NB Financial Health
July’s Most Popular Posts on NextBillion: From the value of female mobile money agents to the power of Latin America’s BoP
If you follow social enterprise and global development, you're probably aware of the many ways that burgeoning mobile access is reshaping emerging economies. Whether it's finance or health care, mobile access is connecting low-income communities to businesses and social service providers on a scale that was unimaginable just a decade ago.
Naturally, we tend to focus on the benefits mobile access provides to end users, or the challenges and opportunities it affords to the companies or organizations that utilize it. But there's another group of people whose lives have been transformed by the growth of mobile services: the workers dedicated to enabling them.
Most-Viewed: The Female Factor
That's the topic of last month's most-read post: The Female Factor: Why enrolling more women as mobile money agents can benefit service providers, customers – and the agents themselves. It provided a ground-level description of what life is like for two Nigerian women entrepreneurs who are training to become agents at Firstmonie – a mobile banking platform offered by Nigeria’s FirstBank. The training program is run by the Cherie Blair Foundation for Women, FirstBank and the Youth for Technology Foundation, and it aims to train 2,500 women entrepreneurs across 10 Nigerian states as mobile money agents. The program not only provides women with additional income, it helps Firstmonie, as female agents improve customer service levels and public trust in their banking products. As Helen, one of the trainees, describes it, making the sale can be a challenge:
It’s not just that people don’t have enough money to save – a lot of the people she approaches are also wary of institutions like banks, and need to be convinced of the benefits of formal banking and the services she is able to offer them. Helen has also overcome technology barriers, moving away from a relatively expensive, cumbersome and unreliable text-based (USSD) system, to downloading the bank’s mobile application to her handset. Although this requires data access, it is actually cheaper and easier for her to transact. Helen can now use this application to easily register customers and credit their accounts through her mobile handset. She tells me, “Right now I am creating awareness locally and registering customers, focusing on people I know and who trust me.” She is clear about her motivations for becoming an agent, saying, “People always want quick results, but I’m not doing this for now, I’m doing it for when I am 60.”
Second Most-Viewed: BASE Forum Takeaways
The base of the pyramid market in Latin America and the Caribbean is huge, vibrant and evolving – and chronicling its development was the focus of the BASE Forum III, a gathering organized by Opportunities for the Majority at the Inter-American Development Bank (IDB). As the IDB defines it, the region's BoP (defined as people who live on less than USD $10 a day) includes 70 percent of its population, and numbers over 400 million people – with more than 90 million in Mexico alone. Regionally, this market is worth USD $760 billion per year. And it's defined by significant upward mobility, with 54 million people moving out of poverty in the region between 2000 and 2010. NextBillion covered the conference as a media partner, and we put together eight key takeaways from the event in our second most-viewed post. Money quote:
Perhaps the biggest topic of conversation at the conference was the value and potential of small, local “mom-and-pop” stores in Latin America. The numbers are impressive: According to Francisco César de la Torre Cevallos, president of the board of directors at FUNDES México, there are 5 million of these shops in Latin America, and they are crucial to its economic and social development. In Mexico alone, he says, small shops provide 2-3 million jobs. Though many people once predicted they’d be driven out of business by larger, more powerful retailers, they’ve not only survived, they’ve actually grown in number. As Jorge Ortega, senior director of financial inclusion at Visa America Latina, describes it, they’ve thrived thanks to some key advantages: proximity, perception of low prices and relationships and trust within their communities. And many entrepreneurs – including a number of major companies – view them as keys to reaching the region’s BoP customers with products and even social services.
Third Most-Viewed: Demand Aggregation for Financing
In Northern India close to the Arabian Sea, salt farmers known as agariyas harvest salt in large pans from sub-surface brine. Every day during the seven-month-long production season, they labor for eight to 10 hours pumping, channeling, scraping and piling salt in salt pans – which requires their diesel pumps to run for over 16 hours a day. But when the season ends, after paying for the cost of fuel and other inputs, they’re left with only about USD $80 as savings. Solar-powered pumps could help these farmers save much more, but without access to local financing, few farmers can afford them. In July's third most-viewed post, Dalberg discusses an innovative solution – demand aggregation for consumer financing:
Rather than purchasing solar water pumps individually, demand aggregation could allow farmers to access financing for the pumps through their local marketing cooperative. (These cooperatives provide training and financial assistance to salt workers, and enter into purchase agreements to ensure remunerative prices for their produce.) Under demand aggregation, each farmer owns an individual pump eventually. But for the purpose of financing, their pumps are purchased on loan by the cooperative, which leases them to individual farmers. Once the farmers have paid down the loan to the cooperative (which in turn pays it to the bank, as an aggregator), they take ownership of their pumps. We worked with a local cooperative that agreed to act as an aggregator of services for bank loans: The cooperative would collect payments from individual members, ensure timeliness of payments, apply informal pressure on those who defaulted, and offer financial planning and advice.
Most Shared Posts for July
Our most shared posts via social media included just one of the above:
Congratulations to these contributors, and thank you to all our guest writers for the month of July.