New routes to financial inclusion

As we look at ways the new consumer class will differ from the Western model--one question to ask is: Will they have traditional bank accounts, or rely on emerging solutions?

An article in the Economist this month points to many ways in which people are succeeding along the latter path, as mobile phone and smart card technologies make faster inroads across developing areas than large-scale banking infrastructure. In many places, governments and entrepreneurs are unbundling services traditionally provided by banks and delivering them more effectively.

In Kenya, for instance, 75% of Kenyan adults a mobile payment system called M-PESA that works phone to phone using a simple text-messaging system. According to the Economist, it is so widespread that "some reckon almost half of the country’s GDP flows through it."

As with many issues touching on the middle of the diamond, the scale of the trend is large: 2.5 billion adults—more than 50% of the global adult population—lack bank accounts. How they ultimately participate in the financial system will have a significant impact on global business.

Image Source: Economist, November 15, 2014

-- Clara Shen


New Asian Trends Monitoring Urban Poor Bulliten

We previously wrote about the valuable insights ATM's Urban Poor series provides.  And we find the latest bulliten in the series an important addition. 

From the synopsis:

Education is a vital tool for breaking the vicious cycle of poverty. Indeed, it is often claimed that educated children will be able to earn more money in the long run, eventually lifting the entire family out of poverty. This, in turn, leads to the future generations being better educated and able to enhance the financial well-being of families and communities. However, reality is rarely that simple. A 2006 OECD report on education notes that economic and social disadvantages are equally important elements to consider as they can severely hamper the educational experience of learners. While social disadvantages influence test scores and educational achievements in the developed world, in the developing countries of Southeast Asia, economic and social disadvantages are severe impediments to even accessing and attending school.


Rethinking charity and calling for rebuilding the capitalist system

Peter Buffett wrote an op ed titled "The Charitable Industrial Complex" that ran in the New York Times over the weekend.

As the son of Warren Buffett, the author's point of view might be different from most when it comes to issues of philanthropy and economic security.  Be that as it may, we like the piece because it raises some good (and sometimes difficult) questions.  Questions that we are also grappling with in our Economics of Mutuality endeavors.

It’s time for a new operating system. Not a 2.0 or a 3.0, but something built from the ground up. New code.

What we have is a crisis of imagination. Albert Einstein said that you cannot solve a problem with the same mind-set that created it. Foundation dollars should be the best “risk capital” out there.


Community strength and the value chain in Kenya

We came across this piece in by Michael Hoevel, Deputy Director of Agriculture for Impact, in the Huffington Post, about a project to help strengthen rural communities in Kenya by re-introducing sorghum as a commercial crop.

One of the things we like about the description of this ongoing work is the recognition that, in order to be effective, the project must take the value chain for sorghum into account.  It is not enough that sorghum, a native grain, will grow better than corn/maize in the Kenyan climate.  It's not even enough to ensure that the farmers growing the crop utilize effective agricultural practices for better yeild and processing.  To be truly effective, sorghum's place in the value chain of various food and beverage products must be understood and -- if necessary, promoted, in order for the positive impact to be sustainable.

You can read the full article following the link above.


Why companies need a higher purpose, and navigating the cultural elements of change.

We enjoyed two articles in the latest MIT Sloan Management Review for their attention to topics that are central to two Catalyst labs, PiA Metrics and Organizational Culture.

The first of these concerns the question of finding a purpose beyond profit, and presents one view of how to make money by doing good things.

The second takes an in-depth look at how executives can successfully launch change initiatives by mapping the emotional and political landscape to identify the key stakeholders who will be affected by the change and the key influencers within each stakeholder group.