Cash Machines for the Poor

Access to basic banking services for the poor is weak at the best of times. Many are openly discriminated against as a ‘bad risk’ by banks, and denied the sort of banking services middle and higher income people take for granted. Yet it is a myth that the poor do not have money or do not wish to save and invest for their future or for business.

The so-called Bottom of the Pyramid (BOP) – the four billion people around the world who live on less than US $2 a day – are being targeted by a wide range of businesses. Indian business consultant and professor CK Prahalad, the man who coined the term BOP, has gone so far as to claim this is a market potentially worth US $13 trillion, while the World Resources Institute puts it at US $5 trillion in its report, The Next 4 Billion.

And contrary to popular perception, the poor do have buying power, as has been documented by Massachusetts Institute of Technology (MIT) professors Abhijit Banerjee and Esther Duflo in their paper “The Economic Lives of the Poor”. Surveying 13 countries, they found those living on less than a dollar a day, the very poor, actually spent 1/3 of their household income on things other than food, including tobacco, alcohol, weddings, funerals, religious festivals, radios and TVs. The researchers also found that the poor increasingly used their spending power to seek out private sector options when the public sector failed to provide adequate services.

India, where 63 percent of the BoP market is rural and 304.11 million people are illiterate (Human Development Report), makes for a particularly tricky market to reach with bank machines: the average transaction is just 100 rupees (£1.25).

But a Madras-based company has come up with the Gramateller – a low-cost, blue-and-white bank machine custom-designed for the poor and illiterate. Vortex received funding of 2 million rupees (US $48,000) from an investment company, Aavishkar, that specializes in micro-venture capital — small sums for new business ideas. The advantage of micro-venture capital funding is its longer payback time: a young company does not get driven out of business by having to pay back the cash before the idea has been realized. Normally, venture capital helps a business to grow quickly but the venture capitalist wants to see an immediate profit on the investment.

Vortex’s chief executive officer, V.Vijay Babu, said: “The idea was conceived by Prof. Jhunjhunwala of IITM (Indian Institute of Technology Madras) in the course of an exploratory project focused on using ICT to deliver modern banking services to rural India.”

“It was found that branch-based banking is too expensive to be extended to remote rural locations where the volume and size of transactions are small. Using conventional ATMs (automatic teller machines) as a channel posed many difficulties because these ATMs were not built to operate in [illiterate] environments. Hence the need for developing an ATM specific to this context.”

Costing just a 10th as much to build as an ordinary cash machine, Gramateller has a fingerprint scanner for the illiterate, and is able to accept dirty and crumpled bank notes. Vortex came up with an ingenious solution to do this, said Babu: “Vortex developed a beltless dispenser design that in many ways mimics the way a human teller would pick and count notes.”

Vortex hopes to massively expand access to cash machines: at present, India has just 30,000 machines, or one for every 43,000 people (the US has a machine for every 1,000 people). These machines are being piloted with India’s biggest private bank, ICICI, and they have garnered interest from Indonesian banks as well.

“We are running pilots for two leading banks with about 10 ATMs,” said Babu. “Though it is still early, the initial response has been very encouraging – rural users find fingerprint authentication intuitive and simple and the ATM convenient and easy to use. A few users also gave feedback that our ATMs look less intimidating, maybe because it is placed in a non-air conditioned room with easy access and also is different in shape from a typical ATM.”

Furthermore the cash machines have taken a beating to see if they are robust enough for rural India: “The ATMs were tested for extended operating cycles under the harshest of environments that would prevail in the rural context — using soiled currencies, operating in non-air conditioned and dusty environments, subjecting the machine to typical fluctuations in line voltages and power outages. User-acceptance was tested by enlisting the participation of rural and semi-urban people to carry out test transactions.”

As for thieves getting their hands on the cash before the poor, Vortex maintains the machines will not become the victim of thieves: each machine will only carry a fifth of the money of city-dwelling bank machines.

Elsewhere in the South, a South African research and analysis company BMI-TechKnowledge (http://www.bmi-t.co.za/) in its latest report identifies a boom in banking services across Africa. In particular, South Africa, Botswana, Namibia, Angola, Mauritius, Tanzania, Kenya, Ghana, Nigeria, Egypt and Morocco – all have seen surges in profit and services as a result of improving banking regulations and political conditions. Maybe future markets for the Gramateller to reach Africa’s poor lie ahead?

By David South, Development Challenges, South-South Solutions

Published: August 2008

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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Milk Co-operatives Help Hungry Haiti

The global food crisis has hit the impoverished Caribbean country of Haiti especially hard. Already suffering from decades of food crises brought on by the collapse of domestic farming, the country has become notorious for its people being reduced to eating cakes made of mud to stave off hunger pains. It is the poorest country of Latin America and the Caribbean and one of the poorest in the world.

Haiti imports some 52 percent of its food, including over 80 percent of its rice. Local food production only covers 43 percent of the country’s demand and food aid supplies only 5 percent of its needs. Of the estimated 9.8 million Haitians, 5.1 million live on less than US $1 a day and 7.6 million on less than US $2 a day. At current prices, one dollar buys only half a meal per day (Source: United Nations Country Team in Haiti).

Haiti’s problems are made worse by a global food crisis. So-called agflation (agricultural inflation) has seen spiralling food prices around the world, which in turn are causing food shortages, hunger and malnutrition. On international commodity markets, food prices have gone up 54 percent over the last year, with cereal prices soaring 92 percent (FAO – World Food Situation). U.N. Secretary General Ban Ki-moon has called for food production to increase 50 percent by 2030 just to meet rising demand – and right now there are 862 million people worldwide who are undernourished (FAO).

In Haiti, most agriculture is done on a small scale by about 700,000 family farmers. Few belong to any production association or mechanism to market and distribute their products, and local produce has been pushed out of the market by imports.

Subsidized U.S. rice began flooding in 30 years ago, becoming so cheap that Haitians began eating it instead of the corn, sweet potatoes, cassava and domestic rice they grew. The U.S. imports drove rice farmers out of business and incited a rural exodus that swelled the slums of the capital, Port-au-Prince. That dependence on imports has caused dangerous food insecurity. Today, the U.S. rice that is the staple of many Haitians’ diet has doubled in price in little more than a year.

“The problem is that Haiti doesn’t have the land to give every peasant family enough to allow them to make a living,” said Bernard Etheart, head of the National Institute for Agrarian Reform. Etheart estimates that if all arable land was planted, each farmer would have no more than half a hectare, or 1.25 acres.

A cooperative of dairy farmers is doing its bit to revive domestic production of milk products and reduce the crippling costs of importing milk for Haiti. Importing 85,000 tonnes of milk from Europe and the United States costs Haiti US $40 million a year. A walk through the capital, Port-au-Prince, will reveal how much milk is imported in one form or another: tiny cans of evaporated milk are sold in the street markets, while the wealthy can buy powdered and long-life milk in the air conditioned supermarkets of the upscale neighbourhood of Petionville.

Dairy production in Haiti was in decline for 20 years until, in 2002, the country ceased to produce any milk at all. The urgent need for milk in Haiti is shown in the average consumption: per child, only 110 ml is consumed per day. In Uruguay, for example, it is 520 ml a day (190 litres per head of population per year).

Lèt Agogo (Creole for Unlimited Milk) is a cooperative using small-scale farmers to bring milk to the hungry. Founded by the NGO Veterimed six years ago, it now has a network of 13 dairies across the island.

Lèt Agogo is hoping to get Haiti’s milk production up to 145,000 tons a year from the current 45,000 tons. So far, the product’s single biggest client is the Haitian government. It buys bottles of sterilized milk below cost and distributes them to 130,000 school children in 44 government-funded schools. Dr. Michel Chancy told the Miami Herald that the government would like to expand the distribution to 800 schools.

“Haiti is a country where we consume a lot of milk,” said Chancy, a veterinarian and one of the visionaries behind Lèt Agogo. “After rice, milk is the second-largest import.”

At present, Haiti has 500,000 dairy cows out of more than a million head of cattle. The problem came down to marketing and distributing the dairy products. With no structure in place, few farmers bothered milking their animals. But by the end of 2007, 600 farmers had joined the network and 400 producers in dairy product making and grass pasture management. In 2007, they turned 540,000 litres into yoghurt and sterilised milk that can stay on the shelf for six to nine months without refrigeration. Made from sterilized milk, the yogurt comes in 280 ml bottles and sells in stores throughout the country and has a shelf life of nine months.

The farmers have seen their income almost double, from 4 (US 10 cents) to 8 (US 20 cents) gourdes per litre, from 10 (US 25 cents) to 12 (US 30 cents) gourdes per litre.

Farmers walk to processing centres with their litres of milk and receive US $2.20 for each US gallon (4.55 litres).

“The milk is here,” Chancy said, but the lack of roads and electricity in the country pose huge challenges. “The problem is transporting it.”

Haiti’s president, Rene Preval, has cited Lèt Agogo as an excellent example of how Haiti can recover its domestic food production capability. The scheme won a US $10,000 first prize in the W.K. Kellogg Foundation and Economic Commission for Latin America and the Caribbean Experiences in Social Innovation Award.

Lèt Agogo believes it will take 100 dairies throughout Haiti’s rugged terrain to truly take over the import market, and would cost US $10 million to set up. ”Normally in five to ten years, a dairy would pay for itself. But you need the investments,” Chancy said.

“It’s not the production of milk that is important here… It’s accomplishing it together,” said Philippe Mathieu, from Oxfam International in Quebec, Canada, who is working on helping the brand produce cheese, noting that Haiti is at a difficult crossroads with today’s global price hikes. “The goal is to show Haitians there is a way to do things — a way to construct something collectively.

“Haitian peasants have always taken care of their cattle; tying them, feeding them and giving them water to drink,” Mathieu said. ”The cow has always been their bank book, something they could sell for money during hard times. Now it has become a revenue source for them.”

By David South, Development Challenges, South-South Solutions

Published: August 2008

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

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Traditional Healers can Heal the Mind, as well as Body

Mental healthcare is critical to physical health and overall wellbeing, yet it is seriously neglected around the world – and especially in poorer countries.

Often seen as a luxury for the wealthy or an indulgence for the weak, mental health services are often left at the bottom of any list of development priorities. Yet Professor Martin Prince of King’s College London in the United Kingdom found that an estimated 14 percent of the global burden of disease is due to neuropsychiatric disorders, mostly depression, alcohol- and substance-use disorders, and psychoses.

Since the contribution of mental disorders to physical illness is inadequately appreciated, the actual global burden of mental disorders is probably higher than this. Dr. Shekhar Saxena of the World Health Organization has reported that a scarcity of resources for mental health is compounded by inequities and inefficiencies in the delivery of mental healthcare.

As a result, people who need care get none. “The treatment gap – the proportion of those who need but do not receive care – is too high for some mental disorders,” Saxena said. As many as one in three people with schizophrenia and one in two with other mental disorders do not receive any treatment. The WHO has reported that the treatment gap for serious disorders is 76 percent to 85 percent for low- and middle-income countries. And the organization says shortages of healthcare professionals have been shown to be the main limiting factor in delivering mental healthcare in most low- and middle-income countries.

But an ingenious solution to this problem has emerged in the South American country of Ecuador. It involves turning to the traditional healers who are already well-established in communities. They are both cheaper and faster than waiting for medical psychiatrists to turn up in poor communities, and they can start right now to provide the support people need in a culturally tolerant way. Their effectiveness has been proven by Dr. Mario Incayawar, director of the Runajambi Institute for the Study of Quichua Culture and Health in Otavalo.

“Poor countries where you find numerous traditional healers could benefit the most,” he said.

In findings published in the prestigious British Journal of Psychiatry (The British Journal of Psychiatry (2008) 192: 390-391. doi: 10.1192/bjp.bp.107.046938), Incayawar found there are just 800 psychiatrists in Ecuador, and most live in the cities and speak Spanish. The native population on the other hand, mostly speak the local Quechua language and are served by only one psychiatrist, but thousands of traditional healers.

In the Andean mountain city of Otavalo, most people are descendents of the ancient Inca people. Health conditions are poor and far worse than in Spanish-speaking regions. Over 3 million of Ecuador’s 12 million residents speak Quechua, many of them living in indigenous communities high up in the mountains, bypassed by development. Roughly 90 percent of indigenous communities live below the poverty level, a fact reflected in high maternal and infant mortality rates. In some remote communities, maternal mortality reaches 250 deaths per 100,000 live births, compared to the national average of 130, and one in 10 infants does not live to see his or her first birthday.

For 5 million Indigenous people in Ecuador, for example, there is not one single mental professional paid to work within the Indigenous communities.

Traditional healers’ practices are widespread around the world, yet their diagnostic skills have rarely been investigated. Incayawar’s study found the yachactaitas (Quichua healers) in the Andes were able to identify cases of psychiatric illness in their communities. During the study over 18 months, 10 yachactaitas participated in the identification of 50 individuals with a condition. None of the participants was found to be healthy in biomedical or psychiatric terms when reviewed by psychiatrists. The results suggest yachactaitas can be an early warning system for identifying general psychiatric cases in their communities through their powers of observation.

“From the Quichua perspective, it is a matter of common sense,” said Incayawar. “We have a sizable number of traditional healers, why not promote their clinical skills for taking care of our communities.”

“Healers are paid in cash or by gifts such as a bag of potatoes, a basket of eggs, or a couple of chickens. The Quichua people are not familiar with psychiatrists or mental health professionals.”

He also sees a bright future for the role of the traditional healer: “Young people feel less threatened to pursue a career as a traditional healer. Currently, the trend points to an increase of traditional healers.”

In the future, Incayawar would like to see a happy co-habitation between the scientifically-trained psychiatrists, and the traditional healers: “We would like to see traditional healers working in a respectful partnership with biomedically trained mental health workers. The collaboration between equals … could be something to work on for the coming decade.”

By David South, Development Challenges, South-South Solutions

Published: August 2008

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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Fashion Recycling: How Southern Designers are Re-using and Making Money

With the rising awareness of the importance of doing fashion in an ethical and sustainable way, more and more fashion designers in the South are getting very creative. Fashion earns big money around the world: The global clothing industry is estimated to be worth US $900 billion a year.

In Paris, the Ethical Fashion Show, now in its fifth year, showcases fashion that respects people and the environment while still being glamorous, luxurious and trendy. It has attracted designers from around the world, including Mongolia, Thailand, China, Peru and Bolivia. The show demands that all participants adhere to International Labour Organization conventions – including banning forced and child labour – respect for the environment, creating local employment and working with craftspeople to ensure skills are retained and the fashion reflects the diversity of the world’s cultures.

In Abidjan, Ivory Coast, Felicite Mai is using pride in her nation’s top export commodity, cocoa (Ivory Coast is the world’s number one exporter of cocoa), to make smart fashion wear at affordable prices. She has turned the beige-coloured jute sacks used to ship cocoa beans around the world into clothes for men and women.

“Ivory Coast’s economy is based on agriculture, especially cocoa and coffee. So I decided to promote these crops by creating these fashion designs,” Mai, whose real name is Maimouna Camara Gomet, told the Reuters news agency.

“For me, it’s a way of drawing the whole world’s attention to cocoa and coffee,” she said

Mai comes from a family of cocoa planters and is a graduate of a sewing school. She works out of a studio-cum-shop in the Treichville suburb of Abidjan.

The clothes are usually beige, but some are dyed dark brown or blue. They include skirts, tops, trousers, shirts, waistcoats, caps, bags and accessories; she gets the sacks – most emblazoned with “Product of Ivory Coast, Cocoa” — from the city’s port warehouses. She cleans the jute cloth first, before creating the fashions.

“I had this idea from when I was still at sewing school in 1987. Then I opened my own workshop in 1996 and I first launched these kind of designs in 2003 during a fashion contest at Divo (in the south of Ivory Coast)” said Mai, who has several assistants at her shop.

She has been able to attract as clients local celebrities, artists and musicians and even a few from abroad.

In Brazil, it is footwear that is getting the recycled-look treatment. The brand Melissa specializes in plastic shoes that are eco-friendly and made from 100 percent recycled materials. They use a plastic called melflex made from recovered plastic. The shoes are made in injection molds and the factory is so efficient, it has next to no waste as a byproduct. It recycles all the waste and water used in the production process. And as a plus, they make a point of paying the workers well, and supporting social and environmental causes in Brazil.

Their secret to putting zing into recycled plastic shoes is to have high-profile, celebrity designers design some of the shoes. So far, they have had UK fashion mistress Vivienne Westwood, the Campana Brothers, and the UK-based, Iraqi-born architect Zaha Hadid. Hadid is a controversial figure who always stirs up debate, and her rubber shoes have brought attention to the brand.

The Chilean studio Modulab has turned to recycled rubber from the car industry to make bags. The rubber comes in sheets so it is easy to cut and shape into bags, thus reducing the amount of time and energy used to make the bags. The line is called RTA (ready to assemble) and includes three types of bags: an envelope, a handbag and a messenger bag. Each sheet of recycled rubber comes with the specific slots and pins for the consumer to put the bag together at home, without any glue or sewing involved. Energy used in the making of the entire bag is 100 percent human, except in the production of the material itself.

In Ghana, the cheeky Ghanaian businessman-cum-fashion designer Kwabena Osei Bonsu wanted to do something about the ubiquitous plastic bags that pollute the landscape of the capital, Accra.

In Accra, a small city of 2.2 million people, up to 60 tons of plastic packaging is dumped on the streets every day, a figure that has risen by 70 per cent over the past decade.

“I wanted to come up with an idea that would solve problems in my lifetime,” he said to the Independent.

He came up with the brilliantly simple solution of turning these wasted and damaging plastic bags back into usable and fashionable carryalls and handbags. He collects the plastic sacks and stitches them back together. The business, Trashy Bags, employs a dozen tailors and seamstresses. Launched in December last year, it so far has collected 10 million used plastic sachets from the streets, and sold more than 6,000 bags. Handbags go for US $7.79.

Ghana’s huge quantity of discarded plastic water bottles are gathered up for recycling too. A storage room overflows with more than 3 million sachets that have been collected and cleaned ready for recycling.

Bonsu’s business has turned into a source of income for local people, who receive US $3.89 for 1,000 sachets – a good return where the average yearly income is US $495

“I collect sachets because I am jobless and this gives me money,” said Hadiza Ishmael, a 55-year-old grandmother who has delivered 4,000 plastic bags. “It also makes the place look nicer.”

By David South, Development Challenges, South-South Solutions

Published: August 2008

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

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Innovative Mobile Phone Applications Storm South

The pace of change in information technology in the South is impressive, and nowhere has it been more rapid than in the take-up of mobile phones. In the past three years China has become the world’s largest exporter of information and communications technology (ICT), and home to the same number of mobile-phone users (500 million) as the whole of Europe. According to India’s telecoms regulator, half of all urban dwellers now have mobile- or fixed-telephone subscriptions and the number is growing by eight million a month. In Tanzania, mobile phone use grew by 1,600 percent between 2002 and 2008. In Nigeria it grew by almost 7,000 percent over six years, from 5 percent of the population 140 million in 2002, to a predicted 34.3 percent by the first quarter of this year.

But it is the Philippines that has become a global leader in mobile phone commerce. A whole panoply of banking tasks can now be done by mobile phone: transferring funds from one person to another, making small purchases, or paying fees.

“The most significant lesson learned so far,” said Shawn Mendes, lead author on a report titled The Innovative Use of Mobile Applications in the Philippines Lessons for Africa. “Is that m-Banking, rather than more altruistic applications such as m-Health and m-Education, has delivered the greatest benefits to people in developing countries.”

Access to basic banking services is vital for the world’s poor: The Consultative Group to Assist the Poor (CGAP) found that over 3 billion poor people lack access to even the most minimal banking services to manage their lives.

But mobile phones have come to the rescue as the fastest growing consumer product in history. Portio Research estimates that between 2007 and 2012 the number of mobile subscribers will grow by another 1.8 billion, mostly in emerging economies like India and China.

The Philippines is not alone in introducing so-called m-Banking (mobile phone banking) Africa’s leaders include the Democratic Republic of the Congo (CelPay), Kenya (M-PESA), South Africa (MTN MobileBanking and WIZZIT) and Zambia (CelPay).

“Safari-Com’s M-Pesa in Kenya has grown rapidly from start-up in early 2007 to well over 1 million accounts today,” said Mendes, the report author. “In May of this year Vodacom launched M-Pesa in Tanzania for their 4 million subscribers in that country. I expect very rapid growth of this service in Tanzania where less than 10 per cent of the adult population have conventional bank accounts. There are numerous other examples such as CelPay in Zambia and the Congo but I have been watching the success of M-Pesa in East Africa most closely.”

But the Philippines has taken m-Banking the furthest, with two great models for other countries: G-Cash and Smart Money. And the country has shown that it is possible to make these services attractive to the poor, not just the wealthy.

A combination of a good regulatory environment and an atmosphere of innovation brought mobile phone costs down, and made this possible. The mobile phone innovations were also successful because they mimicked existing consumer habits of the poor, piggy-backing on the extensive retail network of small village shops or “sari sari” stores. Poor Filipinos usually buy “tingi” or “sachets” of products like shampoo, fish sauce or soap. And it is in these shops that credit top-up centres were set up and prepaid phone cards sold.

Cleverly, mobile phone operators in the Philippines at first offered free SMS (short message service) text messaging. This was key to how m-Banking took off. As Smart Money’s Napoleon Nazareno said: “there must be an existing SMS habit.”

This should bode well for Africa, where an SMS habit has taken hold because it is so much cheaper than voice calls. Another important habit was prepayment. People learned how to use prepay cards, call numbers and how to enter codes into phones to purchase credits. They learned how to check their credit balance and to electronically load credit on to their phone. This habit made m-Commerce much easier and fuelled its growth.

In South Africa, m-Banking services are revolutionizing daily life. Hair salon owner Andile Mbatha in Soweto used to have to travel for two hours by minibus to a bank to send money to his relatives. But by setting up a bank account with a service called Wizzit, he no longer needs to keep stacks of cash in his salon (and risk robbery), can send money to his sister in Cape Town by phone, and receive payment for hair cuts by phone from his customers. “This has taken out a lot of stress,” said Mr Mbatha.

For Southern entrepreneurs looking to get the most from mobile phones, another recent development will help. Mobile phone companies are following developments with computers and turning away from using only proprietary software, to allowing open source software. Over the next six months, this will mean small-scale entrepreneurs can get in on making applications for mobile phones on a massive scale. Two software companies are now involved: Symbian, which provides the operating system for most of the new generation mobile phones with web access, and Google’s Android open source operating system for mobiles. In Sub-Saharan Africa and East Africa, these applications will help to bypass the lack of internet bandwidth.

In India, poor rural farmers are using mobile phone text messaging to get an advantage over the commodity markets. With so-called “agflation” and “rising prices for food ” it is crucial farmers keep on top of fluctuating commodity prices. Over 250 million Indians rely on farming for survival. But the pressure on farmers is severe and suicide rates are high.

Banana farmer Kapil Jachak is using a text messaging service to get the latest on the weather and daily market prices. The service, Reuters Market Light, costs a dollar a month. It’s a for-profit business venture by the global business news service, but helps farmers make money too. It already has 15,000 customers signed up.

This market knowledge gives the farmers a huge advantage when they compete with the traders in the wholesale markets of the city of Pune. “By getting the weather reports we can see exactly how much water our banana plants need,” said Kapil to the BBC. “I keep my cost down, and get the best crop I can.”

“This has increased my profit. I don’t have to make some headache, and go to any market, any shopkeepers, and wholesalers. I can do my marketing easily and get more and more money.” The service has already armed him with the knowledge to fight off banana stem weevils when they were attacking crops. The text recommended a pesticide.

By David South, Development Challenges, South-South Solutions

Published: July 2008

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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Slideshare: http://www.slideshare.net/DavidSouth1/development-challengessouthsouthsolutionsjuly2008issue   

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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