Lauren Abendschein — Wed, 17 Jan 2007 15:09:19 -0500

Ashoka Fellow Darin Gunesekera has succeeded in securing deeds to a brand new condominium to more than 670 families – 4,000 people - in Sri Lanka who formerly lived in a slum. Property and regulatory system reform has gained momentum in recent years, and this model suggests significant potential for adoption by governments and landowners worldwide. Yet the challenges of replicating this successfully completed project speak to the immense difficulty of untangling the complex legal and social barriers to property regulations in the developing world.

In Colombo, Sri Lanka, the high cost of land forces low-income residents to squat illegally on public or private land. The squatter has physical occupancy of the land, but his opportunity cost is high because he cannot obtain services or invest in his house as long as he is there illegally; the landowner has legal title to the land but his opportunity cost is also high because he cannot realize the value of the land as long as the squatters are there.

The crux of Gunesekera’s Stock Market Housing Exchange is a deal in which squatter and landowner trade in their main items of value - physical occupancy and title - in order to unlock these opportunity costs. The land is sold and former squatters receive the rights to condominiums in a new building financed by the proceeds of the sale. The landowner receives the difference between the sale price of the land and the cost of the new construction. Former squatters choose the new building's design: bidding developers submit proposals and the winner is selected by vote.

(This post continues past the break; click "Read More" to continue)

Good for the MNC, Good for the BOP - Global Alumina to Open Major Mining Operations in Guinea

Lauren Abendschein — Tue, 16 Jan 2007 12:31:20 -0500

The BBC reported yesterday that Global Alumina – a Canadian-listed corporation – has partnered with the US-sponsored African Development Foundation (ADF) to structure a triple bottom line approach to mining in Guinea. The small West African country is among the poorest in the world, but it is rich in bauxite. When refined into alumina - the aluminium ore from which aluminium is made - bauxite can fetch a price that would give its beneficiaries a significant economic boost. Global Alumina’s plan would channel the spillover effects of these profits toward tens of thousands of workers in Guinea.

(This post continues past the break; click "Read More" to continue)

BOP Activity Update: Fair Trade, Social Marketing, Microfinance

Lauren Abendschein — Fri, 12 Jan 2007 15:51:08 -0500

The four newest organizations in the activity database have remarkably different business models for engaging with the BOP, yet they all do so successfully. Equal Exchange has shaken up traditional distribution chains and created value by cutting out multiple intermediaries and sharing risk with coffee producers. Along similar lines, TransFair USA has benefited the BOP through proving the demand for fairly traded goods. On the other hand, Population Services International has shown that rigorous application of traditional for-profit business techniques can be extremely effective for achieving social goals. MicroCredit Enterprises has mobilized private sector investment to support microfinance institutions, further illustrating new applications for old models. Check out more detailed descriptions below and in the activity database.

MicroCredit Enterprises

MicroCredit Enterprises is committed to reducing poverty by mobilizing private investment capital to finance micro-businesses of poor families throughout the developing world. MicroCredit Enterprises gears its entrepreneurial results to produce jobs, sustain micro-businesses and improve human lives.

MicroCredit Enterprises leverages the collateral assets of individuals and institutions to borrow debt capital in the United States which is channeled through overseas, locally-run, non-governmental microfinance organizations in order to make thousands of tiny business loans to local entrepreneurs. MicroCredit Enterprises' reverses the cycle of poverty in economically distressed countries using the tools of the marketplace to provide self-help opportunities to millions of impoverished women and their families.

(This post continues past the break; click "Read More" to continue)