ieee humanitarian technology webinar leveraging ict for the bop marc van den homberg
TRANSCRIPT
Leveraging ICT Business Models to Help Reduce Poverty
Webinar IEEE Humanitarian Technology
Marc van den Homberg
26 Jan 2012
2
� Our methodology: classifying solutions to learn fro m 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
Agenda
280 140 15
4Sources: Ashoka; AMG; TNO; Hystra analysis; UN; Experts Interviews, mobithinking.com; mobileactive.org
Initial scan
~280projects
15 case studies~140 projects
1st selection
Elimination of
• fully grant based approaches
• pre-pilots
•“dead” post pilots(older than 2008)
(a) Mapping of projects based on clients’ needs
(b) Clustering based on mapping and 40 experts’ interviews
(c) Within each market-based cluster, selection of representative:
•Best practices (largest scale)
•Innovative solutions (high potential to scale and at least completed successful pilot)
(a) Elimination when further study shows over stated success
(b) Five field visits, representative of business models analyzed
1 2 3
Key types of projects
� Africa: 117
� Asia: 93
� Lat. Am: 31
� Global: 14
We select both “best practices” and “innovative approaches”,
representative of market-based solutions that work
Note: No implied hierarchy of projects, but good examples representative of best models
We studied 15 cases in 4 clusters reflecting business models across sectors
1-way directly from technology
platform
1-way via
intermediaries
2-way on 2 sides
of technology platform �CKW
�txteagle
Education Health Financial services
Agriculture and support to economic
activities
�Insurance via mobile
�M-PESA
�MYC4
2) Local agent: Value added services through local agent
�mPedigree�HealthLine
�BBC Janala �Reuters RML�Esoko
�Drishtee (education)
1) Direct access: Value added information directly accessed by end-user
3) Crowd-sourcing or crowd-funding: Information or funds collected from
multiple sources, aggregated via ICT
4) Financial services
�eChoupal�eKutir�Drishtee (FMCG)
Business model
Sectors
�Narayana Hrudayalaya Hospital
Data flow
�FINO�Bradesco
The projects analyzed in our case studies span 3 continents
India - Bangalore
• Narayana Hospital
Nigeria
• mPedigree
Uganda
• CKW
Kenya
• Txteagle
• Mpesa
Bangladesh
• Healthline
• BBC Janala
East India
• Drishtee
• Ekutir
Ghana
• mPedigree
•
• Esoko
MYC4
Brazil
• Bradesco
India - Mumbai
• FINO
• Reuters Mobile Light
India - Nagpur
• Echoupal
Business models
Technology front-end
Technology back-end: source of information and service
Direct access Crowdsourcing
Client /end-user
Local Agent
The “direct access” model: simple information accessible directly on cheapest ICT device – eg, mobile phones
Technology backend –source of
information and service
Informal sharing of benefits of technology to with others
End-users benefiting from service directly
Technology front end owned by end users
=
Technology front end at local agent’s
Technology front end at local agent
Technology front end at local agent
The “local agent” model: specialized services delivered by trusted intermediaries
End-user benefiting from the service: no need for ownership of technology
Technology backend –source of information and service
The “crowd” models: 2 way-services through direct or indirect ICT use, linking two worlds for mutual benefits
Technology front end owned by end users
Technology backend –source and recipient of information
Indirect crowd-sourcing through intermediaries for information (CKW) …
…or for investment (MYC4)
Direct crowd-sourcing by techno-users (txteagle)
Client organization gathering data
(txteagle, CKW)
Crowd-funders funding projects directly through technology (MYC4)
2-way service1-way service
10
=
11
� 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
Agenda
Source: ITU World Telecommunication /ICT Indicators databaseNote: The developing country classification is based on the UN M49: http://www.itu.int/ITU-D/ict/definitions/regions/index.html
100%
5.5 7.9 10.3 13.517.5
22.930
38.5
48.2
57.7
67.6
The rise of mobile phone and internet usage makes it possible today to reach the BoP via market based approaches…
Number of projects in database:
Note: this database does not include « technology project » such as data collection softwares, that were listed separetely as out of scope
… and yet most projects using ICT for development are yet to find sustainable business models
With market-based mechanisms(not fully grant-based) and proven viability on the ground (no feasibility study or “dead pilots”)
Fully grant-based, “dead pilots” older than 2 yearsor feasibility studies
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� 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
Agenda
15
Financial services: case studies
FINO: some business aspects…(local agent model)
FinancialsDistribution
Service Customers
Savings, loans, access to credit,
remittances, insurance and
pension payouts
28 million BoP
23 banks, 10 MFIs, 15 government
entities and 5 insurance agencies
15k field agents employed
(Customer Service Points)
Deposits, remittances; free
Remittance $ 0,5 per transaction
Loan 24% interest rate
Revenue US $ 52 million 2011
Profit margin 10-15%
Largest
project seen!
Simple ICT banking replaces more expensive practices -complex ones need consumer education to elicit payment
Legend�Service provided by ICT⇒Corresponding Impact on the BoP
�Secured money platform⇒Avoided safety risk from
carrying cash⇒Avoided loss or theft risk
from entrusting cash to informal intermediaries⇒Lower cost compared to
money transfers through traditional institutions
�Remote access from ICT device⇒Access to bank or other
financial institutions offering savings, for previously unbanked populations⇒Safer money deposits⇒Build-up of income history,
allowing to access loans
�Remote customers’ evaluationand remote payments of premium or installments
⇒Cost savings on transportation both for clients and providers
⇒Lower price from lower cost of services, making it affordable to more clients
Money transfers, remittances,
paymentsSavings Loans Insurance
�New sources of funds from crowdfunding⇒Access to loans for more
borrowers, including the “missing middle”⇒Lower interest rates⇒New investment
opportunities
�Simpler advertising and registration process⇒Access to insurance for
more customers⇒Enlarged customer base
allowing lower premium⇒Safety net against
adverse events
Agriculture: case studies
18
Agriculture– Reuters Market Light
RML: some business aspects…(direct access model)
FinancialsDistribution
Service Customers
Customized, localized and
personalized weather
forecasts, local crop prices,
agricultural news via SMS, 4-5
times a day
Several 100k subscribers in 15k
villages
Trade partners such as mobile
service providers, Indian post
office, co-op credit society,
agri-product companies: 1.5k
distributors and 20k retailers
Free subscription
Service packs at $7 per quarter
Revenue $ 1 million 2009
Farmers are ready to pay for agro-services as they get financial benefits from it all along the value chain
Monitoring of farmers’ data
Sourcing of inputs
CultivationSales of outputs
Decision on crop to plant
� Info on demand for crops⇒Cultivation of higher
value crops⇒Better supply-
demand match
� Info on prices and availability of input
�Aggregation of farmers for purchase⇒Purchase at lower
costs
�Direct order for inputs⇒Guaranteed
authenticity of inputs
� Info on best practices and expert advice
⇒Better choice of inputs
⇒Better agro-practices
⇒Higher productivity⇒Higher crop quality
� Info on market prices and demand⇒Choice of place to
sell⇒Lower transaction
costs and overall better price obtained for outputs
�Aggregation of farmers for grouped sale⇒Access to larger
buyer, guaranteeing purchase
�Data on farmers’ income⇒Construction of
credit history, allowing farmersto access loans
�Data on farmers’ harvests⇒Better linkage
between research/NGOs/governments and farmers
�Weather forecast
Legend�Service provided by ICT⇒Corresponding Impact on the BoP
Health care: case studies
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mPedigree: some business aspects… (direct access model)
FinancialsDistribution
Service Customers
Consumers: verify authenticity
medicines
Pharmaceutical/distribution
companies increase consumer trust
and counterfeit tracking
2 million consumers and 6m
products protected in 3 countries
In pilot phase 10-20% of tagged
packs generated a verification SMS
Direct access in pharmacies
Partnerships with HP, mobile
operators,
Free service for user
Revenue: sales of codes to pharmacies
minus costs SMS, printing, overhead
Profit margin: not known
Monitoring (patient cases, regional
health data, drug authenticity)
Local delivery of basic care
Advanced/specialized care
Follow up care and long-term
Awareness/ Decision to seek care/desire
for primary/preventive
care
�Awareness on disease⇒Overcoming cultural
taboos⇒Avoiding epidemics
spread� Information on
patient condition⇒Awareness of basic
remedial action⇒Savings on
(unnecessary) trip to doctors⇒Best practice to
manage general health (chronic conditions, pregnancies, etc)
�Efficient remote follow-up⇒Better results post
sickness/operation⇒Quicker return to
work, family, productive life
�Aggregation of patients for group purchasing⇒Access to cheaper
supplies, more and more affordable insurance, more investment in local infrastructure
�Data to follow patient care in the by patient and in the aggregate⇒Creation of dynamic
patient records⇒Improvements in
health budgeting and improved spending of scarce resources⇒More patients under
better care�Verification of drug
authenticity⇒Savings from
spending on fakes⇒Improved patient
health
�Best practice info and advice on locally available remediation measures⇒Triage care⇒Understanding of
where more advanced care might be needed⇒Savings on
(unnecessary) trip to doctors⇒Info on options for
more advanced care⇒Info on payment/cost
options
�Advanced care delivered remotely (e.g. via telemedicine) and/or more efficiently at non-local venues ⇒Treatment of more
serious conditions⇒Cost savings from
more efficient care for patients, doctors, insurance companies, governments, donors⇒Ability for scarce
resources – doctors, sophisticated equipment – to be used on more patients, improving health outcomesLegend
�Service provided by ICT⇒Corresponding Impact on the BoPNot market based
Health: Market-based models provide remote consultationor verify drug authenticity
Education: case studies
25
Learning British English – for the
cost of a cup of Bangladesh tea
Michael Trucano
BBC Janala: some business aspects (direct access model)
FinancialsDistribution
Service Customers
Combination of mobile, internet, TV
and newspaper based language
lessons
3.8 million customers in Bangladesh
with 6 million paying courses
Direct access
Partners with mobile
operators, Bangladesh TV
$0.02 for 3 min. lesson or cost of
access to internet
Cost efficiency: now at $4 per person
across all platforms
Profit: not yet
ICT can play a role before school, at school and after school, with paying models only for adult education or private schools
Monitoring of perfor-
mance
Designing content
Training teachers
LearningDesigning curriculum
Practi-cing
�Classes via video-conferences⇒Enrollment of
new students
�Mobile phone based courses⇒Affordable
courses⇒Reaching
remote areas
�Pedagogytraining ⇒ Better
teachers⇒Multipli-
fying effect on students
�Finding class content⇒ Improved
curriculum
�Sharing class content⇒Teachers
networking
�Using ICT as learning tools⇒More
enjoyable classes⇒Better
understanding� Interactions
with teachers through ICT⇒ Teachers
closer to the students’ needs⇒Empowered
students� ICT classes⇒ More job
opportunities
� Quizzes on mobile⇒Out-of-school
practicing⇒Higher grades
�Accessing classes archives⇒Better
understanding
�Online forums⇒Student
networking
�Reporting grades⇒ Real-time
access to grades for students
Reaching students
Attending classes
�Reporting attendance⇒ Higher
attendance of teachers and pupils⇒Better
statistics on education
�Classes on ICT⇒More job
opportunities
�Classes via video-conferences⇒Development
of the course portfolio
Before school At school After school
Legend�Service provided by ICT⇒Corresponding Impact on the BoPNot market-based
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� 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 serv ices, while collaboration is key to scaling
Agenda
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
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In education, health, agriculture and financial services,
ICT4D leaders face similar issues to scale
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)
Challenges mentioned by the 15 project leaders interviewed for this study
*CKW, Drishtee, eKutir, esoko, mPedigree, MyC4, Narayana Hrudayalaya Hospital, txteagle considered as social entrepreneurs
*
Recommendations
�Focus on problem driven approach
�Support existing entrepreneurs, promoting cross-sector synergies
�Create a systemic environment for cross-border replication
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Public report presents project findings
Report structure:
Sponsor’s Foreword
Hystra Introduction
Acknowledgements
1. About this project: Methodology
2. Executive summary
3. The basis for ICT4D: Connectivity
4. The “Direct access” model
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
12.Environmental impact of ICT4D projects
13.Conclusion on findings and recommendations
Appendix
A joint report by Sponsored by
In collaboration with
Leveraging ICT for the BOP
Innovative business models in education, health,
agriculture and financial services
Thank you for your attention!
Any questions?
For any questions/topics to discuss, arising after
the webinar, do not hesitate to contact me at: