NextBillion’s Most-Read, Most-Shared Posts for August: Building the perfect accelerator, new rules in Indian banking and what can be learned from Walmart’s relationship with USAID
How do you design a business accelerator that:
A) Supports enterprises concentrating on new products and technologies designed for poor and low-income people?
B) Engages investors – not just their money, but also their knowledge and mentors?
There’s no single formula, especially if this entrepreneurial assignment takes place in developing countries and across multiple industry sectors. Many smart people are studying what makes a good accelerator a great one. In fact, it’s the subject of a big research project called the the Global Accelerator Learning Initiative (GALI), a collaboration between the Aspen Network of Development Entrepreneurs and Emory University.
Given the serious interest in how an accelerator churns out value for everyone, it’s no surprise that It Takes a Village to Build a Business: Lessons learned from a fintech accelerator in Mexico by Jackie Hyland, was our most read post in August. Hyland, senior investment analyst with Venture Lab, explained how her firm teamed up with Village Capital and the MasterCard Center for Inclusive Growth to organize and promote a three-month financial technology accelerator earlier this year. Their mission was to identify 12 fintech companies in Mexico, which has a countrywide ecosystem of about 330 identified fintech firms. Money quote:
“… seeing these companies struggle with tough questions and decisions throughout these three months helped us learn more about how entrepreneurs in Mexico think, who is out there hustling, and who could be our next investment. It was also a special chance to get to know CEOs outside of our typical investment process, which is often characterized by an uncomfortable ‘sizing up’ evaluation on both sides, and a feeling of power imbalance. In this accelerator context, we’re all genuinely pulling in the same direction and want everyone to succeed, and we can find ways to help without raising expectations for an investment.”
Second Most Viewed
The Reserve Bank of India (RBI) recently announced that it will issue 11 Payments Bank (PB) licenses, permitting a variety of institutions to provide a limited suite of financial services to underserved populations. The RBI hopes PBs will “revolutionize banking” in India. Jatinder Handoo identified the obstacles PBs will face and how they can live up to the government’s ambitious goals in our second most read post of August: 10 Challenges That Could Make or Break India’s Payments Banks: Their revolutionary potential is no guarantee. And although the RBI hopes the PBs will “revolutionize banking” in India, Handoo, with India’s Microfinance Institutions Network, was more cautious:
“… the impact of these banks is not guaranteed, and they will face the same hurdles as any financial services provider that aims to serve the country’s low-income, rural communities. If it were simple to serve these customers, India’s previous Business Correspondent efforts – not to mention its experience with private services like M-PESA, which captures almost every payment in countries like Kenya and Tanzania – would have met with more resounding success.”
Third Most Viewed
Walmart elicits strong opinions when it comes to its business practices and how it influences supply chains, not to mention the global economy. But a new case study, “Walmart and USAID: The Evolution of a Global Cross-Sector Partnership,” shows a very different side of the mega-retailer’s impact than the one often broadly portrayed in the media. Published by WDI Publishing and available for free, the case explains how Walmart’s drive to use its supply chains for social good intersected with the U.S. Agency for International Development’s own push for more private sector-like tactics to form an unusual cross-sector partnership. (Note: The William Davidson Institute (WDI) is the parent organization of NextBillion.) Powerful Partnership: Teaching case spells out how Walmart and USAID collaborate to meet global challenges by NextBillion’s Kyle Poplin details the case and the partnership’s impact for both sides. Money quote:
“The Walmart/USAID relationship had three distinct phases, according to the case.
“The first began in Central America where Walmart and USAID experimented with building the capacity of smallholder farmers. Walmart’s role was as a buyer from farmers trained as part of the program. While this model allowed Walmart to increase the amount of fresh goods purchased from local farmers and delivered a clear business benefit, the program reached only a small number of farmers and had limited social impact.
“That evolved into the second phase, with Walmart and USAID engaging at a corporate level through a GDA (Global Development Agreement), and co-investing in project design and implementation. While this model achieved greater scale than the first, it, too, produced relatively limited business and social outcomes. This was due, in part, to the organizations having different priorities. While USAID’s Feed the Future program focused on low-income populations in remote rural areas that typically grew staple crops, Walmart required fresh fruit and vegetables for its stores.
“The third phase began with the organizations signing a global ‘memorandum of understanding’ and agreeing to join projects already underway that had a large impact on women. The goal was to speed uptake and reduce the cost per farmer trained. Walmart, for example, helped fund one project extension to train 40,000 women farmers, and another to train 50,000 farmers in bio-intensive gardening. Lots of farmers were trained, but there was relatively limited business benefit because these projects were focused on impacting women farmers and not necessarily aligned with geographies or value chains that were of interest to Walmart.”
Our most shared posts via social media in August: