From the Classroom: Finnovations at Work
At business school, we hear a lot about financial innovations that spur economic growth in developing countries. On paper, these ideas sound incredible, infallible, and a developed, prosperous world is just around the corner. But in practice, which ideas are really working and, just as importantly, can we really tell from the safe confines of a university?
This semester, one class at MIT Sloan – Financial Innovations in the Social Sector – is tackling these challenges head on. 20 students – half with a finance background and half with a development background – are studying some of the most difficult yet most compelling market-based solutions to poverty: the scalability of micro-insurance, the capital access challenge for SMEs, and understanding where the rubber meets the dirt road in creating carbon credit markets in developing countries. At the end of the five week seminar, we head to Cambodia and Indonesia, where we will visit with companies implementing these ideas.
Finally, the students will spend two days in Jakarta with companies such as Allianz, which is pioneering a micro-insurance package throughout the region, and New Ventures’ Indonesia chapter, which is looking at ways to attract more smart capital into the region for its portfolio of SMEs. The students will meet with all the stakeholders: the consumers, the organizations that provide goods and services, the government institutions that provide support and create a business environment, and the markets that enable efficient valuations and smooth transactions. Ultimately, we will walk away with a more sophisticated understand of the space and begin to create stronger linkages between these stakeholders.
You can follow all the Finnovators work at finnovation.tumblr.com and on twitter #finnovation. We would value the nextbillion.net community’s feedback, ideas and thoughts as we work to make this topic a mainstay in all business school curricula.