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Showing posts with label emerging markets. Show all posts
Showing posts with label emerging markets. Show all posts

Friday, November 18, 2011

Weekly Review November 13 – 19

For Global Entrepreneurship Week, we’re following the discussion in various media outlets around the flow of capital to early stage startups. Most agree that entrepreneurship is a necessary tool for development and we’re happy to see that capital is beginning to flow to places where it's needed.

“Tanzania: Grants to Private Sector on Low Cost Energy Open” on All Africa
The Africa Enterprise Challenge Fund is continuing to promote the flow of private investment to clean tech entrepreneurs in Tanzania. To earn funding, businesses must offer an affordable product that is accessible in rural areas or an innovative solution to climate change to help small-hold farmers. Solutions must be financially viable, beneficial to the user, and conducive to the adoption of clean tech. EGG-energy recently won an AECF grant. Applications for this round close December 15, 2011.

“Global Entrepreneurship Week: A Smarter World by Startups” by Jonathan Ortmans on The Huffington Post
This week’s celebration of entrepreneurship across 123 countries is a reminder of the many emerging markets that are welcoming and enabling startups. Some emerging markets have Ease of Doing Business Indices competitive with the likes of Switzerland and Singapore. This doesn’t come as a surprise, Ortmans says, and iterates: “New firms are indeed the greatest source of new wealth for struggling economies and a powerful weapon against poverty.”

“Sean Parker: ‘Little Startups Are Ridiculously Over-Funded” by Erick Schonfeld on Tech Crunch
This week’s discussion surrounds the flow of investment capital into startups around the world. Sean Parker, somewhat controversially, thinks that the number of investors outweigh the number of fundable startups. He says that this leads to a diffusion of talent and VCs scrambling to get deal flow. Parker may think that “talented engineers and product designers … starting their own companies” lacks “impact,” but we think that entrepreneurs developing innovative technologies in mobile tech and energy open many more opportunities for impact. 

“Accel Raises $155 Million for India Fund” by Evelyn M. Rusli on The New York Times DealBook
Facebook and Groupon backer, Accel Partners, raised a $155 million dollar fund called Accel India III. While Accel Partners isn’t the typical investor you’d find seeking to invest in impact at Sankalp, Accel India III will fund high-growth technology companies in India, include mobile technology. Investments will be early stage between $500,000 and $1 million.

“A Silicon Valley Dream Grows in Guatlemala, Despite the Risks” by Damien Cave on The New York Times
Recreating Silicon Valley and technology incubators to promote social impact -  it’s happening in Guatemala, a huge achievement for a country known for its wide income gaps. Campus Tecnológico is an innovative new space that is promoting development on a large scale by housing startups dedicated to technology as a catalyst for change. Locally, the entrepreneurs at Campus Tecnológico are making the once run-down neighborhood attractive by filling apartments and simply buying lunch. Check out the article to learn more about the companies and their impact.

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Wednesday, November 16, 2011

In Boston? Interested in new opportunities for clean tech innovation?

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Tuesday, November 15, 2011

Poverty-Fighting Mobile Transaction Systems (Part 3): Information Exchange

This is the third installment in our series on mobile transaction systems and their contribution to the fight against poverty. First, we introduced this series with an overview of mobile penetration rates and the mobile phone’s power for impact. Then, last week, we highlighted the first transaction system - mobile money - and the benefits such transactions offer to users. This week, we will look at the different ways mobile phones facilitate exchanges of information and how they benefit the users.

Information Exchange
Mobile phones can provide information to the otherwise isolated citizens at the base of the pyramid. When mobile phones facilitate the exchange of information, this has perhaps the most wide-ranging impact on its users.

For Farmers
Source: http://www.grameenfoundation.org/
The ability to access information about weather and prices leads to make or break decisions for farmers. To facilitate quality access, organizations like the Grameen Foundation have developed schemes that allow poor farmers in Uganda to gain access to valuable market data. This empowers the farmers by granting them access to information about market prices, weather reports, and planting advice. Without the data and information, farmers can suffer costly losses that would be preventable with timely knowledge. A designated “community knowledge worker” (CKW) identified by Grameen collects information from farmers and uploads it to the database for other CKWs. This sort of data collection and information sharing is hugely empowering, but it’s impossible without access to a mobile phone. Other examples of organizations seeking to fill this gap are mFarm, iCow, and Esoko. 

For Job Seekers
Source: http://www.assuredlabor.com/
There are transaction systems that have revolutionized the job and talent searches in the developing world. As more corporations are moving into emerging markets, they need to source and hire talent. Mobile transaction platforms like Assured Labor (branded as Empleo Listo, think of Monster on SMS), allow companies to access potential employees on existing channels – mobile phones. On the other side, users can search for job openings on their phones. This enables users to find local jobs and avoid emigration where possible. This platform is especially advantageous for those who do not have access to traditional Internet on a PC, where most jobs are posted.

The mobile phone creates opportunities in markets that are beyond the reach of a traditional laptop.  You’ll find farmers and job seekers in all populations, but continued innovation in mobile technology can further extend the benefits of information exchange on a mobile phone.

Check back next week for examples of networking, participation, and social capital exchanges made possible on mobile phones.

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Friday, November 11, 2011

Weekly Review November 6-12

A cornerstone of our philosophy is to combine the efficiency of the free market with the heart of the social sector. Private investment and entrepreneurship will create sustainable development in emerging markets.

“Social Venture Catalyst Ennovent invests in Barefoot Power” on YourStory.in
Ennovent’s Sustainable Enterprise Fund announced yesterday that it invested in Barefoot Power. Barefoot provides renewable energy and lighting to off-grid or under electrified communities in India. Co-investors include Insitor, Oikocredit, and The Grace Foundation. There is still a large need for greater investment activity in India to electrify the country and eliminate energy poverty.

“Investment manager speaks about venture capital in East Africa” Interview with InReturn Capital’s Eelco Benink by Regina Ekiru on How We Made It In Africa
Benink, an investment manager at InReturn Capital, discusses the firm’s investment criteria and portfolio, and the interest VC firms are showing in Africa. Africa is attractive to both impact investors and traditional venture capitalists because of its demonstrated and expected growth. The population is young, political environments are stabilizing, and there is a growing middle class and an abundance of natural resources.

“Venture Capital Office Hours with Sean Smith” by Patrick Munyi on iHub Blog
Now that Invested Development is growing and expanding globally, our team member Sean Smith is getting settled in Nairobi, Kenya. He’s now holding open office hours at iHub Nairobi every other Friday. Entrepreneurs, innovators, or those interested in venture capital are welcome to come by and chat.

Global Entrepreneurship Week 2011
November 14th marks the beginning of Global Entrepreneurship Week. A project supported by the Kauffman Foundation. Local activities in participating countries include competitions, conferences, and networking events. This is an exciting opportunity to drive venture capital into emerging markets and to encourage entrepreneurship.


“Libyans Need Economic Freedom” by Jay Hallen on The American
Libya is at a crossroads. Similar to Egypt, there are high numbers of unemployed youth. The article recommends that the National Transitional Council use oil revenues to create venture capital funds for college graduates. A startup community would not only develop the country’s economy, but do so in an all inclusive way.

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Friday, November 4, 2011

Weekly Review October 30 – November 5


This week, we’re stepping back and looking at the explosive developments in the ICT industry and their effects in emerging markets.  In case you missed it, check out our ongoing series on how mobile transactions systems can fight poverty, Part 1 and Part 2.
Image Courtesy of SlimTrader
“Ethio Telecom launches credit transfer service” Press Release from Ethio Telecom
Ethiopia is infamous for its lagging mobile penetration rates. The Government-led telecom released ambitious goals for mobile penetration last year. So far, it seems that the country is on target to meet them. Last week, Ethio Telecom announced that it would now allow prepaid users to transfer airtime to one another, an early version of mobile money. Airtime is like a currency in emerging markets, and we’re excited to see this type of development continue in Ethiopia.

“M-Pesa transactions surpass Western Union moves across the globe” on Daily Nation Kenya 
With over 14 million customers signed up since its March 2007 launch, Safaricom’s M-Pesa is processing more transactions in Kenya than Western Union is in the entire world. M-Pesa provides mobile money services to more than 70 percent of Kenya’s adult population, according to the International Monetary Fund. M-Pesa has revolutionized the way Kenyans transfer their money, moving about 17% of the country’s GDP each year.

“84 million mobile devices are Internet enabled” on IT News Africa
In Zimbabwe, mobile phone penetration has begun to significantly contribute to levels of entrepreneurship in the country. A report from the United Nations Conference on Trade and Development revealed,“59% of Zimbabweans have access to mobile phones compared with only about 5% in 2005.” The UNCTAD pointed out that Zimbabwean SMEs are using mobile phones regularly to conduct business and m-commerce. The Government of Zimbabwe indicated that m-commerce has been a significant economic driver. In addition to mobile penetration, phones with mobile Internet are always increasing; in Arica, “7 out of 10 are expected to be Internet-enabled by 2014.”

“UN Team Approves ICT Goals As EA’s Speed Lags” by Esmond Shahonya on All Africa
The UN’s Broadband Commission for Digital Development has endorsed new targets that aim to provide global broadband access. The first target requires all countries to have national strategies for implementing universal broadband access. Furthermore, broadband access must be affordable. The final target aims to provide broadband access to 40% of households in developing countries by 2015. The goals were developed at the International Telecommunication Union (ITU) Telecom World 2011 summit, which considers “broadband as a vital ingredient for development.” 

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Thursday, November 3, 2011

Poverty-Fighting Mobile Transaction Systems (Part 2): Mobile Money Transactions

Last week we introduced this series that will highlight the different ways mobile phones can combat poverty. This week, we will discuss the first example of a poverty-fighting mobile transaction system. Mobile money transfer services provide financial inclusion benefits for the unbanked, and are the most heralded impact of mobile penetration.

Mobile Money Transactions
Perhaps the most well-known mobile transaction systems that engage the base of the pyramid are mobile money transactions. The various flavors of mobile money transactions (mobile payments, m-wallets, mobile banking, etc.) have revolutionized the way users send and receive money throughout emerging markets, bringing millions of previously unbanked users closer to full financial inclusion.

Safaricom’s M-PESA, the golden beacon of the mobile money industry, set a standard in Kenya that others are trying to follow. The telecommunications company released its mobile money service in March 2007 and currently has 14 million users in Kenya alone. Today, nearly 17% of Kenya’s GDP flows through M-PESA, even though many of these users do not have bank accounts. The resounding success of M-PESA has sent a message across the globe. There is tremendous demand from the unbanked for financial efficiency and cashless transactions.

Inspired by the success of M-PESA, others are quickly joining the movement. Competing telecommunications companies from Manila to Mexico have created similar models and even banks are deploying mobile payments with branchless banking models to serve the rural poor. Whatever the approach, mobile money transactions give the unbanked the opportunity for financial inclusion, including secure, cashless financial transactions. In most cases, users can transfer money, and pay bills with a simple and secure text message, or deposit/withdraw cash at any participating agent.

There are also less obvious benefits that come from the growth of mobile money transactions. Agents, who are usually small shopkeepers, enjoy increased revenue streams and increased customer presence in their stores. Because the money is “e-float” and not cash, the risk of funds being lost or stolen decreases significantly as well. 

Image Courtesy of Simpa Networks
However, for real financial inclusion, mobile transaction systems are going to have to expand their services beyond simple cashless transactions. Some of this is happening already. For example, Safaricom recently partnered with Equity Bank to develop M-KESHO in Kenya, a product that provides M-PESA users with interest bearing mobile savings accounts. Another example comes from Simpa Networks, an ID portfolio company that leverages mobile technology to finance the costs of solar home systems. The Simpa Regulator allows users to make payments with their mobile phone to pay off the cost of the system over time. In this way, mobile transactions can expand one of the most important aspects of financial inclusion, credit.  

Check back next week for examples of information exchanges made possible with mobile phones. 
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Friday, October 28, 2011

Weekly Review October 23-29

Several exciting headlines this week point to the adoption of clean tech as a affordable and scalable solution to the world’s energy problems.

“New Technology Could Double Solar Cell Efficiency” by RP Siegel on Triple Pundit
Although installed costs of solar photovoltaics have declined by over 43 percent since 1998, many who rely on fossil fuels are still reluctant to make the change to solar. Now, through advancement in the research and development of using so called “quantum dots”, several scientists at UT Austin have demonstrated how to increase solar panel efficiency from 31 percent to 66 percent, harnessing the previously illusive “hot energy” from the sun’s rays. These advanced developments and efficiency increases will likely drive down the costs, making solar energy more affordable for all.

“World Bank opens up $60m climate finance scheme to developing nations” on Business Green
A newly developed $60m fund by the International Finance Corporation will promote innovation in clean technology for emerging markets. Individual investments are expected to be in the range of $3 and $4 million. The fund will also support startups’ endeavors to reduce greenhouse gas emissions.

“Developing world ups ante in cleantech ‘arms race’” by Fiona Havey on The Guardian
Not surprisingly, the developing countries of the world are investing more and installing more clean technology than their counterparts in the developed countries. Specifically, China added 19GW of wind generating capacity, while India met targets of about 10GW. The Global Wind Energy Council wrote in its annual report that the demonstrated growth in wind capacity “puts an end to the assertion that wind power is a premium technology only for rich countries which cannot be deployed at scale in other markets.”

“Massachusetts Celebrates Green Technology with 2011 Clean Energy Week”
The Seventh Annual Conference on Clean Energy is happening in Boston on November 1.  The Massachusetts Technology Transfer Center and The Massachusetts Hydrogen Coalition host the event as part of Massachusetts Clean Energy Week. Our own Miguel Granier is a panelist on “Energy Solutions for Developing Countries,” alongside Sam White, Co-Founder of our portfolio company, Promethean Power. Check out the agenda for all the details, including pitch sessions and lots of exciting panels. 

“Selling Home Solar Like a Cell Phone Plan” by Brian Merchant on TreeHugger
It’s no secret that the two biggest obstacles to scaling clean technologies are cost and access. TreeHugger points out that it’s important to invest in renewable energy sources but also to experiment with pricing models that will allow people at all income levels to afford and access sustainable energy. Our portfolio company, Simpa Networks, tries to combat the financial barrier by allowing users to pay for energy just as they would with a mobile phone. Watch Brian Merchant’s interview with Paul Needham, Simpa Networks founder and a new PopTech Social Innovation Fellow.

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Monday, October 24, 2011

Poverty-Fighting Mobile Transaction Systems (Part 1): Leveraging Mobile Ubiquity at the BoP

The ID team spends a lot of time discussing and studying the mobile technology industry. The driving force behind our focus on mobile technology in emerging markets has been the explosive growth of mobile phone penetration rates and the potential for mobile transaction systems to reduce poverty.

Our most popular post on this blog is “Mobile Phones at the Base of the Pyramid: Accessibility and Affordability” published in June 2010. In that post, we outlined why mobile phones matter, citing examples of connectivity and mobile access increasing income at the bottom of the pyramid. Since then, we’ve narrowed down our focus even more. Every day we learn about new mobile transaction systems and applications that change the way people at the base of the pyramid live and work.

Over the past few years we have learned that the key to mobile transaction systems is the exchange. As Dr. Harish Hande, founder of SELCO-India and the winner of the 2011 Ramon Magsaysay Award said in his keynote speech at ForSe2011, the poor must be “asset creators”. It’s not just about selling to the BoP, it’s about letting them sell to us as well. This means that when we drive products, information, thoughts, and opinions to the BoP, we should allow the flow to be reciprocated. Everything that flows “down” must flow back “up” for a sustainable cycle. This includes money, information, and social capital.

In that 2010 post, we also looked at the demonstrated market growth for mobile phones.  We consistently monitor the penetration rates of mobile phones in emerging markets. The World Bank Database is a reliable resource, currently offering data through 2009. Based on that data, we projected the penetration rates for 2010 and 2011(using a conservative diminishing returns formula for the falling year-on-year growth averages). The chart below shows the number of mobile phone subscribers per 100 people in Latin America & the Caribbean, India, and Sub-Saharan Africa. We compared these three emerging market regions with the United States, the European Union, and the world as a whole. 


Mobile Subscriptions per 100 Inhabitants
Even at slowing growth rates and our conservative estimates, we can see that access to mobile technology in the developing world has increased tremendously over the past decade. Now, social entrepreneurs are leveraging these high penetration rates to create businesses and wealth that enable sustainable development. Muhammad Yunus, Nobel Peace Prize winner and founder of Grameen Bank, famously said: ”When you get a mobile phone it is almost like having a card to get out of poverty in a couple of years.” There are a variety of tools, applications, and services that mobile technology provides to empower the BoP and, here at ID, we strive to understand each of them.

Over the next few weeks, we will post the different examples of mobile transaction systems and the ways they empower the world’s poorest citizens by creating exchanges.  Up first on the agenda is Mobile Money Transactions, check back next week for the first examples. 




Update:
Part 2 - Mobile Money
Part 3 - Information
Part 4 - Social Capital
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Friday, October 7, 2011

Weekly Review October 3-7

Last week we spoke to the impact that mobile technology can have for development. For the same reasons, our other investment focus is alternative energy. While alternative energy is traditionally expensive, many social entrepreneurs are creating clever financing models that deliver clean energy at an affordable price. The following articles detail why and how alternative energy can create such a significant impact at the BoP in emerging markets.
Source: Simpa Networks 
“Could a Pay-as-You-Go Model Convince People to Go Solar?” by Sarah Laskow on GOOD Magazine
GOOD Magazine spotlights Paul Needham, co-founder of Simpa Networks, our portfolio company, and a member of the Class of 2011 PopTech Social Innovation Fellows. Paul understands that solar energy incurs an upfront cost that is too high for most users. So he and the team Simpa created the Simpa Regulator, which allows users to pay for the cost of a solar home system over time. Simpa smartly pegs its prices to be the same as kerosene, which most people at the BoP use for energy. This way, the Simpa Regulator not only delivers energy affordably, but it also delivers clean energy that isn’t damaging to personal health or the environment.  Even better, Simpa’s light from SELCO-India’s solar panels is brighter than a kerosene lamp. Consumers get a safer and longer-lasting energy source for the same up-front price and ultimately spend less money over time.

“Pay-As-You-Go Makes Solar Accessible in Emerging Markets” by Sami Grover on TreeHugger
Simpa is not the only company offering pay-as-you-go models. A company called Eight19 creates solar film – or printable solar panels. In partnership with Solar Aid, the pair has developed IndiGo, a charging technology that is specifically designed to be affordable for the BoP. Users can add credit to their IndiGo box by using the codes sent to their mobile phones after purchase. Like Simpa’s Regulator, this model allows users to pay for their energy over time without the initial upfront cost.

“Impact Investing in Energy Enterprises:  A Three-Act Play” by Christine Eibs Singer, Executive Summary on the E+Co Blog
Christine Eibs Singer, the co-founder and CEO of E+Co, recently published a case study for the MIT Innovations Journal’s latest edition - SOCAP11: Impact Investing Special Edition. An executive summary is available on the E+Co blog. In the Case Study, Singer looks at the different stages that E+Co has gone through, and how the organization got to where it is now. E+CO started before “impact investing” was a buzz word. Despite the merge of impact-focused funding vehicles, the goal has always been to help energy enterprises grow and prove their worth, and ultimately create impact for the BoP.  The full journal is available on Amazon and contains articles from many other industry experts including Kevin Doyle Jones, Phillip Auerswald, Antony Bugg-Levine, Mario Morino, and Ross Baird.

“Nepal on track to achieve MDGs: PM” on The Himalayan Times
The UN’s Millennium Development Goals seek to halve poverty by 2015. The Prime Minister of Nepal, Dr. Baburam Bhattari, noted that his country’s achievement of the MDGs is largely hindered by energy poverty, and in a broader sense, a lack of technology and innovation. Energy poverty occurs when there is limited or no access to electricity for cooking, heating, cooling, and/or lighting. Many people at the BoP in Nepal use unsustainable and harmful energy sources like kerosene. The Prime Minister addressed the “Sustainable Energy for All: Water, Food, and Energy Security” session at a UN Roundtable, where he suggested that the Nepalese government is accelerating efforts to scale sustainable energy solutions to fight against poverty.

“Can Microgrids Eliminate Energy Poverty?” by Christine Hertzog on The Energy Collective
A staggering 2.4 billion people in the world live in energy poverty - a way of life that is very unfamiliar to us in the United States. Almost a third of the world’s population lives with very limited or no access to electricity. This means that the time they can spend working or studying is limited, and it affects everything from cooking to communication to refrigeration. In other articles this week we discussed pay-as-you-go solar as a solution. Another solution to help bring energy access to the BoP is microgrids. General MicroGrids, Inc. is a company founded by Terry Mohn who is also the Co-Chair of the UN Foundation’s MicroGrid Work Group. He hopes that the company can deliver affordable and renewable energy to eliminate energy poverty and contribute to the goals outlined by the UN Campaign of Sustainable Energy For All.  The three main goals that the UN is promoting to achieve by 2030 are: “1) Achieve universal access to modern energy serves; 2) improve global energy intensity by 40 percent; and 3) Produce at least 30 percent of the world’s energy from renewable sources.” Microgrids , according to Mohn, are a technological answer and solution that can meet the UN’s goals for energy. 
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Friday, September 23, 2011

Weekly Review September 19-23

Source
Banks and mobile network operators are working in an environment that is constantly evolving with the addition of new competitors, new regulations (or lack thereof), and new markets. The mobile payments world in emerging markets is experiencing explosive growth and widespread support, as evidenced in the following articles.

“First universal mobile payments platform goes live” on Mobile Money Africa
Luup is now providing universal mobile payment systems through a combination of Microsoft BizTalk Server and Temenos T24, a core banking software used around the world. Luup CEO Martin Wilson claims that the platform can serve corporate and retail users in both developed and developing markets on any mobile device on any mobile network. Successful mobile payment platforms are scalable and fall in line with regulatory and security requirements. Luup believes their service meets these criteria, “connecting senders and receivers of funds across the globe.” The integration of Temenos T24, a technology used in “over 1000 financial institutions in more than 125 countries across the world,” implies that Luup is highly adaptable and is likely to be successful globally.

“Banks have some good news… are they listening? by Kabir Kumar on CGAP
Although these are tough times for banks, a recent research project on branchless banking by CGAP, the Inter-American Development Bank, and Akya (a banking consultancy) found some good news. Branchless banking, though fiercely competitive in emerging markets between banks and MNOs, can present new and opportunistic business cases for banks. There are five key findings regarding the business case for banks in the collaborative report. First, a critical factor to success in branchless banking is a strong agent network. At low transaction volumes, in rural areas for example, an agent is the most economical option. Second, banks offer branchless banking because it is an additional and efficient channel to reach unbanked or under banked segments. This allows them to grow their market share, while increasing cash flow activity. Third, a strong agent network adds value for a branchless banking customer by offering a new level of convenience. Fourth, branchless banking promotes growth of the bank and markets, and also reaches new geographies and customers. Finally, banks practicing branchless-banking practices will find that payments can make a substantial contribution to profit. The full presentation, “Understanding the business case for banks in branchless banking” is available here.

“Liberate mobile payments for more inclusive economy” by Wesley Lynch on Mobile Money Africa
Despite the tremendous adoption of mobile money penetration in Africa, South Africa’s rate of adoption has been lagging in comparison. Wesley Lynch, CEO of Realmdigital, blames this on the regulatory environment in South Africa. The restrictive banking regulations also limit innovation from MNOs who could offer cheap and easy mobile transaction services to customers at the BoP. M-PESA’s famous success in Kenya has not been repeated in South Africa, “a country with 13 million unbanked citizens.” The major obstacle for mobile network operators to behave as banks has been government regulation. Once mobile network operators can obtain banking licenses in South Africa, the mobile payment ecosystem will open up a new, liberated economy.

“Nigeria: GSMA to Partner State on Mobile Money” by Obinna Chima on AllAfrica
The mobile payment industry in Nigeria has the support of the Global System for Mobile Communication Association (GSMA). The GSMA promises to ensure the successful adoption of mobile money in the country by working closely with the federal government and key banks and mobile network operators. Mobile payments transactions could improve trade and commerce significantly in Nigeria thanks to the high level of mobile penetration and the high number of unbanked citizens. Mr. Ross Bateson of the GSMA stated that mobile money would increase productivity and improve the Nigerian economy. Additionally, there are other opportunities beyond mobile payments that access to mobile can offer to enable development.

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Friday, August 26, 2011

Weekly Review August 22-26


Via Afrographique
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, July 15, 2011

Weekly Review July 11-15

At ID, we often discuss the benefits of mobile phones for those at the Base-of-the-Pyramid. Access to mobile phones is proven to increase financial inclusion and accessibility to basic goods and service. This Weekly Review examines the benefits of mobile phones specifically for migrant workers.

“Editorial:  Access to financial services” via The Jakarta Post
Forty million Indonesians do not have access to formal financial services. This lack of financial inclusion stunts growth and development in the region. The government is working to create solutions for its people. Mobile money services have been successful elsewhere, and would be welcomed by the estimated 70% of the population with mobile phones.  If the government were to “expand the regulatory framework for service providers to use mobile and electronic banking… banks and non-banks [could] provide a wider range of services through low-cost mobile banking solutions such as short message service (SMS).” Importantly, the article notes, this would enable Indonesian migrant workers to send money home easily and safely. In fact, this idea has been proven successful for Filipino migrant workers, who sent “remittances worth millions of US dollars home every month.”

“Indonesia To Give Migrant Workers Free Mobile Phones” by Steven Millward via Penn Olson, The Asian Tech Catalog
Last year, 4,000 Indonesians worked temporarily in South Korea. So far this year, 3,000 Indonesians have migrated to South Korea to work temporarily. As a result of the rising numbers, the Indonesian government and the National Agency for the Placement and Protection of Indonesian Migrant Workers announced a plan to provide 8,000 to 10,000 mobile phones each year to migrant workers. This deal is “in cooperation with the local manufacturer PT Nurkumala Abadi, a subsidiary of South Korea-based LG.” The goal of the plan is to encourage migrant workers to communicate consistently with their families and related government authorities at home to enhance their safety and comfort while working abroad. The government hopes this plan will prevent tragedies like the recent beheading of an Indonesian maid working in Saudi Arabia.

“Creation Investments Social Ventures Fund 1 leads a $5.5 million USD investment into Eko India Financial Services Private Limited” Press Release by Patrick Fisher via Creation Investments
Creation Investment Social Ventures Fund will invest $5.5 million in Eko India Financial Services, a “mobile banking technology provider in India.” Eko India provides financial services India’s unbanked, particularly to accommodate migrant workers. To date, Eko India “has served 912,455 customers through its 1,300 customer service outlets and employs 100 people.” Creation Investments CEO Patrick Fisher states: “We believe that Eko has best-in-class technology which gives easy, secure, inexpensive and convenient last-mile connectivity to the unbanked, migrant workers and the poor.”

“Staying in text” by Tammy Grubb via Chapel Hill News  
For Hispanic migrant workers and immigrants living in the United States, learning English can be an overwhelming obstacle to communication. To ease the transition for Hispanics in the US, there is a new SMS messaging service called ReK2 (pronounced reh-CAH-dos). ReK2 helps users learn English by sending daily vocabulary. ReK2 also “sends out weather reports and lets users post and read classified ads” to find work.  More than 450 users in North Carolina and Virginia use the service.



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Friday, July 8, 2011

Weekly Review July 4-8

Tomorrow, South Sudan becomes the newest country with their declaration of independence. At ID, the newfound independence sparked a conversation. We discussed social enterprise in post-conflict areas, and found that social enterprise will be and has been effective in South Sudan and throughout other conflicted areas in the world.

“Arab public sectors, the new battlefield” by Dag Detter via Al Bawaba
Recently, we’ve watched public uprisings unfold in Tunisia, Egypt, and Libya over high unemployment rates, mismanaged public sectors, and outdated political regimes. The common trend in MENA seems to be state-owned enterprises failing to meet the public’s needs and demands, which are as simple as employment and transparency. “A regional reform program for state-owned enterprises is a financial and social enterprise with global relevance.” Such social enterprises will not only development the economy, but give the people what they want: jobs.  

“Going for mobile money, Egypt operators face uphill battle” by Desmond Shephard via Mobile Money Africa
photo: Mai Shaheen via Ahram Online
Earlier this year, information and communications technologies played an integral role in the Egyptian revolution. Many will recall that Internet and phone services were shut down during the protests to oust President Hosni Mubarak. Despite the highly influential ICT sector in Egypt and obvious success of mobile money transfer services throughout Africa, mobile money operators will find it difficult to penetrate the Egyptian market until the telecoms recover their losses from earlier this year. Social enterprise in the form of mobile wallets will grant financial inclusion to the 90% of the population who do not have access to traditional credit cards.

“Inzozi Nziza, a social enterprise in Rwanda, sells ice cream and trains entrepreneurs” by Jonathan Kalan via Christian Science Monitor
In an effort to bring economic opportunity to a country still scarred from genocide in 1994,  two non-profits, Blue Marble Dreams and BPeace, teamed up to open Rwanda’s first ever ice cream shop. BPeace believes that “creating jobs creates peace.” The ice cream shop, called Inzozi Nziza or “Sweet Dreams,” is a unique social enterprise with both financial and social goals. Although not a high-tech product or elaborate business model, Inzonzi Nziza exists to foster entrepreneurship and provide employment for Rwandan women who were directly affected by the Rwandan genocide. The women working at Inzozi Nziza received training in all aspects of business and ice cream service.  While there are some struggles for this one-year-old social enterprise, Inzozi Nziza serves as an example of using business to create economic and social change in post-conflict areas.

“The private sector must assume a central role in global development” by Peter Davis via Guardian
The private sector has the power to create successful businesses that will also protect the environment, reduce poverty, and promote sustainable agriculture and safe water management. Especially in areas in post-conflict resolution stages, the article reports, the private sector has a significant influence on the development of a devastated area. For some investors, it may seem too risky to invest in post-conflict zones, however the potential for significant social return outweighs the cost of patient capital. In fact, for-profit social enterprise over non-profit philanthropy has a better capacity to develop a post-conflict area. “A study of post-war Bosnia concluded that ‘workplaces… [are] better suited than neighbourhoods or voluntary organisations for building bridges.’”

“South Sudan presents a mixed bag for business” by Steve Mbogo via Business Daily Africa
Kenya has been a key ally in South Sudan’s efforts to gain independence. Now, Kenyan business will play an influential role in the development of the world’s newest country as of July 9, 2011. Many Kenyan enterprises operate in South Sudan and a surge of new businesses is expected in the newly independent country. With the support of North Sudan and a largely anticipated peaceful declaration of independence, impact investors and social entrepreneurs may find new opportunities in South Sudan. An improved business environment means that it will take 15 days to register a business, compared to Kenya’s  30+ days wait time. Additionally, a new South Sudanese currency and Central Bank will build financial independence for the new nation.  All around, South Sudan is a new market for social enterprise and investment for those willing to take on the challenge. 



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Friday, May 20, 2011

Weekly Review May 16-20

This Weekly Review focuses on the economic and social opportunities in renewable energy and clean technology, especially within emerging markets to better the lives of the world’s poorest citizens.

SELCO solar panels in India at Simpa Site Visit

“Mobile Phones to Use Noise from Your Conversations to Charge Low Batteries” by Jaymi Heimbuch on TreeHugger
We know that there’s a certain connection between mobile technology and alternative energy, which is why they are our investment focus. Researchers at the Texas A&M and University of Houston are studying piezoelectric material that could harvest sound waves for energy. Researchers at a Korean university are studying particular ways to harvest sound waves that are abundant in urban environments. So far, tests show that “100 decibels of sound can generate 50 millivolts of electricity,” which is perfect for charging cell phones during conversations. Harvesting the sound energy from traffic has the potential to produce abundant clean energy, but would require extensive urban planning. The article reports that harvesting sound energy is still in its early stages, but something to look out for in the future. Capitalizing on energy that is readily available and potentially highly affordable will be beneficial to the poor populations in urban areas. 

“Renewable Energy Can Power the World in 40 Years: IPCC” by Brian Merchant on TreeHugger
It’s clear that the global community needs to find sustainable and renewable energy sources before we run out of oil or do any more environmental damage. In order for this to happen, change is necessary. Realistically, people and, more importantly, companies won’t change their energy consumption habits unless the government requires them to do so. With some governmental policy, the Intergovernmental Panel on Climate Change reports that “the world can get 80% of its power from renewable sources by 2050.” This includes everywhere from the US to Tanzania (where EGG-energy operates), to India (where Promethean Power and Simpa Networks operate). The report from the Intergovernmental Panel on Climate Change offers many great stats, including “the investment that will be needed to meet the greenhouse gas emissions target demanded by scientists is likely to amount to $5 trillion in the next decade, rising to $7 trillion from 2021 to 2030. “ What the article doesn’t touch upon, however, is that many investments will come from impact investors who have social goals beyond those that are simply environmental. Impact investors' contributions will promote economic development and improve citizens’ lives in emerging markets. Clean energy and technology in emerging markets can do more than save the environment (which is important, too). Investing in renewable energy in emerging markets can create jobs and provide products and services that the people there need to get an education or overall better their lives.  

“Emerging markets lead in energy growth,” by Aya Lowe on Gulf News
ExxonMobil’s latest Energy Outlook Report states that global energy demand “will be up 35 per cent in 2030 compared to 2005.” What’s interesting is that the demand coming from countries outside of the Organization for Economic Cooperation and Development (OECD) will “increase by 70 per cent in 2030.” See here for a complete list of OECD member countries. Non-OECD countries include India, all of Africa and most of South America. In other words, the three major areas where we seek to invest. Furthermore, “the types of energy consumed [are] also forecast to change in the coming years,” and we’re confident that the switch will be towards renewable in both developed and developing countries.

“Global alliance seeks to promote renewable solutions for rural electrification” by Eleanor Seggie on Engineering News
Simon Rolland is the secretary-general for the Alliance for Rural Electrification. He argues (and we agree) that people in Africa need to turn towards renewable energy sources. However, as we’ve noted before, there are many challenges for the social entrepreneurs who try to bring renewable energy to rural regions. The Alliance for Rural Electrification helps to alleviate some of those challenges by developing key recommendations for companies or those involved in the renewable energy sector “to guide governance and decision makers.” Rolland says, “Markets must be shaped according to the needs of the private sector because the first needs in developing countries are for reliable technologies, suitable business models and investment.” The Alliance believes that energy access in rural areas will contribute to sustainable development and progress. Here at ID, we seek to invest in those very companies that aim to electrify rural areas.

“How Start-Ups Will Lead the Clean Tech Revolution” by James Parle from Presidio Graduate School’s MBA program on Triple Pundit
Clean tech is one of the “fastest growing sectors in the economy.” Parle points out that GE’s Ecomagination foreshadows that “start-ups and not large corporations will lead the clean tech revolution.” More specifically, small start up social enterprises like those in our portfolio and clean tech incubators like our friends at Greentown Labs will have maximum impact and the greatest influence in the clean tech revolution. The most successful clean tech incubators, Parle notes, are those that operate with sustainable business practices with a triple bottom line: people, planet, profit. A combination of investors who are willing to offer patient capital and sustainable clean tech incubators will lead the clean tech revolution both in the US and in emerging markets. 


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