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What do cows and cell phones have in common? Until the advent of microfinance, the answer was not much. Over the past twenty or so years, small loans have enabled thousands of low-income clients to purchase a cow – a story we've all heard before. The client sells milk, making money to re-pay the loan and maintain a steady income. In recent years, microfinance clients in Bangladesh, Rwanda, Uganda, and the Philippines have used their loans to purchase cell phones and service through a project called Grameen (now Village) Phone. These entrepreneurs then re-sell minutes on their phone at a slight mark-up to fellow villagers – just like their predecessors sold (and still sell) milk to generate money.

Grameen/Village Phone – combining innovative technology with microfinance and a good business model – has always been one of my favorite base of the pyramid success stories (WRI published an excellent business case study on GrameenPhone way back in 2001). Despite the project's strength, it hasn't grown much beyond its roots in four countries. Even when you have a good, proven idea, it's hard to expand quickly without local offices and staff in new markets. For Village Phone to work, you need to be able to evaluate clients, manage loans, interface with local phone companies, and keep the phones charged and running. The Grameen Foundation has the staff and expertise to do all this in their four operational countries – but why limit such a good model because of a lack of staff?

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This article is re-produced with the kind permission of Russell Southwood, Chief Executive of Balancing Act. Browse this week's edition of their excellent newsletter, or consider subscribing.

The holy grail of cheap computers for emerging markets is producing a sub-$100 laptop for education purposes. One Lap Top Per Child, the initiative launched by MIT's tech showman Nicholas Negroponte took a step nearer last week with its first test production run. But it has a competitor in the shape of a Canadian company producing a similar if
more expensive laptop product called Ink. The road to the holy grail is already littered with the failure of the Brazilian Volks and the Indian Simputer. The Volks never made it into production and the Simputer is under-specified and over-priced. It has had low sales in India and its African distributor closed up shop some while ago. Russell Southwood looks to see whether the latest contenders will overcome the scale of challenges involved in succeeding with low-price computing.

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The Financial Times reported Friday that Citigroup, the world's largest financial firm, will roll out a network of biometric ATMs to better serve low-income Indian neighborhoods. The machines will use thumbprint recognition technology in place of personal identification numbers, and color-coded instructions will be delivered by voiceover to serve the needs of illiterate customers.

The smart card stores the customer's relevant information including name, account number, account balance, five most recent transactions, and digital fingerprint. When customers approach a PRODEM FFP Smart ATM, they receive audio instructions...[they are] instructed to insert their smart card and place their finger on the fingerprint recognition device...The system reads the smart card and matches each customer's fingerprint with the image stored on the card to authorize transactions. The touch screen display is color-coded to ensure that the customer can follow the verbal instructions (blue button for withdrawals, yellow for account inquiries).

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Remember Innovations?  First issued this past March, Innovations: Technology | Governance | Globalization is a relatively new journal from MIT Press about people using technology and new modes of organization to address global challenges.  I wrote about it on NextBillion back then, after Phil Auerswald graciously sent over a pre-publication copy.  At the time, I called it "a must-read for anyone interested in creative, local solutions to the world's problems", and suggested that "its content bridges the gap between 'whatever works' BOP practice and rigorous academic analysis."  More than six months later, I stand by my assessment, in part due to their upcoming issue's focus: microfinance and technology.

Those of us interested in reading more about microfinance and technology will have to wait until next March, but I’m sure there are plenty of NextBillion readers who are practitioners in this emerging field.  If so, consider submitting a paper.  Nick Sullivan, whose forthcoming book You Can Hear Me Now focuses on the impact of cell phone companies in development, is also publisher of Innovations.  He sent over some general criteria for submission:

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I've been busy lately, partly because I'm trying track a slew of recent BOP news stories appearing in the mainstream media.  (For readers who subscribe to the main NextBillion RSS feed, you may want to consider subscribing to the News Feed for daily updates).  Four stories set themselves apart from the group for the depth and breadth of coverage:

Acumen's New Model for Third-World Aid: BusinessWeek innovation editor Jessi Hempel profiles the New York-based investment fund and its founder, Jacqueline Novogratz.  There’s a special focus on Drishtee, an Acumen portfolio investment that's launching entrepreneur-owned and -run kiosks in rural India.  

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Guest blogger Darrell Owen is an international consultant specializing in Information Communication Technologies (ICTs) in developing countries. Prior to forming his own company, he worked for the U.S. Agency for International Development. This week, he will present some of his on-the-ground experiences at the Silicon Valley Challenge Summit.

Over this last year, a number of my colleagues and I have been engaged in on-the-ground pilots proving that the combination of wireless networks (WiFi, WiMax, new generation IP-based satellite services) and Voice over Internet Protocol (VOIP) can cost-effectively reach low-income, rural and even remote locations.  This brings the potential of the Internet telecommunications revolution to the billions who have been left behind.  Details of this work can be found in a collection of my working papers (pdf).

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The AirJaldi Summit mentioned here last week brought together a lot of people working with low-cost wireless connectivity in Asia. Discussions on the list serve created to follow up on the Summit indicate activity in parts of Latin America as well. Today the New York Times reports on similar networks in Africa in an article entitled "Wireless Technology to Bind an African Village". Nonprofit Inveneo is engineering and deploying solar-powered WiFi networks for NGOs in 18 projects scattered through Uganda and a number of other countries in the region.

These projects show technical feasibility and the social impact of rural connectivity. They also show that rural connectivity can be achieved at very low cost. But they beg the question of scale. And that raises the question—if it’s so low cost to provide rural coverage, and rural communities are so eager for service, why don’t mobile phone companies use WiFi and VOIP to extend their networks inexpensively into rural areas? In Africa, many mobile companies are already using satellite connections as back-haul for their cellular base stations—so it is not much of a stretch to use them to connect up rural WiFi networks, in areas that are too sparsely populated or too remote to justify putting in high cost cellular equipment.

Regulators have pushed for more universal service for years. Now NGOs are showing how to use new technology to accomplish that goal. Isn’t it time for the carriers to step up?

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Of the MNCs with which we have worked, none goes to greater lengths than Vodafone to create opportunities to listen to its "stakeholders" - and the company counts us as one.  I attended such an occasion in New York Wednesday evening, linked to the publication of a new Vodafone report, "Economic Empowerment Through Mobile," (pdf) to which we contributed a piece.   Cynics will say that these gestures are mere flattery, or worse, bribery, designed to disarm potential critics, and no doubt many companies do just that, but in the case of Vodafone, I don't buy it.  Vodafone understands what it takes to generate innovative ideas - and it's not gathering only like-minded folks to reinforce everything they already know.  In my experience, the company actually listens hard to what outsiders say, and they try to respond.  As Vodafone is a big company, and there are lots of competing interests and priorities - and the demands of the market (Vodafone has had a few bad years, and it has slowed them down) - but, in the main they are inclined to be responsive, and that puts them in a class of company with few peers.  And by the way, read the report, it's good, if we must say so ourselves.

Continuing the social butterfly circuit, I returned to DC to attend yet another soiree related to the release of the full study of Wizzit, the South African BOP-focused cell service on which we have previously reported, that is contained in the aforementioned Vodafone publication.  This study, "Mobile Phone Banking and Low-Income Customers: Evidence From South Africa", (pdf) was done in cooperation with CGAP and UN Foundation.  CGAP's Elizabeth Littlefield made it abundantly clear why mobile phones are the platform of the future for all manner of BOP-related activities, including financial services.  It's just in the numbers - try 20 million total existing outlets worldwide for financial services as traditionally defined, and 2 billion mobile phones today, with the number rising by the hundreds of thousands a day, mostly from growth in emerging economies.  

Paul Braund is Co-Founder of RIOS Institute (Research and Innovation for Organizations and Societies Institute) in Berkeley and Silicon Valley, California. He has worked as an architect and award-winning industrial designer and has developed numerous patents. He has spent 20 years working in technology research and development in Silicon Valley.

He has spent the past 5 years working on social development and finding appropriate technology transfers for developing countries, particularly in communications technology. He has supported and represented the UN-World Bank at conferences and various fact finding trips and workshops in developing countries, while maintaining independent work with numerous NGOs, small community groups and academic institutions who are helping to bring more human-centered innovation to development.

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Acumen Fund's Eric Cantor reports on the recent AirJaldi Summit and points to the revolutionary potential of wireless mesh networks to empower communities. Our own work on a new model for rural connectivity points in the same direction. WiFi mesh can be deployed easily, without sophisticated engineers. Some of the newest equipment has very low power needs, so can be readily and affordably paired with solar panels.  Advanced mesh also has much expanded range, throughput, and interference management—so it can manage 10 hops with no loss of capacity, cover areas a mile square or greater, provide 15 Mbps bandwidth or more. By empowering a range of user devices—phones and PDAs as well as computers—mesh is more broadly accessible, even to those for whom literacy is a barrier.

Most importantly, WiFi mesh offers the potential of radically lower costs, especially for rural areas: in a pilot we are developing for a province in rural Vietnam, we project a cost of access (and in-network VOIP telephony) of less than $1 per household per year. Whether as stand-alone entrepreneurial efforts, community-owned systems, or low-cost extensions to mobile networks, we believe that mesh WiFi networks are the means to bring low income rural areas into the global conversation and the global economy.