Author Archives: microfinance

“The Next 4 Billion” BOP market report by WRI

The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid is a timely and valuable contribution by the team of WRI (Allen L. Hammond, William J. Kramer, Robert S. Katz, Julia T. Tran, Courtland Walker). This reports gives a detailed economic portrait of the BOP based on recorded incomes and expenditures and an overview of sector-specific business strategies from successful enterprises operating in the BOP markets. It is full of data and information that is needed for the private sector which is currently increasing its engagement to this large segment.

Sequoia Invests in SKS Microfinance

A story that came to our attention through the courtesy of Mark Straub.
Sequoia Capital, the famous venture capital firm for its early stage investments in Google, Yahoo, Paypal, YouTube and others leads the $11.5mn equity investment in SKS Microfinance, one of the fastest growing microfinance institutions in the world. According to the press lease of SKS Microfinance, Sequoia Capital is the lead investor with $6.5mn. Other investors include Unitus Equity Fund, Vinod Khosla, Ravi Reddy, and Odyssey Capital.The funds will provide the stimulus that SKS needs to achieve its ambitious goal to provide financial services to over 5 million poor families by 2010. Another example of convergence in the investment world.

Danone plans to launch a 100mnEuro microfinance fund

According to the FT(March 30th) Danone plans to launch next month with the help of Credit Agricole a novel mutual fund to invest in microfinancing projects in the world’s poorest countries. The idea is to raise initially 100mn Euro and it will be named Danone Communities Fund. This move follows the pioneering social business, Grameen Danone Foods Social Business Enterprise, a 50-50 joint venture established last year between the Grameen Group and Groupe Danone. This is probably the first private sector corporation (not a financial institution nor a foundation)that is launching a microfinance investment fund.

Skoll World Forum 2007

The Skoll World Forum on Social Entrepreneurship starting tomorrow(March 27-29) is a leading gathering for changemakers around the globe attracting over 700 people from over 40 countries.
This forum is organized by The Skoll Centre of Social Entrepreneurship at Said Business School, University of Oxford in partnership with the Skoll Foundation. The Forum attracts an international community of outstanding practitioners and thought leaders in social entrepreneurship to set the future agenda for visionaries who want to transform society.
Speakers featured this year include: Jeff Skoll, the founder of Skoll Foundation, Muhammad Yunus founder of Grameen Bank, Peter Gabriel, musician, activist and cofounder of Witness, Larry Brillant, Executive Director of Google.org Bill Drayton, founder of Ashoka, Fazle Abed, founder of BRAC,and Ashok Khosla.
The Skoll Foundation invests in social entrepreneurs through the Skoll Awards; it connects them through their online community Social Edge. It also celebrates social entrepreneurs by enabling filmmakers and journalists to produce works that tell the stories of individual social entrepreneurs to promote large-scale public awareness on social entrepreneurship.
The theme this year is enabling social innovation. The 10 leading social entrepreneurs which will be receiving the Skoll Award this year are Escuela Nueva Foundation, Friends-International, Global Footprint Network, Gram Vikas, Kashf Foundation, Free The Children, Manchester Bidwell Corporation, Marine Stewardship Council, Verité, and YouthBuild USA.
You can follow the forum or see the latest newsletter of Skoll for more detailed information on the 2007 Awards.

The Converging Worlds: Social and Business

The business (corporate sector) and the social worlds are converging. We could call this a megatrend and it continues to gain momentum. One has seen this through microfinance where an effective development tool initially created in the social/NGO/NPO world have given birth to numerous microfinance institutions that have become sustainable and profitable. Microfinance now attracts funding/investment from both capital markets (commercial banks, asset managers, private investors) and foundations. Social entrepreneurs are also another major force behind this and no doubt that Microfranchising also links these two worlds.
One can also see it through the new partnerships between players of these two worlds especially as the multinational corporations and their executives team up with social activists and NGOs to market products to the 4 billion people at the base of the pyramid (BOP). C.K. Prahald, one of the leading advocates of BOP opportunities, has recently co-authored with Jeb Brugmann, a very interesting article in the February Harvard Business Review titled Cocreating Business’s New Social Compact. It is an excellent read (even if you have to pay for the copy to download) for those who are interested in these new partnerships. Many examples are cited including British Petroleum, Healthstore Foundation, and ICICI.

CGAP expands programs linking technology and microfinance

CGAP will accelerate its quest for technology solutions that can bring critical financial services to billions more of the world’s poor thanks to the $24mn grant by the Bill and Melinda Gates Foundation. CGAP has been providing for the past few years an increasing range of technology services to MFIs and financial institutions. Most of this funding will support pilots to expand access to financial services with new technology approaches (using mobile phones, POS and card based technologies for deposits, payments, remittances). CGAP has selected 9 project ideas for further development together with institutions in Colombia, Kenya,Mexico, Mongolia, Pakistan, Philippines, South Africa and the Maldives. This is very good news as the majority of the unbanked live in rural and remote areas where the nearest bank is very far away.

Inspiring story-Leaving Microsoft to Change the World

Leaving Microsoft to Change the World: John Wood
This book is the story of John Wood an ex-executive of Microsoft who founded “Room to Read”, an NPO that promotes literacy throughout the developing world. Since its inception in 2000, Room to Read has established over 3000 libraries, constructed 221 schools, published 99 local language children’s titles, donated 1.2mn English books, funded 2344 long-terms girl scholarships, and established 108 computer and language labs in developing countries (Nepal, Cambodia, Vietnam, India, Laos, Sri Lanka, South Africa). What impressed me was not only the results but how they operate. In other words it is a model of the new breed of npos that are managed with professional business practices i.e., a management calling for scalable, sustainable and measurable results. The communities involved co-invest with Room to Read through the Challenge Grant Model for constructing the schools/libraries thus facilitating the long term sustainability of the projects. Also this book provides very good information on how to raise funds if one is building up an npo.

Davos World Economic Forum 2007

The 2007 World Economic Forum Annual Meeting starts today in Davos. This year’s theme “The Shifting Power Equation” reflects the elements that are shaping the global agenda: the new power of the emerging economies, the increased leverage of commodity suppliers and the enhanced voice of individuals and small groups. Climate change is also high on the agenda. WEF brings in over 2000 leaders from business, politics, academia and civil society. The multimedia coverage of this meeting is quite amazing. One can see through their website any transcript or webcast, podcast and many blogs. Also for those interested in social entrepreneurship, one of the preconferences leading to Davos was the Schwab Foundation’s Social Entrepreneurs’ Summit in Zurich. I recommend the blog of Jim Fruchterman, also a well known social entrepreneur, who is covering both conferences.

Book Tip: The End of Poverty by Jeffrey Sachs

This is not a new book (came out in early 2005) but it is a must read and one of the most educational books I read in 2006. Jeffrey Sachs provides a clear strategy on how to end extreme poverty by 2025. What I found most informative were the explanations on why poverty had not diminished but increased in some areas in Africa after decades of the so-called aid or perceived aid provided by the industrialized nations. Also it is a great update on the most influencing economic and business forces today as it covers extensively the news giants such as China, India and Russia.

Muhammad Yunus promotes social business enterprise

Professor Yunus promoted the concept of “social business enterprises” in his Nobel Lecture delivered after receiving the Nobel Peace Prize in Oslo yesterday.
The eloquent yet moving lecture portrayed the milestones of Grameen Bank and how microcredit has been lifting millions of people out of poverty. It also touches upon how technology is playing a major role (telephone ladies) in empowering people. Prof. Yunus in his continuing fight to make poverty history promotes a new type of enterprise which has as its objective to make a difference. These social business enterprises will be self sustainable, in his words “no loss, no dividend enterprises”. He refers to two types of such enterprises one having investors like the latest joint venture between Grameen and Danone, an enterprise providing fortified yoghurt to malnourished children. Investors will get their capital back, but, profits will be injected back to the company to continue to achieve its objective. The second type of social business enterprise is a for-profit model but owned by the poor such as Grameen Bank. The Lecture video is available on demand (the social business enterprise topic is covered between1:15 to 1:25).