SIP Panel on Innovation & Development
By Priya Parker
As part of the MIT Sloan Study Tour program, the three study tours, the Financial Innovation in the Social Sector team, Access to Capital in East Africa and Agriculture and Innovation in Brazil and India, are meeting today for 7 hours to prepare, learn, share and launch.
We just had a thought-provoking panel featuring Paul Breloff, consultant to CGAP and formerly with SKS Microfinance in India, and John Amberly from Oxfam. Both panelists first presented a number of key ideas and observations from their work in micro-finance and development, and then hosted a lively Q&A with the students.
Some questions Paul raised and some key take-aways from Paul’s presentation:
- How can regulation be moved in a direction of branchless banking?
- What are the ways we can leverage the distribution channel at the BOP?
- How do you be “customer centric” rather than “product centric”
- The poor pay “poverty premium” for access to basic goods because of costs it takes to get it to them, etc. How do we cut costs and maintain quality
- Key capabilities of MFIs: physical infrastructure, customer relationship and brand, and ability to mobilize local resources.
- sustainability vs profitability: what is the right threshold for investment decisions at BOP?
Some key take-aways from John’s presentation:
- Make sure you look at definition of these words “innovation” “market” “sustainability” “development” “capital” and “emerging” from more than the definition of the elite
- any kind of change has multiple (and differential) effects in the short term and unexpected results on the 2nd and 3rd generation. wanting “positive social and economic impact on the BOP” without harm is an “audacious goal”
- examine dark side also of innovations/tech: technology tends to be appropriated by men and often at the marginalization of women. tech also tends to increase income disparities
- the best rice researchers were the ones that spent 2 years getting their knowledge up to the level of farmers — and then they could move beyond and begin thinking about innovation
Some key take-aways from Q&A
- Corporations are tending to get more involved with micro-insurance over micro-finance
- Challenges of micro-insurance: take-up is a big problem. Keep products simple. Many products are mis-understood. Not a culture of buying a product that doesn’t guarantee a pay-off.
- Weather-based indexes are currently being developed and seen as easier to measure and create than crop-insurance. One interesting approach is to use remote-sensing data to create the index. Key: keep the index simple so farmers understand what they’re buying.
- Is there a role for outsiders? Yes, the most powerful role is if you LISTEN. Take that 2 years to get up to the knowledge of the people and places you’re trying to work in, and then go beyond. You bring depth and breadth of knowledge beyond the local situation, but the local situation has to be relevant to you.
- Further caveat on the above: the balance between developing “niche products” to particular situations and ability to scale
