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

Ashoka Focuses on Agricultural and Sustainable Development in India

Last week, Ashoka announced that the organization will use a US$15 million grant from the Bill and Melinda Gates Foundation to support the placement of Ashoka fellows in Africa and India.  The grant money will specifically target social innovation and entrepreneurship in agriculture and sustainable development.  According to their press release,

Agricultural and rural sustainable development initiatives supported by Ashoka will be oriented around key issues such as new technologies, farmer productivity, key agricultural policies, and connections between smallholder farmers and markets. Ashoka’s network already includes many Fellows working on agriculture and rural development related issues— whether developing markets for small farmers in Kenya, or using local knowledge to regenerate arid land through natural farming and permaculture in India.

The most promising aspect of this partnership is the approach that Ashoka espouses in ensuring that their social innovations become sustainable – a community based approach:

Ashoka realizes that innovations alone do not create sustainable large-scale solutions in agriculture and sustainable rural development. These new solutions endure only when social entrepreneurs have a community-level understanding, build a broad citizen base of support, introduce incentives for participation, and topple traditional barriers to entry or involvement. This partnership will allow Ashoka to launch 90 social entrepreneurs and their powerful, pattern- changing ideas that are built on this bottom up approach. Additionally, as a product of the increased number of entrepreneurs in this area and their broad base of supporters, Ashoka will be able to identify transformative universal principles that will ultimately revolutionize the field.

Looks like this is a great time to become an Ashoka fellow in India.  I’m looking forward to seeing what developments Ashoka comes up with in 2009.

[TC-I Call to Action]: South Asia-Agricultural Development Department, Market Access Team

Here is what looks to be an amazing opportunity to work for the Bill & Melinda Gates Foundation. Here is the description:

Independent Consultant: South Asia
Agricultural Development Department, Market Access Team
Global Development Program

We are searching for a full time consulting resource to help us shape our strategic approach to  India and assist our grant development activities and serve as an important point of contact and interface for our South Asian partners, both potential and current grantees. The ideal candidate will have an entrepreneurial spirit and excellent problem solving, analytical and communication skills. Specific responsibilities will include: Continue reading

Aravind Eye Care System wins the Gates Award for Global Health

The Bill and Melinda Gates foundation just announced that the Madurai based Aravind Eye Care System wins the $1 million Gates Award—the world’s largest prize for international health which honors extraordinary efforts to improve health in developing countries.

By winning the award Aravind Eye Hospital, founded by the visionary social entrepreneur Dr. G. Venkataswamy, the organization joins other cutting-edge organizations working towards improving health in the developing world. Its also important to note that Aravind Eye Care System is the first Indian organization to win the award.

Below is short six minute video on the Aravind Eye Care System, showcasing the largest and most productive eye care facility in the world:

[TC-I Changemaker]: CGAP’s Gautam Ivatury on the linkage between technology and financial empowerment of the poor

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 tab.

This week, Vinay sat down (over the phone) with Gautam Ivatury of the The Consultative Group to Assist the Poor (CGAP), a consortium of 33 private and public development agencies focused on working together to expand poor people’s access to financial services. Such services include but are not limited to microcredit and branchless banking. Within this organization, Gautam is the Manager of CGAP’s Technology Program (their blog on India can be read here), which focuses on researching, identifying and disseminating knowledge on how technology will help financial institutions deliver such services to the poor. The Technology Program is co-funded by the Bill and Melinda Gates Foundation.

Vinay Ganti: First, I want to thank you for taking the time to speak with ThinkChange India and its readership. Why don’t we start out generally. Can you speak more on CGAP’s goals and how the aspect of technology plays a role?

Gautam Ivatury: CGAP is about building financial systems that work for poor people. However, there is more to it than that as we want this financial system to be integrated with the mainstream financial system at large. We do not want to create a state where the poor bank in some parallel world completely disconnected from the resources and financial options that other people enjoy. In essence we envision one inclusive financial system that provides tailored products to all types of people, including the poor.

This desire for inclusion partly stems from the need to develop financial institutions for the poor that are sound and stable, and one of the most effective ways to do that is to link them to the mainstream financial architecture. Poor clients need to have the same level of security regarding their savings and deposits as do individuals elsewhere in the traditional banking structure.

To address the stability while also providing a wide array of financial products, CGAP recognizes that there must be an approach that moves beyond just microfinance institutions (MFIs) and includes other players in the space to maximize choice for the consumer and to help us attain scale. When one looks past the traditional MFI, one observes postal banks, agricultural banks and other actors that are already helping the poor.

This is where the technology program becomes so critical as it is charged to identify those technologies that will best assist this wide range of potential providers to reach out to the poor regardless of their location or personal circumstances. Right now, the one obvious solution is the mobile phone and the rise of branchless banking that can be done via that medium.

VG: CGAP’s website highlights three key players — financial service providers, public and private funding organizations, and government policymakers and regulators — that are stakeholders in CGAP’s work. Can we discuss the conflicts that emerge among these actors?

GI: All of these actors are critical. Without governments implementing the proper regulatory framework for banking, it cannot be done. Likewise, the other stakeholders also play a vital role. In fact, there is a fourth actor, whom CGAP does not deal with directly, who are the actual customers themselves. In any market these can at times become opposing forces. Government wants safety plus access; businesses want to make money. This forces CGAP to take a practical approach with each stakeholder.

Each player has different incentives and needs, and therefore when our conversations with them require differing skill sets that reflect these distinctions. When you sit down with a banker you have to understand their perspective. She will ask what services am I supposed to give and how should I give them? Do I want to provide them at the branch and encourage the poor people to come inside or do I want to do it in a way where it can happen remotely? What sort of incentives must I provide my employees to provide these services, and what is the structure in which the employees interact with these new clients?

In contrast, when we deal with an MFI, there concerns are more technical with regard to the management and oversight of their loans or disbursements. Questions regarding improvements to portfolio tracking software, customer relationships and external fund raising all dominate the conversation.

Continue reading

Midday Newsfeed

Headlines:

Reacting to Raj Thackeray’s statements on north Indians, the SC said that such a tendency is leading to Balkanization of the country should be curbed with an iron hand.

Unless the government, people and media scale up measures to ensure cradle-to-grave food and water safety, the ongoing controversy over pesticides in soft drinks will achieve little. There’s only one way to go: If a material or product can’t be produced, used or disposed safely, phase the damn thing…

Lauding her exemplary contribution to jail reforms and human rights in the country, Kiran Bedi has been selected for the Annemarie-Maddison Prize.

The Bill and Melinda Gates Foundation has been awarded the Indira Gandhi Prize for Peace, Disarmament and Development for 2007.

Condoms and Kabbadi

Building off of the momentum from a first campaign that reached 18 million men in Tamil Nadu, Maharashtra, Andhra Pradesh and Karnataka, a new effort — funded by the Bill and Melinda Gates Foundation — will use the game of kabbadi as its medium:

The campaign’s TV advert shows a kabaddi match in which the protagonist wins the match against a macho team by chanting ‘condom’ instead of kabaddi… The campaign will run across TV, radio, cinema, outdoor and print over a six-week period… It will also feature an interactive element with an SMS poll in print media around the core message of the campaign.

By the end of the campaign, 48 million men are expected to be reached, with 6.5 million of them high risk individuals. While the method is no doubt unorthodox, research has shown that by forcing men to speak about condoms it is a significant affect on their choices with regard to practicing safe sex.

A baseline survey has already been carried out in the four target states to assess existing knowledge, attitudes and practices related to condoms.

An endline survey will be carried out at the end of the campaign to measure progress on increasing positive attitudes and changing behaviour around condom use among men.

Source: OneWorld South Asia