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.

Building Skills, Building Confidence: How Ultra-Poor Women in India Are Taking a Step Toward Self-Reliance

This is a guest post by Avinash Kumar, a staff member of The Livelihood School of BASIX who is working with Grameen Foundation as the project manager for the Livelihood Pathways for the Poorest project in Gaya, India.

Asha Devi’s eyes sparkled as she rolled agarbatti (“incense sticks” in Hindi) for the first time. Asha is a member of an adapted self help-group (ASHG) in Pali, a village in India’s Bihar state, where the Livelihood Pathways for the Poorest, a joint project of Grameen Foundation’s Solutions for the Poorest group and BASIX/The Livelihood School, is being implemented. The sparkle in Asha’s eyes reflects newfound self-confidence and pride that by selling handmade agarbatti, she will be able to supplement her family’s income.

Women from the program hold up their newly-rolled agarbatti (incense sticks) during training

Nearly 100 women from six village ASHGs participated in our week long training. Agarbatti rolling, which is a common activity in almost all of the villages in the Gaya district of Bihar, is one of two income-generating activities being promoted through the project. These activities require simple skills and provide modest increases in income to help households meet their immediate consumption needs. As the clients’ confidence levels and skills increase, the project team will transition them into entrepreneurial income-generating activities, such as poultry farming and goat rearing, which require higher initial capital investment and skill sets but can significantly help fill income gaps throughout the year.

The agarbatti rolling training was unique not only because it was the first time women from the poorest families were receiving it, but also because it was the first time local women were given a leadership role to train their fellow community members. The experience of having a local woman train them in this skill helped increase the participants’ confidence, leaving them optimistic about their prospects and ability to contribute to their families’ income. While agarbatti rolling is common in the region, many of the households participating in our project had never done it because they live in relative isolation, making it more difficult for them to access agarbatti agents and vice-versa. Instead, they have depended largely on wage labor from agriculture production, construction work and road building.

Faced with very unpredictable and insecure income sources, these families have not had the luxury of time nor the opportunity to experiment with an entrepreneurial activity. In fact, these households often lack the necessary self-confidence to take up and learn a new activity, even such low-skill ones as agarbatti rolling. One of the aspects of the project is building the self-confidence of the members and, which, thus far, has been successful.

This training is the beginning of a change in this aspect of these women’s lives. As their self-confidence grows and they see their income rise, this positive change cycle will encourage them to seek out other opportunities. As they move forward, our team will work with them to continue on this path.

Savings for the Poor: Some Key Lessons

There are often myths and misperceptions about the ability of poor people to save. At the SEEP conference, Kate Druschel Griffin, director of Grameen Foundation’s Solutions for the Poorest team, discussed those myths and also highlighted lessons her Microsavings team has learned over the past two years.

The Microsavings team has been working with three organizations in three countries: ACSI of Ethiopia, CASHPOR of India, and CARD Bank of the Philippines. Some of the key lessons they learned include:

1. The poor are saving – and thanks to our poverty measurement tool, the Progress out of Poverty Index® (PPI®), we’re able to track how people at different poverty levels are saving in their accounts. This helps us better adapt products to their needs.
2. Technology is and will continue to be a key component in any program, but trusted intermediaries can play a critical role.
3. The poor know why and how to save. However, they often need more guidance and financial education so that they can better understand and choose between the services that are available to them.

Watch a video of Kate speaking at the conference.

Helping the Poorest Access Resources, Training, Financial Services

Luckshmi Sivalingam, Program Officer for Grameen Foundation’s Solutions for the Poorest program, oversees the Livelihood Pathways for the Poorest (LPP) project in India.

One week last August, after slogging barefoot through a kilometer of muddy fields and monsoon rains, my colleagues from The Livelihood School at BASIX India and I reached our first ASHG (adapted self-help group) meeting of the week. We were greeted with warm smiles from the female members of one of the strongest ASHGs developed through the Livelihood Pathways for the Poorest (LPP) project in Bihar, India, to date. Trust levels and self-confidence are slowly building, as are savings habits among our members. Our project has two main goals: identifying and building a diverse and stable group of livelihood activities that will generate increased income throughout the year, and providing immediate and long-term socio-economic support for the group members and their families.

We have been working with the local government since May to link poor households to various support programs, including child and women’s healthcare and work for unskilled laborers. (The 2005 Mahatma Gandhi Rural Employment Guarantee Act guarantees 100 days of wage labor for adults in rural communities who are willing to do unskilled manual work or the equivalent in wages.)  Though the households in our project were eligible to receive these government programs, they either didn’t have the required proof of identification (India is one year into a national ID campaign that many hope will alleviate this problem) or were not aware of them. With our help, they now appreciate the immediate, tangible benefits of engaging in the government programs, as they begin to gradually access and experience the much-needed services that are rightfully theirs. Since we began our discussions with the local government, our target villages have been assessed to see which eligible households lack job cards; the ones that do are currently being processed. In addition, the households will each receive one to two fruit saplings for planting next month.

Participants in one of the LPP project's Adapted Self-Help Groups, or ASHGs, discuss the importance of savings.

Understanding our clients’ thinking and the conditioning caused by a lifetime of chronic poverty is one of the most challenging aspects of this work. Our ready access in the developed world to the conveniences of modern life can limit our ability as practitioners to relate to and understand the very different reality of the poor we are seeking to help – a reality that can be a painful one. Living and interacting with them provides us with a window into the challenges of their daily lives, and shapes our own understanding of their needs and the context in which they live. It also helps us to understand the rationale behind the difficult daily decisions they must make – how to feed themselves and their families, what they must forego for the survival of their children and what sacrifices must be borne by the entire household, regardless of age. Designing a methodology, products and services to create “livelihood pathways for the poorest” will be a process of testing and retesting these next two years.