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.