Despite the best efforts of the development community, resource-dependent developing countries continue to be plagued by economic stagnation and political corruption.  The solution rests in the palm of our hand.  By utilizing the existing mobile phone infrastructure to establish a nation-wide m-banking system, these countries will be able to use digital direct transfers to solve the resource curse.

Direct transfers have limited corruption in extractive industries in developed countries, but many policy analysts believe that this approach is not a viable option in the developing world.  However, the m-banking movement is demonstrating that mobile technology can make financial systems possible even in the poorest settings.  Therefore, by using M-banking on a national scale to implement a digital direct transfer system, resource-dependent developing countries will be able to harness the benefits of the developed world’s solution to extractive industry and in so doing, promote good governance and guard against corruption.     

Though complex in implementation, this project is simple in design.  The establishment of a national m-banking system will be part of the negotiated resource contract.  Using national identity numbers, an individual bank account will be created for each registered citizen, and then a proportional share of the nation’s resource revenue will be electronically transferred into each one of these accounts on a regular and predictable basis with market prices and transfer amounts announced on the radio, newspaper and on an accompanying SMS.  These deposits, like those in M-banking, will be accessible with any cell phone and will be able to be easily transferred to another account or converted into cash at trading centers.

To the individual in poverty, the paths out are unknown. In this situation and alone, he/she can only try directions out. If he is repeatedly disappointed in his attempts, he caves in. He cannot get out. In opposition, individuals can develop strategies where they share their findings, coordinate their decisions and explore together their ways out. Our NGO grew out of a mathematical model we developed at the MIT for such coordination games. Since, we’ve been playing them in Brazil to find jobs (bring together our disparate, long searches into joint, quick searches) and to repair homes (our disparate, costly repairs into neighborhood, cheap repairs).

Job Games: A choice of activity (courses, certifications...) is also a probing of a neighborhood for knowledge on what works and what doesn’t. Through coordination, we can escalate what is probed to a degree many times beyond what anyone could try alone in their entire lifetime (the quality of our decisions following). By modeling the past movements of all players, the system predicts and coordinates their best future paths. Trying a recommended activity, the player (and his community) gain a little more information. So that with more people and more time, the community collectively maps (with increasing reliability) its neighborhood possibilities. The ensuing dynamics is akin to a scavenger hunt and very efficient - once players can predict the actions of one another they part in different directions and explore the entirety of the landscape quicker than alone.

Housing Games: The possibilities hide now not in the neighborhood, but in the neighbors. Fixing a faucet, putting a coat of paint in a wall, planting a tree, once again they are within reach if only the individual knew. The system recommends mutually-benefiting plans of joint action and let players send out invitations to act. Upcoming are christmas neighborhood decoration and samba band assembly games.

Instead of being imposed top-down, solutions in these games emerge from conversations between players. Mobile technology not only is the natural channel for these conversations, but also puts in touch both the necessary number of people (almost half of young urban Brazilians live in slums, 65% have cell phones), and the necessary type of people (locals with similar constraints and problems to solve).

Our initial thoughts were: our diverse, small-scale communities need to discover on their own what works on their diverse, small-scale economies. This way, effort will be connected to visible advancement, not disappointment. This way, we won’t have anyone that is willing to work hard living in such demeaning conditions simply because they don’t know something. And today, as our communities set in coordinated motion, it’s observing the unfolding of this unlikely ‘justice’ (the increasing correlation of effort and success) that makes us think they are becoming places of their own, in poverty but not of poverty, a thousand small lands of opportunities.

Small and medium enterprises (SMEs) are an important engine of economic growth missing from many developing countries where limited access to financial services severely restricts their capacity to grow and prosper. Without loans, credit, savings and payments services to create, maintain and expand their businesses, small businesses and microenterprises are unlikely to create jobs or take advantage of new economic opportunities.

A critical obstacle that must be overcome to successfully connect small firms to financial services and capital is the general lack of information that small firms are able to provide financial institutions about their operations. As predominantly cash-based businesses, most small firms are unable to produce the data financial institutions need to adequately assess risk and determine suitable terms and conditions.

MPOWER Mobile plans to solve this problem with a mobile software application called YAP Accept that can turn any cell phone into a Point of Sale (POS) system capable of accepting credit and debit card payments. By linking a reloadable debit card to the entrepreneur’s mobile phone, he/she is able to accept payments through the SMS interface and the money is then credited to the debit account.  For example, a residential painter equipped with YAP Accept can receive payments for his job using YAP Accept.  The money is loaded into his debit account which he can then use to purchase the supplies needed for the job. With this powerful and simple solution, micro-entrepreneurs anywhere in the world will be able to expand their customer base, reduce the cost of doing business, document their transaction history and develop a logged cash flow they can use to demonstrate their credit-worthiness.

VillageSuite is a concept for a multi-user suite of applications focused on empowering people in developing countries whether urban or rural.  The applications focus on allowing users to utilize banking institutions, receive fairer prices for goods and crops, and increase literacy. 

 Applications include:

Mobile Banking- an application allowing users to utilize payments and transfer funds remotely since many Africans do not have access to bank institutions and are unaware of current mobile banking operations.

Market Prices - Ensures growers can get fair prices for their crops when many are unaware of current market prices by offering daily updated prices from local,  national, and regional markets.  

Store - A simple app utilizing (if available) a phone's camera  and simple interface for villagers to list items for sale from singular to bulk local or internationally. Included would be a payment system linked with the banking app to ensure villagers receive cash and has it protected.  Farmers could also use this app to inform buyers of harvests, overstock, and other sales items as well.

Reading - An application devoted to increasing literacy by teaching users how to read with audio and quick tests.

Math - Allows children to learn basic math concepts from adding and multiplication to more concept business related subjects.

Logistics - Bring drivers, pilots, and producers together with updated pickup, shipping, and delivery times as well as alerting each other of new orders and changed schedules to enhance efficiency and cut down  on cost.

The suite would have a multi-user interface to allow people to share the same device while not giving up privacy or security.  In case some users are illiterate, the icons will be user-friendly and clear of purpose as well as an audio byte in the native language the app's basic function when pressed.  This last feature can be turned off however would be the default. The software would be open-sourced so other developers could personalize and improve upon it as well as increase the availability via cost.

For too long, we have conducted development without good information about our “customers” – the people whose lives we want to improve through our money and effort. We believe this is because developing countries often lack good statistical information on which policy-makers, donors, and private companies can base sound decisions. To date, our knowledge has mostly been limited to expensive door-to-door surveying techniques or difficult phone interviews. The proliferation of mobile phones in developing countries opens the exciting possibility of surveys reaching far fewer people for far less money and providing income for the beneficiaries themselves.

In this system, text messages would be sent to mobile phone users with one or two question surveys, perhaps about health care, education, or even consumer preferences. To provide an incentive to reply, mobile phone credits or mobile banking payments will be issued in exchange for complete surveys. Backend analysis will be used to improve credibility of the results, a task which will be made easier by the large number of people reachable using this system.

Those data can then be used by local, regional or national governments to improve service delivery, by donors and multilaterals for analysis and reporting and even by private companies interested in serving the bottom of the pyramid.

The data platform itself could also have the added benefit of spurring on the spread of cell phones and mobile banking to underserved populations. Instead of being a service they have to pay for, they can be paid to have access to these technologies and financial products.

We have conducted over one year of research to advance this concept and have determined that many of the tools already exist but have never been aligned in quite the right way. We are looking for seed capital and partners to help us launch this exciting venture.

Dana Worth and John Stephenson, the project directors, have extensive experience in both the private and public sectors. We both started our careers at private sector strategy consulting firms and now work at Dalberg Global Development Advisors, a firm that applies business approaches to the challenges of development. Through our involvement with healthcare and humanitarian response works, we have been struck by how little data district, province, national and international decision-makers have at their disposal, and consequently, how many critical decisions were made based on old numbers of just plain gut-feeling.

Making Cents International’s recently developed Value Chain Analysis and Market Opportunities curriculum brings the world of value chains into perspective for young entrepreneurs, helping them to discover market opportunities and business relationships that are critical to sustainable business growth.  This curriculum provides students with the knowledge and experience they need to take their learning beyond the classroom and into their communities.  As a result of this course young people are able to conduct market surveys on their own, know what a value chain is and why it matters for the growth and management of their business, as well as understand how to respond to changes in the market.  The curriculum has been piloted in Senegal, Niger, and Sierra- Leone.    Leveraging the power of cell phone technology, Making Cents International seeks to further engage newly trained youth by presenting them the opportunity to join a mobile business network of entrepreneurs and market opportunity seekers.  With an estimated 4.123 million cell phone subscribers in Senegal, and 776,000 in Sierra Leone, information can be shared and disseminated with relative ease.  Furthermore, youth have a strong proclivity to join networks and to effectively utilize new technology.  As members of the “Youth-Cell” network youth will exchange local market information with other members spread across the entire region to help broker new transactions, share innovative ideas, and create business partnerships that will lead to greater market penetration.        The type of information found on the network might include real-time prices of sector related goods and services, a marketplace, ideas forum, and tips and trades “from youth like you!”  As the network and demand for services grows, other features will be added organically to meet the specific needs of the member users.  The Youth-Cell Market Opportunities project would be piloted in Senegal and Sierra-Leone with the vision of going global.

Since 1997, USAID has provided support for the Rural Bankers Association of the Philippines Microenterprise Access to Banking Services (RBAP MABS) program www.rbapmabs.org [A1] which has been providing training and technical assistance to its participating rural banks to help them establish profitable, sustainable microfinance operations. MABS works under the Rural Bankers Research and Development Foundation (RBRDFI) to provide training and technical assistance to 700 member rural banks with more than 2,150 branches nationwide.  Over 200 rural banks now have active microfinance operations reaching more than 800,000 borrowers.  The sector as a whole provides deposit services to mostly low income households and they now manage more than 6 million deposit accounts. MABS has identified however that rural banks need to improve efficiency and reduce transaction costs in order to effectively reach more microenterprise clients especially in rural areas.

With over 66 million mobile phone subscribers in the country and with the existence of two mobile money platforms (GCASH and SMART Money), the ability for banks to reduce operational and transactional costs and reach out to more clients is now being offered via m-banking..  Since early 2005, the MABS program has developed a full set of m-banking applications that utilize the GCASH platform that run on almost all basic mobile phones.  Services include person-to-person money transfers, international and domestic remittances, micro loan disbursements and payments, deposits and withdrawals, payroll services, bill payments, and the ability of merchants to buy and sell products using GCASH while facilitating remote deposit and cash-out services at accredited rural banks. Over 70,000 clients have been registered by accredited banks and plans are to reach out to more than 500,000 clients and customers over the next three years. M-banking transactions tripled in 2006, 2007, and again in 2008. There is now a huge opportunity to expand m-banking for microfinance through RBAP’s recent partnership with SMART (with almost 35 million subscribers) as well as renewed support and commitment from Globe (with almost 25 million subscribers). There are also plans to expand m-banking services to include automated message alerts, loan payment reminders, and other services through an SMS gateway.

 [A1]Can this be included as a hyperlink?

One of the greatest problems which is faced during the successful implementation of the Development Schemes is lack of proper awareness about them amongst the target beneficiaries and if they need it would cost them a lot of time and money just to get the information. Our project aims to change the scenario of widespread ignorance about these Schemes by means of a centralized information system. The project aims to bridge this gap and spread awareness so that there is a wider reach of the development programmes and the poor may be able to avail all its benefits. This information dissemination to the public as per the project proposal would involve establishment of around 35 Call Centers across the country having a Toll Free number.

So the idea is to give free of cost information to them and also spread awareness at the same time. This idea would work both on the push and pull theory. The Push theory involves spreading of awareness of Existence of various Schemes via SMS (mobile advertising) to the mobile customers on a regular basis. As per the Pull theory the Call Centre executives of each State specific Call Centre would be trained to cater to the needs of the callers  by providing them any information related to the Schemes which is applicable in that area/region.

The project would involve establishing one call center operating in each State/UT enabling smooth and clear transition of information about the Centre/State/Local government run Schemes in the various sectors such as education, employment, welfare, health, and infrastructure, in their respective regional languages to the Callers. The data comprising all the schemes and their benefits will be collected and stored in one location (Centralized Server) and will be distributed to the various Call Centers (decentralized) operating in different states as and when required by a Caller.

We envisage that the project would be having the following impacts in the long term:

v     Creating knowledge is bliss scenario and hence an increased number of beneficiaries claiming the benefit of the schemes and thus a better life for them in the long term.

v     Also it would help in establishing transparency into the implementation system as ignorance about the schemes and their features is one of the greatest corruption enablers.  It can help in positive modification of the schemes as per the actual needs of the poor.

Large solar panel packages are expensive, require extensive training and maintenance programs, and are almost always provided to local communities free of charge through donor or government funding. Although most solar equipment is extremely reliable and include 20-25 year warranties, the lack of training, community involvement, and sense of community ownership of the equipment have resulted in over 70% of solar packages in Africa failing within five years of installation.* Through One Degree Solar, clean energy will not only be a tool for development, but a catalyst for sustainable and continued growth.

Goals

• To provide affordable, clean technology products to individual consumers, schools, health facilities, small- and medium-size businesses, NGOs, and micro-finance institutions.

• To reduce energy costs for the world’s poorest communities and create opportunities for economic growth through increased access to lighting and other energy-related prerequisites for development.

• To generate income within these communities using clean energy (crank and/or solar) products including, but not limited to, radios, phone chargers, flashlights and general lighting, and battery chargers.

• To address the market need and demand for rechargeable batteries of all sizes and battery recharging services. Using solar energy for such services would virtually eliminate operating costs, thus drastically increasing profits for store owners and lowering costs for consumers.

• To create jobs for small business owners and individuals who sell clean energy products and provide services using these products

Products Tested

• Solar powered universal battery charger; lunchbox size. Charges AAA to D size batteries used in existing radios, flashlights, and headlamps.

• Solar car battery charger; briefcase size. Car batteries are used to power small stores and homes.

• Battery powered headlamp. Cost effective lighting for health professionals, school children, as well as average individuals and families.

• Solar and crank powered radio. Radio is the primary means for government and UN to relay news.

*based on interviews with energy experts from major multilateral donor agencies

Bangladesh has shown the world the magic of micro-credit.  This m-deposit project aims at revolutionizing the financial wealth of the bottom of the pyramid consumers through micro deposit, using mobile.

With current Banking system, the poor who don’t have a bank account cant have any bank deposit to save regularly. Even those who have Bank account can’t use the banking system for depositing small amounts on a daily/weekly basis. Collecting amount like Tk 5 (USD 0.07) doesn’t make viable business case for a Bank in current system.

M-deposit collaborates bank & the mobile operator to make any mobile phone user deposit any small amount regularly.  The mobile user signs up for the m-deposit with the bank through a user menu in the mobile & promises to deposit some small amount regularly i.e. daily, weekly basis.

The mobile operator deducts that amount from his mobile’s credit balance in agreed interval (e.g. weekly, monthly). This is just like auto-debit for credit card bill payment used by banks.

The consumer doesn’t have to visit banks which are normally located in distance for getting the service and the bank doesn’t have to make any human resource available to directly serve the low-value depositors.

The depositor can check his balance, withdraw amount and take loan against the deposit just like regular bank account by using his mobile.