The Eyes Have It: January’s Most Viewed Posts on NB
We’re happy to renew our NextBillion awards for the most popular and most shared posts of the month – and January’s top three brought a heady brew of sharp criticism, deep analysis on design and health care models worth a second look.
Independent researcher Milford Bateman writes that despite its well-intentioned mission, microcredit has backfired. He argues that easy access to credit has created an excess of informal micro-businesses that have flooded the market, driving down prices and undermining the more efficient formal sector.
“This is why in developing countries, and lately in developed countries too, we find that new microcredit-supported microenterprises do not attract very many new unattached clients, but overwhelmingly end up taking away clients already attached to other informal microenterprises already operating in the same sector. And cramming more and more new microenterprises into poor communities leads to hyper-competition, which tends to soften prices. So already struggling microenterprises see a progressive reduction in their turnover, profits and wages – that is, they are made poorer.”
It’s worth reminding readers that from time to time, we think it’s important to provide a forum for debate – even when it challenges market-based solutions to poverty, this site’s reason for being. And several readers took issue with Bateman’s assessment in their comments. I’d encourage you to check them out and add your voice to the chorus.
Louis Potok, an analyst with Grameen Foundation, walked us through a project with CARD Bank to design microsavings products in the Philippines. But, as Potok explains, defining the problem (initially described as increasing the uptake of new savings accounts at CARD Bank) is not always as obvious as it seems at first blush.
“… when we dug deeper into the data, we saw that people were already opening plenty of new accounts. The problem was that they didn’t use them: for one savings product, 71 percent of people who opened an account in 2012 didn’t make a second transaction – deposit or withdrawal – by the end of the year. We recognized that the bigger problem was that people were failing to make regular savings. This highlights the importance of being flexible in your approach to tackling problems.”
(Note: ideas42 is a NextBillion Financial Innovation Content Partner).
Companies like NetFlix or even the local health club bank on their members not taking full advantage of their monthly membership. But what if your monthly subscription applied to health care, particularly preventive care or care for chronic illness, which was often far too expensive in normal circumstances? Your provider might be able to keep you healthy and thereby save costs down the line – leading to a more sustainable system for other patients.
Conor Brennan-Burke, a sophomore studying economics at Haverford College, profiled Sevamob, a company that’s providing Indian patients with preventative care and regular checkups delivered to their doorstep, for a monthly subscription fee of $1.60 (Rs 100) per month.
“This care is delivered by mobile clinics supported by a network of specialists and hospitals. These clinics rely heavily on mobile technology, using cloud-based storage for patient medical records, and provide a 24/7 call center and help line for subscribers. For many of its new customers, Sevamob is the first to provide them with documented medical records.
In addition to care, Sevamob also provides affordable insurance coverage. For an additional payment of 80 cents (Rs 50) per month, subscribers can opt for a basic insurance plan, which covers up to $800 (Rs 50,000) of hospital expenses in case of emergency or other advanced care. This service is important, as few low-income individuals have sufficient savings to pay for emergencies, and also provides an incentive for healthy individuals to enroll in the program.”
This post first appeared on Money Spent Well and was cross-posted with permission.
Thanks to our winners, and all of our contributors and commenters in January.