Invested Development: August 2011

Friday, August 26, 2011

Weekly Review August 22-26

Developing countries tend to have high export rates of their most valuable resource: people. However, many changes on the ground in Africa are encouraging entrepreneurs to stay and create businesses and better lives for themselves at home. A successful entrepreneur in the developing world is no longer a rarity. In fact, entrepreneurs are finding great success in Africa in ways that also have the potential to have a significant impact.

“Female African Entrepreneurship” by Ivan Colic via Afrographique

Historically, entrepreneurs are more likely to be men, but women are certainly making a splash in the entrepreneurship marketplace .The latest post from Afrographique highlights data on female entrepreneurship in Africa. The chart shows that in Ghana, Botswana, and Zambia, almost half of enterprises are owned by women. This entrepreneurship climate shows a progressive attitude that will have social and economic benefits.

Strivers Foundation

A few weeks ago, Jeremy Fryer-Biggs introduced the Invested Development team to the Strivers Foundation, an organization that works with bright men and women in Uganda to help them achieve their entrepreneurial goals. The program benefits the individual as well as the economy by creating local businesses, jobs, products and services. One Strivers student, Nasur Mugega, shows real entrepreneurial drive and technological savvy. He developed a mobile phone charging platform powered by a bicycle and entered it in the Business Plan Competition to receive Strivers Foundation Funding. Nasur is an example of a bright student tapping into his entrepreneurial spirit to better his life and the lives of those around him. Many thanks to Jeremy for introducing us to him and the Strivers Foundation. Visit the site to read Nasur’s biography and those of other Strivers students who are studying and working to become entrepreneurs in Uganda.

“Africa: Investors Report Improved Business Climate in 29 Countries” by Neville Isdell via All Africa

After decades of skepticism from investors, entrepreneurs are frequently finding success in Africa. Many factors are contributing to the increase in entrepreneurship, including an explosive growth in mobile phone penetration (currently at 50% in the continent). The IFC and World Bank’s Doing Business 2011 report indicated that the ease-of-doing-business indicator has increased in many African countries and investment climates are improving. More efficient and less expensive business registration processes also allow Africans to tap into their entrepreneurial spirit.

“Zidisha: Financing Dreams and Empowering Entrepreneurs” by Clarissa Perkins via Social Earth

As entrepreneurship becomes increasingly common in Africa, so does the need for investment and lending. It is especially difficult for micro-entrepreneurs to borrow money, since most do not have bank accounts or access to financial services. Microfinance institutions have worked to change that, but we came across another solution leveraging technology. Zidisha is a peer-to-peer microfinance organization operating on an Internet-based platform. Entrepreneurs can create a profile to reach out to potential lenders. Lenders can read reviews on the borrower’s credibility and past repayment scenarios. The borrower and the lender can communicate directly through the platform. In Kenya, the funds are usually delivered via M-Pesa. To date, 130 businesses have been financed with a 100% repayment rate. This is a creative platform leveraging technology to empower the world’s poorest citizens.

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Friday, August 19, 2011

Weekly Review August 15-19

In response to the slow but steady increases in smartphone adoption and data usage in Africa, developers are releasing mobile applications to increase interoperability in the mobile money industry. This week, we read about new mobile apps appearing in emerging markets that increase access to financial services. We also read about mobile Internet access throughout Africa that allows for the adoption of such services. Africa is leveraging mobile technology for social change.

“Kenya: Tech Firm Pulls Down Cost of E-Commerce with New App“ by Paul Vafula via All Africa
Craft Silicon has released a new mobile application, Elma, to facilitate mobile commerce transactions in Kenya. The application runs on 3G-enabled mobile phones and facilitates transactions among users and service providers who have installed the application. For a subscription fee of Sh80/month, users can “transfer money, pay bills, buy airtime, buy stocks, and check commodity prices.” Elma is claiming to be a solution for interoperability amongst mobile money service providers, no matter which Mobile Network Operators (MNO) hosts the service. By facilitating interoperability, more users in emerging markets can take advantage of mobile money transfer services.

“Application to wean mobile money off SIM card” by Patrick Githinji via Mobile Money Africa
Currently, mobile money users are tied to their MNO and can only make transfers to other users hosted by the same provider. Now, Orange Kenya allows money transfers by way of Java and WAP applications, unattached to SIM cards. Although this means that consumers won’t have to belong to a particular telecom, it will drive demand for such services. Interoperability leads to increased transaction frequency and increased adoption. According to the Orange CEO, the new Java and WAP applications will allow users to transfer money with their mobile device to “anywhere in the world.” Along with the start of 3G services in Kenya and a rise in smartphone adoption (see below), the demand for applications downloaded from or hosted on the Internet is growing. In addition to Orange’s new application and Craft Silicon’s Elma, Google is expected to allow mobile payments on the Android operation system later this year.

“Smartphones will drive Africa’s Internet uptake” by Savious Kwinika via IT News Africa
Smartphones and feature phones are required to facilitate the increasing adoption of mobile applications like Elma. While the most popular phone in Africa is the Nokia “dumb phone,” smartphones are becoming more affordable. Half of the African population owns a mobile phone. Twelve million Africans have data plans and this number is expected to grow to 265 million by 2015. Research in Motion, the maker of BlackBerry, reports growth in data usage amongst its customers. Although Internet penetration is currently low in Africa, leveraging mobile ubiquity to promote mobile Internet will “have a huge impact on productivity and efficiency in Africa” for individuals and businesses alike. Furthermore, more smartphones means more applications, opening the door for interoperable mobile money transfer services and financial inclusion.

“8ta slashes data prices – again” via IT News Africa
In addition to increased demand for applications, smartphones, and mobile Internet, data prices are falling in Africa. South Africa’s 8ta is offering a 3GB pre-paid data bundle for about $21USD. There’s no contract, so users can top up whenever they need to. 8ta also offers a 10GB post-paid data package.

“Dual SIM mobile phones ideal for Africa” via IT News Africa
Many Africans own two mobile phones to take advantage of the offerings of two different MNOs. In response, Samsung offers dual SIM phones and predicts that they will gain 15% of the market share with this offering. The dual SIM phone allows users to switch between SIM cards easily to take advantage of the network depending on where they are and whom they want to call. This type of phone gives users the opportunity to maximize their airtime on the network that suits them best in different scenarios. In the case of mobile money, it would allow users to make transfers with the mobile service provider or two different operators. This, however, does not allow for universal interoperability like Internet-enabled mobile applications.

Friday, August 12, 2011

Weekly Review August 8-12

Solar panels at a tent village in India

This week we read a lot of articles on the global efforts to eliminate energy poverty. At Invested Development, we’re interested in electrifying the poorest countries to promote development using clean and sustainable energy. In addition to development, energy access can also prevent humanitarian crisis like the one we’re currently seeing in the Horn of Africa. Businesses, agencies, and governments need to work together to research and develop clean technology to eliminate energy poverty in its many forms.

“U.S., India Collaborate on Scientific Research” via Voice of America Editorials

The U.S. and India are working together to research and develop clean technology. Specifically, The Partnership to Advance Clean Energy (PACE) exists to research and deploy clean technology innovations. Both the U.S. and India are aiming to better understand the production of clean energy in their countries, but the lasting effect for India particularly would be profound. Access to clean energy technology in India would allow poor people to work and study longer, stay healthier and save money in comparison to costly kerosene. This partnership to electrify India contributes to the country’s efforts to advance economic growth and reduce poverty by 50%, the first Millennium Development Goal.

“Rwanda: Govt to Meet 16 Percent Power Access Target Next Year” by Frank Kanyesigye via All Africa

In 2009, 7% of Rwandans had access to electricity. Currently, in 2010, 14% of the Rwandan population has access to electricity. The government is aiming to increase electrification to 16% by the end of 2012. Coletha Ruhamya, the State Minister of Energy and Water, believes that increasing access to power will “contribute to economic growth, social development, and poverty alleviation.” Currently, the main energy source in Rwanda is wood fuel, which is damaging to the population and to the environment. Globally, indoor smoke from biomass fuels like wood has contributed to 1.6 million premature deaths each year, especially amongst women and children in developing countries (WHO, 2005). The Rwandan government will find that promoting and investing in not just electricity, but clean energy, will lead to sustainable and safe economic growth, social development, and poverty alleviation for its people.

“Angola: Government to Facilitate Rural People’s Access to Electricity“ via All Africa

Angola’s State Secretary for Energy, Joao Borges, announced a new plan to electrify rural parts of the country in an effort to avoid over-crowding in cities. This announcement also comes as part of an effort to promote development in the country. Borges hopes to implement clean energy solutions like solar power.

“Preventing the Next Somalia: Energy + Water = Food” by Robert A. Freling via Huffington Post

Famine in the horn of Africa has left humanitarian organizations scrambling to provide aid. Already 30,000 children have starved to death with another 500,000+ at risk. However, sending $700 million in humanitarian aid is only a temporary fix. Long-term solutions are required to make a lasting change in the region. Energy plays a key role in maintaining food security. In many parts of the world, like Somalia, irrigation systems save crops in times of drought or dry seasons. Without reliable energy systems in place, irrigation can be impossible and crops will perish, as is the case in the Horn of Africa. For example, the Solar Electric Light Fund facilitates solar electrification by offering solar pumping technology to agricultural villages, enabling reliable irrigation to water and fertilize crops. While the short-term need in Somalia is desperate, long-term solutions such as solar-powered drip irrigation will prevent the same from happening again.

“Targeted financing needed to expand energy access in developing world”
by Daniel Kammen via The UC Berkeley Blog

The UN Secretary General has designated 2012 the “International Year of Sustainable Energy for All” in an effort to keep pace with the UN’s Millennium Development Goals and eliminate energy poverty. The World Bank also considers energy access a key strategy to eliminating global poverty. A variety of tools are employed to meet these goals, like battery subscriptions, progressively purchased solar home systems, or solar-powered energy storage systems. No matter what tool is used to electrify the electrified, funding is required to research and develop these innovations. A new paper, “Informing the Financing of Universal Energy Access: An Assessment of Current Flow ” delivers an assessment of appropriate and effective policies to reduce energy poverty. The solution to eliminating energy poverty, thereby serving basic human needs and contributing to global economic health requires targeted financing in impacting and affordable innovations.

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Monday, August 8, 2011

Senior Investment Analyst

Senior Investment Analyst

Overview
Title: Senior Investment Analyst
Start Date: Immediately
Location: Boston, MA
Schedule: Full Time/20% travel possible
Pay: Salary commensurate with experience

Invested Development is looking for a highly motivated individual with experience in start-ups, investment analysis, or business lending to serve as our Senior Investment Analyst. This is a senior position in a small, exciting, young firm. Candidates should have a keen interest in international development, venture capital, entrepreneurship, and technology. The ideal candidate is a self-starter, works independently, and possesses strong communication and analytical skills. Willingness to travel and/or move to India is a plus.

Schedule is flexible but demanding with some national/international travel required. Salary is competitive for a small young firm with an opportunity for bonuses and equity participation.

Applicants should be comfortable working in a start-up environment with minimal resources and supervision. This is a great opportunity for a smart and ambitious leader who is ready to have a lasting impact on a growing enterprise.

Job Description
The Senior Investment Analyst will source and vet very early stage impact-oriented angel investments, focusing on India and South Asia. In addition to performing in-depth analysis of business plans and investment proposals, the Senior Analyst will coordinate an active investment pipeline, manage and support an Investment Analyst, and actively monitor portfolio performance. Key duties include:

Building a robust network to actively promote ID and attract the best start-up companies in our investment niche;
Coordinating deal flow from initial review to closing,

Performing in-depth investment due diligence such as market analysis,
Performing in-depth financial analysis and projections,
Reviewing the work product of an Investment Analyst and Interns,
Assessing key strengths, weaknesses, opportunities, and threats (SWOT) of seed and early stage social angel investments;

Sourcing new investment opportunities through event attendance, online sources, networking, and working with the ID Director and Research & Marketing Director;
Maintaining up-to-date knowledge on industry-related deal terms.

In addition to the key duties outlined above, the ID Senior Investment Analyst will be expected to assist the ID Director with new business development and investment product innovation.

About Invested Development
We are a for-profit impact investment fund manager sourcing and creating the most impacting solutions to global poverty.

For more information please contact Christina at: ctamer@investeddevelopment.com

Friday, August 5, 2011

Weekly Review August 1-5

As the mobile money industry grows and evolves, we are seeing new business models emerge. More and more mobile phone users around the world are finding access to financial services through branchless banking. Here at ID, we’re working to stay on pace with the ever changing risks and opportunities.

“Worldwide Mobile Payment Volume Up 76% to Reach $86 Billion in 2011” via Mobile Payment Magazine

The proof that the mobile payment industry is growing and evolving is in the numbers. In 2011, 141.1 million users worldwide will transfer a forecasted $86.1 billion, according to Garter, Inc. and the Mobile Payment Magazine. Users are up 38.2% from 2010 and the volume of transfers is up a staggering 75.9%. Additionally, SMS and USSD will continue to be the dominant access technologies in developing countries. Money transfers are also driving mobile commerce, which is where the door opens for emerging business models. With new business models, new risks and complexities present themselves simultaneously.

“MobiKash Afrika rolls out mobile banking platform in Kenya” via the Paypers

MobiKash Afrika is a mobile commerce service provider. This week, the company launched their mobile banking platform that will be operable across Kenya’s four GSM networks and across participating banks. This will allow users to pay for services and products with their phones and cash-in/cash-out at any one of the anticipated 3,000 agents. MobiKash will be vying for market share with the dominant M-PESA, which has about 20 million customers. On the other hand, MobiKash has the advantage of offering cheaper transaction fees than M-PESA and is operable across all mobile networks.

“Africa sprints ahead with mobile banking” by Vanessa Clark via Mobile Money Africa

Whether it’s mobile network operators offering mobile money transfer services, or banks offer mobile banking technology in partnership with a MNO, the African continent is a breeding ground for mobile money operations. In fact, Visa recently purchased Fundamo, a South Africa mobile financial services infrastructure provider, for $110 million. African countries “are making large strides forward in this space,” fostering new mobile banking models for the banked, unbanked, and under-banked. In a continent with an ever increasing mobile penetration rate (currently at 50%) and an estimated 70% unbanked or under-banked, access to financial services via mobile phone is the ideal solution. The CEO of FNB Africa, Danny Zandamela, said, “Mobile money services offer an inexpensive and convenient method to bridge the gap between the banked and unbanked. The African continent, by pure virtue of being one of the fastest growing mobile phone markets in the world, is the ideal environment for such innovation.”

“State Bank of Pakistan Removes Barriers to Branchless Banking” by Chris Bold via CGAP

Pakistan is one of the first countries in the world to introduce regulations specifically designed to encourage branchless banking. The regulations allow for a variety of business models and an extended agent network to deliver financial services on behalf of banks. The State Bank of Pakistan recently amended the regulations to further encourage branchless banking and increase access to financial services for the poor. Biometric fingerprints are no longer required to open an account, only a digital image of the account opener. Additionally, there are no maximum account balances and there have been substantial increases in transaction limits. Finally, a new “Level 0” account allows more people to open an account without physical paperwork. According to Mr. Mansoor Siddiqui, the Director for Banking Policy & Regulations, the changes were necessary to keep pace with the rapidly evolving industry.

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