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

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

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.

Aiming for 100 Million

Many people dream, but some people dream big.  Dr. Ashok Khosla is one of those that dream big – but also puts the dream into action.  As founder of Development Alternatives, Khosla plans to bring wide-scale employment to India’s rural areas.  IndiaWest reports:

“Poor people are seeing more products, but have little access to them. The poor do not have purchasing power,” said Khosla, the 2002 winner of the United Nations’ Sasakawa Environmental Prize, and the Schwab Foundation’s outstanding social entrepreneur award in 2004.

The Technology and Action for Rural Advancement (TARA), a partner of Development Alternatives, is a social enterprise focusing on standardizing “technology packages, which offer training, technical support, financing and marketing assistance to small enterprises.”  TARA’s products range from paper to textiles to cyber-kiosks.  Khosla aims to create 100 million jobs by 2018 through these micro-factories – no easy feat, considering that the organization claims to have created 3 million jobs in the last 15 years.

More importantly, the initiatives are created in a way that the villagers benefit above all.

In a typical model, the village will form a cooperative to purchase the equipment needed for the project, and determine wages for the workers, typically slightly above the area’s minimum wage. Development Alternatives’ social enterprise arm, Technology and Action for Rural Advancement, markets the products created by the villagers.

Tracking TARA’s progress in the next decade will be interesting and may provide further evidence of the impact of social enterprises and employment generating activities.

Bolstering Rural Industries

The comments from a previous post questioning the value of urbanization discussed the need of developing rural industries and services. According to iGovernment, the government has made a real step toward this with the Ministry of Panchayati Raj and the Khadi and Village Industry Commission (KVIC), a non-profit, working together to promote the Rural Business Hubs (RBH) initiative.

Under this initiative, Panchayats and KVIC will jointly identify potential projects that can be supported under KVIC schemes and also extend marketing support through the corporate members of industry working on the RBH initiative.

Wherever required, skill development and skill upgradation training will be provided to the potential beneficiaries by KVIC through accredited training agencies.

Considering the fact that RBH has been in place for three years, I wonder how successful programs under the initiative really are. In addition, there is a barrage of other questions that come to mind: Do the MoUs actually become operational? Are the rural areas in which they enact MoUs seeing an increase in economic development? And more importantly, does the development of rural industries allow for self-sustaining local economies, or does it make them more dependent (in an arguably negative way) on global markets?

In Theory v. In Practice: The India Development Gateway

In line with its National E-Governance Plan, the Government of India recently launched the India Development Gateway, which seeks to “foster inclusive growth and empower its rural users through relevant information in six languages – Hindi, Telugu, Tamil, Marathi, Bengali and English.” In addition, the portal aims to provide information on agriculture, health, primary education, rural energy and e-governance, namely in the form of government schemes and other services.

Before I go any further, a primer on the National E-Governance Plan:

The Government of India has formulated the National E-Governance Plan with the vision of providing all government services in an integrated manner at the doorstep of the citizen, at an affordable cost. The NeGP initiatives consist of 26 Central, State and Integrated Mission Mode Projects (MMPs) along with 8 other support components for rapid introduction of e-governance in the country. The NeGP envisions a three pillar model for delivery of “web-enabled Anytime, Anywhere access” to information and services in rural India.

According to President Patil, the gateway has the potential to benefit a large swath of the rural population:

“A space has been created in the virtual world where knowledge and experience transcend geographical distances to benefit citizens at the last mile,” said President Patil in her address.

The portal would help connect panchayats across the country, making them “knowledge hubs” and help inform on various government schemes and their benefits, said the President.

This initiative is yet another attempt to harness the untapped power of information technology for the benefit of the rural poor. Minister of Communication and Information Technology, Thiru Raja, “expressed hope the portal would help synergise different government initiatives by becoming a nerve centre of knowledge for the rural masses.”

The question that remains unanswered is this – what vehicle will the rural poor use to access these services?

Continue reading

From Basic Elements to Useful Technology

Raja Sekhar Malapati shares a piece on water technology that is not as popular or known in the quest for safe, accessible drinking water everywhere. A company known as Aqua Sciences developed a way to extract water not from the ground, but from the air – even in dry regions. According to a Wall Street Journal article published last year, “the technology uses a blend of salts to collect water, then employs a combination of heat, chemistry and mechanics to extract the water from the salts.” Employing a 40-foot trailer, the generator can produce about 1,200 gallons of water a day from moisture captured in the air.

Currently, the company’s products are in use by the U.S. government for emergency situations and troops in Iraq. Malapati wonders if this technology could be implemented in India, with its vast dry regions and serious water issues in rural areas. The 40-foot trailer may be a bit of an eyesore, but the technology is nonetheless exciting and certainly one to watch and see in which ways it can contribute to solving water challenges.