Kiva: New Gateway of Loans for the Poor

 

The rise of social networking websites has created new opportunities for the poor to gain access to much needed credit. Kiva.org is pioneering a new way for entrepreneurs in the South to obtain for their businesses unsecured, no-interest financing from lenders worldwide. By just a click of the mouse a person anywhere in the world can lend as little as US $25 or more to aspiring entrepreneurs in developing countries.

Kiva, which means “agreement” or “unity” in Swahili, was founded by Matthew and Jessica Flannery after time spent in East Africa. They built upon the idea of Nobel Peace Prize Winner, Mohammud Yunus’ Grameen Bank but took it a step further by tapping into the resources of the web. It works by allowing potential lenders to search for an entrepreneur via the website. Each entrepreneur’s business idea is explained, a photo of the entrepreneur is posted and the amount of the loan they require and how much they have raised so far are clearly displayed. It is then a simple matter of the lenders using their credit cards to make a loan online. Kiva then transfers all the funds to their local partners (microfinance institutions) which, in turn, disburse the loans to each business. All entrepreneurs are screened for their trustworthiness and the viability of their business. Loans are usually between 6 to 12 months and lenders receive regular email journal updates from the business they sponsor. Gradually, the loan is paid back and the lender is returned the full value of the loan.

The process is so simple that one may ask, “Does this really work?” Take the story of Nicholas Kristof, columnist for the New York Times who recently accounted his experience with Kiva.org in his New York Times Op-Ed piece, “You, Too, Can Be a Banker to the Poor”. Through Kiva.org he chose two entrepreneurs, a baker and an owner of a TV repair shop in Afghanistan and lent them US $25 each instantly making himself a business partner with total strangers. He recently visited Afghanistan to see their progress and found two thriving businesses. Mr. Abdul Satar, the baker, borrowed a total of US $425 from a variety of lenders, Nicholas being one of them, and was able to open a second bakery with four employees. Mr. Abdul Saboor who runs a small TV repair shop now has a second shop with two new employees.

By harnessing a user friendly website to make instant cash loans, Kiva has come up with one of the simplest and most direct ways to help poor entrepreneurs who need start up capital. It was first tried out in Uganda about a year ago where partnerships were forged with local microfinance institutions that examined and evaluated each business before they were posted on the website. It has now attracted close to 18,000 lenders contributing an average of US $82.

“I believe the real solutions to poverty alleviation hinge on bringing capitalism and business to areas where there wasn’t business or where it wasn’t efficient,” co-founder Matthew Flannery told the New York Times. “This doesn’t have to be charity. You can partner with someone who’s halfway around the world.”

By David South, Development Challenges, South-South Solutions

Published: April 2007

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

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Like this story? Here is a dirty secret: this website is packed with stories about global South innovators. We spent 7 years researching and documenting these stories around the world. We interviewed the innovators to learn from them and we visited them to see how they did it. Why not use the Search bar at the top and tap in a topic and see what stories come up? As for my work, I have been involved with start-ups and media ventures since the early 1990s. While most tech entrepreneurs were either still in their nappies in the 1990s (or just a drunken night away from being conceived in the 2000s), I was developing content for this new thing they called the "Internet". In the years since I have learned a great deal about innovation and digital and have shared these insights in the stories on this website as well as in the 5 issues of Southern Innovator magazine. So, stick around and read some more!    

Google Books: https://books.google.co.uk/books?id=T2V2VMuJuQEC&dq=development+challenges+april+2007&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challengessouthsouthsolutionsapril2007issue

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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Innovation from the Global South

 

A major study has documented a rising tide of scientific innovation coming from Asia’s fast-developing countries, especially India and China. Conducted over 18 months by UK-based think tank Demos, it challenges the conventional wisdom that scientific ideas come from the top universities and research laboratories of large companies based in Europe or the US. It found ideas emerging in unexpected places, flowing around the world conveyed by a mobile diaspora of knowledge workers from the South.

China has seen its spending on research and development jump by 20 percent each year since 1999. India is now producing 260,000 engineers a year and its number of engineering colleges is due to double to 1,000 by 2010. Research and development in India has grown by threefold over the past decade. There is now a global flow of research and development money to the new knowledge centres of Shanghai, Beijing, Hyderabad and Bangalore.

The study found the greater political and economic emphasis being placed on science and technology was paying dividends. These emerging science powers are now investing heavily in research to become world leaders in information technology, biotechnology and nanotechnology within the next ten to fifteen years. This is also producing a flood of scientific papers from China and India to the world’s prestigious scientific journals.

For India, its knowledge-based industries by the end of this year will be a US $57 billion export industry, accounting for 4 million jobs and 7 percent of Indian GDP. Interestingly, the study also found a new wave of change is underway. Where once it was mostly low-wage manufacturing and call centre jobs that were going to China and India, a new wave of research and development jobs is now moving there. Drawn in by technology clusters in Shanghai and Bangalore, “Microsoft began to realize we can’t find all the talented people in the US. Nowhere in this universe has a higher concentration of IQ power (than India),” said Harry Shun, head of Microsoft’s research in Asia.

By David South, Development Challenges, South-South Solutions

Published: April 2007

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=T2V2VMuJuQEC&dq=development+challenges+april+2007&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challengessouthsouthsolutionsapril2007issue

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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Social Networking Websites: A Way Out of Poverty

Social networking websites also known as, Web 2.0 – the name given to the new wave of internet businesses and websites such as YouTube and MySpace that are transforming the way people interact with the Web – has been dubbed the social web for its power to bring people together. The label has been derided as a marketing gimmick by some, but many argue there are a number of characteristics to Web 2.0 that make it something different and a valuable tool for entrepreneurs seeking ways out of poverty.

The new Web 2.0 applications offer many free software tools stored online, from accounting and business related tools, to new multimedia ways to communicate for free. Unlike Web 1.0 sites, which offered information to passive users, Web 2.0 sites allow interaction and comment. These qualities have meant Web 2.0 can be used to build communities and social and business networks. By being able to store vast quantities of information online, it becomes faster to work and reduces the painful delays brought on by slow connections.

All these new tools are making it easier and easier for entrepreneurs to work from home, in internet centres, or anywhere there is a wireless connection, and is slashing the costs of managing a business. All the applications are online so there is no need to be hidebound by one operating system or hardware capability. The number of internet centres has increased significantly all over Asia and Africa, bringing the power of Web 2.0 to millions more people.

Linking mobile phones and the internet is also remarkable. It is becoming more and more possible in Africa to send messages to weblogs via text messaging, to post photos and videos, or to stay connected with a community, advocacy or business group via messaging to its website.

“Web 2.0 is a pre-occupation of ours that can be beneficial in fighting poverty,” said Tobias Eigan, founder and co-executive director of Kabissa.org, a web portal dedicated to promoting Web 2.0 in Africa. “It is really relevant for Africa. It makes the internet a read and write function, it is more user-friendly – that dynamic is going to make a big difference. It is so much easier to upload content with Web 2.0. It will build the capacity of local institutions and society and that will improve the lives of people – it will be much easier to fight poverty with this connectivity.”

Two other champions of the Web 2.0 way out of poverty are Waleed al-Shobakky, science and technology reporter for alJazeera.net, and Jack Imsdahl, a consultant and technology commentator. While they admit subsistence farmers and the illiterate will not directly benefit, those who are students or are working in proximity to computers will definitely benefit. They point out how rapidly mobile phones have been taken up by the poor and that this is being driven by the new services they offer.

There are still profound obstacles to more rapid take-up, however. Internet connection speeds will have to get better and more will need to be invested in this area. Web 2.0 tools will also need to be adapted to local languages if they hope to get past those who speak major web languages like English.

Entrepreneurs in the global South can now easily sign up to a vast array of e-newsletters that are sent to email accounts and keep on top of trends and innovations in their field. The relative anonymity of these email lists mean subscribers are less likely to be judged on their physical circumstances.

By David South, Development Challenges, South-South Solutions

Published: March 2007

Development Challenges, South-South Solutions was launched as an e-newsletter in 2006 by UNDP's South-South Cooperation Unit (now the United Nations Office for South-South Cooperation) based in New York, USA. It led on profiling the rise of the global South as an economic powerhouse and was one of the first regular publications to champion the global South's innovators, entrepreneurs, and pioneers. It tracked the key trends that are now so profoundly reshaping how development is seen and done. This includes the rapid take-up of mobile phones and information technology in the global South (as profiled in the first issue of magazine Southern Innovator), the move to becoming a majority urban world, a growing global innovator culture, and the plethora of solutions being developed in the global South to tackle its problems and improve living conditions and boost human development. The success of the e-newsletter led to the launch of the magazine Southern Innovator.  

Follow @SouthSouth1

Google Books: https://books.google.co.uk/books?id=Hni77Zii2aAC&dq=development+challenges+march+2007&source=gbs_navlinks_s

Slideshare: http://www.slideshare.net/DavidSouth1/development-challenges-march-2007

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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Cities for All shows how the world's poor are building ties across the global South

 

Cities for All, recently published by Habitat International Coalition, draws together thinkers and innovators in a compilation of case studies addressing the challenges of inclusive cities in the global South. The book seeks to articulate experiences of South-South cooperation and enhance the links between different regions. David South interviews the co-editor, Charlotte Mathivet.

By David South

Cities for All, recently published by Habitat International Coalition, draws together thinkers and innovators in a compilation of case studies addressing the challenges of inclusive cities in the global South. The book seeks to articulate experiences of South-South cooperation and enhance the links between different regions. David South interviews the co-editor, Charlotte Mathivet.

Published: 24 August 2010

Global Urbanist (http://globalurbanist.com/2010/08/24/cities-for-all-shows-how-the-worlds-poor-are-building-ties-across-the-global-south)

The largest movements of people in human history are occurring right now, as vast populations relocate to urban and semi-urban areas in pursuit of a better quality of life, or because life has become intolerable where they currently live. In Arrival City, Canadian journalist Doug Saunders finds that this movement —

— is creating new urban spaces that are this century's focal points of conflict and change — centres of febrile settlement that will reshape our cities and reconfigure our economies. These Arrival Cities are where the next great economic and cultural boom will be born, or where the next explosion of violence will occur.

For most, this process is chaotic, unplanned, and fraught with risk, hardship, poverty and stress; yet, because so many are also able to dramatically improve their life chances, many millions will continue to follow this path.

The speed of urbanisation makes the question of how to build liveable cities increasingly urgent. A new book hopes to help people get closer to solutions to these vexing problems.

Cities for All: proposals and experiences towards the right to the city, published by Habitat International Coalition (HIC) in Santiago, Chile, and co-edited by HIC's Ana Sugranyes and Charlotte Mathivet, was launched during this year's World Urban Forum in Rio de Janeiro, and highlights ways in which urban residents across the South are defining how they would like their cities to evolve, refusing to accept social exclusion and demanding a "right to the city".

The book is published in three languages — English, Spanish and Portuguese.

"A lot of social initiatives based on the right to the city are coming from these 'new cities of the South'", says Mathivet. "The book highlights original social initiatives: protests and organising of the urban poor, such as the pavement dwellers' movements in Mumbai where people with nothing, living on the pavements of a very big city, organise themselves to struggle for their collective rights, just as the park dwellers did in Osaka."

"Another innovative experience came from the children's workshops in Santiago, aimed at including children in urban planning in order to make a children-friendly city."

The cities of Africa and Asia are growing by a million peole a week. If current trends continue, mega-cities and sprawling slums will be the hallmarks of this majority urban world. In sub-Saharan Africa, 72 per cent of the population lives in slum conditions. And by 2015, there will be 332 million slum-dwellers in Africa, with slums growing at twice the speed of cities.

"The consequences have produced a deeper gap between the city and countryside, and also within the city between the rich and poor," said Mathivet.

Cities for All details African experiences from Nigeria, Cameroon, Ghana and South Africa. Mathivet believes "one common topic affecting these countries is the problem of forced evictions, due to the rural exodus and growing urbanisation. It is therefore very important for the right to the city to include a perspective of linking the struggle between rural and urban movements, because problems in cities and the countryside are closely connected, especially in Africa."

And the current surge to cities in Africa raises the issue of what type of development will occur. The book argues that cities aren't automatically a solution to the plight of the poor. Cities need to be worked on, and many of the problems faced by the South's fast-growing cities stem from a power imbalance.

"A very important thing to realise is that a city life is not a synonym for a better life or a miracle solution for poor people, nor for the 'capitalist' way of life," says Mathivet. "African nations and their people have to find effective solutions on their own to overcome poverty — which they are doing — without copying development models from the North."

"In my understanding, urban growth is not haphazard or poorly planned in 'developing' countries. Rather, I think that urban 'planning' or lack of planning is done with a goal of generating more benefits for powerful interests and fewer benefits for poor people."

The book argues for a two-way relationship with the people who make up the majority of these fast-growing cities. And it says each city will have to customise its solutions.

"It is very difficult to apply social innovations to other countries without understanding the history and the social, economic, cultural and political context," says Mathivet.

"Hope comes from learning of different experiences. For example, if a social movement in South Africa succsesfully avoided an eviction from a slum, it may help another social movement in Brazil to strengthen its own strategy. One of the book's goals was to articulate the various South-South experiences and enhance the links between different regions."

In one chapter, contributor David Harvey argues that "the right to the city is not simply the right to what already exists in the city; it is also the right to transform the city into something radically different."

"The right to the city itself will not stop the over-whelming phenomenon of urban growth," believes Mathivet. "The consequences produced by implementing this collective right would rather change people's daily lives by achieving more equality in cities as well as in the relationship between the city and coutnryside in regards to growing urban populations."

Cities for All highlights the existence of 'cities without citizens': the vast numbers of slum dwellers and the poor who live mostly ignored by authorities (unless they are in the way of commercial development).

"The expression 'cities without citizens' means the exact opposite of the right to the city proposal," Mathivet says. "This alternative to the present global paradigm proposes to allow people to participate in the process of creating the city in terms of urban planning, decision-making, budget, public policies, etc. It is possible for people to influence their own lives and the community."

"There is no miracle solution, and the right to the city is a banner around which people can organise themselves to articulate their struggles and demand social justice."

The book concludes by arguing for the advantages of a 'slow city' approach. But how does this work in fast-growing urban areas where people are looking to quickly escape poverty, or are seeking rapid improvements to their quality oflife? Would they not find a slow city approach frustrating?

Mathivet believes a leap of imagination is required: "Cities for All is not intended to be a recipe book. The slow city experience was chosen as a conclusion to the book in order to present a different approach, but not to propose a clear solution to follow. Concluding with the slow city experience, which is radically different and difficult to apply in African and Asian cities, where the spread of urbanisation is uncontrollable and leads to major problems, emphasises that the fight for the right to the city involves imagination and the desire for another possible city …

"Moreover, slow city experiences have been developed otuside of wealthy European countries, for example in some small Argentine and South Korean cities."

And with the coming decade unfolding, what will cities in the South be like? Are we on the cusp of a new, dark age akin to the misery of Europe's cities during the industrial revolution?

Mathivet acknowledges that "we can see a dark future where the interests of the most vulnerable will not be the priority. However, looking at the experiences by and for the people, we cannot consider them poor, but rich of knowledge, cognitive capital, and with courage to change their lives and their communities, through self-management and autonomy.

"Cities for All aimed to show this richness … the challenges are for civil society to deepen links between different movements to build a stronger global strategy, during events like the next World Social Forum in Dakar, February 2011."

David South is an international development consultant and writer. He writes the Development Challenges: South-South solutions e-newsletter for UNDP's Special Unit for South-South Cooperation. He led the Communications Office for the UN in Ulaanbaatar from 1997 to 1999 and has worked for the UN in South Africa, Turkmenistan and Ukraine.

The Special Unit for South-South Cooperation is mandated to promote, coordinate and support South-South and triangular cooperation on a global and UN-systemwide basis.

This story is adapted from a piece in the July 2010 edition of Development Challenges.

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Lima to Delhi: What can be learned on Urban Resilience?

By David South

southasiadisasters.net March 2015

Fast-growing cities and urban areas in the global South can be vulnerable because they lack the web of structures and institutions that enable more long-established cities to mitigate risks and, when a disaster does strike, to bounce back quickly. But thanks to many new technologies, and some smart new thinking, it is possible to bring resilience to even the poorest and most deprived urban communities.

The essence of resilience is to build into plans and daily activities a community's ability to weather any disaster, small or large. All cities, rich or poor, can experience a disaster of some sort, be it weather, civil unrest, war, earthquakes, shortages, or economic, financial and health crises.

New technologies make it possible for all cities, no matter how poor and overcrowded, to build in urban resilience. The ubiquity of mobile phones introduces a powerful city and urban planning tool. Mapping chaotic and unplanned areas is already underway in many cities of the global South (in Brazil and Kenya for example) (http://tinyurl.com/qgba8kb).

Impressively, innovators in the South are using affordable micro-electronics in the form of mobile phones and laptops to gather data and map it. This computing capability was once the sole domain of big information technology companies such as IBM. Now, a single laptop computer combined with a smartphone equipped with the right software can manage a large urban area, a task that once required rooms full of computers. The data can then be used to manage growth today and re-build after a disaster. Any excuse not to be resilient has been wiped out with this technological leap.

But how to deal with the common reality of feeling overwhelmed by the many obstacles to rational planning and building for urban growth in the South? Innovators have stepped in to take matters into their own hands with simple construction technologies as the solution. One example is the Moladi system of recycled plastic moulds (moladi.net). Anybody can master this simple building technique, as the mortar-filled moulds are designed to fit easily together to construct an earthquake-resistant, beautiful home. This approach has the advantage of bypassing the failings of authorities to enforce building codes and standards in poor, urban communities, creating safer places to live and preventing the growth of unregulated shanty towns at risk to fire and earthquakes.

Others have found social ways to organize people, even in the most desperate of conditions, providing services and laying down the groundwork for an upgrading of an urban area to improve living conditions and long-term opportunities. The concept of ‘cities for all’ has inspired many to re-energize civic organizations and networking in poor areas to ensure they are not left out of economic growth. In Colombia, a famous example of this is the escalator in the city of Medellin, which connects a hillside slum to the centre of the city, opening up economic opportunities to all (http://tinyurl.com/nm47d3u).

Still more exciting, new technologies are in the works to simplify construction of major infrastructure and new buildings. A future city will be able to gather extensive data on an expanding urban area, make detailed development plans with architects and engineers, and then have robots and 3D fabricating machines quickly lay down infrastructure and erect buildings. Sounds far-fetched? Well, in China one company recently used a 3D machine to make 10 houses in a single day (http://www.yhbm.com/index.aspx).

An infographic from Southern Innovator’s fourth issue (http://tinyurl.com/m9vfwur) shows 10 ways any urban area - either planned or unplanned - can build in resilience. All are proven approaches from cities in the global South.

Southern Innovator’s upcoming sixth issue will explore the interplay of science, technology and innovation in the global South and how people are making the most of 21st century advances to increase wealth and improve human development. Hopefully, all of this innovation will lead to more resilient cities in the future!

- David South, Editor, Southern Innovator
United Nations Office for South-South Cooperation (UNOSSC)

Southern Innovator Issue 1: https://books.google.co.uk/books?id=Q1O54YSE2BgC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 2: https://books.google.co.uk/books?id=Ty0N969dcssC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 3: https://books.google.co.uk/books?id=AQNt4YmhZagC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 4: https://books.google.co.uk/books?id=9T_n2tA7l4EC&dq=southern+innovator&source=gbs_navlinks_s

Southern Innovator Issue 5: https://books.google.co.uk/books?id=6ILdAgAAQBAJ&dq=southern+innovator&source=gbs_navlinks_s

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