Month: November 2015

Q&A With Thea Anderson, Director of Financial Inclusion at Mercy Corps

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Two women transacting payments over their phones in Kathmandu, Nepal Source: Mercy Corps

WAM UK hosted a dinner with Thea Anderson, Mercy Corps’ Director for Financial Inclusion, with our members to learn more about the global organisation’s engagement in advancing access to financial services for women. Mercy Corps operates in 42 countries and is a leader in integrating mobile technology in financial inclusion. On the night, Thea shared her experiences working directly in designing and implementing solutions on the ground for Mercy Crops, and for the benefit for those who couldn’t join us, we asked her some questions here:

Thank you Thea for sharing your experiences with WAM, but first things first, could you introduce us to Mercy Corps?

Mercy Corps is an international non-governmental, non-profit agency impacting over 30 million people each year in the world’s most difficult places and emerging markets. We focus on solutions to systemic global poverty through humanitarian relief and long-term development. We recognize that new technology, business models and creative partnerships provide transformational opportunities to overcome poverty. Managing and providing technical assistance to over 40 country offices, with US and European Headquarters (based in Scotland) and a representative office in London U.K. Mercy Corps complies with the U.K. International Aid and Transparency Initiative and is rated each year by the U.S. Better Business Bureau and Charity Navigator – the premier American charity evaluator. Consistently, Mercy Corps receives the highest ratings. Mercy Corps ranked in the Top 10 in the 2013 Global Journal list of top 100 NGOs.

As Director of Financial Inclusion you’ve worked on expanding the reach of financial services in some of the world’s most fragile environments. Could you tell us more about Mercy’s Corp’s approach to financial inclusion?

Mercy Corps leads financial inclusion initiatives in over 30 countries partnering with commercial and public banks, MFIs, non-bank financial institutions, community-level financial institutions, and technology providers.  Even as a non-profit, we have launched commercial bank models in the Philippines, Mongolia and Indonesia, and most recently agent banking in Ethiopia which all use digital payments to serve millions of low-income clients without the need of a physical bank branches.

We recognize that traditional foreign aid hand-out programs will not lift and keep the billions of people at the bottom of the pyramid out of poverty. Mercy Corps therefore uses market-based approaches in partnership with commercial actors where feasible. We see technology as the key driver to lower transactions costs and payments as the entry point for other financial services allowing people to access money with the longer-term goal of establishing a place where they can safely save money, access capital and insurance products.

How does Mercy Corp use Technology to achieve financial inclusion, in particular with women?

Globally, Mercy Corps supports technology providers, financial institutions, and mobile network operators (MNOs) to identify and expand access to financial services at scale through the use of mobile and cashless technologies. This includes digital financial services and e-commerce platforms, agent networks, and bundled technology solutions such as the examples below:

  • In Nepal, Mercy Corps works with over 260 community-level financial institutions to access wholesale capital as well as introduce new savings, affordable credit, and remittances. This includes scaling several mobile payment platforms to rural Nepal in partnership with banks and Nepal’s largest branchless banking provider to reach thousands of new clients.

  • In Indonesia, Zimbabwe, and Uganda, Mercy Corps bundles financial services and farm- and crop-management tools for 170,000 small-holder farmers on affordable, unified mobile phone platforms. Farmers move along a four-step process using access to digital information and payments solutions as an entry point. Through these digital transactions, farmers build a transaction history to develop credit scores that enables them to engage with more formal financial services, including remittances, savings, credit, and insurance.

  • Mercy Corps hosted Tunisia’s first ‘Innovation Challenge for Financial Inclusion’ with financial institutions, crowd- sourcing platforms and angel investors for new mobile financial products for the growing Tunisian market. As a result, Mercy Corps is co-financing new crowdfunding platforms targeting youth entrepreneurs. In 2015, the Tunisian Post Office, which has over 1,000 branches and millions of clients, will launch a micro-savings product via mobile phones and electronic cards across the country with support from Mercy Corps.

Is Technology an effective enabler for financial services? If so, how can we ensure that women are not left out of the digital revolution?

Digital technology can change lives. It provides access to critical information for women. Female farmers can learn to weather costs of agricultural inputs, be linked to financial services such as payments, remittances, and savings, and connect to social media and e-commerce platforms. However, to benefit from technology you must have access to technology. Globally, over a billion women do not have full access to a mobile phone or access to digital financial services even in its most basic form.[1] This is especially acute in South Asia. Recent data shows than more that up to 50% of women in Niger, the Democratic Republic of Congo, and Indonesia have never used a mobile phone, even for voice calls.[2]

As the world moves forward towards digital, huge numbers of the population are being left behind. Not only is this a missed opportunity for women on the customer-side this is a huge lost for the commercial sector – up to an estimated £111 billion for MNOs alone over the next five years.

Mercy Corps has a major role to play – to connect different segments of women to technology providers, financial institutions, and MNOs to expand their access to and usage of digital financial services. International agencies like Mercy Corps offer valuable insights about potential client demand to governments, multinational corporations and technology firms that don’t have first-hand knowledge of field realities and needs. Development actors like Mercy Corps play a critical partnership role by mitigating risks for other actors, especially in complex and fragile states.

Looking ahead, what are the key priorities for Mercy Corps’ in financial inclusion?

Mercy Corps will continue to prioritize countries in transition from war or natural disaster or in the midst of economic or social transformation. For us, ‘business as usual’ means partnerships with governments and the private sector to solve complex global challenges of both emerging and pre-emerging economies, including financial inclusion.

Please find more on Mercy Corps current work in financial inclusion here.

[1] http://www.gsma.com

[2] Ibid.

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7 Things I Learnt at the Global Social Business Summit 2015, Berlin

By Sophia Velissaratou, co-founder WAM UK

GBS

Source: Global Social Business Summit 

Social business is a relatively new concept introduced by Nobel Peace Prize winner, Professor Muhammad Yunus, which he describes in detail in Building Social Business. Simply put, Yunus describes two types of social businesses:

Type I: a non-loss, non-dividend company devoted to solving a social problem (concerning education, health, environment, access to technology etc) and owned by investors who re-invest all profits in expanding and improving the business.

Type II: a profit making company, owned by poor people, either directly or through a trust that is dedicated to a pre-defined social cause.

Professor Yunus distinguishes Social Business from other concepts such as Corporate Social Responsibility (CSR), social enterprise and entrepreneurship; seeing CSR as charity (CSR) and social entrepreneurship as profitable outfit for investors. Since its first inception the Social Business movement had gained momentum amongst many, ranging from businesses to NGOs to academia.

On the 6th and 7th of November, I attended the 7th Global Social Business Summit in Berlin and as the co-founder of WAM UK, I would like to share a few things I learnt with the wider WAM community:

  1. The Social Business movement is here. To stay: During the summit I came to realise that there are many social business initiatives and they take many forms. Take for example Grameen Danone who set up a small unit in Bangladesh to produce nutrition fortified yoghurt for low income families. Or McCain industries who have a program helping Greek farmers in the Northern village, Notia. Not to mention numerous university programmes worldwide focussed on the research and promotion of social business, for example The Grameen Creative Lab and Yunus Social Business, both of which have ample information to share.
  1. It’s not about the star, it is about the purpose: This year’s summit was marked by Prof. Yunus’ absence. A minor health issue prevented him from travelling to Berlin to be there in person but he addressed the participants with a video message. Undoubtedly any event Yunus attends attracts notable crowds and WAM UK experienced that first hand when we organised an event with him back in 2011. Yunus is often lovingly described as a rock star in his own right within the sector, which despite its obvious benefits can also be a drawback, since his absence could have led to disappointment and deflation. However, that was definitely not the case. Organisers and participants alike worked, presented and interacted with incredible drive and on top of it all – we had fun!
  1. Some CEOs get it. Big multinationals like Danone, Veolia, McCain and others talk and think seriously from a business perspective on how to solve social problems. They are not just interested in ticking CSR boxes or having a good PR profile. They are showing commitment to this type of business. They understand that failure is part of the process and not all social business ideas will work but they allocate time, resource and energy just like any other business unit they are running. They showed us that they won’t stop until their social businesses become sustainable and poor or unprivileged people have profited from it.
  1. There is such a thing as ‘good’ business, it’s called social business: During my years in finance I was always wondering why profit and growth usually come at the expense of values such as partnership, compassion or empathy. Can you not have a serious business proposition by combining all these aspects? The summit made me realise that social business is a legitimate answer to this question. Yes, you can have a business which is both profitable and solves a social problem. Yes, you can generate profit and re-invest it in the business to create more jobs; ameliorate conditions for poor people – to change the world.
  1. Partnerships are a must: Listening to the panel discussion during the conference I was impressed to see the degree to which partnerships are important for the success of social business. Words like competition, confidentiality, possession were not part of the social business vocabulary. Instead words like transparency, exchange of ideas, collaboration, resilience, joy and facilitation are the language of social business. This was evident in focus groups where there was a genuine exchange of ideas. The workshop organisers were not interested in telling their stories but in hearing our ideas on how we would approach a social business idea differently or find a better solution than the ones they thought of.
  1. Youth is the future: Yunus’ decision to focus on youth and academia shows he is a visionary. Social business is a relatively new concept that taps on ideas such as non-dividend business, compassion and teamwork etc. These and similar ideas are not commonly found in the conventional business world, and that’s likely because today’s professionals were not educated to think otherwise. Educating people on the concept of social business from an early age is key. Because these young students will be tomorrow’s academics, investors and entrepreneurs who will strive for a better world. On top of that, youth are very creative and driven – and experience suggests they don’t give up easily. Moreover, today’s youth are raised amongst increasingly advanced technology, a leading force in social business.
  1. Location, location, organisation: Last but not least I would like to mention the organisation of the conference. First I was impressed by the venue: Hangar 7 at Tempelhof airport was for me the perfect location for such a conference. The set-up of the venue facilitated the smooth transition from the panel discussions to the meeting area where participants could meet, grab a coffee and roam around the various stands promoting social business. The organising team practiced what they preached: from the conference bags, the conference furniture, the catering, the products, everything had a social business story to tell. Every single moment you were surrounded by inspiring examples. Hans Reitz (Head of GSBS and Founder of the Grameen Creative Lab) and his team created a fantastic environment for participants and they deserve compliments all round.

In short, I can’t wait for next year’s summit.

Find pictures of the Summit on GSBS website newsroom , GCL Facebook page, and a new video on YouTube.