Ieee Humanitarian Technology Webinar Leveraging Ict For The Bop Marc Van Den Homberg


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Leveraging ICT business models to help reduce poverty

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Ieee Humanitarian Technology Webinar Leveraging Ict For The Bop Marc Van Den Homberg

  1. 1. Leveraging ICT Business Models to Help Reduce Poverty Webinar IEEE Humanitarian Technology Marc van den Homberg 26 Jan 2012
  2. 2. Agenda Our methodology: classifying solutions to learn from what works Rhetoric trumps reality in ICT4D Financially sustainable models exist in finance and agro-services, to a lesser extent in health, and not yet in education Entrepreneurship is key to starting successful services, while collaboration is key to scaling 2
  3. 3. 280 140 15
  4. 4. We select both “best practices” and “innovative approaches”,representative of market-based solutions that work Initial scan 1st selection Key types of projects Africa: 117 ~280 Asia: 93 ~140 15 case studies projects Lat. Am: 31 projects Global: 14 Note: No implied hierarchy of projects, but good examples representative of best models 1 Elimination of 2 (a) Mapping of projects based on 3 (a) Elimination when • fully grant based clients’ needs further study shows approaches (b) Clustering based on mapping and over stated success • pre-pilots 40 experts’ interviews (b) Five field visits, (c) Within each market-based representative of •“dead” post pilots cluster, selection of (older than 2008) business models representative: analyzed •Best practices (largest scale) •Innovative solutions (high potential to scale and at least completed successful pilot)Sources: Ashoka; AMG; TNO; Hystra analysis; UN; Experts Interviews,; 4
  5. 5. We studied 15 cases in 4 clustersreflecting business models across sectors Sectors Education Health Agriculture and Financial support to economic services Data flow activities 1) Direct access: Value added information 4) Financial 1-way directly accessed by end-user services directly from technology BBC Janala mPedigree Reuters RML Insurance platform HealthLine Esoko via mobile M-PESA 2) Local agent: Value added services through local agent 1-way Drishtee Narayana eChoupal FINO via (education) Hrudayalaya eKutir Bradesco intermediaries Hospital Drishtee (FMCG) 3) Crowd-sourcing or crowd-funding: 2-way Information or funds collected from on 2 sides multiple sources, aggregated via ICT of technology platform CKW MYC4 txteagle Business model
  6. 6. The projects analyzed in our case studies span 3 continents India - Bangalore • Narayana Hospital India - Mumbai East India • FINO • Drishtee • Reuters Mobile Light • Ekutir India - Nagpur Bangladesh • Echoupal • Healthline • BBC Janala Nigeria • mPedigree Kenya Brazil • Txteagle • Bradesco • Mpesa Uganda Ghana • CKW • mPedigree • MYC4 • Esoko
  7. 7. Business models Direct access Local Agent Crowdsourcing Technology back-end: source of information and service Technology front-end Client /end-user
  8. 8. The “direct access” model: simple information accessibledirectly on cheapest ICT device – eg, mobile phones Technology End-users front end benefiting = owned by from service end users directly Technology backend – source of information and service Informal sharing of benefits of technology to with others
  9. 9. The “local agent” model: specialized services deliveredby trusted intermediaries Technology front end at local agent’s End-user benefiting Technology Technology from the backend – front end service: source of at local agent no need for information and ownership of service technology Technology front end at local agent
  10. 10. The “crowd” models: 2 way-services through direct or indirectICT use, linking two worlds for mutual benefits Direct crowd- sourcing by techno- Technology front end users (txteagle) = owned by end users Client organization gathering data (txteagle, CKW) Technology backend –Crowd-funders source and Indirect crowd-sourcing throughfunding projects recipient of intermediaries for informationdirectly through information (CKW) …technology(MYC4) …or for investment (MYC4) 1-way service 2-way service 10
  11. 11. Agenda Our methodology: learning from what works Rhetoric trumps reality in ICT4D Financially sustainable models exist in finance and agro-services, to a lesser extent in health, and not yet in education Entrepreneurship is key to starting successful services, while collaboration is key to scaling 11
  12. 12. The rise of mobile phone and internet usage makes it possible today to reach the BoP via market based approaches…100% 67.6 57.7 48.2 38.5 30 22.9 17.5 10.3 13.5 5.5 7.9Source: ITU World Telecommunication /ICT Indicators databaseNote: The developing country classification is based on the UN M49:
  13. 13. … and yet most projects using ICT for development are yet to find sustainable business models Number of projects in database: With market-based mechanisms Fully grant-based, (not fully grant-based) “dead pilots” older than 2 years and proven viability on the ground or feasibility studies (no feasibility study or “dead pilots”)Note: this database does not include « technology project » such as data collection softwares, that were listed separetely as out of scope
  14. 14. Agenda Our methodology: learning from what works Rhetoric trumps reality in ICT4D Financially sustainable models exist in finance and agro-services, to a lesser extent in health, and not yet in education Entrepreneurship is key to starting successful services, while collaboration is key to scaling 14
  15. 15. Financial services: case studies 15
  16. 16. FINO: some business aspects…(local agent model) Service Customers Savings, loans, access to credit, 28 million BoP remittances, insurance and 23 banks, 10 MFIs, 15 government pension payouts entities and 5 insurance agencies Largest project seen! Distribution Financials 15k field agents employed Deposits, remittances; free (Customer Service Points) Remittance $ 0,5 per transaction Loan 24% interest rate Revenue US $ 52 million 2011 Profit margin 10-15%
  17. 17. Simple ICT banking replaces more expensive practices -complex ones need consumer education to elicit payment Money transfers, remittances, Savings Loans Insurance payments Secured money platform Remote access from ICT Remote customers’ evaluation ⇒Avoided safety risk from device and remote payments of premium or installments carrying cash ⇒Access to bank or other ⇒Cost savings on transportation ⇒Avoided loss or theft risk financial institutions both for clients and providers from entrusting cash to offering savings, for ⇒Lower price from lower cost of services, informal intermediaries previously unbanked making it affordable to more clients ⇒Lower cost compared to populations ⇒Safer money deposits New sources of funds Simpler advertising and money transfers through from crowdfunding registration process traditional institutions ⇒Build-up of income history, allowing to access loans ⇒Access to loans for more ⇒Access to insurance for borrowers, including the more customers “missing middle” ⇒Enlarged customer base ⇒Lower interest rates allowing lower premium ⇒New investment ⇒Safety net against opportunities adverse events Legend Service provided by ICT ⇒Corresponding Impact on the BoP
  18. 18. Agriculture: case studies 18
  19. 19. Agriculture– Reuters Market Light
  20. 20. RML: some business aspects…(direct access model) Service Customers Customized, localized and personalized weather Several 100k subscribers in 15k forecasts, local crop prices, villages agricultural news via SMS, 4-5 times a day Distribution Financials Trade partners such as mobile Free subscription service providers, Indian post Service packs at $7 per quarter office, co-op credit society, Revenue $ 1 million 2009 agri-product companies: 1.5k distributors and 20k retailers
  21. 21. Farmers are ready to pay for agro-services as they getfinancial benefits from it all along the value chain Decision on crop Sourcing Sales of Monitoring of Cultivation to plant of inputs outputs farmers’ data Info on demand for Info on best practices and expert advice Info on market Data on farmers’ crops ⇒Better choice of Weather forecast prices and demand income ⇒Cultivation of higher inputs ⇒Choice of place to ⇒Construction of ⇒Better agro- value crops sell credit history, practices ⇒Better supply- ⇒Lower transaction allowing farmers ⇒Higher productivity demand match costs and overall to access loans ⇒Higher crop quality better price obtained Info on prices and for outputs Data on farmers’ availability of input harvests Aggregation of Aggregation of ⇒Better linkage farmers for farmers for grouped between purchase sale research/NGOs/go ⇒Purchase at lower ⇒Access to larger vernments and costs buyer, guaranteeing farmers purchase Direct order for inputs ⇒Guaranteed authenticity of inputs Legend Service provided by ICT ⇒Corresponding Impact on the BoP
  22. 22. Health care: case studies 22
  23. 23. mPedigree: some business aspects… (direct access model) Service Customers Consumers: verify authenticity medicines 2 million consumers and 6m Pharmaceutical/distribution products protected in 3 countries companies increase consumer trust In pilot phase 10-20% of tagged and counterfeit tracking packs generated a verification SMS Distribution Financials Direct access in pharmacies Free service for user Partnerships with HP, mobile Revenue: sales of codes to pharmacies operators, minus costs SMS, printing, overhead Profit margin: not known
  24. 24. Health: Market-based models provide remote consultationor verify drug authenticity Awareness/ Decision Monitoring (patient to seek care/desire Local delivery of Advanced/special Follow up care cases, regional for basic care ized care and long-term health data, drug primary/preventive authenticity) care Awareness on Best practice info and Advanced care Efficient remote Data to follow disease advice on locally delivered remotely follow-up patient care in the ⇒Overcoming cultural available remediation (e.g. via telemedicine) ⇒Better results post by patient and in the taboos measures and/or more sickness/operation aggregate ⇒Avoiding epidemics ⇒Triage care efficiently at ⇒Quicker return to ⇒Creation of dynamic spread ⇒Understanding of non-local venues work, family, patient records Information on where more advanced ⇒Treatment of more productive life ⇒Improvements in patient condition care might be needed serious conditions health budgeting and ⇒Awareness of basic ⇒Savings on ⇒Cost savings from Aggregation of improved spending of remedial action (unnecessary) trip more efficient care for patients for group scarce resources to doctors patients, doctors, purchasing ⇒More patients under ⇒Savings on insurance companies, (unnecessary) trip ⇒Info on options for better care more advanced care governments, donors ⇒Access to cheaper Verification of drug to doctors supplies, more and ⇒Best practice to ⇒Info on payment/cost ⇒Ability for scarce more affordable authenticity resources – doctors, manage general healthoptions sophisticated insurance, more ⇒Savings from (chronic conditions, investment in local spending on fakes equipment – to be infrastructure pregnancies, etc) used on more patients, ⇒Improved patient improving health healthLegend outcomes Service provided by ICT⇒Corresponding Impact on the BoPNot market based
  25. 25. Education: case studies Learning British English – for the cost of a cup of Bangladesh tea Michael Trucano 25
  26. 26. BBC Janala: some business aspects (direct access model) Service Customers Combination of mobile, internet, TV 3.8 million customers in Bangladesh and newspaper based language with 6 million paying courses lessons Distribution Financials Direct access $0.02 for 3 min. lesson or cost of Partners with mobile access to internet operators, Bangladesh TV Cost efficiency: now at $4 per person across all platforms Profit: not yet
  27. 27. ICT can play a role before school, at school and after school,with paying models only for adult education or private schools Before school At school After school Monitoring Designing Designing Training Reaching Attendin Practi- Learning of perfor- curriculum content teachers students g classes cing mance Classes on Finding Pedagogy Classes via Reporting Using ICT as Quizzes on Reporting ICT class training video- attendance learning tools mobile grades⇒More job content ⇒ Better conferences ⇒ Higher ⇒More ⇒Out-of-school ⇒ Real-time opportunities ⇒ Improved teachers ⇒Enrollment of attendance enjoyable practicing access to curriculum ⇒Multipli- new students of teachers classes ⇒Higher grades grades for Classes via fying effect and pupils ⇒Better students video- Sharing on Mobile ⇒Better understanding Accessing conferences class students phone based statistics on Interactions classes⇒Development content courses education with teachers archives of the course ⇒Teachers ⇒Affordable through ICT ⇒Better portfolio networking courses ⇒ Teachers understanding ⇒Reaching closer to the remote areas students’ needs Online forums ⇒Empowered students ⇒Student networking ICT classesLegend ⇒ More job Service provided by ICT opportunities⇒Corresponding Impact on the BoPNot market-based
  28. 28. Agenda Our methodology: learning from what works Rhetoric trumps reality in ICT4D Financially sustainable models exist in finance and agro-services, to a lesser extent in health, and not yet in education Entrepreneurship is key to starting successful services, while collaboration is key to scaling 28
  29. 29. Conclusions Successes had an entrepreneurial debut: •Focus on ability and willingness to pay of targeted clients, not on needs assessed top-down •Built from the ground-up and systemic approach (cross-actor, cross-sector) to reach scale: •Capture a sufficiently large share of customer mind and wallet through a related set of services •Multiple income streams over time, maximizing revenues 29
  30. 30. In education, health, agriculture and financial services, ICT4D leaders face similar issues to scale Challenges mentioned by the 15 project leaders interviewed for this study Policy: 1. Enabling policy (10) 2. Support from government (5) Internal capacity: 1. Recruiting agents (7) 2. Recruiting internal staff (5) 3. Training workforce (4) Partnerships: 1. Partnering with MNOs (4) 2. Deepening existing partnerships (3) Funding: 1. Equity investments (6) (2 for patient capital) 2. Investment in advertising from third parties (2) Technology: 1. Robustness (5) 2. Usability (3) Connectivity: 1. Broadband (5) 2. Increased mobile penetration (3) * Other requirements mentioned: trust (6), literacy (4), demographic density (2)*CKW, Drishtee, eKutir, esoko, mPedigree, MyC4, NarayanaHrudayalaya Hospital, txteagle considered as social entrepreneurs
  31. 31. Recommendations Focus on problem driven approach Support existing entrepreneurs, promoting cross- sector synergies Create a systemic environment for cross-border replication 31
  32. 32. Public report presents project findings Report structure: Sponsor’s Foreword Hystra Introduction Acknowledgements 1. About this project: Methodology 2. Executive summary Leveraging ICT for the BOP 3. The basis for ICT4D: Connectivity Innovative business models in education, health, 4. The “Direct access” model agriculture and financial services 5. The “Local agent” model 6. The “Crowd” model 7. ICT4Financial services 8. ICT4Agriculture 9. ICT4Health 10.ICT4Education 11.Socio-economic impact of ICT4D projects A joint report by Sponsored by 12.Environmental impact of ICT4D projects 13.Conclusion on findings and recommendations In collaboration with Appendix 32
  33. 33. Thank you for your attention! Any questions?For any questions/topics to discuss, arising after the webinar, do not hesitate to contact me at: