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2005 was designated as the ’Year of Microcredit’ by the United Nations, a title meant to raise awareness of the need to build inclusive financial sectors and strengthen the powerful, but often untapped, entrepreneurial spirit existing in communities around the world. Microfinance is generally accepted as one of the most successful poverty alleviation strategies tried in recent decades, a claim bolstered by a recent World Bank report that shows a strong correlation between lack of financial access and low incomes.

Now that 2005 is ending, it’s worth asking what interesting outcomes were produced over the past year. Is the microfinance sector rapidly scaling? How interested are larger commercial banks in providing such services? How much money is being invested? To answer these questions, I searched through more than 100 microfinance stories that appeared in our Newsroom over the past year. Although not comprehensive in their scope, taken together these stories strongly indicate that the ‘Year of Microcredit’ may well be remembered as the tipping point when providing financial services to the poor went from a charitable activity to a core investment strategy for both the financial and philanthropic sectors.

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This is not BOP so much as CSR (corporate social responsibility)-related, but the philosophy for the latter certainly affects the former.  Both involve the guiding ethic for how much to profit and who should benefit.

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We've updated the Harvard Global Poverty Conference page on Nextbillion.net with almost two dozen PowerPoint presentations. The 3-day conference featured case studies on and empirical research of successful business models, the role of civil society and government, and the ethical and operational challenges faced by businesses who seek out poor customers.

We encourage you to share your thoughts on the themes and questions brought up by the many provocative panelists, keynote speakers and participants. To post a comment, visit the conference page.

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If necessity is the mother of all invention, then people living at the base of the pyramid should have plenty of marketable ideas. Anil Gupta, executive chairperson of the National Innovation Foundation (NIF) and the founder of the Honey Bee Network thinks so. For 16 years, he's been systematically scouting for and documenting such innovations in rural India.

I first learned about the Honey Bee Network years ago while working for the Digital Dividend program, and recently ran across an article that reintroduced me to the organization. While reading it, I was impressed by how forward-looking its strategy is in terms of unlocking the market potential of poor rural areas.

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The Edelman communications and public relations firm recently released "Business and International Development," a survey of what businesses are expected to contribute to international development and what their responsibilities are. The participants surveyed were anonymous, but represented leaders from the business, NGO, and media community. (25 Fortune 500 executives, 10 NGO executives, 6 journalists, 4 investment analysts).

The survey revealed the general confusion about how much and in what domains business should engage in international development(ID). I won't summarize the findings here, I'll just mention the ones that surprised me or stimulate further questions. Your thoughts and comments (from the most basic to advanced) are welcome-don't be shy!

1) All groups seemed to recognize that businesses can and should engage in activities that benefit local communities, and can do so profitably. That's an encouraging and huge change in perception. Some of the benefits listed:
-creation of jobs and enterprises "Establishing facilities and creating jobs are , in my opinion the best thing a company can do." (Financial services company)
-infrastructure-related improvements which increase access to/reduce costs of technology, nutrition, water and sanitation
-microfinancial services
-managerial expertise conferred to local NGOs, other groups, government

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Along with colleague Stuart Hart, C.K Prahalad is widely thought of as a godfather of the base of the pyramid hypothesis. We've noted before that both Hart and Prahalad are garnering much-deserved recognition for their work in this field (full disclosure: C.K. Prahalad is a member of WRI's Board of Directors.)

Not surprisingly, the accolades continue. BusinessWeek has put out a "Best of 2005" feature, including a "Best Leaders" slideshow featuring - among others - Prahalad's profile:

Getting perspective on how we make decisions is useful, but to delve more deeply into the art and science of leadership, Big Business turns to strategic thinker C.K. Prahalad. Prahalad, with a partner, coined the term “core competence” in 1989. His new mission, laid out in his recent book, The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits, is to get multinational companies to realize that the world’s 5 billion poor represent a huge growth market for the right business model—and make up a huge pool of future innovators.

(Via loyal BusinessWeek reader and NextBillion fan David Katz)

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WRI's latest What Works case study, Thamel.com: Diaspora-enabled Development, is now available through the NextBillion.net Case Studies page. The report documents a Nepal-based marketing and development company that has tapped the resources of the diaspora to create new opportunities for Nepalese workers, generate cultural value, and help move local businesses in a new direction.

I recently spoke with Bal Joshi, founder of Thamel.com, and Bob Granger, his partner in Thamel International. They shared their thoughts about the company, where it's heading, and the value it adds to Nepal and other countries looking to tap the resources of the diaspora to enable local economic growth.

1. In your opinion, what is the most innovative aspect of the Thamel.com model?

Bal: My father used to tell me in business, “tel k hernu, tel ko dhara hernu!” Direct translation: “identify the source of the oil, not just the end product!” In plain English, “follow the money.”

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Over the past few weeks, we have been working with the NextBillion.net team to upgrade some of this website’s features to make it easier for you to access the content you need. The most recent addition, and probably the most obvious, is the improved RSS integration with NextBillion.net.

RSS lets you subscribe to have all new content posted to a particular website sent to a newsreader where you can read it. What this means is that you can subscribe to all your favorite news sites and blogs and check them all just by going to one place, your newsreader.

RSS had been allowing you to receive news and posts from NextBillion.net without ever coming to the site. Now it’s even easier for you to sign up to receive RSS updates and keep them organized. If you use My Yahoo!, Bloglines, or NewsGator as your newsreader, all it takes is one click to subscribe – look for the buttons on each category overview page.

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I was reminded again this morning by PSD Blog of the Global Social Benefit Incubator, "an intensive two-week residential program that enables successful technology innovators to scale their endeavors and achieve sustainability." The two-week in-residence program (July 29 - August 12, 2006) carries a value of US $20,000, claims a lofty goal: to enhance social entrepreneurs’ ability to scale their ventures. Past participants have gone on to win international recognition and receive venture funding. The application process (due January 15, 2006) is understandably difficult, but worthwhile. Good luck!

What do your local Chinese restaurant’s delivery service and MIT’s advanced cryptography department have in common? The answer: Peppercoin, an innovative payment platform allowing consumers to use credit or debit cards for small transactions -- thus eliminating merchants’ need for those annoying $10 minimums on credit card purchases (e.g. last night’s sesame chicken, when I had to order egg rolls to get over the $10 hump).

Peppercoin has been around since 2001, the result of two MIT professors’ efforts to commercialize their revolutionary payment protocols (Verisign and Zero Knowledge Proofs). As it stands, high processing and customer service costs discourage merchants - both online and physical - from accepting issuers’ credit and debit cards for small purchases. Peppercoin aggregates small transactions to increase efficiency and lower merchants' cost. Furthermore, the service lies wholly on the merchant side, making it invisible to consumers – so I can buy my sesame chicken with a credit card, no up-sell egg rolls necessary.

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