Collaborating to improve productivity and the quality of life in Colombia

Mobile phones can transform the way rural farmers in developing countries get information to better manage their crops and animals. Today, Grameen Foundation announced a new collaboration with MasterCard Worldwide that will develop new mobile applications for rural farmers in Colombia.

With these solutions, a smallholder farmer will be able to know the specific prices for his crops and the best weather conditions for planting and harvesting, without even having to leave his land.

The pilot will start in Urabá and Santa Marta, areas that were hard hit by Colombia’s internal conflicts. Over the next year, we will begin using research that was conducted earlier to test applications that will enable farmers to access information more easily and provide the organizations that serve them with tools to do so more effectively.

In addition, we will be tapping volunteers from MasterCard to work on this project and other global initiatives through Bankers Without Borders®, Grameen Foundation’s volunteer program.

Listen to Alberto Solano, Grameen Foundation’s regional CEO for Latin America and the Caribbean, discuss this initiative.

Read more at the MasterCard Worldwide blog.

Lessons Learned From Mobile Money in Tanzania

While researching mobile financial services (MFS) best practices, Grameen Foundation had an opportunity in August to visit Tujijenge Microfinance, a microfinance institution (MFI) in Tanzania. At the time of the visit, it was the only MFI in the country that had implemented MFS, and used it for more than two years, reaching one-third of their clients (5,000 people) with noted impact in institutional growth. It has used MFS for collection, both savings and loans.

Debora is a client of Tujijenge and serves as treasurer for her loan group. She sends repayments for the group using M-Pesa on her mobile phone.

Although MFS has been successful in Tujijenge, there are key lessons to be learned from this implementation. What was evident from the study was that customer awareness and training is key. Tujijenge did invest a lot of time training clients, conducting training at each group meeting, and creating informational pamphlets with simple language. Literacy levels in Tanzania are quite low, leaving a question over the success of the training and pamphlets, and whether clients had to struggle to understand the product, which would affect how easily and quickly they trusted the system.

The MFI’s staff are happy with the initiative. However, they are challenged by the down-times by the Mobile Network Operators’ system and the low literacy levels of most of their clients, which means they must spend a lot of time helping clients send their repayment. This close assistance can lead to fraud, as a loan officer may send money to his or her own phone account or to a wrong account, intentionally or accidentally. One way of mitigating this risk involves proper client training and awareness.

Another challenge involves the country’s financial regulator, the Central Bank of Tanzania, which regulates the amount that the e-wallet can hold per day. Each SIM card can only send a fixed amount of e-money per day and the transaction cost for loan disbursement is fixed at 1% of the value disbursed to the client. Due to these limitations, Tujijenge is not actively using mobile for disbursement.

Additionally, we have learned is that it is important to peg an MFI’s key performance indicators to any incentive scheme for staff, to motivate staff to enroll more clients into using the system when an MFI is rolling out MFS.

We’ve seen that market research is key to implementing mobile. MFIs interested in implementing such a program should always visit other regions where MFS is working, and do their own research, to familiarize themselves and contextualize how MFS works. “Copy and paste” never works! Remember that a different environment will always offer its own unique circumstances.

Finally, manage your expectations when rolling out an MFS solution. Tujijenge expected that many clients would be interested, but discovered many pitfalls after the pilot because it did not conduct enough market research prior to implementation, and so lacked information.

Note From the Philippines: Client Learnings on Microsavings

Any good bank strives to understand its clients’ preferences and needs. This is especially critical when you’re working with very poor people. In our three-year microsavings project at CARD Bank in the Philippines, Grameen Foundation Project Manager Julie Peachey has worked with the CARD savings team to implement a better, more accessible savings product for their clients. She discusses her experience in the September edition of Microlink’s Notes from the Field. We’ve included a short excerpt of her piece below, followed by a link to the whole article.

CARD Bank client with her ATM card.

“By the grace of God, my business is running well these days. CARD Bank’s Matapat account is convenient for small traders like me. I need smaller amounts more frequently for my business, and the ATM helps me withdraw money at my convenience.” What a joy to hear Evangeline, a CARD Bank client, speak so positively about her experience with the various features of a newly designed savings product. In a conversation with our team, Evangeline told us that she likes that Matapat ensures a return on her savings, and she is particularly pleased about the texting service for deposit pick-ups. Evangeline explained to us, “I am using SMS pick-up to deposit to my account, thus avoiding a wait at a teller counter. The receipts given by the savings associate and confirmation message received on my mobile give a feeling of security since I know my balance from my phone.”

Scaling up affordable savings products

It was just about a year and a half ago that I arrived in San Pablo City, Laguna in the Philippines and took up my role on CARD Bank’s newly formed savings team as lead Project Manager from Grameen Foundation. Grameen Foundation is partnering with CARD Bank [i] in a three-year project aimed at scaling up CARD’s offerings of safe, convenient, and affordable savings products to poor clients. The goal is to reach 350,000 new voluntary savers by October 2012.

>> Continue reading this article at Microlinks’ website.

Money & Meaning: Manage What Matters

Steve Wright is Director of Grameen Foundation’s Social Performance Management Center. He is a keynote speaker for the upcoming SOCAP11 conference. This is the 2nd of a series of blog posts focusing on money and meaning (You may also want read Part 1). We’ve excerpted a section of the post below, with a link to the full post afterwards.

Maximize Impact

Markets : Capitalism :: Physics : Ideology

Markets have natural laws, like physics. Capitalism is an ideology. Ideologies can be changed.

All social enterprises want to know if they are producing positive social outcomes. They closely monitor their financial performance to maintain sustainability and closely monitor their social performance to see if they are achieving their mission of doing good. This blog focuses on the questions “Am I any good?” and “What is the good I am producing?”

There is no quantifiable unit of good

I have always found it strange that social performance is predominantly perceived as a measurement problem. The reality is that great social enterprises don’t focus on measuring what matters; their priority ismanaging what matters. Measurement is an artifact of good management. To a large extent the obsession with measurement is a problem unique to socially-funded entities (by that I mean organizations with capital provided at a rate of return between -100% and about 6%.) Because the money is not earning as much as it might otherwise, it needs additional justification to be invested. An investor/funder wants to ensure that their money is well spent, that it earns a valuable return that includes both money and social impact. The social impact or non-monetary component of the return on the investment comes in the form of social metrics or measurement.

However, as Kevin Jones, Co-Founder SoCap Conference, said to me recently, “Understanding the specific impact of a specific dollar invested is a pipe dream.” Even if it were possible to track a specific dollar’s impact, the overhead to do it would be significant and would subtract from the resources needed to achieve the impact. With this as a given, how do we build a marketplace when a marketplace requires comparability to understand relative value?

For a for-profit entity this is easy. An investor gives an entrepreneur a dollar and sometime later gets $1.25 and rejoices at the 25% return on investment (ROI). The math is easy because the input and the output are the same thing: money. In a social enterprise, money is an input but it is not an output. Money is important because it dictates sustainability but profit is not the purpose of the enterprise; social impact is. A massive amount of work has gone in to replicating this math to calculate an SROI (social return on investment). The work of REDF, Jed Emerson, Social Venture Technology Group and others have taught us a tremendous amount about what is possible. A primary lesson from this SROI work is that there is no monetary equivalent to a universalunit of good. Moreover, it is not rational to equate a specific social outcome to the amount of money that was spent to produce that outcome. We cannot use a financial balance sheet to compare the relative goodness of a homeless advocacy group in Brooklyn and a fair trade cooperative in Peru. The Beatles said it best: Money can’t buy you love.

>> Read Steve’s entire post at the SOCAP11 Blog.

Seeing Is Believing

Luckshmi Sivalingam is a program officer in Grameen Foundation’s Solutions for the Poorest initiative, where she is managing a pilot program to expand income opportunities for the very poorest people in India.

After what seemed would be a third year of dry spells during the critical monsoon season, the rains have finally come in Gaya district of Bihar, India. Agriculture is one of the primary revenue sources for both farmers and wage earners like the 200 households that Grameen Foundation is reaching through the Integrated Livelihoods Model for the Poorest (ILM) pilot project being implemented in partnership with BASIX/The Livelihood School. The rains bring increased wage-earning opportunities, which translates into enhanced income and food security for most poor rural households.

The rains have finally come in the Gaya district of Bihar, India

To lessen the risks that come with erratic income-generating opportunities, Grameen Foundation’s Solutions for the Poorest (SfP) team is trying to gradually enhance the skills of the primary breadwinners of the households participating in the initiative, and connect them to more stable livelihood activities. These activities include supplementary income-generating opportunities that are often seasonal and low-skill, as well as entrepreneurial or productive activities that have a higher income-generating potential and often require increased skill sets and start-up capital.

Through our project, we are promoting livelihoods by first enhancing existing supplementary income-generating activities or introducing new ones that can rapidly increase household income and enhance our clients’ self-confidence and trust in our project team and partners. Next, we will introduce new, entrepreneurial livelihoods that generate higher incomes and can sufficiently fill the gaps in income that the rural poor often experience throughout the year. Examples include rearing goats, poultry farming and selling vegetables. By using this approach, we move away from creating an immediate dependency on credit to meet daily consumption needs and avoid disrupting clients’ existing livelihoods.

Over the past month in Gaya, we’ve held “exposure visits” for our clients to enhance their understanding of both the supplemental income-generating and entrepreneurial livelihood activities. These visits enable clients to visit another location to observe and learn from the other community’s activities and experience. Most importantly, they are able to see the various processes and participants involved in the entire chain of activities we will link households to. This deepens their understanding of the benefits and challenges of each activity and better informs their decision to commit to the “right” livelihoods for themselves and their households.

Two weeks ago, our clients visited the neighboring village of Orr, where they met with women of the same socio-economic background who have successfully engaged in “kitchen gardening.” This method of small-scale vegetable production involves very little or no land, and mostly organic inputs. Home-grown vegetables significantly increase nutritional levels while also contributing to income, as families can sell excess produce. Our clients also received a demonstration on gunny-bag gardening, which is essentially a garden in a bag that grows along creepers against the walls and roof of the house.

Before the visit, our clients doubted whether they had the capacity to start new activities, but after seeing how successful their peers have been, they said, “Now that we have seen them do it, we know we can do it too! And, we are ready to start!” Seeing really is believing.

Grameen America: Bringing Microfinance to the U.S.

Alex Counts is president, CEO and founder of Grameen Foundation, and author of several books, including Small Loans, Big Dreams: How Nobel Prize Winner Muhammad Yunus and Microfinance Are Changing the World.

Recently I had the pleasure of visiting our sister organization, Grameen America, which has been providing microfinance services to low-income, mostly Hispanic clients in New York since 2008, and has since opened branches in Omaha and Indianapolis.  My host was GA’s CEO of Operations, Shah Newaz, someone I have known for more than 20 years.

When I first arrived in Bangladesh, Shah was head of Grameen Bank’s audio-visual unit, and later became the longest-serving zonal manager in the bank’s history.  (A zonal manager is the most senior field-based position in Grameen Bank’s structure.)  Some years after that, he served as a senior technical consultant for Grameen Foundation in the Dominican Republic, where he did a great job and picked up some Spanish (which he has continued to perfect in his new role).

Alex Counts attends a Grameen America center meeting in Jackson Heights, NY. (Photo by H.A. Shah Newaz.)

I was interested in how GA was progressing for a lot of reasons.  My book Small Loans, Big Dreams extensively examined one of the earliest microfinance programs in the United States, the Full Circle Fund.  While doing that research, my eyes were opened for the first time to the vibrancy of the grassroots economy in many inner-cities.  Later, I became involved in microfinance institutions in the United States that Grameen Foundation also supported: Project Enterprise in New York City, the PLAN Fund in Dallas and the New Opportunities program of Volunteers of America in Los Angeles.  Though the LA program was phased out, the other two continue providing microfinance effectively while drawing on the Grameen Bank model extensively.  However, they operate on a relatively small scale, even as they try to serve a lower-income population (including many African-Americans) than other microfinance and microenterprise programs here serve.

A Farmer Milks His Smartphone to Help His Cow

Dani Limos is a Marketing and Communications Intern at Grameen Foundation’s Seattle office.

The dairy cow needed more calcium.

When Gonzaga Kawuma’s cow collapsed and could not stand up, Gonzaga was away from his farm. His wife called him on his smartphone with the disheartening news. Without seeing the cow in person, without conducting expensive tests, without being an expert in agriculture, Gonzaga was able to conclude that the cow needed more calcium.

Why was this cow having trouble standing up? Gonzaga relied on his smartphone to diagnose its illness.

This cow’s fall could have been caused by a number of ailments – muscle fatigue, arthritis, foot rot – but a shortage of calcium in a cow that produces milk? How could Gonzaga ever come up with such a diagnosis?

As a Community Knowledge Worker (CKW) in Uganda, Gonzaga has access to a wealth of farming knowledge through mobile phone technology. He helps other poor farmers every day find solutions to their problems, providing them with information about weather, crop and animal diseases, market prices, and the like. Now, as a poor farmer himself, he was his own client. He took out his smartphone, typed in the symptoms of his dairy cow and pored through databases of information. The verdict? “Milk fever.”

Caused by a sudden shortage of blood calcium, milk fever causes the cow to stagger, experience difficulty rising, and finally become unable to stand at all. It often occurs when the cow gives birth, and the demand for calcium to produce milk exceeds its ability to do so. Gonzaga’s cow had given birth just three days ago.

Gonzaga was able to save his cow – and his livelihood – thanks to the information he found using his smartphone.

The information that Gonzaga had found suggested contacting a veterinarian for help. Taking advantage of his smartphone once again, he called a vet, who prescribed a calcium injection. The treatment was administered and the cow successfully recovered. Thanks to Gonzaga’s CKW access, the cow is healthy and currently produces between 18 and 20 liters of milk per day!

Learn more  about our Community Knowledge Worker program in our previous blog posts, or read more at Grameen Foundation’s AppLab website.

Money & Meaning: Return Value

Steve Wright is Director of Grameen Foundation’s Social Performance Management Center. He is a keynote speaker for the upcoming SOCAP11 conference. This is the first of a series of blog posts focusing on the intersection of money and meaning. We’ve excerpted a section of the post below, with a link to the full post afterwards.

Recently, a lot of great thinking has happened around the idea that business – and by extension the economy – should return value, in addition to generating profit. For example, Mark Kramer and Michael Porter wrote a very interesting piece on creating shared value that was also discussed in this New York Times article, “First make money. Also, do good.” Nestle Corporation is one of a growing number of companies that see shared value as an evolved form of corporate social responsibility. Customer capitalism (which focuses on providing value to the customer before the shareholder) is described in the Harvard Business Review as the third stage in the evolution of capitalism. (Professional management and shareholder capitalism are the first two.) And Umair Haque’s book, the New Capitalist Manifesto, describes “thick or authentic value” as the subtraction of total or real cost from the price a product can demand.

This is a good thing; however, it is still within a largely amoral paradigm, where the mythology centers on the primacy of profit while – potentially, maybe, hopefully – “doing good”. This can also be seen in how we (social enterprises and investors) use the words “sustainable” and “profitable” interchangeably, depending on who we are talking to. “Sustainable” implies a primary focus on doing good, while “profitable” implies a focus on profit.

My intent here is to make arguments that err on the side of doing good, arguing that we should focus on meaning before money.

>> Read Steve’s entire post at the SOCAP11 Blog.

You Can Support Mobile Microfranchising in Indonesia with Your Vote

Susana Escudero is an intern for Grameen Foundation, based in our Washington, DC, office.

Grameen Foundation has been selected as a semi-finalist for the Ashoka Changemakers Powering Economic Opportunity: Create a World that Works competition, for our initiative to provide mobile phone-based services and business opportunities for the poorest in Indonesia. We were selected as one of 15 semi-finalists from 873 innovations in 83 countries around the world!

The 10 projects that receive the most votes from July 20 through August 10 will proceed to the final judging round, where five organizations will be chosen to each receive a $50,000 grant to further their work. Your vote today will help us become one of those finalists, enabling us to help improve the life of Halimah and more women like her in Indonesia.

Halimah, who lives on the island of West Java, owns and operates a small shop with her husband. Though he tries to find day labor whenever possible to help supplement their income, his work is not steady, so their income is not consistent. Like most of us, Halimah’s dream is to provide a better life for her children, aged 9, 13 and 15. Despite all her hard work, for many years her family’s combined income averaged only $1.80/day.

But that was before Grameen Foundation offered her new income-generating opportunities. For the last four years, we have worked with our collaborators – Qualcomm Wireless Reach, PT Ruma, and Bakrie Telecom – to help people like Halimah to lift themselves out of poverty.  Through our Village Phone initiative and AppLab program, we offer poor entrepreneurs profitable mobile phone-related business opportunities that can help improve their lives.

When Halimah was approached by a Ruma field officer about starting a new line of business selling airtime, she was excited about the possibilities and agreed to do it, because of the existing demand and the potential of a steady cash flow for her shop. Today, Halimah is able to provide an additional income of $1.10/day for her family through her mobile phone business.

Ibu Halimah has been able to increase the income from her small store -- and provide a better life for her children -- by selling airtime for mobile phones to others in her village.

AppLab Indonesia provides the working poor with an innovative and sustainable way of meeting growing demand for affordable access to information through a microfranchising model that is easy for them to use and benefit from. To find out more about the initiative, watch a video about the project on the Grameen Foundation website.

You can be part of the team working to help poor women like Halimah – with the click of a mouse! Please visit the Changemakers competition website to learn more about our innovative project and vote for our Mobile Microfranchising in Indonesia initiative, and ask your friends and family to do the same.

You can vote once during the three-week period for each email address you use (so, for example, if you have a personal email address and a work email address, you can vote once from each account). The Changemakers site will ask you to either create a username and password linked to your email address, or log in through your Facebook account. With enough votes – and a $50,000 grant – we can continue expanding our efforts to create opportunities for women like Halimah.

Celebrating 10 Innovative Years Fighting Poverty with Technology

Georgina Allen is a marketing and communications intern, based in our Seattle office.

David Edelstein, Director of Grameen Foundation Technology Center, speaks about the poverty-fighting potential of the mobile phone.

It’s been 10 years since Grameen Foundation established its Technology Center in Seattle to empower poor people through information and communication technology. On Tuesday, May 17, we hosted an open house to celebrate this milestone and thank the donors and supporters who help make our work possible. Almost 200 people attended!

Upon arrival, guests were invited to make their way around the space where different “stations” were set up to highlight each of the Tech Center’s projects and demo some of the accompanying mobile phone technology.  Photographs of microfinance clients, farmers and pregnant women who have benefited from our work lined the walls, with a story behind each photo that demonstrates the potential of communications technology in economic development.  Our staff was excited to welcome our supporters to explain more about our work and connect with people in the Seattle community.

Just when the office felt like it was at capacity (or over), Alex Counts, President and CEO of Grameen Foundation, took the stage to share some reflections on our work.  After welcoming and thanking supporters, Alex recollected the birth of the Tech Center 10 years ago.  At that time, Craig and Susan McCaw, long-time philanthropists with a background in telecommunications technology, generously partnered with Grameen Foundation to finance a replication of the village-phone program that Grameen Bank had pioneered in Bangladesh.  This seed then grew into the idea to establish an entire technology center devoted to the field of information communications technology for development.

Susan McCaw recalls the early days of Grameen Foundation Technology Center, while (from left) Alex Counts, Peter Bladin, David Edelstein and Craig McCaw look on.

Following Alex,  Susan McCaw briefly discussed her and Craig’s long-time belief in mobile technology as a solution to economic development.  She commented on the importance of dignified solutions like the Village Phone program, where individuals get the opportunity to earn income for themselves while offering a valuable service to individuals in their community.  She also drew on her experience as an ambassador, implying that “micro solutions,” like those supported by Grameen Foundation, actually have the potential to help solve “macro problems” like global security.

To conclude, Peter Bladin and David Edelstein, founding and current directors of the Tech Center, went through a list of the Center’s major accomplishments over the years, including proving the value of technology to microfinance institutions, delivering relevant and actionable agricultural and health information through the mobile phone, and creating microbusinessses.  Both acknowledged that Grameen Foundation’s mobile phone-related work would not be possible without the ability to partner with private mobile phone companies – whose work is the reason why 4 billion phones are in the hands of individuals in the developing world.  Both Peter and David also attributed our success to enduring core values – empowerment, sustainability, scalability and collaboration.

After nearly three and a half hours, the last of the guests trickled out, full of cheese, donated wine (courtesy of Vehrs Domestic and Imported Beverages) and interesting Grameen Foundation tidbits.  If the success of this event is an indication of how the rest of our anniversary-event series will go, be sure not to miss the next one!

Be sure to check out our photo album as well as a video of the program.