Round 2 with CGAP’s Gautam Ivatury

The ThinkChange India staff is committed to providing our readers with interviews with people we believe are at the brink of something special but have for the most part been overlooked by the mainstream media. Readers will be able to see other conversations under our TC-I Changemakers tag.

This week, Vinay sat down (over the phone) with Gautam Ivatury of the global microfinance center CGAP, which works to expand poor people’s access to financial services. Such services include but are not limited to microcredit and branchless banking. This interview is a follow up to one conducted on May 4, 2008, which you can read here.

Vinay Ganti: Could you please review yourself on the following topics, which we discussed in our last conversation?

  • Reaching beyond MFIs:

Gautam Ivatury: This still continues to be a major focus of CGAP’s mission. Across all of CGAP’s work we continue to look for ways to partner with a range of institutions and providers, including but not limited to MFIs, to be able to massively expand financial services for poor people.

GI: With regard to branchless banking, we set out to accomplish a number of goals. Overall we have been happy with the results of CGAP’s work in this area over the last six months, despite the fact that it has taken longer than expected for our project partners (in countries like Pakistan, Kenya, Mongolia, South Africa and elsewhere) to roll-out the branchless banking channels we helped design and finance.

Since our last talk, CGAP has expanded its policy and regulatory diagnostic work in branchless banking. New markets analyzed have included Colombia, Argentina and Indonesia, and we’ve continued to maintain close dialogue with the Reserve Bank of India and regulators elsewhere.

Also, the actual awareness of mobile banking in the field, i.e. what is and how it can work, has increased dramatically in the past. Last May we co-organized the first major annual event on “Mobile Money” for the unbanked in Cairo with the GSM Association (the industry body for the world’s 700+ mobile operators), IFC and DFID. That event got more than 500 paid attendees, most from private industry. And this week at the GSM World Congress in Barcelona, GSMA and other private sector players will announce additional activities in the space. DFID announced its new FAST program to encourage branchless banking this week. Initiatives like these are critical to get widespread adoption of the concept and to achieve scale. Moreover, major consulting and research outfits like Aite, Monitor and McKinsey have started research and published reports on the topic.

At the same time, our seven branchless banking projects have been slower to launch than we all expected two years ago. There have been some notable achievements — our Philippines partner has entered three new rural provinces and signed up about 80,000 new mobile banking clients, and Telenor bought 51 percent of Tameer Bank (our partner in Pakistan) to jumpstart its mobile banking initiatives. But in general the implementation of mobile / branchless banking has been slower than anticipated.

VG: Why do you think this is? Continue reading

Advertisements

Laptops and Local Trains

When I first heard the news, I was reminded of chaiwalas on local trains who chant, “chaiiii, chaiiiii, chaiiiii” and sell just the right amount of delectable tea in earthen cups for a very sweet price. Has the day come? Will a new army of “laptopwalas” soon be chanting, “laptopppp, laptopppp, laptopppp,” on local trains and markets, especially given the recent media flurry that the Indian government is getting ready to launch a $10 laptop as part of its e-learning campaign?

Admittedly, the idea of laptops being sold on local trains is somewhat preposterous. Unfortunately, the amount being quoted through the media – $10 – seems equally as preposterous. First, some background, courtesy of the Guardian:

The computer, known as Sakshat, which translates as “before your eyes”, will be launched as part of a new Rs46bn “national mission for education.” This envisages a network of laptops from which students can access lectures, coursework and specialist help from anywhere in India, triggering a revolution in education. A number of publishers have reportedly agreed to upload portions of their textbooks on to the system

There are plenty of skeptics, however, including Atanu Dey:

So what’s wrong with a $10 laptop? What’s wrong is that it flies in the face of all reasonable expectations about the world. It is disconnected with reality. The reality is that Nicholas Negroponte’s OLPC project tried desperately to build a $100 laptop and despite having access to considerable talent and expertise, the best it could do was a machine that costs around $200. What this tells us is that hardware costs, though they have fallen dramatically over time, are still high enough that it is virtually impossible to produce a laptop for around $100. If it were possible, they would have done it.

Regardless of whether this innovation is as cost-effective as it claims to be, which is doubtful, it is still important to keep in mind that technology is simply a tool, not the ends itself. I can’t say emphasize this point enough – should the Indian government roll out a shiny, new, cost-effective laptop with Wi-Fi and 2 GB ram (which I highly doubt), I hope they also have plans to actually implement the technology effectively. Most difficult is not the “what,” but rather, the “how,” which is, in this case, unclear in both respects.

[Check our previous coverage on the topic: Prerna’s Op-Ed on the Logic of Laptops in Education, Story featuring affordable PC maker NComputing, OLPC’s entry into India]

Ride on the Internet Bus

Using a mobile bus (such as the Nandini Mobile Van, which focuses on sanitation) is a popular method to do outreach to rural or underexposed areas.  Google India is launching their Internet Bus Project, an initiative that is essentially a mobile exhibition of the Internet.   The bus will provide an introductory look at the Internet and its services.   The project focuses on Tamil Nadu and aims to reach people that are not currently using the Internet.

The Internet Bus Project is an attempt educate people about what the Internet is, and how it may be beneficial to their lives, by taking the Internet experience to them through a customised Internet-enabled bus, which will travel to several towns and cities across India.

As the Google India blog states, there is potential in equalizing many playing fields through the Internet.  Additionally, this project highlights content in both English and Tamil, allowing larger segments of the population to participate and really understand the value of the web.  The video below is used as an introduction – complete with a song in Tamil.  Also be sure to take a look at the Internet Bus Project site, which has photos of the high-tech vehicle and tracks the route as the bus moves around the southern state.

Transfer money after the beep

Here is an interesting approach to the technological hurdles of mobile banking. Called Cashnxt, this venture in Kerala, uses high-pitched sounds via mobile phones to encrypt and decrypt the secure data needed to perform a financial transaction. An article on ReadWriteWeb, explains it as such:

As a customer, if you and a vendor are a member of the Cashnxt network, you can conduct transactions using your mobile phones. The merchant dials CashNxt’s IVR number, enters their PIN and transaction amount, and then hears a high pitch sound on their mobile phone. The customer does the same – calls the IVR number, enters their PIN and hears a high pitch sound. The two phones are then brought together, held close enough for CashNxt to encrypt and decrypt the sounds. 

Go after the jump to see a youtube video of the process:

Continue reading

HaraBara Builds Greener Pastures

In the effort to connect “green” business manufacturers and suppliers, Jagdish Amin and David Wheat launched HaraBara in October 2008.  Businessworld features the duo’s new business-to-business platform:

HaraBara’s primary objective is to unearth ‘golden nuggets’: companies that are doing great sustainable work, and getting them to talk about it.

While there are plans to create a worldwide forum, the focus right now is on India.  The HaraBara Connect India site offers a clear benefit for greening businesses in the country:

Thousands of Indian companies are dealing with environmental and green challenges. Share experience with other Connect members facing green concerns. Find out what works and what doesn’t work.  Access proprietary HaraBara databases, undertake joint projects, and establish new connections. Save time and money dealing with green issues.

The online platform allows a quick and easy way of making connections in the green indsustry, and as a result, could promote faster progress of environmental efforts.

Perhaps more interesting is the founders’ explanation to Businessworld of what prompted them to start HaraBara, when a “client wanted to sell solar lanterns in rural India but wasn’t able to develop a local distribution network.”

“We realised that companies would find it useful to have a website that gave them access to customers and suppliers, and that helped them figure out local laws and regulations,” says Wheat.

I’m sure there are other industries which face a similar challenge when trying to start up operations in a new location.  For that reason, HaraBara is a great example of turning a roadblock into a far-reaching solution.

Checking in on CGAP and Branchless Banking

When I heard that Gautam Ivatury of CGAP would be at NYU’s “From Innovation to Impact” Conference, I thought it would be a great time to follow up with my previous interview with him.  While he did not have time to talk today, we are going to schedule a follow up soon.  Nevertheless, I was able to listen to his presentation on what CGAP has been doing to help move the market to be more amenable to branchless or mobile banking.

Here are a couple highlights from his talk, but stay tuned for a more in depth interview in the coming weeks.

  • The most interesting point raised was the importance of centering the business plan around the potential agents.  In essence, branchless banking would operate in the same way people currently refill their cell phones throughout India.  A shopkeeper, authorized by a bank or cell phone company to accept withdrawals and deposits, would receive an SMS or some other communication from a customer’s phone and then either accept the deposit or disburse cash.  Ivatury emphasized that such models have only been successful when it is designed to ensure that it is profitable and worthwhile for these agents themselves — a point, while obvious, can be easily overlooked by a major player.
  • Ivatury also commented on the process of actually “moving the market” — or getting the greater financial community on board and outlined the process as such:
    1. Research and Information — first find the data that must be presented
    2. Synthesis — analyze the data in a way that is clear and concise
    3. Communicate — get mainstream media, like the Economist or Financial Times, to pick it up
    4. Influence — once major players are aware, bring them together through events to persuade them to adopt it
    5. Market Changes

[TC-I Call to Action]: New Ventures India Business Proposals

Anil G of  New Ventures India informs us that New Ventures is inviting clean tech companies to submit their business proposals for a chance to receive mentorship, assistance, and connections with capital and market opportunities to scale up.  Click here for further details about the call for proposals, including eligibility requirements and contact information.  Proposals are due by April 30, 2009.  This is a great opportunity for clean tech and clean energy SMEs in India.

About New Ventures India:

New Ventures India works for sustainable entrepreneurship and is specially designed to meet the needs of Indian entrepreneurs and help them overcome common business challenges to deliver environmental and social benefits in addition to economic development and growth opportunity.