Sunday, October 25, 2009

Microfinance 2.0: People + Technology investment

The fact that microfinance has been a successful business model for poverty alleviation is undisputed (operational quibbles notwithstanding). The reason is that Grameen bank turned conventional wisdom on its head and made the unbankable (people with no collateral) into safe banking bets. Once they proved that the model was financially sustainable - the world followed suit. Now we are even looking at IPO's for microfinance institutions like SKS and others. So what is next? If microfinance 1.0 was about betting on the innate entrepreneurship of people microfinance 2.0 will be about betting on technology (providing scale by lowering cost) for changing the world. A partnership with social entrepreneurs can pave the way because they typically look for sustainability and are technology savvy. Unfortunately, social capital is still hard to come by especially for social entrepreneurs involved in changing the rural economy through innovations in renewable energy (like solar for lighting) or education (e-content for education) or healthcare. Government institutions involved with rural development should especially take note as they can provide the scale and sustainability. The Jaipur foot is a good example of medical technology that got a boost from a government partnership. Right now when India is so visible in the climate change debate, by investing in companies bringing solar to rural - off grid areas - would strategic. Companies like SELCO, D.Light, Duron energy are good investments for microfinance or NABARD (Govt. banks). It has long been held that research is expensive and emerging economies need only be markets. This is no longer the case when technologies of the developed world do not scale to meet the needs of the emerging economies.

Saturday, October 24, 2009

Revitalizing the Rural Economy- NREGS?

I am looking forward to my session ‘Revitalizing the Rural Economy’. The moderator for this session is Biswajit Sen. The session is scheduled for October 28, 2009 from 1600 to 1715 hrs at the Taj Palace Hotel, New Delhi. The session brief is as follows:
“Various initiatives have been made to revitalize the rural economy and mainstream them into the promising economic growth. One of such example is the flagship large scale government program – NREGS. This programme is mandated to strengthen and boost the rural economy through ensuring minimum employability in the rural areas. Besides NREGS, NABARD, the lead bank especially targeting agriculture in India, has been leading various interventions to strengthen the rural economy, primarily the Rural Infrastructure Development Fund that has been instituted to boost the rural infrastructure. These different initiatives have been successful with their own set of challenges. This session envisages deliberating on the challenges of these initiatives and hence drawing on the learnings for future strategies.”
If you have ideas on the subject – its a good time to speak out – I am still formulating my final thoughts and recommendations

Friday, October 23, 2009

NRN VC Fund: Help those doing good work

A headline in my TOI (Times of India Friday Oct 23- I'm getting addicted to acronyms like all Indians) has made my day - yes its the one about Murthy (of Infosys fame) setting up a $36 million VC fund saying "entrepreneurship is the only cure for poverty and job creation". In India, family businesses still rule. If its not the M&M saga its headlines like "Prez's son leads the baba log charge" (about Pres. Patil's son winning assembly seat- politics is business) or how 5th generation Kapoor is set to be the next bollywood star (entertainment). So a move like this by one of the most respected people in India signals change. But it is the fine print that excites me. Murthy has said he will invest in the fields of basic health care, education and nutrition signalling that long term investment is also a priority. Additionally his reason for setting up the fund is: "there are people doing good work in India." He wants to support them and help them grow rather than start yet another effort himself and reinvent the wheel.
Good move Mr. Murthy - I am a fan of Good Capital.

Tuesday, October 6, 2009

Dancing in the Rain

Life is choice. Do I sit out the storm or learn to dance in the rain? Safe or Sorry? Bored or alive? It all depends on how you frame it. What if the storm lasts longer than the span of my life? What choice do I have? None. Life is not a choice. I must learn to dance. This is the technology and social impact conundrum. The digital divide is in your face 24 -7 in full color- on news channels and print and falsely interpreted as a choice of waiting technology to sort itself out. Get over it. There is no choice. Get engaged or get irrelevant. Use technology to lower cost, invent new paradigms, create new teaching models or just fun. Social entrepreneurs who want to use technology are tormented with the spectre of trying to find a solution (you can't eat technology) without understanding the problem - "if we wanted to eradicate poverty we would first have to understand the "reasons" behind poverty. otherwise what would happen is that the factors that had kept the rickshaw puller poor in the first place would operate over time to once again reduce him to poverty". Framed like this, it presents a false choice. We can't predict time- how long the storm will last. We understand poverty as we get engaged and try to dance. We will learn but we may not ride out the storm. Si there a choice? I got the comment in connection to my recent posts about microfinance and education. What do you think?

Sunday, October 4, 2009

Mobile Phones for Literacy? Launch of Kontax

Mobile phones are the revolution in emerging economies. In the past year 128m new mobile subscriptions were signed up in India, 89m in China and 96m across Africa. Mobile Marvels, a special report on telecommunications from The Economist, is compelling in its detail about how handsets are helping even the poorest of the poor - through sustainable and scalable business models. Today. For the future the interesting possibility is mobile broadband Internet decoupled from the computer. What if educational content could be delivered over the phone, or a device held in the palm (like iPhone,) not the ear? Mobile affordability means, in parallel, we need research on how to use mobile phones for education. At Digital Vision program we had several projects exploring education using mobile phones. One of them just went live. Steve Vosloo (DVF 2007) of Shuttleworth Foundation writes:
Just wanted to let you know about the launch of the world's first m-novel written in English and isiXhosa (an indigenous South African language). It's a teen mystery story set in Cape Town about four graffiti writing friends. Read the press release for more info at Or read the first chapter of the story at (on your PC or from your WAP-enabled phone). Every day for 21 days there'll be a new chapter. Enjoy. I think m-novels have the potential to be big in Africa and want to explore this space (from a practical and research perspective).
Literacy is directly coupled to creativity, innovation and hope. And education is a big market at the right price point. We already see innovation even in the computer space (there's a $10 computer just announced) and netbooks are overtaking computers in the emerging economies. Projects like Kontax are a beacon of hope.