Sunday, January 30, 2011

Mainstreaming Microfinance: Malegam Report and Artoo

Lately, the micro-finance industry reports have been squarely in two opposing camps: unconscionable profiteers or saviours for stimulating the economy for the poorest of poor. If nothing else, the Malegam report, as an official, publicly available document from India, shifts the conversation from sensationalist news items to promote informed debate. Additionally, having regulations (such as the 24% cap on interest rates, 25K rupee limit on loan size, max 2 lenders for 1 client etc) outlined in the report, mainstreams a  capital procurement instrument for the poor - a population not served by traditional capital markets.The debate is no longer whether micro-finance works or not- the debate is how to make it work better for the client as well as the lender. While many practitioners view the report favourably, some may argue otherwise; that the Malegam restrictions favor the bigger MFIs or that the industry will no longer be self-sustaining or that the restrictions are unenforceable. I think the report is a fantastic development irrespective of the specifics of the debate because it brings micro-finance into the mainstream.

In addition to all the analyses you can read for yourself (google or follow link above) I have another point to make- The report, with its concrete guidelines will spur technology innovation in bringing down the cost of transactions. IT hardware as well as software exits to bring transparency which reduces corruption and automation to reduce cost/transaction (of the large number of small loans MFI must deal with that raise their costs) but so far the MFI industry has been somewhat tech-averse - it increases risk to take a technology and market risk at the same time after all. With industry benchmarks to follow I believe entrepreneurs as well as established MFIs will be motivated to enlist technology to develop applications specif to the MFI industry.
For a specific example of "technology to the rescue" check out the initial results of start-up Artoo. Sameer Segal, founder of Artoo writes "we truly believe we can help MFIs bring their OER down to meet the new requirements".
Mainstreaming micro-finance will also allow the industry to open up new product offerings (e.g. savings accounts) that further benefit both client and lender.

Monday, January 17, 2011

BASES Bootcamp: Apps due Feb 1

Be part of one of the nation's most selective national entrepreneurship conferences, held in conjunction by the Business Association of Stanford Entrepreneurial Students (BASES) and Princeton University's Business Today (BT).

The BASES - BT National Entrepreneurship Bootcamp is an all-expenses-paid trip to Stanford University, including food, lodging, and travel for 110 student delegates. We are committed to a conference focused on bringing together students with brilliant ideas from universities around the nation with founders, entrepreneurs, and venture capitalists for an intensive learning experience. We are looking for students with ideas in web/software, biotech, cleantech, social entrepreneurship, etc.
Applicants will be evaluated on the basis of the idea they would like to bring in to develop into reality throughout the conference, and on the potential we feel they have to become outstanding entrepreneurs (see application for more details). We welcome any highly motivated student to apply, regardless of prior experiences.
Held April 7-10, 2011 at Stanford University, this event will feature small-group workshops, keynote addresses, panels, and more — all hosted by the top entrepreneurially-minded people in Silicon Valley and beyond. At the end of the event, participants will have the opportunity to present their business idea in a competitive format. Because the focus of our conference is on applied entrepreneurship, we are looking for undergraduate and graduate students who have the potential to begin transforming their fantastic startup idea into a successful venture.
Applications close on February 1, 2011. Decisions will be emailed to applicants by March 1, 2011. Email all questions to Apply now at!
Ruby Lee & Brian Reiser
E-Bootcamp 2011 Co-Directors