Newsroom

The FINANCIAL -- IFC, a member of the World Bank Group, is working with key stakeholders including government, regulatory bodies, private sector developers, and financiers to help make affordable housing available for low- and middle-income populations in India.  

"As part of this initiative, National Housing Bank and IFC are hosting a two-day conference that started today on Affordable Housing and Housing Finance for government officials, regulators, financiers, bankers, housing specialists, and developers.  Issues relating to pro-poor housing initiatives, alternate approaches to affordable housing, and the role of government in securitization of low-income housing are the key themes being discussed," IFC informed. 

Estimates indicate that more than 14 percent of South Asians have no home or live in inadequate housing such as urban slums and squatter settlements.  While the region's housing and housing finance markets are dynamic, they are limited in their outreach, catering primarily to upper-income groups.

Continue Reading This News Entry

MUMBAI - Mansukh Prajapati invented a first-of-a-kind refrigerator that is made out of terracotta, works without electricity, costs US$53 and is selling in the thousands. It's a sample of an innovation wave from rural and small-town India enriching the world with common-sense products. 

Anil Gupta, a professor at India's premier business school, the Indian Institute of Management, Ahmedabad, leads a pioneering tribe of technocrats working for no-frills change at the mass level, by harnessing knowledge wealth from economically weaker sections of society. 

"Being economically poor does not mean being knowledge-poor," Gupta told Asia Times Online. "But the poor who are at the

    

bottom of the economic pyramid are often considered as being at the bottom of the knowledge pyramid as well. Nothing could be further from the truth." 

To prove the truth that wisdom does not depend on university degrees, Gupta's 21-year-old Honey Bee Network has compiled an unprecedented database of 140,000 innovations created by farmers, villagers and small-town inventors. Many have no formal education or technical training. Teams of Honey Bee volunteers scout across India to hunt out local innovations, inventions and traditional knowledge practices. MUMBAI - Mansukh Prajapati invented a first-of-a-kind refrigerator that is made out of terracotta, works without electricity, costs US$53 and is selling in the thousands. It's a sample of an innovation wave from rural and small-town India enriching the world with common-sense products. 

Anil Gupta, a professor at India's premier business school, the Indian Institute of Management, Ahmedabad, leads a pioneering tribe of technocrats working for no-frills change at the mass level, by harnessing knowledge wealth from economically weaker sections of society. 

"Being economically poor does not mean being knowledge-poor," Gupta told Asia Times Online. "But the poor who are at the bottom of the economic pyramid are often considered as being at the bottom of the knowledge pyramid as well. Nothing could be further from the truth." 

To prove the truth that wisdom does not depend on university degrees, Gupta's 21-year-old Honey Bee Network has compiled an unprecedented database of 140,000 innovations created by farmers, villagers and small-town inventors. Many have no formal education or technical training. Teams of Honey Bee volunteers scout across India to hunt out local innovations, inventions and traditional knowledge practices.  

Continue Reading This News Entry

Global agribusiness companies are waking up to smallholder farmers. Long used to buying their produce through intermediaries, companies are now meeting farmers in the fields. Cadbury is committed to making its leading Dairy Milk brand Fairtrade by supporting small cocoa farmers in Ghana.

Unilever is offering 5,000 small farmers guaranteed markets, access to finance and technical assistance to grow black soybeans in Indonesia. Blue Skies - a business supplying processed tropical fruits to Europe - is training workers to meet international accreditation standards, increasing exports from Ghana.

This trend is recognised by some of the most senior authorities in the field. Oscar Chemerinski is director of global agribusiness at the International Finance Corporation (IFC), the investment arm of the World Bank. "There is an increased realisation by global agribusiness that their success or failure in the medium and long term is tied to the success of the small farmer, both financially and environmentally." He says: "The balance of power may be shifting in favour of the producer."

The challenges facing smallholder farmers, however, remain high. There are an estimated 1.5bn of them on the planet, but only a tiny proportion are involved in the global food supply chain. Many farmers complain about poor credit access, the burden of risk and international trading standards that they cannot understand or afford to implement. Increasingly, farmers are migrating to urban areas in pursuit of higher wages, letting their farms fall into disarray.

Continue Reading This News Entry

Soon, low-income families in Kenya will be able to add to their diet a pre-cooked porridge product that is rich in proteins and vitamins and supplies the nine essential amino acids required by the human body.

The porridge will not be delivered under the auspices of an aid agency or a government-funded programme.

Most families will buy it as part of a revenue-based approach to attacking malnutrition.

The market-based approach to malnutrition is something being explored by large companies such as Unilever, PepsiCo and Danone, as awareness grows of the need to address malnutrition - something that affects not only the poorest communities but also higher income populations - and the potential of doing so through for-profit products. However, some believe that there is a role for smaller entrepreneurs in coming up with hybrid models that can address what is often known as "hidden hunger".

It is for this reason that Acumen Fund - a New York-based social venture fund that provides financing to enterprises using market-based approaches to addressing poverty - has invested in Insta Products, a Kenya-based private company that supplies organisations such as the World Food Programme and Unicef with emergency relief food.

"The majority of their revenue is going to come from the big aid contracts," says Omer Imtiazuddin, health portfolio manager at Acumen Fund, which is working on these types of food products with the Geneva-based Global Alliance for Improved Nutrition, a non-profit group that promotes public-private partnerships to fight malnutrition. "But for Insta this could be a significant source of revenue."

The food product Insta is developing - known locally as uji - is particularly well suited to Kenyan tastes, as the porridge is eaten by 80 to 90 per cent of the local population across all age groups and income segments.
The fortified version is badly needed. Many women in Kenya suffer from low micronutrient intake during pregnancy, making it hard to gain the necessary weight for the development of their babies.

Continue Reading This News Entry

CHENNAI: Owning a dream home for many a poor Chennaiite could soon become a reality with a leading builder, Khivraj Estates, all set to promote a low-cost residential project at Thiruvottriyur, 10 km from the city centre, at Rs 4 lakh per 269-sq ft studio apartment. The project will come up in an area where a 650-sq ft apartment costs at least Rs 15 lakh at present. 
Khivraj MD Ajit Chordia says he embarked on the project drawing inspiration from Tata's Nano Homes and Patrimonio Hoy, a cooperative initiative of Cemex, world's leading building material supplier and the third largest cement manufacturer, started in Mexico in 1998 to provide shelter to 20 million homeless people in that country. In the 11 years of its existence, Patrimonio Hoy has spread to more than 100 centres in Colombia, Costa Rica, Nicaragua and Venezuela providing quality shelters to more than 2.08 lakh families. 

Chordia has acquired a 1.1 acre plot close to Thiruvottriyur railway station, where he plans to promote 100 such dwelling units in the first phase. The bigger apartments, each measuring 485 sq ft, would cost Rs 8.7 lakh though. "Based on its success, we propose to expand it to another four acres abutting the first phase," he told TOI.

He has engaged a team to bring down the cost of construction. "As of now, the overall cost works out to Rs 1,800 per sq ft. But we will bring it down to Rs 1,500 per sq ft at least for our own employees, who buy from us," he said. Hoping that at least 10% of them would opt for the project, Chordia said, "We know about their skills and many of them can do works like interior painting and electrical wiring. By adopting high levels of standardisation and using pre-fabricated material, the cost can be reduced further." 

Continue Reading This News Entry

NAIROBI, 19 January 2010 (IRIN) - Fridah Awour Agolla has sold vegetables in Nairobi's Mathare slum for 20 years. In better times, her stock sold out every day. But lately market forces have begun to bite even harder for the millions in Kenya who live in such squalid, neglected settlements. 

"My customers are buying less and less; now I find that goods like vegetables do not sell out, they go into the next day. People's ability to buy these goods has really dropped," Agolla, a mother of five, told IRIN. 

Agolla managed to put her children through primary school but never earned enough to pay for secondary education. 

"If I could afford to join a savings club [where members' regular contributions are distributed on a rotational basis], I'd buy a variety of food to improve my stock and I would probably be selling more, and perhaps some of my children could go back to school," she said. 
Pamela Anyango Odhiambo, 25, and a mother of five, says making ends meet gets harder and harder in Mathare. 

"I think food prices have more than doubled within a short time; for example, with 300 shillings [US$4] I could feed my family for days. Now it is not even enough for one day," said Odhiambo, nursing two-month-old twins. 

"Humanitarian crisis" 

Slum-dwellers are among the Kenyans worst hit by high food prices, yet they receive far less humanitarian attention than other demographic groups. The poorest urbanites spend up to two-thirds of their income on staple foods alone. 

"There is a humanitarian crisis in deprived informal settlements around the world, and one of the regions where this dynamic is playing out is in Kenya," said Choice Okoro, advocacy and outreach officer for the UN Office for the Coordination of Humanitarian Affairs-Kenya. 

"Urban poverty is set to be Kenya's defining crisis over the next decade if it is not urgently addressed," she added.

Continue Reading This News Entry

Before he got a mobile phone seven years ago, Vijay Navle, a small Mumbai fish trader, spent much of his time and scant income travelling on buses and trains.

Every day, he would make the five-hour round trip to visit fishermen living on the Arabian Sea on the north of the city to see if they had caught any of the prawns and large fish that he sells to exporters at south Mumbai's Sassoon Dock.

"I can immediately inform my customers that there's a big catch coming in fresh and we get a better price for it," says Mr Navle.Today, like a growing number of Indians, rich and poor, Mr Navle and the fishermen have mobile phones. Fishermen call him when they catch something and he arranges the pick-up and delivery to customers by phone.

For hundreds of millions of people across India such as Mr Navle, the rise of mobile telephony has led to changes in their lives as profound as the advent of the fixed-line home telephone was for rich consumers in the west.

Aside from television, the mobile handset is the first contact for many Indians with the world of sophisticated consumer electronics and their first connection with the organized modern economy. And with third-generation cellular services on the horizon, the next phase of this consumer revolution is poised to begin with the spread of the mobile internet to India's masses.

"The mobile phone is the first piece of technology that so many people in India will have owned, it's their first communications device and it's their first [mobile] entertainment device," says Kunal Bajaj, managing director with consultancy BDA in New Delhi.

Continue Reading This News Entry

After 62 years of Independence, the informal economy dominates 80% of India and half the below-poverty-line households still have no access to any kind of financial services. This will continue, unless radical steps are taken. A starting point is the bottom-of-the-pyramid people's need for a basic financial service, viz. mobile money transfer (MMT).

While almost all wage earners carry mobiles, not all wage earners will have a bank account. The mobile is the proverbial silver bullet. Firstly, its reach is ubiquitous and provides for a low-cost point of service (PoS) for all forms of inclusive banking-be it no-frills banking, savings, credit, insurance, pensions, NREGA, social payments and fund transfer.

Secondly, it reduces the distance between the depositor /beneficiary and service point. Thirdly, it costs less than a rupee to use a mobile as the medium rather than smartcard, ATM, internet, telephone or branch. Fourthly, it plugs the holes in social sector schemes. For instance, every NREGA beneficiary, with a job card linked to a no-frills account and a mobile number, will ensure that the entire Rs 39,000 crore earmarked for NREGS would reach the 40 million households in fair and full value.

Lastly, the repudiation risk on mobile is 1/10th of what it is on the Internet, and probably many times lesser for other instruments.

The financial system, along with a whole range of PCOs, pansaris, kiranawalas, fair price shops and business agents, together with telcos and solution providers will have to collaborate to build an end-to-end mobile financial service ecosystem for the unserved and excluded.

From such a collaboration, efficient payment facilitating systems will emerge to facilitate low-value, person-to-person (P2P) transactions across the country, bringing in, over a period, accountability. It will also place a larger chunk of transactions under the 'formal' electronic channel. A recent RBI relaxation allowing for sub-Rs 1,000 transactions without recourse to end-to-end encryption, is recognition that usage of basic mobile technology for inclusive activities is critical for mass and quick adoption.

The Corporation Bank, Tata Teleservices (TTSL) and TataTeleservices (Maharashtra) Ltd (TTML) together recently launched the first pan-India pure mobile-based financial inclusion service branded as Green. Initially, it caters to the growing need for money transfer between migrant workers living in cities and their families in Maharashtra, Karnataka and Kerala. This a bare-bone service where both the sender and the beneficiary opens no-frills account at PCOs and then are able to remit money over the mobile. 

Continue Reading This News Entry

Aavishkaar CEO Vineet Rai has been raising the 'social entrepreneurship' bar that will help create excellent, livelihood-generating rural enterprises, says Rajni Bakshi.

Vineet Rai enjoys putting a twist in the buzz about social entrepreneurship. Since his work is one of the reasons for the excitement about such businesses, Rai is now a frequent speaker at public events. "I can't wait for the 'social' to be dropped" is usually his opening line.

Rai's tightrope walk with India' first social venture capital fund, Aavishkaar, usually attracts cheer-leading from the proponents of 'inclusive growth'. But it simultaneously challenges the hollow claims about inclusion in business circles and the extreme skepticism of political activists that profit and social justice can ever be combined.

That's partly because Rai likes both the ends of the spectrum for different reasons -- but does not fully believe in either.

With a corpus of little over Rs 165 crore (Rs 1.65 billion), Aavishkaar's portfolio is a tiny drop in India's economy. So why is Rai's restlessness with the label of 'social' important? Because it helps to highlight challenges that urgently need to be addressed.

There is no shortage of, what one insider calls, 'faux-philosophers' who tell policymakers and general public alike that social equity can be got by seeking profit in more innovative enterprises, particularly those which tap the 'bottom of the pyramid'. Such trickle down oriented wealth-generation, this view holds, will eventually -- some day -- make all Indians prosperous.

But when Rai says that 'shareholders can take that profit which is left after stakeholders needs have been met' he is raising the bar much higher than most conventional business persons may be ready to jump.

Rai, now 38, entered working life just as the liberalisation process was getting underway. Born into a middle class family in Uttar Pradesh, Rai graduated from the Indian Institute of Forest Management and was recruited on campus by Ballarpur Paper Mills.

Being posted at a remote village of Orissa introduced Rai to the complex structure of poverty. Later, by what he calls a series of accidents, Rai became a research associate at IIM Ahmedabad and then CEO of GIAN (Gujarat Grassroots Innovations Augmentation Network), a company for promoting rural innovation, development and business.

He soon realized that the main barrier to decentralized, livelihood-generating rural enterprises is often not shortage of skills, imagination or initiative, but investors who are overly risk averse.

So with the support of a few business veterans and an initial investment of Rs 50 lakh (Rs 5 million) Rai cobbled together Aavishkaar.

Over the last ten years Aavishkaar has invested in companies such as -- Servals Automation, which is producing energy solutions for the poor; Vaatsalya, creating rural hospitals for low income groups; Vortex Engineering, which designs and manufactures low-cost ATMs for use in remote regions; Rangsutra Crafts, a company of a thousand textile artisans from the remote regions of India; Saraplast, which provides mobile toilets and aims to solve sanitation issues; et cetera.

Continue Reading This News Entry

Imagine your life if you had no access to banks, ATMs, credit cards, or savings and checking accounts -- just cash that you needed to hide or carry around. It would be hard to save, plan, get ahead, take chances, or feel secure.

For billions of poor people in the developing world, that's how life has always been -- and it's a big reason why many have remained poor. And because they're poor, banks steer clear of them.

Enter the cell phone.

In recent years some mobile operators in emerging markets -- most notably Safaricom in Kenya with its profitable M-Pesa service -- have made a splash by allowing customers to send remittances and pay bills via SMS.

So far so good: millions of lives are much better for it. But what about savings? For telecommunications companies, that part is trickier.

"Regulators see savings as belonging to banks," notes Samee Zafar, director at the consultancy Edgar Dunn & Company in London.

"Where they're willing to give way as far as pure payments and money transfers are concerned, I think savings is going to be a much bigger battle against the regulators."

As a result, what might become increasingly common in the developing world is close tie-ups between mobile operators and banks. Such an approach requires open minds.

Continue Reading This News Entry