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Africa Beckons as the Next Pot of Gold for the Cellphone Telecoms Industry

Mon, 12/12/2011 - 2:20pm  |  NextBillion

Africa's lag in land-based telecoms infrastructure has propelled the continent directly into the mobile age, opening up unparalleled short-term growth prospects.

Sector players have seen growth especially in mobile Internet and banking services, as people use cellphone technology for lack of landlines or cable Internet.

"Africa is the last market to emerge. China's emerged, India's emerged. So where else outside Africa needs emerging? The growth opportunity is right here," said Nicolas Regisford, co-founder of Mi-Fone, a South African company that specializes in producing low-cost handsets.

Mobile subscribers in Africa have increased by 20 percent annually over the past five years and will reach more than 735 million by the end of next year, a study by global mobile operators association GSMA found last month.

"Africa is now the world's second-largest mobile market by connections after Asia, and the fastest growing mobile market in the world," according to the GSMA Africa Mobile Observatory 2011 report.

Industry players are equally excited over the commercial prospects posed by the continent's 1 billion people.

ENTRY-LEVEL PHONES

"Samsung is expecting revenue within Africa to amount US$15 billion, with the SADC [Southern African Development Community] region contributing about 25 percent of that figure, by 2015," said Gavin Clare, the company's representative in Zimbabwe.

This philosophy also drives Mi-Fone, which eyes the immense market of consumers seeking entry-level phones.

"The African person wants a mobile device which will be doing mobile payments and accessing the world wide Web. Right now, a lot of people cannot afford the smartphones that are flooding the market," Regisford said.

Ironically, this lack of traditional infrastructure, telecom and landline services, Internet penetration and broadband access, and banking services drives this growth in Africa, according to mobile systems expert Tomi Ahonen.

"As it happens, the global Internet industry believes that the future of Internet is mobile. The global telecom industry believes that the future of the telecom industry is mobile and the global money industry is starting to believe that the future of money is mobile," Ahonen said.

One case in point is Kenya, already the world's largest mobile financial services user in relation to its GDP. Almost 18 million Kenyans use their cellphones as a bank account to deposit or transfer money - contributing 8 percent of the GDP and several other African countries are following suit.

Wise Ethical Investment Seeks Profit

Mon, 12/12/2011 - 2:16pm  |  NextBillion

Like motherhood and apple pie, socially responsible investment warms most people's hearts. But during a two-year cycle trip across Africa, Swiss investment banker Klaus Tischhauser realized the SRI industry was failing in a key challenge-fighting poverty. Ten years on, the grassroots style of social investing he helped pioneer is wooing many wealthy investors

The rich are different, and not just because they have more money. Wealthy individuals often have a wider sense of responsibility toward society. Traditionally, this desire to do good is harnessed through philanthropy.

But a growing number are now turning to socially responsible investing, which marries social good with financial returns.

"These investors realize that there is no contradiction between ethical and financial performance," says Mr. Tischhauser, co-founder and chief executive of responsAbility Social Investments, an asset manager for social investment.

Despite the market turmoil, the wealthy have kept putting money into socially responsible investment. That is mainly because they can afford to take a long-term perspective, particularly if they have inherited wealth.In 2010, Europe's high-net-worth individuals-usually defined as people with at least $1 million in financial assets (excluding residences and consumer durables)-dedicated €729 billion, or around 11% of their wealth, to "sustainable" investing, according to Eurosif, a Paris-based research firm. That's an increase of 35% over the figure for 2008, even while such individuals' total assets under management shrank during that two-year period because of the global economic crisis.

"They aim to protect assets rather than chase returns, so short-term turbulence has less of an effect," says Anders Nordheim, Eurosif's head of research.

The trend, Mr. Nordheim says, is here to stay. By 2013, Eurosif predicts the share of HNWI assets allocated to sustainable investing will have risen to 15% or just below €1.2 trillion.

"There has definitely been a pick-up of interest in the SRI area," says Karina Litvack, head of governance and sustainable investment at F&C Investments, a U.K. fund manager whose SRI roots go back to the 19th century.

Clearly, one of the attractions of SRI for wealthy investors is the comfort in knowing their money is helping make the world a better place. "Part of our job is to tell our investors heart-warming stories so that they feel good," says Mr. Tischhauser. His firm has grown to manage $1 billion in assets and offers eight SRI products, covering themes such as microfinance, fair trade and small and medium-sized enterprise financing.

Eyes Down for a More Revealing Insight into Economic Development

Fri, 12/09/2011 - 2:05pm  |  NextBillion

A group of people had just disrupted a baseball game by running naked across the field. After the disturbance, legendary player Yogi Berra was asked whether they were men or women. He replied: "I don't know. They had bags over their heads." That story illustrates what is perhaps the biggest issue in development economics today: the inability of many researchers to look in the right place when searching for answers.

I have just returned from east Africa, where change is stimulating the debate about the future of the continent. Yet, despite the optimism, I came back with some concerns. Important players still appear confused about what development strategies to recommend to low-income countries.

It was painful to sit in some meetings and observe foreign experts trying to assess whether the government had provided enough funding to "priority sectors" (defined very broadly as agriculture, education, health and infrastructure) to justify more external financing. It was equally frustrating to see these well-meaning people attempt to reach definitive conclusions about whether things were going in the right direction by analysing the number of reforms carried out to "improve the business climate". Watching them search for answers, I could not help but think of Berra's comment.

Vague notions of reform are meaningless in developing countries. What does a budget increase for the agriculture ministry reveal, exactly? A minister might simply have purchased a few more expensive cars for his staff, or his personal ranch. Why expect any low-income country with limited administrative capacity to simultaneously improve all the many "doing business" indicators every year? It is unrealistic to recommend an overwhelming laundry list of reforms that no government has the capacity to achieve. (By the way, China, Vietnam, and Brazil, which have been among the top-performing countries in the world for the past 20 years, are consistently ranked quite low when it comes to the ease of doing business; Brazil is 126th, Vietnam 98th, and China ranks 91st, behind such star economies as Kazakhstan, Azerbaijan, Belarus and Vanuatu.)

Unfortunately, development economics has not always been a trustworthy source for those policymakers who need a concrete blueprint for action. Decades of paradigm shifts, from grandiose project financing (interventionist policies) in the 60s and 70s, to structural adjustment (laissez-faire) in the 80s and 90s, have led to intellectual confusion and random economic policy.

Global Microcredit Summit 2011 Report

Fri, 12/09/2011 - 2:00pm  |  NextBillion

Monday, November 14th 2011 saw the culmination of several years of delicate preparation in a packed conference centre in Valladolid, Spain. The fifth Global Microcredit Summit (held every few years - with regional conferences in between) kicked off in the magnificent Centro Cultural Miguel Delibes, with an opening ceremony full of music, pomp, and a great deal of gratitude - in the particular direction of Sam Daley-Harris, the outgoing Director of the Microcredit Summit Campaign.

Queen Sofia of Spain has been an impressive and dedicated supporter of the microfinance sector since its early days. After welcomes to the city of Valladolid and the region of Castilla y Leon by the Mayor and Governor respectively, and an outline of Spain's development priorities by the Secretary of State for International Cooperation, Queen Sofia took the podium to declare open the fifth Global Microcredit Summit.

Describing the summit "not just [as] a forum for debate, and for the exchange of experiences", it aims to promote "two basic goals": to enable about 175m families to reach basic financial services by 2015, and to get 100m of the poorest families on earth above the US$1/day income threshold.

These objectives date from several years ago, and laudable as they are, it was clear from the offset - not to mention the plenary and workshop papers circulated in the weeks before - that the concerns of the industry have expanded to include other matters. The so-called 'crisis' in India (Andhra Pradesh in particular) continued to dominate the agenda, not just as a localised, acute issue in one of the largest microfinance markets in the world, but as a clarion call for the industry to wake up.

The industry's 'father', as we are repeatedly informed, is Professor Yunus, who reiterated at the Opening Ceremony his vision of a sector that is anathema to profiteering (and probably to profit too), but painted a rosy picture of microfinance compared to the broken, mainstream financial sector. "Microcredit is a way of helping future generations...dark clouds are gathering [in the broader global economy] and they will not go away; they will create frustration and disappointment, a great deal of unemployment and tension [in the West]". Microfinance, he argued, by contrast "is a shining hope, creating light at the end of the tunnel".

There must be plenty of light to follow, as it is an industry that was globally well represented. Roughly 1600 delegates were in attendance. Without seeing an actual breakdown, it was clear that Africa, Latin and Central America and the Indian subcontinent were well represented with practitioners. MIVs, commercial banks, analysts and donors made up most of the balance - with a surprisingly broad contingent of media present throughout the whole summit - evidence, perhaps, of the reputational hit the sector has taken in the last couple of years, and how microfinance has long since left behind the periphery of global finance. Having the Queen in attendance obviously helped, too.

The Summit, as each before it, had a mixture of plenary sessions, workshops and associated sessions. Perhaps more than previously, however, there were dominant themes for each day.

IFC Stakes 18.9% Equity in ACCION

Fri, 12/09/2011 - 1:56pm  |  NextBillion

ACCION International, parent company of Accion Nigeria and a pioneer in global microfinance, has signed an agreement with IFC, a member of the World Bank Group focused exclusively on the private sector, in which IFC will invest approximately $1 million in ACCION's Chinese affiliate, ACCION Microfinance China (AMC).

The investment will enable ACCION to strengthen the operations of AMC, which it launched in December 2009 in Chifeng Prefecture, Inner Mongolia, to deliver financial services to the region's working poor. IFC's investment of Chinese RMB 7 million represents an 18.9 per cent equity interest in AMC.

In connection with its investment, IFC previously signed a cooperation agreement with ACCION to provide up to $1 million to finance a three-year technical assistance program for AMC.

"IFC has been a valuable ACCION partner in many of our projects around the world," said Michael Schlein, president and CEO of ACCION.

"We're pleased and honored to have its engagement and support as we continue to help create a microfinance industry in China, where ACCION is one of only a handful of foreign-owned organizations involved in the field."

For Hyun-Chan Cho, IFC country manager for China and Mongolia, "we are committed to working with ACCION to help AMC expand access to finance for small businesses in Inner Mongolia and support the sustainable development of one of the least developed regions in China.

"With our financing and advice, AMC is well positioned to become a leading microfinance institution in Inner Mongolia, benefiting thousands of small entrepreneurs."

Chutes, Ladders, and Safety Nets: How Microinsurance Helps African Development

Thu, 12/08/2011 - 10:37am  |  NextBillion

James Abuh-Prah had owned a used electronics shop in a small market in Accra for 17 years before a flood took everything.

It was late one night in October, and the torrential rains hadn't stopped for hours. "By 5 a.m. the water was up to my chest," he says. He had taken out a $2,400 loan from his bank, Opportunity International, to use as capital to buy used televisions, stereos, and other electronics. Now, everything was destroyed.

It's like a game of Chutes and Ladders," says Richard Leftley, president and CEO of the U.K.-based MicroEnsure, a company devoted to serving the materially poor. The company embeds free or inexpensive insurance policies into products targeted at poor families-like loans, savings accounts, and pre-paid mobile phone credit.  Founded in 2005, MicroEnsure now has more than 3 million clients worldwide.

If you are poor, you might take out a loan from a microfinance institution to start or expand a business. The loan is like a ladder, Leftley says. But if someone gets sick or a flood comes, you're back where you started, or sometimes worse off. That's the chute. Leftley was thinking about this cycle while talking with women in Zambia in 2001. It was then, he recalls, that "a light went off in my head: [the poor] need a safety net." They need insurance, he thought.

Creating a safety net for millions of people is no easy task. How do you make insurance affordable enough that someone living on less than $4 a day can afford it? And once they can afford it, how do you convince them to buy it? In most of sub-Saharan Africa, insurance companies have poor reputations. Some prey on the poor by hiding extensive exclusions and policy conditions in the fine print, making illiterate clients especially vulnerable. Others give processors financial incentives to reject claims, MicroEnsure general manager Peter Gross says.

In 2010, Ghanaian insurance companies paid out just two dollars in claims for every 10 dollars they earned in premiums, according to reports published in the Ghanaian Business & Financial Times. "You see the frustration on the face of a client when they come and in the end they are not going to get any money," says Leona Essiam, a MicroEnsure account executive who previously worked for another insurance company in Ghana. "The general perception about insurance is that is doesn't work here in Ghana."

Because of the distrust around insurance, "we had to redesign [it], so that rather than it taking months or years [to pay out a claim], it takes a matter of days," Leftley says. While many life insurance companies exclude people with terminal conditions like HIV, MicroEnsure covers them. If someone dies, they don't need mountains of proof. And the policies are so simple, you could write down the terms "on a napkin," Gross says. "Most international insurance companies look at Africa and all they see is risk: famine, conflict, HIV/AIDS," Gross says. " Our people are in the markets every day. We know the risk is not that high."

Ecuador Expanding Access to Microcredit for Low-Income Women

Thu, 12/08/2011 - 10:31am  |  NextBillion

Ecuador will expand access to microcredit, particularly among low-income women, through a $50 million loan approved by the Inter-American Development Bank (IDB) aimed at increasing employment opportunities and reducing poverty.

The National Program for Finance, Entrepreneurship, and Economic Solidarity (PNFPEES) will be the executing agency for the program, which will contribute to its strategy for fostering economic inclusion with particular emphasis on financing for women entrepreneurs.

"We expect that by 2015 the program will provide loans to approximately 25,000 microentrepreneurs," said Rosa Matilde Guerrero, IDB specialist."We also anticipate that these credits will lead to the creation of at least 5,000 new jobs over the next four years."

The program is intended to result in an 60 percent increase in credit available in districts with high levels of poverty, and at least 54 percent of the credit operations will benefit women microentrepreneurs.

Ecuador has seen a significant expansion in microfinance over the past eight years.The total loan portfolio of microfinance institutions has increased from $73.2 million to nearly $2.5 billion, an average annual growth of 405 percent.In addition, the total number of entrepreneurs served by this sector has expanded at an annual average of 232 percent over the same period, rising from about 60,000 to more than one million customers.

Microfinance Industry Going All Out to Regain Lost Glory with Women Power

Thu, 12/08/2011 - 10:29am  |  NextBillion

HYDERABAD/MUMBAI: Beleaguered microfinance industry is turning to women power to lift it out of the depths. The fairer sex is increasingly occupying the rank and file of recovery agents of lenders to the poor as the industry attempts to restore its past glory after charges of molestation and browbeating made it an unwanted child. "We will push the MFIs to have more women on rolls once the industry, currently in fire fighting mode, comes back to some kind of normalcy," said Alok Prasad, CEO, Microfinance Institutions Network, an industry lobby group.

"Imbalances need to be addressed to ensure more balanced gender dynamics, which should in turn offer positive results." Twenty seven-year-old Susheela is one of them. She didn't know in 2009 that she can succeed in a male-dominated microfinance recovery agents' force when she quit a children's rights organisation to join microfinance firm Basix. Today, she is one of those successful ones, though significantly minority , who are most sought after.

"Being a female, I am able to gel well with women borrowers and gender does offer an advantage in the changed scenario," says Susheela, a graduate in economics, history and political science. The preference for women agents is largely due to a view that domination of loan recovery operations by male agents was the key factor that led to the state blaming the entire industry for becoming a bully.

Africa Rising

Wed, 12/07/2011 - 2:33pm  |  NextBillion

THE shops are stacked six feet high with goods, the streets outside are jammed with customers and salespeople are sweating profusely under the onslaught. But this is not a high street during the Christmas-shopping season in the rich world. It is the Onitsha market in southern Nigeria, every day of the year. Many call it the world's biggest. Up to 3m people go there daily to buy rice and soap, computers and construction equipment. It is a hub for traders from the Gulf of Guinea, a region blighted by corruption, piracy, poverty and disease but also home to millions of highly motivated entrepreneurs and increasingly prosperous consumers.

Over the past decade six of the world's ten fastest-growing countries were African. In eight of the past ten years, Africa has grown faster than East Asia, including Japan. Even allowing for the knock-on effect of the northern hemisphere's slowdown, the IMF expects Africa to grow by 6% this year and nearly 6% in 2012, about the same as Asia.

The commodities boom is partly responsible. In 2000-08 around a quarter of Africa's growth came from higher revenues from natural resources. Favourable demography is another cause. With fertility rates crashing in Asia and Latin America, half of the increase in population over the next 40 years will be in Africa. But the growth also has a lot to do with the manufacturing and service economies that African countries are beginning to develop. The big question is whether Africa can keep that up if demand for commodities drops.

Frequent Flier Miles at the Base of the Pyramid

Wed, 12/07/2011 - 2:21pm  |  NextBillion

OK, so you are a cell-phone user in rural Nigeria or Zimbabwe, and your provider is Econet Wireless. You've been a customer for a while, so you've accumulated loyalty rewards, just like airline frequent flier points.  You live in a small hut in a village with no electricity, so you can't use your phone as much as you would like, because you can only charge it on market day at the district headquarters.

But now you can get a big discount on a solar lantern, or if you have enough Bonus Points, a rooftop home solar system from Econet -- electricity has become an added feature of cell phone service.  But the wrinkle is that having electricity enables you to use your cell phone when you want to, instead of hoarding a charge -- so Econet can afford to discount the price of the lantern or home solar system dramatically, so that even the poorest cell phone customer can afford it.

The leader behind this model -- loyalty rewards that enable cell phone users to get clean solar electricity in remote villages -- is Strive Masiyiwa.

And today Econet launched its latest initiative, an affordable Home Solar Station, electricity in a box, which enables a poor family to electrify without paying the upfront costs of solar power -- they just pay for the electricity as they use it, thanks to a "slave sim card," which bills their cell phone account for each kilowatt hour, but at a rate low enough that even if the lights are left on all day the monthly bill is only a dollar, far less than poor families currently pay for candles or kerosene.

The basic Home Solar Station has four LED lights, a rooftop solar cell whose size varies on the household size, and an outlet which can be used to charge a cell phone, run a fan, or power a small computer.  Larger versions can actually power a television which Econet is designing for this low voltage market. Masiyiwa is crystal clear.  His business is not selling handsets, or solar panels -- it's selling airtime, or in the case of the Home Solar Station electron time. Customer loyalty is his holy grail -- and how better to obtain that loyalty than to provide his cell phone customers with light, fans, and electrical charging capacity in their own homes, however humble.  (The systems are designed for the basic informal urban slum dwelling, the kind that fills the slums of Lagos or Harare  -- or for rural huts. He'll also offer much larger systems for middle-class customers.  This is power for everyone.)

It's a radical notion, and if he has the economics right, will transform the lives not only of his customers, but potentially of all 1.2 billion of the world's population who are currently denied light and electricity.  Econet will license its technology to other cell-phone providers, and if the model takes off, competitors are sure to spring up.

Mining Proves a Test of Mettle for Peru's Ambitions of Economic Development

Wed, 12/07/2011 - 2:17pm  |  NextBillion

The resignation of Peru's deputy environment minister amid violent protests against the country's largest ever mining project has highlighted how weak institutions, unable to ensure decisions are made on the basis of robust information, undermine green policymaking in Latin America.

José de Echave quit in late November, calling environmental impact studies on the $4.8bn (£3.1bn) Minas Conga open-cast gold and copper mine, located in the northern Cajamarca region, "weak, outdated and lacking in credibility".

The move exposed divisions within the administration of President Ollanta Humala indicative of the difficulties faced by left-of-centre governments in resource-rich countries. Balancing economic development based on foreign investment with environmental protection is far from easy.

After days of violent protests, and following De Echave's resignation, the US-based Newmont Mining Corporation - the majority partner in the joint venture, together with Minera Yanacocha, behind the Conga plans - said it was halting construction in an effort to ease tensions. But CEO Richard O'Brien indicated that the company, which is South America's largest gold producer, remains committed to the project.

At issue is the impact on the local watershed, as Yanacocha plans to divert water from four mountain lakes into new reservoirs to enable mining to proceed. Protests have been led by local farmers and residents concerned about the impact on the underground drainage network and natural water harvesting system. Cajamarca is Peru's leading dairy and livestock region.

Citi Micro Entrepreneur Awards 2011 Honors Individual Enterprise

Tue, 12/06/2011 - 5:11pm  |  NextBillion

The Citi Micro Entrepreneur Awards 2011 recognized nine micro entrepreneurs and a community owned enterprise at a ceremony presided over by Dr. K. C. Chakrabarty, Deputy Governor, Reserve Bank of India. The Citi Micro Entrepreneur Awards 2011 received over 800 applications from 77 nominating organizations. There were 74 % women nominations and four new categories introduced - youth, green, innovative and community owned enterprise.

The 2011 awards took into account geographical, socio-economic nuances and highlighted innovative, youth and green entrepreneurs for the first time. The national winner for the individual micro entrepreneur is Charulata Swain. Awards were also given to individual micro entrepreneurs on a regional basis. The winner for the south region is P.Madan, for west is Godavari Shankar Satpute, for north is Nazma Bano, for east is Padmini Jena and for northeast Karabi Rajbonshi.

The youth entrepreneur award was given to Sumaiya Khatun. The green entrepreneur award was awarded to Gakanan Bhaurao Bhasme and the innovative entrepreneur award was awarded to W. Memi Devi. Lastly, the winner of the community owned enterprise is SADHNA, a mutual benefit trust.

The awards program has grown to become a global initiative at Citi that acknowledges entrepreneurial skills and exemplifies the spirit of micro entrepreneurs who have overcome economic and social challenges to successfully build self-sustaining micro enterprises. It is also the first initiative to recognize the growing number of enterprises owned collectively by local communities in India.

Prince of Poverty Leaves Behind Questionable Legacy

Tue, 12/06/2011 - 5:09pm  |  NextBillion

Vikram Akula was the golden boy of microfinance when he launched his company SKS. How did things go so horribly wrong?.

The story of Vikram Akula is almost like a classic Greek tragedy with epic peaks, troughs and betrayals that could easily make up a Hollywood movie. Akula remains a controversial character, whose very name incites admiration and criticism in equal measure. Some say that he gave birth to the microfinance industry as we know it in India. Others say that his model of lending, pioneered by his company SKS Microfinance, gave birth to an almost unquenchable thirst for profit, driven by a business model that has no place in ameliorating the state of the poor in India. Regardless of how people feel, one thing remains clear: Microfinance will never be the same without him.

Around a week ago, SKS reported that Vikram Akula stepped down as Chairman of SKS in order to pursue a career in mobile banking. However, all indications suggest that there was something entirely different going on in the company. The seed of dissent at SKS became public, when last year Akula sacked CEO Suresh Gurumani, who was brought in SKS to give it a corporate identity. It is believed, Gurumani wanted to deviate from the traditional MFI model, and replicate a modern-day technology-driven retail banking structure in SKS.

To understand what was happening in SKS recently, one has to take a peek at data from Bombay Stock Exchange which reveals that as of September 2011, Indian promoters held just 11.55 per cent stake in the company, while foreign promoters held a 25.29 per cent stake. The public held 63.16 per cent. In other words, promoters have, in effect, little control over SKS on Monday. Data from SKS website shows that Akula has no shareholding as a promoter in SKS but still wanted to steer the ship that he had built from scratch. "The company was making huge losses, and investors were not getting returns as promised. They obviously didn't like Akula's intervention in running SKS, even when his stake was negligible, while he felt that the company's achievements were to his credits and its failures were someone else's fault," said an industry insider who prefers to remain anonymous.

Ultimately, the institutional investors whom Akula inducted into SKS with much fanfare, proved to be the Frankenstein's monster that ousted him. Sources say that Paresh Patel is the CEO of Sandstone Capital and Sumir Chadha, Managing Director of WestBridge formerly Sequoia Capital, both of whom are SKS board members, were the most vociferous against Akula in the last board meeting. (Both Patel and Chanda could not be reached for comments.) "The company needs a strategic redirection, and we will announce the plans soon," said Dilli Raj, Chief finance officer, SKS, as an explanation.

But the most trenchant-indeed vicious-critic of Akula is his ex-wife and co-founder of SKS, Malini Byanna who has accused him of a whole host of unsavoury practices related to SKS. Akula refused to talk to Business Standard, except to say, "I am legally advised that I am not in a position to discuss, comment on, or respond to your queries. Consequently, I regret my inability to respond to your questions beyond saying "I am unable to comment."

How could a 'golden boy' of a promising industry purportedly offering succour to the masses in the form of loans that sidestepped usurious moneylenders who held rural India to ransom, fall from grace so quickly?

Endeavor Takes Center Stage at Global Entrepreneurship Summit in Istanbul

Tue, 12/06/2011 - 5:05pm  |  NextBillion

ISTANBUL--(BUSINESS WIRE)--This week, more than 120 Endeavor network members have gathered in Istanbul to participate in the 2nd Global Entrepreneurship Summit (Dec 3-6), hosted by Turkish Prime Minister Recep Tayyip Erdogan. Along with U.S. Vice President Joe Biden, Endeavor Co-founder and CEO Linda Rottenberg delivered a keynote address which recognized the transformative potential of global High-Impact Entrepreneurship and combated 10 common entrepreneurial "myths."

In his own address, Biden cited two Endeavor Entrepreneurs-Alemşah Öztürk (41?29!) and Bedriye Hülya (b-fit)-as examples of Turkey's many visionaries helping the lead the entrepreneurial revolution in the region. Didem Altop, Managing Director of Endeavor Turkey, participated in an exclusive meeting with the Vice President and also spoke on two panels.

"The timing is right for this Summit," says Linda Rottenberg. "From the debt crisis in Europe to the wave of revolutions in the Middle East, the world is clamoring for new solutions. What we at Endeavor call 'high-impact' entrepreneurs remain an important driver of growth: they generate wealth and opportunity, create high-value jobs, and serve as inspirational role models for the next generation. Together, they foster a culture of 'thinking big,' where young people grow up learning to take risks and innovate."

Rottenberg continues: "It is fitting that this Summit is being held in Turkey, which has become an extraordinary hub of innovation and a catalyst for entrepreneurship in growth markets around the globe. Increasingly, the world is looking to Turkey as an example of a successful ecosystem of entrepreneurship-with a growing network of mentors, investors, and role models."

Should Philanthropies Operate Like Businesses?

Mon, 12/05/2011 - 3:01pm  |  NextBillion

It's your money, and you're willing to give some of it away to a worthy cause. But you want to see results. Measurable progress toward agreed-upon goals. Regular proof that your investment is achieving maximum impact. That's the way businesses operate, and charities should be no different.

That's one way to look at it, anyway.

Others argue that things work differently in the world of nonprofits and social change. Tackling some of society's biggest problems is unlikely to produce anything like the steady, chartable path of progress that investors require. And that's simply something donors have to live with if they want to help those most in need.

So what should you expect of your charities? Businesslike efficiency? Or something more intangible, less-easily defined?

Charles R. Bronfman and Jeffrey R. Solomon, chairman and president, respectively, of the Andrea and Charles Bronfman Philanthropies, favor businesslike thinking. Michael Edwards, a distinguished senior fellow at Demos, a social issues think tank, argues that social values should take precedence.

Yes: Good Intentions Aren't Enough

By Charles R. Bronfman and Jeffrey R. Solomon

There are many people who, like Bill Gates, have the vision and the discipline to be great philanthropists. They may not be standing on the same platform as Mr. Gates, but they use the same playbook.

Or at least they should.

Because Mr. Gates understands what any donor, large or small, should understand: that to have a sustained and strategic impact, philanthropy must be conducted like business-with discipline, strategy and a strong focus on outcomes. Organizations receiving your support should be as accountable to you as a company's board is to its shareholders. You are a stakeholder. And that means, above all else, that you have to know your return on investment.

Africa Can Make Significant Progress Towards the MDGs

Mon, 12/05/2011 - 2:44pm  |  NextBillion

Most African countries may not achieve all the MDG targets by 2015. What matters more is that they all make significant progress in all areas of the MDGs and sustain, or even accelerate, this progress in accordance with their national conditions.

Arguably, the political and economic conditions in Africa in 2011 are a lot better than they were in 2000 (the year of the Millennium Declaration), or even 1990, the base year of the MDGs. With exceptions, economies are a lot more robust, many more countries are ruled by electoral democracies, and the quality of elections is getting better. Civil society is maturing and more complex, buoyed by a growing youthful, educated and eager middle class armed with new organising and communications tools. There are massive opportunities for both political and social progress.

One such opportunity lies in fostering true democratic accountability, in which those entrusted with power are held to account in the form of the delivery of tangible benefits, especially basic services, through the effective use of tax revenues collected equitably and efficiently from those who entrust them with the power - the citizens. Parliaments and parliamentarians are crucial to ensuring that this trust is upheld as they intercede between the executive and the people.

This accountability is sustained only when those entrusting power maintain an active interaction at multiple levels with those they elect. The quality of the interaction between the elected representatives and organised citizenry largely determines the quality of democracy and its impact on the material conditions of the people. It goes without saying that the achievement of the MDGs in Africa will be more than guaranteed when we successfully catalyse and channel active citizen-state interaction and civil society-parliament engagement generally.

Diary of a Social Entrepreneur

Mon, 12/05/2011 - 1:04pm  |  NextBillion

Asister organization of the World Economic Forum, the Schwab Foundation has been awarding social entrepreneurs in South-East Asia for five years. It chose Neelam Chhiber of Industree Crafts Foundation as the India Social Entrepreneur of the Year 2011 in partnership with the Jubilant Bhartia Foundation (the foundation is the social wing of the Jubilant Bhartia Group, whose promoters are closely related to those of HT Media Ltd​, which publishes Mint.)

Industree Crafts Foundation is a hybrid, not-for-profit set-up that has adopted India's skilled artisan community and resolved to help it move up the value chain. It incubates grass-root communities so that they become owners and entrepreneurs themselves, in charge of their own destinies. Apart from production, Industree's retail branch, Mother Earth, helps market the products these artisans create. So far, Industree has changed the lives of more than 10,000 artisans living below the poverty line. Chhiber pinpoints milestones in her career that helped her make the shift to social entrepreneur.

1986:I finished my product design course from the National Institute of Design, Ahmedabad, and jumped into the deep end of work life. I worked across categories like wood, metal and ceramic. I spent three years working on a stone crafts project where we documented stone crafts in 14 states. My interest was in the indigenous arts and crafts of India, so I started working as a consultant with various craft organizations like the Handicrafts and Handlooms Exports Corporation of India Ltd, and the UP Export Corporation.

What I learnt in my initial years was that the link between consumer and producer needs to be stronger. It all lacked effective merchandising and I felt that that could only be brought about by a private company. The co-founder of Industree, Gita Ram, who works with the Crafts Council of India, advised as much too.

1994: I had been working with various government agencies for almost eight years but realized that none of the designs really translated into saleable products. So Gita and I founded Industree Crafts Pvt. Ltd, a for-profit entity with a focus on domestic retail and export.

Dr. Yunus Inspires Students to Create Social Businesses

Fri, 12/02/2011 - 2:08pm  |  NextBillion

Nobel prize winner Muhammad Yunus brought to Georgia his vision for students to create businesses that would help alleviate some of the state's most intractable social problems.

And the visit has prompted the University System of Georgia to establish a fund to help finance student-inspired projects inspired by Dr. Yunus' social business model.

The fund was launched as a result of an economic development conference including 38 student teams from the system's 35 universities and colleges that competed for the most creative social business project.

Titled "Social Business and Microcredit," the conference was organized by the university system and held at the Georgia Institute of Technology's Ferst Center on Oct. 17 with 1,200 students and other participants attending.

It was inspired by the work of Nobel Prize recipient Muhammad Yunus, who pioneered the concept of providing small loans to people in poverty designed to encourage entrepreneurial activity, a concept now widely known as microcredit.

Dr. Yunus, who was the featured speaker at the conference, described the origins of his concept that social problems can be solved through business models providing a minimum profit to the business in order to sustain a project.

He said that he didn't want the students to think of their social business projects as an academic exercise, but rather as a way of solving difficult social problems such as domestic violence, adult illiteracy, unemployment and housing.

"This is your age, this is your time," he told the students. "You are the most powerful generation in the entire history of mankind." Their challenge, he added, would be to harness the ongoing technological developments to socially useful ends.

Can Venture Capital Save The World?

Thu, 12/01/2011 - 4:46pm  |  NextBillion

Bahawalpur in eastern Pakistan is known for magnificent palaces built during the British Raj, but in the dusty part of town where most of the 400,000 residents actually live, four dozen farmers have gathered in the decidedly unpalatial concrete building that houses the local branch of the National Rural Support Programme Bank. Their darkened, sun-creased faces testify to the toll of tilling soil in one of the hotter places on Earth (at 11 a.m. in mid-June it's ­already heading toward 105 degrees); many twist their hair into head scarves, and all don cotton ­tunics known as kurta.

Suddenly the front door swings open and a tall woman with piercing blue eyes and brownish blonde hair struts in, dressed in a red tunic and baggy pants. Accompanied by the bank's president, Rashid Bajwa, Jacqueline Novogratz whips out her red notebook and gets down to business. "What kind of livestock do you have?" she asks one client. "How many male calves? How much money are you saving at the bank? What do you do with that cash?" An hour later, the notebook now filled with minute details of how, exactly, the farmers intend to pay back their loans, as well as whether their daughters go to school and what they want their children to do when they grow up, Novogratz walks out of the bank, satisfied. "I'm feeling optimistic about rural Pakistan," she tells me, as a pickup truck, loaded with field hands, rumbles past a mosque. "Farmers are making good money."

Novogratz plays the role of auditor because, as CEO and founder of the Acumen Fund, helping people starts with financial due diligence. In April Acumen sank $1.9 million into the bank in exchange for an 18% stake, one small investment in a decadelong experiment in charitable giving. Instead of shoveling aid dollars to causes or governments that give away life-­sustaining goods and services, Acumen espouses investing money wisely in small-time entrepreneurs in the developing world who strive to solve problems, from mosquito netting to bottled water to affordable housing. It's a new twist on the old adage about teaching a man to fish, except that Novogratz wants to build an entire fish market.

Four Companies Announce New Ventures to Promote Clean Energy

Thu, 12/01/2011 - 3:40pm  |  NextBillion

New York, Durban, 28 November 2011-More than 12 million low-income people in Africa, Asia, and Latin America will gain access to clean energy following four companies' commitments made today to the Business Call to Action, a global leadership initiative that promotes sustainable economic and social development. The companies also expect to create approximately 42,000 environmentally sustainable job opportunities by 2016.

The pledges that range from expanding clean energy in more than 40 developing countries to promoting sustainable use of Amazon Rainforest fruits were made at the start of the 2011 United Nations Climate Change Convention in Durban in South Africa.

"Clean energy access is essential to building a healthier and more prosperous world.  We need to come together to find bold and bankable solutions that protect our planet and promote the welfare of all people. We need CEOs, investors, utility companies and renewable energy businesses," said Business Call to Action Acting Programme Manager Amanda Gardiner. "These pledges show the private sector's growing commitment to address such challenges by promoting alternative solutions to traditional infrastructure and boosting environmentally sustainable jobs."

United States-based juice company Sambazon committed to train 7,000 açaí-berry harvesters in the Brazilian Amazon Rainforest on organic, non-invasive harvesting principles and environmental management principles.  In addition to doubling current yields of the Amazon berry and increasing harvesters' earnings by 40 percent by 2016, the initiative is expected to preserve over 1.2 million hectares of forestland.

"As worldwide demand for açaí continues to rise, this initiative will help promote a sustainable value chain and ensure adequate supplies of organic fruit," said Ryan Black, CEO of Sambazon. "To date, Sambazon's supply chain has provided alternative livelihoods for over 2,500 people and ensures the sustainable use of 700,000 hectares of in the Brazilian Amazon."



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