the African Uptimist

New mobile technologies, microfinancing and the war on poverty

Embedded in an interesting New York Times article by Chris Nickolson is a subtle yet powerful message for promoters of mobile devises --and indeed, any new technology--in the war against poverty:  The best results are achieved when you move with the natural flow of grassroots creativity.  Often, this means abandoning or suppressing preconceived notions, and building on spontaneous and creative adaptations of the new technology by local people to meet their needs.

What does that mean, exactly?  Well, consider the recent experience of Vodafone, described in the article:

When Vodafone began a pilot cellphone project in Kenya, Nick Hughes, the company’s head of international payments, said, “the idea was to reduce the cost of loan disbursal and recovery, but what we found was that customers were using it for person-to-person transfers.”  As a result, the company introduced a commercial program in Kenya three months ago to make financial transactions possible by mobile phone. Customers have flocked to the service. “We’ve passed the 175,000 mark,” Mr. Hughes said, “and they’re signing up at about 2,500 a day.”

See? They went in looking to minimize transaction costs, reduce risks, maximize profits--the usual business.  But to their immense credit, Vodafone quickly realized that the local people had a far better idea, and they grabbed the opportunity to create a matching program that is now maximizing benefits for company and customers.  Everybody is winning.

There are other heroes in this fascinating little article.  Consider Jamii Bora, "the largest microfinance institution in Kenya, " with over 150,000 borrowers.

The organization, whose name means “good families” in Swahili, began to experiment last year with mobile point-of-sale devices, magnetic-stripe cards and fingerprint authentication to take its remote branches online.

Working closely with Craft Silicon to deploy point-of-sale devices, Jamii Bora is expanding a robust and accessible system that "allows clients in the countryside to make loan repayments, receive disbursements and do other business electronically. Once clients log in with a fingertip, authenticating their identity, they are connected to a central database in Nairobi."

i think Jamii Bora's success expresses a message that is greater than the sum of its technological innovations.  A code that is apparently embedded deep in the hearts and minds of its staff, and is beautifully articulated by one of them, Ms. Munro:

We refuse to abandon the poor. Actually, we are the poor: all our staff are recruited from our members.

Evidently, this message resonates with Vodafone, Nokia, and Craft Silicon.  And with a growing army of socially responsible investors now marching against poverty in Africa and other theaters at the "Bottom of the Pyramid."

 

Motorola's "always-charged" mobile phone is (almost) here

Motorola has patented technology that will make it possible to recharge a mobile phone battery through solar cells embedded within the liquid crystal display.  According to Antone Gonsalves at Information Week, commercialization of this technology "would effectively eliminate the need to recharge a cellular phone's battery through a separate transformer that plugs into an electrical socket. The phone would always be charged."  When it finally hits the market (hopefully soon), the "always-charged phone" will remove the energy constraint suffered by far too many mobile phone users in off-grid rural areas of Africa.  The "economic magic" that mobile phones seem to be working for a growing number of rural users in Africa is about to get a whole lot bigger (see: Pius Sawa and Robert Jensen).

Access Energy starts up in Senegal

Access Energy, a Senegalese start-up is the latest small-scale energy enterprise to be supported under the AREED initiative.  Inspired by the Village Phone Program of Grameen Phone in Bangladesh, Senegalese entrepreneur Alpha Diallo approached AREED in 2005, with the idea of creating a business that would “fill lthe need for real time communication in rural Senegal using GSM technology.” With the assistance of AREED partners E+Co and ENDA Energy of Senegal, Mr. Diallo developed the initial business concept into a bankable business proposal.

AREED approved start-up financing of FCFA 58,736,150 (approximately US$106,793).  This will enable Access Energy acquire 100 GSM phone systems with associated solar power solutions, and will also meet Access Energy's initial working capital requirements.  With this support, Access Energy is poised to roll-out 5,000 phones in about 3,500 villages over the next five years, bringing telecommunication services to over 2.5 million people living Senegal’s rural communities.

One aspect of Access Energy that i really like is the strategic relationship Mr. Diallo managed to  forge with Sentel and Credit Mutuel du Senegal (CMS). As some of you may know, Sentel is a subsidiary of Millicon International Cellular.  It is also the second largest cellular operator in Senegal, serving over 700,000 subscribers as of November 2005.  Credit Mutuel du Senegal (CMS) is a mutualist microfinance institution operating since 1988.  Now, add a social enterprise like Access Energy, and what you get is a mutually reinforcing alliance of value-adding partners in sustainable development.  E+Co's Investment Officer for Africa, Kofi Nketsia Tabiri, explains how the Access Energy-CMS-Sentel partnership is set up to expand access to solar-enabled telephone services in rural Senegal:

A rural phone operator, who is a current CMS customer, will secure a loan from CMS to purchase a GSM telephone from Access Energy and start the business of reselling telephone services within the community. Sentel will provide access to its existing telecommunications infrastructure and will provide airtime at a wholesale rate to the rural phone operators. Individual villagers in rural areas can then visit their local phone operator and make affordable phone calls. With proceeds from the business, the phone operator makes loan repayments and purchases additional airtime. CMS earns money from the loan and also a percentage of the revenue from airtime sales from Sentel. Sentel earns money through volume sales of airtime. Access Energy earns money from sales of phone systems and also a percentage of the revenue from airtime sales.