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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:

1. 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.

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By Jeremy M. Goldberg and Andrew Mack
Jeremy M. Goldberg is the Director of Communications for AMGlobal Consulting; Andrew Mack is a former World Bank official and Principal of AMGlobal Consulting. They blog at Andy's Global View.

Rwanda?!

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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.

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Editor's note: NextBillion staff writer Courtland Walker recently returned from a 10-day trip to Rwanda. Over the next week, he will post reflections on his trip as part of the Rwanda Journal series. This is the third post in the series; read the first two here and here.

In high-income countries, the SME sector has been estimated to contribute more than 50% to gross GDP, not to mention being the engine of new job creation and a source of as much as half of the innovation in these economies. In low-income countries, however, the contribution of the SME sector to gross GDP has been estimated at 16% and, in most African countries the SME sector has been estimated at less than 10%.

I read the above quote, over a year ago, in "Venture Capital for Development," a paper by Alan Patricof and Julie E. Sunderland.

While the growth of the SME sector is crucial to the future of developing country economies, there are tremendous difficulties inherent in fully private sector investments in smaller firms. While there are a handful of groups - namely SEAF, GroFin, and Aureos - that are operating fully private sector SME-targeted funds, many, including Patricof and Sunderland have called for the participation of the development institutions to help mitigate the risk faced by the private sector.

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It's heartening to come across real stories of people, who are by no means rich or well educated, entering and supporting the market economy. In India's financial capital of Mumbai, Dabbawalas, whose job is to carry and deliver freshly made food from home in lunch boxes to office workers, are making a mark for themselves.

Every day, 5000 semi-literate Dabbawalas transport 200,000-boxes in a 3-hour period, through a 25 km of public transportation involving multiple transfer points. Forbes magazine, in 1998, gave this service the highest quality rating of Six Sigma. They do this without any IT support. Their business model is a case study at the Harvard Business School. Last December, students at Stanford GSB met them as part of their India Study trip.

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We are happy to announce that Nitin Rao has joined the NextBillion.net team as a blogger and writer. Nitin was born and raised in Bangalore, India. He is studying for a B. Tech. at the National Institute of Technology - Karnataka at Surathkal, which is considered to be one of the best engineering colleges in India. He is majoring in Information Technology. This course emphasizes the managerial facets of software development - creating not just engineers who are part-time managers, but manager-engineers.

A deep interest in economics and business has been important to Nitin’s studies. Recent concepts like the "Fortune at the Bottom of the Pyramid" have awakened in him a major interest in following stories of economic progress throughout South Asia. Nitin's interest in entrepreneurship has led him, for the last two years, to attend The Entrepreneurship Summit organized at the Indian Institute of Technology, Mumbai.

He is an employee intern at Sun Microsystems as part of their Campus Ambassador initiative. This involves driving the adoption of Open Source technologies in the developer community. He is currently enjoying the leadership responsibilities of being the elected representative for his class.

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The BOP universe continues to stay busy, and the multilaterals seem to be leading the pack in certain ways.

First, PSDBlog points to a CGAP press release; the Gates Foundation is granting $24 million over 4 years to scale up CGAP's mobile banking work.  From the release:

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It's been a busy week here at NextBillion – we're finishing the manuscript on a soon-to-be-published book detailing market size and business strategy at the base of the pyramid. Meanwhile, we've had to keep track of all the comings and goings at the World Economic Forum, in and around Washington, and all over the blogosphere. Here's a quick roundup, for your weekend reading and reviewing pleasure. Of course, we've missed quite a bit – so please be liberal in your use of the comment field (below) and the suggest a story function to keep us updated on what you're seeing, hearing, and reading.

Last night in downtown Washington saw the second monthly meeting of the DC International Private Enterprise Group. Oxfam was kind enough to host the 25 or so folks who braved snow showers in order to join the discussion. IPEG members heard from Agora's Ben Powell and New Ventures' Sara Standish (also a NextBillion contributor). Ben and Sara discussed their work in the field of venture capital and its connection to development; the discussion then branched off into microfinance, commercial finance, small enterprise development, and more. After an hour, we retreated to the nearby Post Pub for more conversations over beers and food. These IPEG meetings will be a regular occurrence; if interested, please contact us for more information.

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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

If you can’t make the talk, CGD has some other good resources on microfinance. Research fellow David Roodman and Uzma Qureshi have a publication that analyzes microfinance institutions as businesses, asking how some succeed in covering costs, earning returns, attracting capital, and scaling up. You can also check out the resources for their previous event on microfinance, Mobilizing Private Sector Capital for Microfinance Development, featuring Jonathan Lewis, CEO of MicroCredit Enterprises.

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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:

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