Publication "Connect the BoP"

A Guide to Leveraging ICT for Inclusive Business

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Connect the BoP

A C K N O W L E D G E M E N T S

Intelecon Research & Consultancy Ltd. is a strategy consulting !rm that is specialized in how information and communications technology can empower people, businesses and organizations and assist in socio-economic growth in developing countries and emerging markets. Sonja Oestmann was the lead author, with Steve Esselaar and Andy Dymond as contributors. We would also like to thank Geoff Wilkins for his research support.

Authors Experts

The Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH commissioned this study on behalf of the German Federal Ministry for Economic Cooperation and Development (BMZ) and would like to thank everyone who contributed to the publication.

Experts from a wide range of industries, the public sector, NGOs and consulting companies, contributed to this publication by sharing their experience in interviews and providing feedback.

Maja Andjelkovic, infoDev

Eugene Danilkis, Mambu

Mark Davison, PharmaSecure

Thomas Gottschalk, Mobisol

David Griswold, Sustainable Harvest

Peter Gross, MicroEnsure

Carsten Friedland, SAP

Su Kahumbu, Green Dreams

Dr. Tim Kelly, infoDev

Louise Koch, Grundfos LIFELINK

Jeremy Leach, Bankable Frontier Associates

Chris Murphy, Living Goods

Keith Nalepka, PharmaSecure

Paul Naphtali, biNu

Benjamin Njenga, Syngenta Foundation

Benjamin Olding, Jana

Santosh Ostwal, Nano Ganesh

Frederik P!sterer, Mambu

Mark Sears, CloudFactory

Mark Shoebridge, biNu

Fiona Smith, GSMA

Sheela Subramanian, Jana

Herbert Thuo, Virtual City

Kate Waiganjo, MicroEnsure

ReviewersReviewers provided crucial feedback throughout the project, giving their time and expertise.

Bernd Friedrich, GIZ

Diana Hollmann, GIZ

Lena Koever, GIZ

Stephanie Ludwig, GIZ

Matthew McDermott, GIZ

Thorsten Scherf, GIZ

Dr. Syed Ismail Shah, PTA

C O N N E C T T H E B o P

A Guide to leveraging

ICT for Inclusive Business

Connectthe BoP

Sonja Oestmann Steve Esselaar

Andy Dymond

2P R E F A C E

3

Photo Credit: Living Goods


The German Federal Ministry for Economic Cooperation and Development (BMZ) recognizes the important and diverse role that ICT plays in development and promotes its application in several ways. We work with our partner countries to support their local IT industries and advise their regulatory bodies on creating enabling environments that ensure affordable access to these technologies. Furthermore, we !nance ICT infrastructure and support the implementation of modern ICT technologies across sectors and focal areas, for example in the !elds of good governance and agriculture.

This guide will provide you with practical knowledge and tools so that you can take advantage of ICT to improve your company’s inclusive business model. As you will see, leveraging ICT creates many opportunities, both in terms of promoting sustainable development through innovative business approaches and providing better service to low-income communities in developing and emerging countries. Let’s work together to connect the BoP!

Dr. Christiane Bögemann-Hagedorn Deputy Director General Civil society; private sector German Federal Ministry for Economic Cooperation and Development

Preface

Dear Entrepreneurs,

Bits and bytes are the fuel of knowledge-driven economies. Access to information and the ability to create, distribute and understand data determine competitive advantage in the 21st century. Continuing globalization and advancements in Information and Communication Technologies (ICT) are here to stay. This has implications for business and sustainable development everywhere.

Mobile phone usage in developing and emerging countries has literally exploded in the past decade. Companies can leverage mobile technologies to provide low-income communities at the Base of the global economic Pyramid (BoP) with access to innovative products and services that were previously unavailable to them. This allows farmers to obtain market prices from distant cities, patients to seek medical advice via mobile phone apps and large parts of the unbanked population to conduct low-cost !nancial transactions. Not only do such technologies improve prospects for people with low incomes, they also unlock signi!cant opportunities for the private sector.

Unfortunately there remains a signi!cant digital divide. Despite growing mobile phone penetration in developing countries, mobile services are still relatively expensive when you consider average incomes. Furthermore, approximately two-thirds of the world’s population has no access to the Internet. To bridge this divide, continuous investment by the private sector and innovative partnerships between companies and development actors are required.

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4C O N T E N T S

5

T h e b u s i n e s s c a s e

C o n n e c t e d B o P m a r ke t s a n d i n n o v a t i v e t e c h n o l o g i e s

24S t r a t e g i e s f o r l e v e r a g i n g I C T i n i n c l u s i v e b u s i n e s s

14

Ke y p l a y e r s a n d p o t e n t i a l p a r t n e r s

S u p p o r t d i r e c t o r y a n d f u r t h e r r e a d i n g

5662


ChecklistsHow to integrate mobile-based

tools in your market research 29

How to choose the best pricing model

37

How to decide whether to use m-money and choose a provider

38

How to use ICT to market your products and services

and deepen customer relations 47

How to integrate mobile and other information technologies

that improve sales and distribution 54

Case studies AgriMangr 20

Grundfos 21

Sustainable Harvest 23

Handygo 25

Jana 27

Mobisol 31

MPESA & TrueMoney 34

Mambu 36

Kilimo Salama 39

Nano Ganesh 43

Cloudfactory 45

Tigo Family Care Insurance 46

PharmaSecure 49

CellBazaar 50

SAP 52

Living Goods 53

biNu 55

iCow 58

SpotlightdeveloPPP.de 61

Acronyms 75

The business case 6The BoP market… 7…and its challenges 7ICT trends that enable new business models 8The business case for leveraging ICT 9

Connected BoP markets and innovative technologies 14ICT demand and usage at the BoP 15Technology innovations 18

Mobile applications (m-apps) 18

Mobile money (m-money) 19

Cloud computing 19

Remote monitoring facilitated by Machine to Machine (M2M) communications 21

Location-based services (LBS) and traceability 22

Big data analysis 22

Strategies for leveraging ICT in inclusive business 24Improve market research 26

New mobile market research options and tools 28

Mobile-based data-gathering software for !eld surveys 28

Mobile research platforms for simple questions and fast results 29

Innovate payment and pricing design 30M-money’s global spread 32

New cashless payment options 32

How companies can decide whether to use m-money 33

Choosing the best pricing model 35

Expand marketing and deepen consumer relations 40Company and product positioning to appeal to BoP markets 40

Understanding illiteracy constraints and how to adapt marketing 41

Combining SMS and social media marketing with word of mouth 41

Social media can be used to !nd employees and connect teams 42

Partnering for marketing success 44

Transform sales and delivery channels 48Companies need to !nd lower-cost sales and distribution channels 48

Technologies that connect and improve sales functions 50

Increased opportunities for digital delivery 54

Key players and potential partners 56Mobile operators are sought-after partners 57SMS integrators can be a one-stop shop 59Local IT sector and incubators provide valuable networks 59Assessing the country context 60

Support directory and further reading 62

Approach 70

Contents

T H E B U S I N E S S C A S E

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The business case

Inclusive BusinessCompanies with inclusive business models establish mutually bene!cial business partnerships with the BoP. Through innovative approaches, inclusive business models integrate the BoP as clients, distributors, suppliers of goods and services, or employees. By doing so, companies create new markets for themselves while enabling access to a wide variety of affordable products and lifestyle choices for people with low incomes.

Base of the Pyramid (BoP)The Base of the Pyramid (BoP) concept, (originally termed “Bottom of the Pyramid”), was developed by economists C.K. Prahalad and Stuart Hart at the end of the 1990s. It represents the idea that billions of people, living on only a few US-Dollars a day, have long been largely ignored by companies although collectively they represent a large and growing market. Low prices and easy access to products and services can turn the poor into autonomous customers and creative entrepreneurs, enabling them to increase their productivity and purchasing power.

Photo Credit: © mkistryn / 123RF Stock Photo

BoP markets offer interesting opportunities for companies if they offer innovative products or services that create tangible value for their customers.


The BoP: Over four billion peopleBoP markets present a major opportunity for companies with a total purchasing power of USD 5 trillion. This is based on an estimate of four billion people with no more than USD 3,000 per person per year in purchasing power parity (PPP), with most having much less.1 These people represent the ‘base of the global income pyramid’ (BoP) and live on less than USD"8 per day. Most goods and services are either unaffordable or unavailable. For example, people at the BoP typically do not have a bank account or insurance, a fridge, TV or vehicle of any kind, and they typically lack access to basic utilities such as water and electricity. Many smallholder farmers lack easy access to markets in order to buy inputs or sell their produce. Most of the income of low-income people is spent on food, clothing and fuel, leaving very little for anything else. Because they only buy in small quantities, have little experience as customers and are rarely able to choose between providers, they pay particularly high prices – a situation referred to as the ‘poverty penalty’. Their combined purchasing power, however, represents a major market. Companies who seize these opportunities can position themselves in these growing markets at an early stage.

Business opportunities at the BoPThe past decade has seen a surge of business interest in BoP markets. Companies from a diverse range of sectors have demonstrated innovative ways of successfully launching new and improving existing inclusive business models in order to better meet the needs and demands of low-income consumers and producers.2 For example, energy companies are providing low-cost off-grid electricity (often solar-powered) to rural and low-income users, who previously had no access to affordable and reliable energy. Agricultural entrepreneurs have developed inexpensive micro-irrigation systems for smallholder farmers in water-scarce areas. In the health sector, innovative organizations are using motorcycle #eets to offer cost-effective, reliable ways of supporting health interventions even to the most isolated villages. Examples of similar successful inclusive business models abound, re#ecting the business case for offering innovative goods and services to low-income consumers at affordable prices.3

Not a homogenous marketWhile BoP markets have exciting business potential, they are also very challenging markets. For one thing, low-income consumers differ widely in their needs and requirements. A better understanding starts with a simple segmentation by living standard: there are roughly 1.4 billion people who live on USD 3-5 a day and are considered low-income, with some education and job skills, and a semi-regular income. Around 1.6 billion people live on USD 1-3 a day and are typically poorly educated and low-skilled. They have unsteady incomes (such as subsistence farming or temporary work) and interact in informal markets. The last billion people live in extreme poverty, often due to civil war or droughts. Their basic needs of food, shelter and clean water are not met and they are excluded from participating in the formal economy.4

There are further differentiations, based on region, country, culture and whether low-income people live in urban or rural areas, among many other factors. Companies need to understand their target market and can only be successful if they create long-term value for their clients, improve their livelihoods through tailored services and products, and offer employment opportunities or connect small-scale producers to their value-chain.

Key challengesIn addition to various sector-speci!c hurdles, general challenges of doing business in low-income markets include:

The BoP market... …and its challenges

Low data and market informationAcquiring market data on low-income consumers’ interests, preferences, spending habits and purchasing power is costly and dif!cult to obtain.

Limited marketing channels availableLow-income people are slower to adopt new products and services and thus customer-acquisition costs are high. Word of mouth is still the preferred means to spread product awareness and knowledge.

Lack of sales and distribution channelsThe limited availability or absence of sales and distribution channels capable of handling customer care or after-sales support, such as maintenance or repair, poses challenges to companies.

High transaction costs for companiesOver 2.5 billion people are “unbanked” due to the lack of !nancial services, including 75% of the world’s poor, and many of those live in rural areas.5 BoP markets represent primarily cash economies, which are expensive for companies and can account for up to 24% of total operating costs.

Risk-averse consumersConsumers have irregular and limited incomes and therefore want trusted low-risk products at an affordable price.

High operating costsCost structures can be higher in low-income markets, including for example the distribution of products and services to rural villages or scattered urban living areas.

This guide is aimed at companies that either already serve BoP markets or are interested in doing so. It provides guidance on how companies can make their business models more inclusive by leveraging Information and Communication Technologies (ICT). It is based on an analysis of over 40 companies that successfully used ICT to better address the demands of low-income consumers, as well as in-depth expert interviews. The guide identi!es the main challenges and opportunities related to ICT-based solutions for companies targeting consumers, or working with distributors and suppliers, in low-income markets. In addition, it provides up-to-date data on ICT usage trends among low-income consumers, an overview of key relevant technologies for companies, and insights on how innovative companies from various sectors have leveraged ICT to develop new products and services for BoP markets.

About this guide


8 9

1. The massive uptake of mobile phone usage at the BoPMobile penetration per person has reached over 60% in sub-Saharan Africa and over 65% in South Asia, as mobile operators in developing and emerging countries offer innovative and affordable pricing options for low-income users. Considering that there are several persons in a household, household penetration is even higher. This high availability of mobile phones enables people at the BoP to access new products and services. What was previously a largely unconnected and therefore unknown market is now more accessible to companies. For example, with more data available on the behaviour, preferences and spending habits of low-income consumers, companies can interact in innovative ways with them. This provides significant opportunities for companies to create new markets and develop more inclusive business models.

FIGURE 1

Mobile penetration in emerging markets, 2001-2012

Source: ITU World Telecommunication / ICT Indicators Database, June 2013 edition Note: Countries included are those de!ned by the ITU as “low income”, “lower middle income” and “upper middle income”

160%

120%

80%

40%

0%2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Europe & Central Asia

Latin America & Caribbean

Middle East & North Africa

South Asia

Sub-Saharan Africa

East Asia & Paci!c

20%

60%

100%

140% 134%

110%

95%90%

68%

59%

*

ICT trends that enable new business modelsCompanies can mitigate many of these challenges by integrating Information and Communication Technologies (ICT) into their inclusive business models. Two important developments are enabling companies to do so. The !rst important trend is the spread of mobile phone usage amongst low-income users in developing and emerging countries; the second is the mainstreaming of innovative mobile and other ICT technologies.

are applied


The business case for leveraging ICT

*2. The mainstreaming of innovative ICTIn addition to the high prevalence of mobile phones among BoP consumers and producers, the mainstreaming of innovative mobile technologies opens up new and exciting ways for companies to target low-income users. For example, companies can leverage the following ICT to better serve them:

Mobile applications Companies can develop mobile applications (m-apps) such as supply chain software as a product offering for SMEs and intermediaries serving the BoP, or to help them with their sales force or customer relations.

Mobile money Companies can incorporate m-money as a convenient and cost-ef!cient payment channel when dealing with the BoP.

Cloud computing Smaller businesses catering to or working with the BoP can now afford specialized software, offered as Software as a Service (SaaS) facilitated by cloud computing.

Remote monitoring/Machine to Machine (M2M) communicationsCompanies that provide utility or other services can use remote monitoring to manage payments, as well as maintenance needs.

Location-based services (LBS) Service providers can tailor information and value-added services to the locations of their clients. LBS can also be used to track produce which can help with quality control, among other things.

Big data analysis Companies can use big data analysis to re!ne their products and services, or to develop new products or services. Some companies generate signi!cant client data themselves and this can be valuable to interested third parties, generating additional revenues. However, data-protection requirements need to be adhered to.

Leveraging ICT for more inclusive business modelsThe high prevalence of mobile phones, coupled with growing innovations in the ICT sector, provides companies with a new medium to better reach low-income consumers and producers. In particular, companies can leverage mobile technologies in order to pursue the following four strategies:

By pursuing ICT-based strategies, companies can overcome the challenges traditionally associated with BoP markets and signi!cantly improve their inclusive business models. For example, companies can leverage ICT to achieve greater scalability in their operations, lower their expenditure and create better tailored products for low-income users. The four main business outcomes of incorporating ICT-based strategies are:Increased revenues,

Increased revenues,

Reduced costs,

Improved business functions, and

More inclusive product and service innovations.

Companies can leverage new mobile data-gathering tools in order to gain greater insights into low-income consumers’ interests, preferences and spending habits.

Companies can facilitate small, frequent payments, rather than demanding high up-front fees, in order to adapt pricing options to low-income consumers. In addition, companies can utilize m-money, thereby making it easier and faster to collect, distribute and handle payments of products and services.

Companies can leverage mobile communication tools in order to improve marketing and deepen their consumer relationships. This enables companies to improve consumer acquisition in low-income markets where users tend to be risk-averse and have little knowledge of alternative products and services.

1 Improve market research

2 Innovate pricing and payment design

3 Expand marketing and deepen consumer relations

4 Transform sales and delivery channels

Companies can incorporate ICT in order to improve their sales efforts, deliver products and services via new electronic channels and enhance their after-sales and customer-care services.

*


10 11

Little information or understanding of low-income people’s requirements

Insuf!ciently tailored products and services, few to no options

High cost of handling cash, large transaction costs, poor payment infrastructure

Irregular cash "ow, little disposable income, no bank account, risk-averse

Lack of direct marketing channels, dif!cult to engage with customers

Low consumer education, low trust, slow adopter

Poor distribution infrastructure, high costs of sales channel

No easy options to purchase certain products and services, distance to sales points

Company Consumer Consumer Consumer ConsumerCompany Company Company

Leveraging ICT allows companies to...

Improve marketresearch

Innovate pricing andpayment design

Transform sales and deliverychannels

Expand marketing anddeepen consumer relations

...with the following outcomes:

Faster and less expensive accessto market data and research

Decreased transactioncosts and times

More effective salesforce management

Better targeted, lower-costand broader marketing reach

Clearer market understanding;better-tailored products

and services

More potential customersthrough better pricing design,

competitive advantage

Access to additional clients andproducers via new sales and

delivery channels

Improved consumer acquisition andretention in low-income markets,

unique-selling point

More ef!cientresearch and development

Improved cash-"owmanagement

More reliable, ef!cient andtransparent supply chains

Better customer relationshipmanagement

New ICT-enabled products & services can lead to a competitive advantagefor your company and furthermore provide low-income clients with:

cloudcomputing

mobileapps big data m-money

location-basedservices

remotemonitoring

> Better tailored products and services and hence more choice> More convenient payment options and terms and hence greater affordability> Increased consumer education and greater awareness of alternative goods and services and hence more informed consumer decisions;> Better after-sales and customer-care services and hence better value;> More employment opportunities and hence more income.


This framework diagram shows how typical challenges in BoP markets can be addressed by leveraging ICT and focusing on four strategies. This leads to speci!c business outcomes in each strategic area and to more inclusive and innovative products and services for low-income clients.

Little information or understanding of low-income people’s requirements

Insuf!ciently tailored products and services, few to no options

High cost of handling cash, large transaction costs, poor payment infrastructure

Irregular cash "ow, little disposable income, no bank account, risk-averse

Lack of direct marketing channels, dif!cult to engage with customers

Low consumer education, low trust, slow adopter

Poor distribution infrastructure, high costs of sales channel

No easy options to purchase certain products and services, distance to sales points

Company Consumer Consumer Consumer ConsumerCompany Company Company

Leveraging ICT allows companies to...

Improve marketresearch

Innovate pricing andpayment design

Transform sales and deliverychannels

Expand marketing anddeepen consumer relations

...with the following outcomes:

Faster and less expensive accessto market data and research

Decreased transactioncosts and times

More effective salesforce management

Better targeted, lower-costand broader marketing reach

Clearer market understanding;better-tailored products

and services

More potential customersthrough better pricing design,

competitive advantage

Access to additional clients andproducers via new sales and

delivery channels

Improved consumer acquisition andretention in low-income markets,

unique-selling point

More ef!cientresearch and development

Improved cash-"owmanagement

More reliable, ef!cient andtransparent supply chains

Better customer relationshipmanagement

New ICT-enabled products & services can lead to a competitive advantagefor your company and furthermore provide low-income clients with:

cloudcomputing

mobileapps big data m-money

location-basedservices

remotemonitoring

> Better tailored products and services and hence more choice> More convenient payment options and terms and hence greater affordability> Increased consumer education and greater awareness of alternative goods and services and hence more informed consumer decisions;> Better after-sales and customer-care services and hence better value;> More employment opportunities and hence more income.


12 13

Increased revenues

Companies can take advantage of ICT to increase revenues by:

Discovering new markets through better data-gathering tools and achieving better !t between market needs and existing products and services;

Launching new ICT-enabled services through innovative pricing models and payment options;

Creating customer retention initiatives that add unique value to clients;

Capitalizing on new sales and delivery channels to reach more clients and producers.

Companies can leverage ICT to segment their customers better and tailor products to a customer’s speci!c requirements. They can also create new markets by incorporating ICT-based solutions that leverage off their existing resources, skills and activities, as well as integrate their value chains. For example, Tigo Family Care Insurance offers insurance to existing users of a mobile network. Another company that is selling farm-inputs, has added weather-index-based insurance for smallholder farmers to their product portfolio.

Reduced costs

Companies can leverage ICT to save costs by:

Using more ef!cient data-gathering and market research tools;

Incorporating cashless payment mechanisms;

Maximizing marketing opportunities including social networks of customers;

Integrating supply chain management.

Supply chains around the world have bene!ted from the greater ef!ciencies derived from the use of ICT, such as secured supply sources, transparency and better coordinated logistics. Companies serving BoP markets can reap similar gains simply because so little technology has been used so far. In many instances, supply-chain related data recording is still paper-based which is time-consuming and inef!cient. It is also more prone to error, especially in the case of large volumes of transactions. By digitizing the transactions, a reliable, ef!cient and more transparent supply chain can be created.

Even outside of physical supply chains, there are still major opportunities to save costs and time by automating and digitizing processes. Many micro!nance institutions (MFIs) are still paper-based, tracking client loans manually. This is limiting the number of customers they can support, due to their back-of!ce systems. Mambu, a !nancial services company, provides a software-as-a-service (SaaS) solution that removes the reliance on paper and allows MFIs to reach scale.

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on page 52**

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Improved business functions

Companies can incorporate ICT and mobile technology to:

Conduct better market research;

Automate payment processes;

Increase customer relationship management;

Enhance sales workforce management.

Companies can apply ICT to improve traditional business functions, such as marketing and sales. By using ICT-supported systems to conduct market research in previously inaccessible population groups, companies can understand their target clients better. For example, companies such as Jana are rewarding consumers with prepaid airtime if they answer questionnaires on their mobile devices. Companies can now literally assess their brand in real-time.

Companies can also leverage ICT to manage their customers and sales forces. Mobile phones are being used to both track the success and performance of sales agents and to identify future sales leads.

More inclusive product and service innovations create win-win outcomes

In order to succeed in the long-term in BoP markets, companies need to create a value proposition that addresses speci!c needs and that truly makes a difference. As there is very little real discretionary spending available at the BoP, people are forced to scrutinize very carefully how to spend their money. If companies are able to deliver on their value proposition by providing better healthcare, more accessible !nancial services, more affordable energy or clean water, for example, the quality of life of people with low incomes can improve signi!cantly. This requires products and services to be well designed, sometimes even co-designed with future clients and include attractive pricing and payment terms. Also, incorporating low-income people into a company’s value chains and employment can improve peoples’ livelihoods, create more demand and ultimately enable the market to keep growing. ICT plays a big role in enabling product and service innovations to reach BoP markets.

See Living Goods

on page 27

*

*

Capturing data digitally can improve information "ow in the supply chain, as demonstrated here by SAP’s mobile application developed for the African Cashew Initiative.

Phot

o Cr

edit:

SAP

C O N N E C T E D B O P M A R K E T S A N D I N N O VAT I V E T E C H N O L O G I E S

14 15

Connected BoP markets

and innovative technologies

Photo Credit: Living Goods

Mobile-based technologies not only connect low-income households, but also enable innovative service and product provision.


High mobile phone ownership among low-income usersThe growth of mobile networks and subscriptions6 in emerging and developing countries over the past decade has been unprecedented. The uptake has been steeper in developing countries where the alternative of a !xed network is typically under-developed, costly to deploy and out of reach for lower income groups.

Mobile phone ownership has risen among low-income users, despite the purchase being a substantial capital outlay. For example, nationally representative ICT household surveys in 2011/2012 showed that in South Africa mobile phone ownership at the BoP is 75%. Furthermore, 33% of these mobile phone owners have a phone capable of browsing the Internet. The same study found that in Kenya over 60% of the BoP owned mobile phones, of which 20.5% stated that their mobile phones can access the Internet.7

A study in six Asian countries shows that individual phone ownership among BoP respondents is comparably high, ranging from 37% in India to 89% in Thailand. Respondents are also willing to spend a considerable amount on purchasing their phone.

ICT demand and usage at the BoP

Source: ITU World Telecommunication/ICT Indicators database, December 2012 edition

FIGURE 2

Mobile phone subscriptions per 100 inhabitants (regional average)

FIGURE 3

Mobile phone ownership among BoP phone users, 2006-11

Source: Teleuse@BOP4 - Preliminary !ndings, Rohan Samarajiva, LirneAsia, Dec 2011

38%

23%

65%

Pakistan

40%

9%

37%

India

36%

22%

71%

Sri Lanka

90%

76%

89%

Thailand

2006 2008 2011Europe & Central Asia



East Asia & Paci!c

North America

South Asia

Sub-Saharan Africa 61%

76%

86%

91%

112%

113%

117%

As mobile phone ownership rises among low-income consumers, companies have more opportunities to leverage this technology for product and service innovation as well as for more direct interaction with low-income clients, employees or small-scale suppliers in areas such as market research, customer relations, supply chain and sales force management. In addition, there is a range of other ICT-enabled technologies like mobile money, cloud computing, remote monitoring and location-based services that allow companies to provide services at lower cost, with more pricing options, easier access and better tailored products to their BoP markets.


16

Affordability, usage and spendingIn developing and emerging countries, the large majority of subscribers are pre-paid subscribers without a monthly contract. In other words, they buy airtime if and when they need it, which helps low-income subscribers who cannot easily commit to regular monthly costs. Airtime can be bought in very small amounts, typically for as little as USD 0.10 or 0.20 cents. Most mobile carriers have switched to customer-friendly per-second billing that ensures that customers are only billed for the actual call time.

In addition, low-income consumers have invented several smart ways to minimize their phone costs. Most prominent among them is “beeping” – a caller calls another person (such as a family member, friend, employer) but hangs up before the person answers to indicate that he/she wants to be called back by the other person because he has not enough airtime. The person called sees and recognizes the number and decides to call the person back, hence incurring the call cost. Some operators have made this into a regular feature with “please call me” services. As such, while overall spending on calls and phone usage remains limited by affordability, most low-income customers can afford a fair number of calls depending on necessity and importance. The table below provides an illustration of how people at the BoP use their phones in South Africa.

Latest available data show that people at the BoP spend considerable amounts on ICT, over USD 50 billion globally.8

Many demand studies have shown that people with low incomes spend disproportionately higher amounts of their income on ICT as compared to other users. This is partly due to their lower income but also shows that they choose to spend a higher proportion of their income on mobile phone usage as it

creates cost-savings in other areas. For example, rural farmers can save themselves a time-consuming and costly trip to the city if they can use their phones to obtain information (such as produce prices) instead.

Low-income populations starting to use the Internet via their mobile phonesBoth globally and in developing countries, mobile networks are being upgraded to mobile broadband services (for example 3G and higher). This enables better and faster access to the Internet via data-enabled mobile phones, including feature and smartphones. In all world regions, at least 50% or more of the population has access to these faster mobile networks, making it a relevant trend for companies planning to use mobile broadband networks for delivery of services or to improve their functions.9

Several of the global suppliers are already offering “basic smartphones” which cost under USD 100. Economies of scale and global competitive pressure are predicted to reduce the price further over the next few years. While these basic smartphones are price-wise out of reach for low-income people for now, some can afford feature phones which typically have a larger screen to browse the Internet. Data from a 2012 household survey in Ghana, Mozambique and Nigeria show that roughly 20% of BoP households have feature phones, while 80% still have basic phones.10 Feature or smartphones are now inexpensive enough for companies to equip certain key staff, like sales or distribution agents. This can make business sense if it improves ef!ciency by allowing faster data input, access to data and tracking.

17

Source: Mobile Usage at the Base of the Pyramid in South Africa, Research ICT Africa, Intelecon, 2012

FIGURE 5

How the BoP use mobile phones in South Africa

Source: Teleuse@BOP4 - Preliminary !ndings, Rohan Samarajiva, LirneAsia, Dec 2011

FIGURE 4

Approximate price paid for handset (USD) – Average

Pakistan

Thailand

Sri Lanka

India

Bangladesh

$37$38

$45$51

$93Making and receiving calls

Missed call/please call me etc.

Sending and receiving text messages

Personal Organiser/Diary/Notebook/Watch

Playing Games

Listen to music/radio

Taking photo/video clips

Browsing the Internet

Social networking

Download applications to mobile phone

Transfer airtime

99.4%

96.8%

96.6%

66.8%

42.8%

37.5%

36.3%

13.6%

12.8%

11.1%

10.2%

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While low-income consumers typically cannot afford a computer and might only have access through Internet cafés, lower income groups increasingly use their mobile phones to access the Internet. In South Africa, 33% of people at the BoP have phones with an Internet browser and 14% of the BoP actually use their mobile phone to browse the Internet.11 In six Asian countries, a study found that only 14% of BoP phone owners have Internet browsers on their phones.12 A recent sampling of mobile Internet pricing in Uganda showed that several operators offer daily Internet use of 10 MB for as little as USD 0.10. This trend of dramatically dropping prices for mobile data mirrors how voice became !rst affordable.13 However, since most low-income consumers still use lower-end feature or smartphones, with smaller screens, less processing power and more dif!cult navigation, their Internet experience is still limited.

In South Africa, a nationally representative study found that 47.5% of the BoP respondents stated their !rst Internet experience had been through mobile phones, while only 30% of other respondents reported this.14 This trend will increase and accelerate as more broadband networks become available and the price of smartphones decreases, providing opportunities for companies to target the BoP market in novel ways.

There are currently major initiatives underway by leading technology companies, the public sector and non-pro!t partners, to make the Internet accessible and affordable for all.15

Growing use of social media among low-income usersThe most popular use of the Internet is social media and instant messaging, which is either free or available at very low cost, especially new services such as Facebook Zero and WhatsApp. The top !ve countries with the largest Facebook growth in 2012 include Brazil, India, Mexico and Indonesia.16 A recent study in rural Kenya17 identi!ed many constraints and costs when accessing social media sites, including electricity outages and cost of Internet access. Despite this, all respondents are aware of Facebook and 62% are active users of Facebook and have their own pro!le. In Africa, the

overall Facebook penetration is 5%.18 Driving factors for Facebook usage include a desire to be connected and for the status associated with having a Facebook pro!le (similar to how owning a mobile phone was a status symbol). Furthermore, as many rural Kenyans have relatives or friends in the diaspora, Facebook provides them with a low-cost communication channel via Facebook chat, compared to unaffordable international calls or the less instant communication via e-mail. Lastly, Facebook is seen as a means to access !nancial help in times of hardship, through the network of friends, as well as an avenue for employment opportunities. The study concludes that the persistent desire to use Facebook despite costs and obstacles suggests that low-income users feel they derive social and economic bene!ts from using social media.

FIGURE 6

BoP spending on ICT – $51.4 billion (PPP)

Source: The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid, World Resources Institute & International Finance Corporation, 2007 (Figures are based on PPP)

Source: ITU World Telecommunication/ICT Indicators database, December 2012 edition

FIGURE 7

Percentage of population covered by at least one 3G mobile network, 2011

FIGURE 8

Are you signed up for any online social network (Facebook, Mixit, Badoo, Twitter)?

Source: Research ICT Africa, representative household surveys, Q1 2012, forthcoming publication

41%50%

59% 61% 63%

73% 75% 81% 81% 81%

Ethi

opia

Nig

eria

Uga

nda

Cam

eroo

n

Tanz

ania

Bots

wan

a

Sout

h Af

rica

Nam

ibia

Gha

na

Keny

a

Rwan

da

88%

99%87% 83% 81%

69%

53%47%

Nor

thAm

eric

a

Mid

dle

East

& N

orth

Afr

ica

Euro

pe &

Cent

ral A

sia

East

Asia

&Pa

ci!c

Latin

Am

eric

a&

Carib

bean

Sout

h As

ia

Sub-

Shar

anAf

rica

$ billions (PPP)

$4.4Africa

$28.3Asia

$13.4

LatinAmerica

$5.3

EasternEurope


18

The ICT innovations range from mobile device-centric (mobile applications, m-money) over Internet-based innovations (cloud computing) to mobile network-centric innovations (remote monitoring, location-based services). Big data is connected to all these innovations.

Mobile applications (m-apps)Companies can leverage m-app technologies for several purposes: to provide services to the low-income population, to equip their sales team with the latest product promotions, and as a customer relationship management tool. M-apps can also feature in supply chains.

An m-app is software that runs on a mobile phone or server and interacts with other mobile phones. M-apps can sit either on top of an operating system or on top of a platform. Mobile operators, particularly in developing countries, have been developing m-apps for up to 10 years. M-apps range from a simple SMS providing value-added services (for example agricultural pricing information) on a basic phone to more sophisticated m-apps available on a smartphone through an app-store.

Companies launching m-apps targeting the low-income population must take the following into account:

Since credit cards are not available, the integration with m-money is important; another option is to accept airtime as payment, including through premium SMS, or offer operator billing.

Mobile broadband can be expensive and a company needs to ensure SMS and Unstructured Supplementary Services Data (USSD)19 access. Depending on the region and country, this is likely to remain the case for several years, particularly in rural areas.

M-app stores including services for BoP markets are still at the early stages of development. For example MTN, the largest mobile operator in Africa, only launched its app store in July 2013 and most apps are based on premium SMS rather than m-apps to download. Therefore m-app developers must negotiate with individual mobile operators to make their m-app available to subscribers.

19

Technology innovations

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Mobile money (m-money)Many companies have discovered m-money as a new payment channel for serving the BoP market. M-money refers to the use of mobile phones to perform !nancial and banking functions. By incorporating m-money options into their business models, companies can save costs and offer greater payment convenience to their clients, which allows them to develop new business models. Where the mobile payment systems are available, users can receive funds, pay bills, make bank transactions, transfer funds, and purchase goods and services securely. These services may or may not be tied directly to a personal bank account or a credit card. In most developing countries the services are linked to a mobile wallet or even simpler, money is credited to a customer’s phone number. They can use prepaid cards to add money to their balance, and, instead of using a certain amount of money for phone usage, they transfer it to another person for payment. M-money has often been introduced by a mobile operator, but many have also created partnerships with banks. An example is the mobile operator Smart Communications in the Philippines that now has twelve partner banks.20

The m-money industry is continuing to grow rapidly. There are now more m-money accounts than bank accounts in Kenya, Madagascar, Tanzania and Uganda. However, at this stage, only a few of the existing m-money services are reaching signi!cant scale. Only 14 m-money services world-wide have achieved scale since launch, that is, they have achieved suf!cient penetration and usage in a country for m-money to be considered a viable payment option.21 Companies wanting to use m-money need to evaluate the state of m-money in the countries in which they operate, in order to assess if mobile payment is a suitable option.

Cloud computing Cloud computing is the use of computing resources (hardware and software) available at a remote location and accessible over the Internet. Cloud computing entrusts remote servers with a user’s data, software and computation. While the business software and user’s data are stored on servers at a remote location, the end users can access the cloud-based applications through their computer’s web browser or a mobile app.

Cloud computing reduces the upfront infrastructure and software costs for companies as well as for end-consumers. Instead of having to buy servers and licensed software, companies can rent data storage based on their actual needs and access software on a usage basis. Companies can get their applications up and running faster, with improved manageability and less maintenance. Furthermore, incorporating cloud computing allows companies to adjust resources to meet #uctuating and unpredictable business demands, especially important when serving the BoP markets.

Software offered via cloud computing is referred to as software as a service (SaaS). SaaS is sometimes also referred to as “on-demand software”. This changes the pricing model from purchasing a software license upfront to pricing on a monthly basis or pay-per-use basis.

Source: GSMA, State of the Industry: Results from the 2012 Global Mobile Money Adoption Survey, 2013

FIGURE 9

Number of live mobile money services for the unbanked by region, 2001-2012 (year-end)

*

*

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012

Europe & Central Asia



South Asia

Sub-Saharan Africa

East Asia & Paci!c

1 2 24

6 7 1015

150

109

36

65


Virtual City AgriManagr

CASE STUDY 1

Automating supply chains linking agricultural producers, processing plants and !eld agents via cloud-based software services

20 21

Virtual City is a Nairobi, Kenya-based software development company. It commenced and built up its business by successfully rolling out software solutions that automate parts of the value chain in several economic sectors in Kenya, including the AgriManagr for the tea, coffee and dairy industries, as well as branded solutions for the horticultural, trucking, distribution and !eld engineering sectors.

The AgriManagr solution was !rst supplied in the form of separate turn-key automation contracts with a leading player in each sector (for example an agricultural cooperative or major corporation), that automated one part of the value chain of interest to the main player. Using the proceeds of winning a major USD 1 million challenge award from Nokia and USD 1.8 million from the Acumen Fund, the company has transitioned from supplying its software as a product to Software as a Service (SaaS) by moving its software platform into the cloud. The company now supplies its supply chain mobile applications on a monthly charge basis for all of the above three sectors and is expanding into the horticulture sector, as well as to other countries of East Africa.

The original product was designed to solve the speci!c challenges encountered in each sub-sector separately, using customized software and PDA-based mobile applications interconnected with a central database and processing centre. The objective was to improve value-chain ef!ciency, build trust between the processing factory, farmers and !eld agency workforce, eliminate fraud and establish long-term relationships. The company’s systems have been demonstrated through impact studies to lead to increases in rural productivity and incomes.

The following generalized features were common to all sub-sectors and client groups but their speci!c applications and timing within the value-chain cycle (at every site or not, always or monthly) were tailored to each case as a separate product:

On-site data capture between factory, !eld agents and farmers;

On-site electronic weighing of produce;

Immediate data transfer (over the mobile network);

On-site transaction processing via online recording and m-money payment to farmers;

Centralized data reconciliation;

Electronic data con!rmation and backup.

The cloud-based service is now implementing a common software platform, accessible via a range of basic handsets and smartphones. The various features and activity schedules required by different sub-sectors or client groups can be switched on or off and varied to order, depending on the industry and requirements of the client. Since completing the migration to SaaS, the company has expanded from serving a handful of major entities to a much more varied cross-section of clients. It has added more than 150 clients in less than 6 months.

Key takeaways:

Monthly charging for a cloud-based software solution means that a wider range of client or value-chain partner can now justify purchasing services previously only available through expensive implementations;

Value chain m-apps contribute to more ef!cient, simpli!ed, cost-effective and bene!cial business processes.

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http://www.virtualcity.co.ke/portfolio/agrimanagr-solution/


Remote monitoring facilitated by Machine to Machine (M2M) communicationsSeveral companies providing water and electricity services to low-income consumers use remote monitoring to facilitate payments as well as maintenance. Also, insurance companies use remote monitoring data for risk calculations and claim handling. M2M refers to technologies that allow both wireless and wired systems to communicate with other devices of the same ability. M2M uses a device (such as a sensor or meter) to capture an event (such as temperature or inventory level), which is relayed through a communications network to a software program that translates the captured event into meaningful information (for example, items need to be restocked). In 2017, there will be over 10 billion mobile-connected devices, including M2M modules.22 Companies can utilize these networks to explore an array of new business opportunities and connections between consumers and producers in terms of the products and services being sold.

Remote monitoring can be very valuable for services targeted at BoP markets, as in some countries low-income people are more concentrated in rural areas where the infrastructure is not as good and distances longer. Companies, able to save the travel out to the client by remotely switching the service on or off, or diagnosing any maintenance problem, can reduce costs.

Grundfos Lifelink uses remote monitoring as well as m-money and electronic funds transfer in a water supply system.

Grundfos LIFELINK water wells

CASE STUDY 2

ICT-enabled monitoring and cashless !nancial control The LIFELINK Project, created by GrundFos Group, a leading manufacturer of water pumps based in Denmark, brings together water-supply technology, remote electronic monitoring and accounting, and in some deployments (notably Kenya) m-money. A LIFELINK System is a single-point water supply which uses a submersible pump powered by solar panels. Water is pumped to an elevated, tower-mounted 10,000 litre storage tank, whereupon it is fed by gravity to several electronically controlled taps in a small building, from which villagers draw water. The system is remotely monitored and maintained using the mobile network which is also used to facilitate automatic and cashless payments to the !nancier for loan repayment. Also, the tap unit serves as the payment facility; villagers turn the water taps on and off with an electronic key. This electronic key stores their own personal “water account” which can be topped up with micro-sized payments from m-money accounts or with cash payments at a service kiosk.

Villagers are able to !ll their jerrycans as they would at any other communal commercial source of water, while using their electronic key to control the tap. The price of the water is comparable to the other sources. The villagers purchase their electronic key (a one-time start-up cost) from the local water committee or local operating entity, and load up the key by using their m-money private accounts or by cash payments. In Kenya, where m-money accounts are widespread and practically no households are without at least one mobile handset, access to the cashless payment system is virtually universal. Safaricom facilitated a special low, "at- priced M-PESA transaction fee for the LIFELINK project to reduce the added cost to villages of making payments, which are often as low as Kshs 100 (USD 1.25) - the lowest permitted top-up payment on the system.

This ICT-enhanced project is designed to convert existing hand-pumped or unused boreholes, which often have operating problems, to automatic pumping systems. The project thus

provides reliable, safe and automatically pumped ground water for village communities within a catchment area where villagers may have had to walk several kilometres to collect water from a hand-pumped well or impure surface water source. The system is very reliable and all components have an expected operating life of over 20 years. In addition, Grundfos LIFELINK provides online monitoring (typically via a mobile operator’s data channel) and provides preventive and as-required maintenance for a set annual fee, to ensure continuous operation.

The operating objective is to establish the LIFELINK system in collaboration with local water authorities or local village water committees. Whereas the system is essentially a single point supply, the local water committee or operating entity sometimes also extends pipes from the LIFELINK system to the local school, clinic, houses, or to various public service points. The capital cost of the system is typically !nanced by a bank or donor (to date, usually the latter), while the operating cost is managed through the maintenance contract with Grundfos LIFELINK. Both of these functions are enabled through the communications channel, which monitors operations and the water "ow. Also, the revenues are monitored and payment can be transferred directly from the water account to the !nancier and maintenance contractor.

Key takeaways:

The creative use of remote monitoring and m-payment to enable automatic maintenance, operation and loan repayment;

The use of cashless operation of the water taps through electronic keys which villagers are able to top up through m-money accounts or cash payments at agency kiosks.

http://www.grundfoslifelink.com


22 23

Location-based services (LBS) and traceabilityCompanies can use LBS to tailor information and value-added services to the locations of their clients. LBS are information services that use the mobile network’s ability to determine the geographical position of the mobile device. This means services can be tailored to speci!c locations when accessed by users with their mobile devices. LBS are used in a variety of contexts, such as health, entertainment, work and personal life or to locate nearby pharmacies.

The other application of LBS in developing countries is related to tracing and tracking agricultural produce, such as fresh produce, bulk foods, seafood and livestock. It can help capture produce origin, processing history, or distribution and location of the product after delivery. Traceability becomes increasingly important for a variety of reasons, including increasing consumer demand for ethically-sourced food and quality-certi!ed food. Food and safety government regulations also increase the demand for traceability.23

Big data analysisCompanies can use big data analysis to re!ne their products, services and business operations. Several companies serving BoP markets also accumulate signi!cant client data and generate additional revenues, by providing third parties with access to insights based on aggregated anonymised datasets. In these cases companies must adhere to privacy regulations and data security laws in both the countries in which they are headquartered, as well as in countries of operations. Data sets are growing in size because they are increasingly being gathered by ubiquitous information-sensing mobile devices, software logs, cameras, radio-frequency identi!cation readers, and wireless-sensor networks. In addition to this, there is also a strong trend for governments to make their data publicly available, called ‘open data’. This increases the availability of big data sets even more.

Big data refers to the collection of data sets so large and complex that they become impossible to process using traditional data-processing applications. By analyzing large data sets from a variety of sources, important correlations can be found. This can be helpful in a variety of areas, such as identifying consumer or business trends, preventing diseases, combating crime, predicting traf!c conditions and numerous other applications.24 Using this new data, companies can adapt their products and services to the needs and demands of low-income consumers. However, big data is still in its infancy, especially when it comes to BoP markets. Based on the ease of capturing data and its potential value, the !nancial sector and information industries are the early adopters of big data.25 Companies serving BoP markets in these areas should pay particular attention to big data opportunities.

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Sustainable Harvest Information Tracking System for Producers

CASE STUDY 3

Using mobile technology to enhance farm management, training skills and market accessSustainable Harvest is an importer of high quality specialty-grade coffees from 15 countries around the world. Its unique Fair Trade Relationship Coffee model promotes investment in farmer training and development through improved livelihoods in coffee communities to bring a reliable, traceable, and premium product to the coffee roasters. Founded in 1997, Sustainable Harvest has staff in !ve of!ces in Latin America, East Africa and the United States that serve as global training centres for the supply chain. The company has around 200,000 farmers supplying coffee to its retail markets. Its staff creates and maintains communication networks, connectivity and support along the supply chain “from farm to cup”.

Sustainable Harvest developed the Relationship Information Tracking System for Producers (RITS Producer) in 2010. RITS Producer, and a related educational app RITS Ed which offers training videos, is a mobile application accessible by smartphone web browsers. It is designed to improve the livelihoods of smallholder coffee producers by coordinating production information, providing training materials and improving their product though standard quality techniques. This helps them increase their cooperative’s competitiveness, ef!ciency, communication and logistical data "ow between all members of the supply chain. While the application is optimized for users of the iPad and iPhone platforms, it can be accessed via any web browser or smartphone. For example, most or all applications are expected to be developed for Android devices.

The RITS Ed app provides a library of educational videos in Spanish, English and Swahili to help coffee cooperatives set up and deploy a fully-equipped quality control lab, utilize the international cupping standard, and prepare green coffee samples for shipment. With the app, training materials are accessible in any region of the world, regardless of continual access to regular electricity or Internet. Once downloaded, the app works of"ine. For example, the RITS Ed: Cupping

app provides 10 videos with instructional footage in specialty coffee processing, tasting and quality control from experts in: cupping rules and protocols; quality lab equipment and supplies; preparing and performing a cupping (tasting) session; and green coffee grading and defect evaluation.

An example illustrating a successful RITS implementation is the Kilicafe case in Tanzania. Kilicafe is the brand name of the Association of Kilimanjaro Specialty Coffee Growers in two areas - the highlands near Mount Kilimanjaro and Mount Livingstone in the southwest. Sustainable Harvest staff worked with Kilicafe in the northern area at four washing stations, to track coffee as it went through each step of processing. Sixteen people (four from each washing station) were trained on everything from basic computer skills to the operation of the RITS system. By tracking key data starting from individual farmers, Kilicafe received the tools needed to maximize availability of their highest quality coffees and identify areas for quality improvement overall. This enabled Kilicafe to better meet the needs of their roaster customers. To date the program has registered almost 3,400 farmers and has tracked 131,485 kilograms of coffee. Additionally, RITS Producer reduced the time spent collecting information for the grower certi!cations by 65%. One of Kilicafe’s major buyers (for Allegro Whole Foods) commented: “the information available to them via the RITS system gave the cooperative a large advantage over others in terms of Allegro#s consideration of them as a supplier by providing so much more information about their coffee.”

Training videos can help coffee farmers improve their product quality.

Tracking coffee assists the coffee co-operative to maximize product availability for their roaster customers.

Key takeaways:

An advanced mobile application effectively deployed as a tool for improving production ef!ciency, training and the livelihoods of small-scale farmers;

A tool creating and strengthening both farmers and cooperative leaders who are equipped to pass the training along to their peers, helping to increase and sustain farmer viability and market participation.

http://www.sustainableharvest.com

S T R AT E G I E S F O R L E V E R A G I N G I C T I N I N C L U S I V E B U S I N E S S M O D E L S

24 25

Strategies for leveraging ICT in

inclusive business

Photo Credit: Kilimo Salama

Starting with simple SMS-based mobile applications, companies can take advantage of mobile technologies to better tailor their products and services to low-income consumers.


Companies must adapt their strategies to the local context of BoP markets – that is, develop products and services that are highly customized to the circumstances of people living in remote villages or poor urban areas. Tailored products and services are more likely to be adopted by consumers. Furthermore, there are still a range of services not yet available in low-income markets and so new markets can be created by tailoring them to the needs of low-income consumers. Companies can create innovative and valuable services and products for low-income clients by leveraging mobile technologies. For example, personal insurance in Ghana was until recently a nascent market, with a per capita penetration of less than 6%. In less than a year, a partnership involving the mobile operator Tigo introduced micro-insurance and doubled this market. A similar example is Handygo, an Indian aggregator for mobile content and media, which provides information (such as weather) relevant to the subscriber’s geographical location using location-data services.

This chapter demonstrates how companies can tailor their products and services to the context of local BoP markets by leveraging mobile and other innovative ICT technologies. This enables companies to save costs, increase revenues and improve their business functions.

In particular, they can do so by:

By pursuing these four strategies through ICT solutions, companies can successfully broaden their inclusive business models, create new markets and provide low-income people with access to innovative products, services and job opportunities. This chapter focuses on these four strategies.

Handygo’s Behtar Zindagi – mKisan

CASE STUDY 4

Providing hyper-local content using Location-Based-Service (LBS), regional Interactive Voice Response (IVR), SMS and call centreHandygo Technologies is a leading mobile value-added service (MVAS) provider to India’s major telecom operators. Launched in 2000, Handygo provides a comprehensive range of applications and content for entertainment and infotainment such as ringtones, videos, messaging, cricket scores and recently, m-commerce and mobile e-books and magazines. As subscribers use these value-added services, it increases their overall minutes of usage, increasing the revenue for the telecom operators, and Handygo shares in the revenues.

In 2009, Handygo, launched ‘Behtar Zindagi’, a mobile-based comprehensive information service tailored speci!cally for the rural population in India. This service provides information and advice in the domain of crops, livestock, market prices, weather forecasts, !nance, education, and health care for women and children. Behtar Zindagi has been launched in 16 different regional languages (both as SMS and Voice SMS), with the content tailored to each state in which the service is available. The service also includes subscriber support, which educates users about the usage and bene!ts of this service, and makes use of IVR technology to help people who are illiterate.

Behtar Zindagi’s initial concept was based on extensive research involving rural stakeholders, institutions and experts. Content is curated from a wide range of institutions and organizations, such as government, NGOs, and universities. The service is supported by all handsets and provides 24x7 availability. A regional voice-based menu and LBS ascertains that the information is targeted to the user’s current location. For example, a user in Andhra Pradesh receives information relevant to that state (such as weather, crop advice, market prices, livestock and alerts). Behtar Zindagi has over 1.67 million subscribers and represents 20% of Handygo’s annual revenue. In 2012, Handygo invested USD 1.6 million to expand the services to six additional states with the mKisan project and set up a special call-centre for the rural service.

In addition, Handygo experimented with various marketing approaches to increase the loyalty and satisfaction level of the users and launched a major awareness campaign for the rural service in Rajasthan, including 100 special vans travelling to rural villages to promote and explain the service. In 2013, Handygo used special marketing vans in Madhya Pradesh, Bihar and Karnataka, which travel from village to village, helping to raise awareness of the service. Handygo is actively working with Self-Help Groups to involve women farmers for personalized advisories on organic farming under a special gender initiative of Behtar Zindagi – mKisan.

“I subscribed for mKisan service in the month of November to access information on Cattles. The information helped me in identifying diseases like pneumonia, diarrhea & constipation and its timely treatment. Recommendation on feed was also useful. Now my cattles is in good condition and are producing about 2 - 3 liters more milk in a day with approximately INR 150 - 200 increase in income”.

- Ashok Dhakad from Ratlam district of Madhya Pradesh (Central India)

Key takeaways:

How to provide hyper-local content using LBS;

How to use regional IVR for illiterate customers; and

How to leverage other partners to create a good information offering.

1 Improving market research

2 Innovating pricing and payment design

3 Expanding marketing and deepening consumer relations

4 Transforming sales and delivery channels

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http://www.handygo.com/


26

Key takeaways

27

Improve market research

Photo Credit: Intelecon

Companies can save time and cut costs by up to 70% by using mobile data-gathering technology for their !eld surveys instead of paper-based surveys.

Digital and mobile-based surveys can be created with available user-friendly software and then used in !eld surveys, saving companies costs and time.

Mobile research platforms allow companies to create small surveys that are answered directly by low-income consumers on their phones in exchange for airtime. This can be done across regions, at extremely low costs and within just a few days.

Companies can take advantage of the spread of mobile technology to improve data collection and aggregation in BoP markets. More data of higher quality facilitates better product and service adaptation. Mobile technology lowers the cost and increases the speed of data collection. This can address one of the biggest challenges of targeting BoP markets: the lack of market insights and market data concerning interests, preferences, spending habits, and purchasing power of low-income consumers related to speci!c products and services.

Mobile-based data collection tools make paper surveys a thing of the past.


Jana

CASE STUDY 5

Fast and low-cost consumer surveys through mobile research platform

Jana (www.jana.com) addresses the three challenges of data collection in BoP markets – time, cost and scale – simultaneously. Formerly known as txteagle, Jana is the world’s largest mobile research and rewards platform. With its partnerships with 237 mobile operators, Jana can reward 3.48 billion consumers with airtime. Major companies like Wrangler, P&G, Unilever, Danone, and Microsoft have used the Jana Mobile Rewards Platform to conduct consumer research, launch product promotions, and create consumer loyalty campaigns.

A company that would like to investigate consumer interest in a speci!c product, or reaction to a brand, can submit a small questionnaire to a Jana panel of users. Registered panelists log in to mCent, see a list of surveys and offers available. If they participate, they earn airtime. Respondents can access the survey via any means – computer, tablet or mobile phone. Once the answers are collated they are sent to the client in an Excel spreadsheet for further analysis. Responses are collated in as fast as 24 to 48 hours. The cost per respondent starts with USD 0.15 per question; this would be USD 1.50 per respondent for a ten question survey.

Because of the speed and scale that Jana provides, companies can acquire data on their target consumer’s behaviour, motivation and interests virtually in real time, providing the ability to, for example, modify marketing campaigns mid-stream. Of course, Jana is limited by the complexity of

information it can provide: it is suited to simple, direct and quanti!able questions such as interests, preferences and perceptions of products. For the basic surveys, respondents are usually not selected and responses are on a “!rst come !rst served” basis. As a result, income, gender and other demographic factors may be heavily biased in one direction. However, Jana also offers custom survey options where Jana can target speci!c types of consumers. Respondent targeting is available by gender, location and age, though not by income. Jana often targets the audience by sending invitations based on the respondent breakdown requested.

Jana is a good tool to gather market intelligence and its power lies in its ability to provide speedy, scalable responses. It also redirects some of the market research and advertising money spent to the low-income consumers responding to Jana’s initiatives.

“With its platform, Jana is changing the face of advertising by enabling us to invest in targeted, mobile-based campaigns that put advertising dollars directly into the pockets of the ‘next billion’ consumers our clients are most eager to reach.”

- Maurice Lévy, CEO, Publicis Groupe

Key takeaways:

The bene!ts of using mobile research platforms;

How low-cost access via ICT reaches a large number of consumers;

That a reward system ensures quick consumer response.

Low-income consumers can earn airtime by answering questions and responding to surveys.

http://www.jana.com/


28

New mobile market research options and toolsAny company requires good market data on their potential customers, and this is no different when it comes to inclusive businesses. Market research is not only needed during the start-up phase of a business to assess the market opportunity and create the product or service offering, but also later on, in order to gauge customer satisfaction, and to receive input and feedback to improve or enhance a product or service. Both start-ups and established companies require reliable and detailed data in order to develop their business case, either to attract investors or to make the case and create a budget for new product and service lines.

However, procuring up-to-date product or service-speci!c data from BoP target markets is expensive and dif!cult, especially when a company is interested in targeting large, regionally and culturally diverse countries (such as Russia, China, India, Brazil) or more than one country. This often requires several !eld surveys, often to rural and remote areas.

Collecting !eld data the old-fashioned way – !lling in paper forms, transporting them to a central location, and transcribing them – is slow and cumbersome. It delays the availability of information and related decision-making. Data collection with a mobile phone can dramatically improve the speed and quality of information obtained in the !eld. Because mobile phones can transmit data from even remote locations, responses collected from the !eld can be entered on the mobile phone and uploaded to a central server to be analysed, all within a day.

Mobile data gathering tools can cut costs by over 70%More and more data is gathered by mobile phones, especially in emerging markets. The main driver is cost reduction: for example, the World Bank conducted a nationally-representative survey in Guatemala among poor communities using mobile-phone-based data-collection software and was able to compare this to an earlier paper-based survey. They documented a 71% decrease in data collection costs compared to paper, and at the same time improved data accuracy. Key bene!ts over traditional data-gathering methods such as paper-based !eld surveys can be summarized as follows:

There are two types of mobile data-gathering tools. The !rst type is via software and applications which are used for, and support, a !eld survey where interviewers speak directly to respondents. The second is a mobile research platform which can receive answers from respondents remotely.

Mobile-based data-gathering software for !eld surveys Companies with expertise and experience in designing questionnaires or just planning a small face-to-face survey can access online software tools that support developing questionnaires digitally for mobile phones. These tools provide customizable databases and easy-to-create analytical reports.

The available mobile-based data-gathering tools are offered as customizable self-service web-based software. They are typically open-source and can be used by anyone. They are either free or based on a freemium model, meaning that the basic use is free, but additional and more sophisticated functionality, features or additional services come at a cost.

While mobile data software and methods have many advantages, they still require the company to create the survey itself and hire a !eld team to execute the survey. Another option is to outsource the research to specialized research companies that use mobile technology for data gathering. Costs vary across countries and depend on factors such as travel required and length of questionnaire, but are typically in the USD 20 to 80 range per questionnaire. The questionnaires can be delivered to the !eld surveyors wirelessly using the mobile telecommunications network. The !eld surveyors receive the questionnaire on their mobile phones, and then use their phones to enter and store the responses to questions. This method also enables them to send responses back to a secure server for instant analysis, again via a mobile network.

Companies should research which mobile phones or models are most suitable for the data-gathering tools; for example, some of these tools require that a speci!c application be downloaded to the phone. Depending on the mobile data-gathering tool, the data can be stored in the cloud, allowing real-time visualization of results and analysis, and can be exported to third-party data-analysis programmes. Data can be encrypted to ensure con!dentiality and access restricted by password. However, even using mobile technology, this type of research can still take weeks.

29

Source: Adapted from Nokia

FIGURE 10

Bene!ts of mobile data gathering

Alternative forms of data collection

Paper forms Inexpensive Slow data transcription Costly to introduce changes

once printed

Laptops Fast data transfer Short battery life Impractical and expensive

Mobile phone data collection

Speed Fast data transfer from

remote locations Quicker analysis of results

Practicality and availability Long battery life Easy to carry and protect GPS location information

Reduced costs Lower transportation costs Easier access to respondents Single data entry leading to

reduced cost

Data quality Ability to identify data

problems quickly Ability to correct instantly


Checklist: How to integrate mobile-based tools in your market research

What is your level of market knowledge?

Low - Basic information on target market is missing

In addition to consulting market research reports and secondary data, consider conducting a large !eld survey using mobile data-gathering tools.

Medium - General understanding of marketConduct a self-designed survey among existing and target clients administered by market research organization with mobile data gathering tools. This will allow you to identify the speci!c needs and demands of your target market.

High – Good understanding of low-income household requirements, more data needed to improve & tailor business model

Use a mobile platform with a limited number of speci!c questions. If possible (in other words if customer phone numbers are available) incentivise clients to !ll out survey on their phone in exchange for airtime or other rewards; SMS aggregators might be able to help.

At what stage of product/service development are you?

Initial idea/early concept stage

Conduct large !eld survey to test product/service concept with target clients and use mobile data-gathering tools.

Seize opportunity for co-creation and involve future customers in design and re!nement of product/service offering.27

Pilot-ready prototype, but more data needed to re!ne product/service

Develop survey using available questionnaire design software tools and conduct survey with target and/or pilot clients to evaluate product-market !t.

Existing product or service Use third-party mobile research platform to receive clients’ opinion on a variety of topics such as product or service features, pricing and payment options, marketing channels or brand perception.

What is your main challenge related to conducting market research?

Time Use third-party mobile research platforms – even if they allow only limited and simple questions. This approach can lead to large datasets very quickly.

Costs

Use mobile research platforms – their solutions have a good cost-bene!t ratio and can ensure that a potential second stage !eld survey is shorter and better targeted, as many initial questions have already been covered

Another option is to design a survey in-house with available software, reducing the cost (could be a learning curve, needs some basic understanding of survey technique).

Expertise Outsource market research to companies that specialize in BoP markets and that use mobile-based data-gathering tools in order to save time and costs, as well as gain expertise.

Approach Status

Mobile research platforms for simple questions and fast resultsFor companies requiring more rapid market information within 24 to 48 hours, there are mobile market research platforms that have built up massive databases of mobile phone users, speci!cally including low-income consumers. Such platforms can be used for exploratory and simple surveys (for a maximum of 10 questions) at very low costs. They can be conducted across a large number of countries and results can be obtained within just two to three days. They are particularly useful as a !rst step to design a face-to-face survey or to test certain assumptions.

When planning to introduce a new product or service to BoP markets, it is a challenge to gauge whether this product or service actually addresses perceived needs or interests of low-income consumers. There are many examples of products and services failing because low-income consumers did not see the value of a certain offer, even though they were generally considered to need it.26

There are several organizations that specialize in BoP markets and use mobile phones or handheld computers to collect data from large panels of users. Instead of sending out teams of surveyors to collect data, these mobile research platforms have

built up a database of mobile phone users in select countries. In exchange for answering questions, respondents get a small airtime payment, which is sent to their phone immediately after completing the questionnaire.

Companies looking for quick information about their brand, marketing strategy or the willingness of consumers to pay, can use these platforms. While these low-cost research options have the advantage of speed, they have the disadvantage that respondents cannot be selected in advance to !t certain categories, for example, an even split between gender, or a speci!c distribution of age. The people who respond to the questions are random. Nevertheless, these platforms provide companies with some insight into their product quickly, and are able to poll massive user numbers across various countries. Certain research platforms do offer additional customized surveys where the sample can be pre-selected.

Companies can acquire market data and insights faster and more cost-effectively by leveraging such new mobile data-gathering software and platforms. Due to the lower costs, these tools can be used more frequently to re!ne products and services and better understand user needs and preferences.

Key questions

*

*


30 31

Innovate payment and pricing design

Key takeaways

Offering m-money as a convenient payment option for their consumers in countries which have a suf!ciently high m-money penetration can help companies to differentiate themselves.

Utilizing m-money can be up to 38% cheaper than formal banking options for companies that have to process a large number of transactions involving small amounts.

Companies should consider offering m-money as a new payment channel for their products if they either cover the transaction costs (so that using m-money is free for the paying client) or if transaction costs are very low (such as 2% or less of the product value). Otherwise consumers generally will prefer to pay cash, in particular for lower cost goods and services.

Creating #exible and risk-reducing pricing models is critical for companies that want to successfully position themselves with affordable products and services in BoP markets.

Companies targeting BoP markets have to provide small, frequent and #exible pricing and payment options that allow consumers to adapt payments to volatile income streams and scale down payment obligations quickly if necessary. Low-income consumers tend to be risk-averse and often cannot afford to pay large upfront lump sums or regular monthly bills. Companies can use innovative payment designs and pricing models to allow for these factors.

More frequent and small payments can increase the cost of handling cash for the companies. M-money is a viable solution in countries where the service is widely used and available. People in low-income markets are usually excluded from formal !nancial services. Therefore utilising m-money is often the only technology-based mechanism for companies to receive payments and increase the convenience for their clients. The ability to rapidly process large quantities of payments quickly, irrespective of source proximity, can enable scale and reduce costs.

Photo Credit: Reuters Market LightRML gives farmers "exible subscription packages to choose from for personalised market information.


Mobisol

CASE STUDY 6

Flexible pricing options through m-money and remote monitoring technology

Headquartered in Germany and founded in 2010, Mobisol offers low-income customers in Kenya and Tanzania a high-quality, long-life solar home system. Mobisol has to date sold over 1,700 solar home systems. This is possible through an innovative payment scheme using m-money technology and a GSM modem included in the solar controller, facilitating remote monitoring over the mobile network. Mobisol’s pay-as-you-go method circumvents initial investment hurdles for customers who previously could not afford a high quality solar home system. Using the mobile banking service M-PESA, accounts can be paid off conveniently and from almost everywhere by mobile phone in a 36-month instalment plan, after which the customer owns the product. The remote monitoring technology allows the system to be locked automatically in the case of overdue repayment. Customer churn or failure to pay has been less than 5%.

The Mobisol system is available in four different sizes and the pricing ranges from USD 9 to 43 per month. The smallest option can light two rooms and charge four mobile phones per day. The largest system powers multiple lights, consumer appliances such as a laptop or TV, a battery-run refrigerator and charges up to ten mobile phones simultaneously. The energy obtained through the solar system costs customers substantially less than what they currently spend on existing energy sources such as kerosene, candles and car batteries.

Addressing the importance of risk-reduction for low-income customers, the Mobisol solar home system comes with a three-year warranty on the battery and a twenty-year guarantee on the solar panel. Their locally-based technical service teams provide free maintenance and repair throughout the three-year warranty period, ensuring the usability and longevity of the system. Using the GSM modem included in the solar controller, technical data from the panel and battery is tracked and stored on a web-based database. Data from the solar systems is transmitted to local partners and also to the network centre in Berlin, Germany. Maintenance problems can thus be addressed swiftly. Client communication is done con!dentially through SMS with regular maintenance reminders and other important details pertaining to the Mobisol system.

Mobisol partners with mobile operators to use their network for the m-money transfers as well as the remote monitoring; in return the mobile operators charge Mobisol a small percentage of the monthly fees.

Key takeaways:

How to minimize risks both for the company and clients by offering installment payment enabled through remote monitoring technology and m-money;

How to offer a variety of products at different prices; and

How to minimize risks for clients by providing ongoing customer service.

A Mobisol sales representative explains the different pricing and payment options.

Different sizes of solar home systems enable low-income clients to choose the model that meets their speci!c needs and income.

http://www.plugintheworld.com/mobisol/


32 33

M-money’s global spreadThe m-money industry is continuing to expand rapidly around the world. By the end of August 2013, there were 192 operational m-money services28 in 72 countries, 41 of which were launched in 2012. There were almost 30 million active users of m-money services who performed 224 million transactions totaling USD 4.6 billion during the month of June 2012 alone.30 In countries with successful m-money operations it has had a dramatic impact. For example, in Uganda, the amount of money which moves through m-money platforms annually is equivalent to more than 20% of its GDP; in Tanzania, m-money transactions are equivalent to more than 30% of its GDP, and the same !gure in Kenya is more than 60% of GDP.29 M-money has so far been the most successful in Kenya, under the M-PESA brand. This has been largely due to the large market share of Safaricom, little regulation at the start of the service, and the low level of banking infrastructure, especially outside the capital.

Despite the impressive m-money provider growth, replicating the success of Kenya’s M-PESA in other countries has been challenging. The GSMA points out that only 14 m-money initiatives have reached suf!cient scale, in other words, wide adoption in their respective countries. The challenge for companies is that while m-money may be available, penetration could be low and therefore may not be a viable alternative to cash or a substitute for the formal banking system. Companies should therefore watch m-money developments in their countries of operation carefully, and evaluate whether m-money can help reduce costs and offer a valuable payment avenue for their target clients.

The successful m-money operations have initially focused on just one or two core products rather than a broad range of products. Most have opted to focus on person-to-person

(P2P) transfers and some have pushed bill payments, bulk payments, or merchant (retail) payments. Airtime top-ups and P2P transfers still dominate m-money. Bill payments, usually to utility companies, are growing fast but represent only 6% of the volume of total m-money transactions compared to 61% of airtime top-ups.

What the global numbers hide is the variation between regions: bill payments are particularly popular in South Asia, accounting for 53.1% of transaction in June 2012. While starting from a low base, merchant payments in West and East Africa grew 93% and 31%, respectively28 between 2011 and 2012. Companies need to watch these regional trends to capitalize on opportunities of using m-money for their business.

New cashless payment optionsCompanies can take advantage of m-money in the following areas:

They can use m-money to pay their suppliers and employees, and save costs compared to traditional banking services. Furthermore m-money can assist companies dealing with suppliers or employees who may not have a bank account and would normally need to be paid in cash.

Companies can also use m-money to facilitate payments to their clients, for example, to transfer a payout to a micro-insured person or refund customers. This can also help reduce costs.

Last, but not least, companies can offer m-money as a payment channel to their target clients. This often sets them apart from competitors, and leads to higher customer satisfaction due to increased convenience for the clients, as well as time and cost-savings.

FIGURE 11

Mobile money services around the world

Source: State of the Industry: Results from the 2012 Global Mobile Money Adoption Survey, GSMA 2013

FIGURE 12

Global average number of transactions per active customer account, June 2012

Source: www.gsma.com/mobilefordevelopment/gsma-announces-initial-!ndings-from-mmu-2013-global-mobile-money-adoption-survey

Two or more mobile money servicesOne mobile money servicePlanned mobile money services Average value of transactions (USD)

0.2 0.6

1.4 34.9

1.6 33.4

1.8 36.8

3.5 19.3

Bill payments

Cash-ins

Cash-outs

P2P transfers

Airtime top-ups


Switching to m-money reduces costsFinding estimates of the costs to a company of dealing in cash versus using the traditional banking system is dif!cult because there is little publicly available data. M-money agents might be a good proxy for estimating the costs of handling cash, as m-money agents need to have suf!ciently high cash reserves at their premises to be able to allow cash-out payments to clients. In their case, the cost of handling cash can reach a maximum of 24% of total operating costs.30 These liquidity costs include bank fees and the transport of cash. While the cost of handling cash may be lower for a private business targeting BoP markets (as visits to a bank do not need to be as regular), it can still be signi!cant. A company may also have administrative and overhead costs because of the manual processes used for cash auditing and payment reconciliation. Companies should therefore investigate if m-money reduces that cost.

Businesses can in particular reduce costs by paying staff, suppliers and customers electronically. For a company using m-money as a disbursement mechanism, m-money has signi!cant advantages: the administrative costs of getting money to the low-income consumers are much lower. The experiences of governments using m-money to disburse cash to citizens show that there is a sizeable opportunity here. It is estimated that governments can save up to 75% of administrative costs by moving from cash to electronic payment programmes (including m-money).

Offering clients convenient payment optionsBy offering their clients mobile payment options, companies can increase the convenience for their clients who typically have no bank accounts. 2.5 billion people are “unbanked” and 77% of the unbanked earn less than $2 per day. 67% of the unbanked say that the primary obstacle to getting formal access to !nancial services is high transaction costs.31 Branchless banking, which includes online banking, automated teller machines (ATMs), and m-money, is also 38% cheaper compared to traditional banking in the case of small amounts used by low-income consumers.32 But it is still more expensive than cash, and is thus only a good option if low-income consumers

incur costs to pay in cash, for example if they have to travel to the city to make a bill payment.

Bill and merchant payments via m-money providers experience growth What the global numbers hide is the variation between regions: bill payments are particularly popular in South Asia, accounting for 53.1% of transactions in June 2012. While starting from a low base, merchant payments in West and East Africa grew 93% and 31% respectively between 2011 and 2012.33 While bill and merchant payment options via m-money are on the rise, even in Kenya, the most successful m-money country in the world, 99% of retail transactions are still cash-based. Of the 1% of transactions that are m-money based, the average transaction value is fairly high at USD 75.34 Thus m-money is currently only really attractive for high-value retail transactions. However, companies which serve BoP markets and need clients to pay regular bills should investigate if m-money bill payments are a viable option for their inclusive business model.

Source: Safaricom Annual Reports & Presentations.

FIGURE 13

M-PESA agents vs subscribers

*

0Q1-2008 Q1-2009 Q1-2010 Q1-2011 Q1-2012 Q1-2013

AgentsSubscribers

2,000,000

4,000,000

6,000,000

8,000,000

10,000,000

12,000,000

14,000,000

16,000,000

18,000,000

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

Subscribers

Agents

How companies can decide whether to use m-money

Companies that are considering the use of m-money in their inclusive business models, need to investigate the following questions:

Is m-money widely enough available and used by low-income consumers in the country or region of operation in order to be considered a viable payment channel? Does an extensive network of m-money agents exist?

Does the m-money provider offer the particular payment service the company is interested in, for example, bill payments, fund transfers (for paying employees or suppliers) or retail payments?

What are the costs of using m-money and who will bear the cost – the company or the client or both? Is the m-money transaction cost signi!cantly lower than other simple alternatives such as cash payments?

*


34 35

For companies making these assessments, there are some useful indicators:

The size of m-money agent networksThis is an important factor and indicator for m-money adoption in a country.35 This includes the network of shops, street vendors and pre-paid airtime voucher resellers that provide cash-in, cash-out services, educate subscribers and build trust. A rapidly growing agent network generally strongly correlates with a rapidly growing m-money subscriber base.

The costs of m-money servicesCustomers in Kenya expressed a willingness to pay about USD 0.13 for an electronic payment of USD 6.25 or above, equal to a 2% transaction charge.36 However, there are only a limited number of retailers who accept transactions of this small size. These are retailers like petrol stations, shops, pharmacies, supermarkets and agricultural supply stores. This !gure can help a company to decide whether m-money is a viable option for their product, though this might vary from country to country.

The range of available m-money servicesThe availability of m-money products, such as pension payments, health insurance payments and company salary payments, is indicative of the vibrancy of m-money in a country. The more active m-money users and applications there are, the more likely it is that low-income users will adopt m-money as well.37 Once m-money operators have reached critical scale, they usually tend to expand the range of available products. In Kenya, the initial success of m-money was based on P2P transfers. Since then M-PESA’s product portfolio has grown and now spans savings products, alliances with banks offering insurance, credit products and the ability to pay merchants via m-money. If there are multiple options for making and receiving payment via m-money available in a country, companies should consider incorporating the relevant options into their business model. As volumes of m-money transactions increase, transaction costs will rapidly decrease and m-money can be a viable alternative to cash.

M-PESA & TrueMoney

CASE STUDY 7

Understanding the different market context and opportunities for m-moneyM-PESA started out as a P2P money transfer service in 2007. It was launched by Kenya’s dominant mobile operator Safaricom, which is, in part, owned by the world’s largest mobile operator Vodafone. M-PESA has been very successful and is the best example of a typical m-money service serving the unbanked and under-banked. In Kenya, M-PESA has over 18.2 million registered customers, more than 78,800 agents38 and has registered USD 5.27 billion in P2P transfers since its launch in 2007. There is scarcely a household in Kenya that is not a user of M-PESA; in 2012, 60% of the Kenyan GDP was transferred by M-PESA. It was the need to transfer money that initiated M-PESA in Kenya: many families were split between rural and urban areas and required a money transfer service.

In Thailand, TrueMoney started its m-money operation focused on bill payments. TrueMoney is a subsidiary of True Corporation (TrueCorp), a conglomerate with interests in mobile, pay TV, broadband, coffee shops, online gaming and radio. TrueMoney was introduced to enable customers to

pay their various TrueCorp bills more easily. Due to the large and varied nature of the TrueCorp conglomerate, TrueMoney could guarantee a certain volume of transactions and persuade retailers to offer TrueMoney bill payment services. The TrueMoney eWallet can be topped up by a bank transfer from linked accounts at four banks, at the ATMs of one bank or using a scratch card. Scratch cards are sold through the airtime re-seller network of the mobile operator TrueMove.

Key takeaways:

m-money services and their uptake are highly variable from country to country and are dependent on local context such as ecosystem, banking penetration, !nancial services demand and mobile industry;

m-money needs suf!cient scale to become useful and reach low-income consumers.

http://www.safaricom.co.ke/


Choosing the best pricing modelWhich pricing model best suits a business model depends among other factors upon the level of product awareness amongst the target customers. For consumers a simple pricing model and the opportunity to test the product or service before its purchase is very important. Companies also need to limit high up-front costs and allow for installment payments.

Freemium model: The freemium model provides a basic product or service for free but charges a premium for value-added features. This pricing model is attractive for risk-averse consumers because it allows them to test a product or service without risk. If they !nd it valuable they have the option to purchase more advanced features.

A variation of the freemium model is the reverse-charging model, where the consumer does not pay at all: company A provides services to the target clients on behalf of company B and company B pays company A. An example is a pharmaceutical company that pays another company for drug veri!cation services; the pharmaceutical company is willing to pay as the ability to verify the product as genuine is a unique selling proposition and increases sales markets where counterfeit drugs are common. Another example is government service outsourcing, where a company provides public services on behalf of the government. Public Internet services have been outsourced in the past.

Transaction model: In this pricing model, the user is charged a fee per transaction. Unlike in a subscription model where consumers pay regardless of their use, the transaction model reduces the risk for consumers because they only pay for what they use. The mobile operators revolutionized the pricing model for telephone service by switching from a contract-based monthly subscription model to a pre-paid pricing model on a ‘pay as you go’ basis. This model continues to be largely responsible for the rapid growth of mobile services among low-income consumers.

A variation of the transaction model is the Revenue-Share model, where instead of a per-transaction fee, a percentage of overall revenues is charged. This applies only for B2B transactions though. Mambu is a case study of how a revenue-share model can work.

Market Maker model: This model is usually driven by an established, big company, with a presence in the target market it can take the !nancial risk of creating a new product and is looking to increase loyalty amongst its existing client base. This model reduces risk for companies by utilizing existing resources to launch a new product that will ultimately bene!t their original product. This is not the space for small entrepreneurial companies. This model has the following features:

It introduces a new product to a market by using the company’s brand recognition so that it “makes” the market for a product that previously was not available in the market;

It leverages off an existing product/service; and

It offers loyal customers free products but with the option of value-added services through a transaction (pricing) model.

The case study Kilimo Salama shows how a large organization introduced a new service (farmers insurance) to their existing farming input business.

Freemium model Reverse-charging model

Provides a basic product/service for free but charges a premium for value -added features

Instead of charging the end-customers, companies supplying the service charge a third company

Transaction model Revenue-Share model

User of a service pays a fee for every transaction; that is every time he/she uses the service

Applies to B2B only: a company receives payment as a percentage of the revenue of the company it provides the service for

**


36 37

Mambu

CASE STUDY 8

Developing innovative pricing models made possible through cloud computing

Mambu, founded in 2009 and based in Germany, is a software company that provides retail banking software services delivered via the cloud, also called Software as a Service (SaaS). Mambu provides services to MFIs and other retail banks and is being used by 100 organizations in more than 27 countries around the world, serving around 470,000 clients. It enables MFIs to provide loan and deposit services. The founders of Mambu realised that many MFIs were still paper-based and therefore unable to either effectively scale their businesses or deliver services cost-effectively to their customers.

Initially starting with a subscription pricing model (that is, a fee per licence), Mambu went through several pricing model iterations in order to determine the appropriate fee for their service:

At !rst, Mambu based its price on the number of clients an MFI had, but they quickly realized that clients were not equal – an MFI in Mexico might have few clients but high average loan amounts (such as USD 3,000), while an MFI in Africa might have more clients but low average loans in the USD 10s or 100s;

Mambu then tried to base their prices on the number of users of the software within the MFI but this was also not favoured, as the bene!t per user type varies – for example, the !rst few users make a dramatic difference to the MFI while extending it to additional users is a negligible cost. There is no extra cost if an MFI has 5 or 50 users and there is no advantage if Mambu limits the features and functionalities to create arti!cial pricing scales.

Finally, Mambu switched to a bold and innovative way of pricing their SaaS, namely a service fee on the portfolio revenue. Mambu receives between 0.5% to 3% of the revenue of the MFI. Also, clients pay percentage-wise less as they grow their revenues. Mambu feels that this model has several advantages:

Mambu fully partners with the MFIs and aligns their joint interests – since Mambu hosts all the MFIs’ critical client and other data, Mambu is already a key part of the business of these MFIs;

This pricing model is simple and applies to any country and any banking organization; it removes any complexity and provides a more easily understood value proposition; and

It encourages the MFI or bank client to take full advantage of the software and removes any arti!cial barriers such as user restrictions or limits to features and functionalities.

Overall, this is a simpler pricing model where the client has Mambu’s full resources behind it and both parties bene!t from improved performance.

Another key advantage is that Mambu helps their clients to migrate to the Mambu banking software and helps to optimize operations. This is typically very expensive and time-consuming for traditional core banking systems but Mambu does this at a much lower cost, mainly due to online collaboration and very focussed on-site assistance. It helps clients roll-out within two to three months instead of six month plus. Also, initial cost for this set-up (as low as USD 9,000) is then credited for future service, making the set-up effectively free.

Key takeaways:

How to develop innovative pricing models;

How cloud computing facilitates a risk-sharing approach between companies.

“Our mission is similar to that of an MFI: enabling individuals and emerging enterprises to pursue economic opportunities through ubiquitous access to financial services. We just do it by making state-of-the-art banking technology accessible to everyone who wants to service this market.”

- Eugene Danilkis, CEO and Founder

Mambu provides its software to more than 100 clients in 27 countries via cloud computing.

http://www.mambu.com/


Checklist: How to choose the best pricing model

If you need to prove the bene!ts of the product/service…

and/or

If basic information or a basic service feature can be offered for free and thus attract new customers, while higher value or transaction-related services can be charged…

…choose the Freemium model.

Evaluate how much time your customers need to appreciate the bene!ts of your product (such as a day, week or month) in order to determine the optimal timeframe for a free trial.

Research whether third parties might be willing to pay for or subsidize the service/product on behalf of the customer (for example, the reverse-charging model).

Evaluate whether you can offer new customers free support for installing new products or services in order to lower the entry barrier and costs of switching.

If consumers already understand the bene!ts of the service and just want to access it…

and/or

If you can provide your service on a pay-per-use basis…

and/or

If there are any innovative business models that allow your high-value product to be supplied on a per use basis to save customer investment cost – for example, by allowing it to be rented or by having another business offer its use…

…choose the Transaction model.

Consider the appropriate “use” units (for example, time-based, per user, per transaction etc.) to build your pricing on.

If you offer a B2B product/service, evaluate whether it makes business sense to accept a small percentage of the revenue of your client as payment in order to build trust and demonstrate that you tie your clients’ success to yours.

Consider if you can retrieve your product in case of non-payment or fraud.

If you are not a market maker yourself (that is you do not have an existing presence in the market with other products or services) but would like to introduce a new service or product on a large scale…

…choose the Market Maker model.

Identify which complementary partners could ‘make’ your product or services as part of their offerings. Since this kind of partnership creates large dependencies be sure to closely evaluate potential partners and carefully consider:

Size of overlap of target markets;

Degree of consumer trust in partner brand;

Marketing capabilities of partner;

Distribution model and reach of partner.

Once a partner has been found, you will need to negotiate what revenue share your company is willing to invest in the partnership. Collect suf!cient information to ensure that you have a realistic view of your bargaining power.

…and consider the following approach: If… …then choose the following pricing model…

The dashboard of Mambu’s retail banking software service.


38 39

Checklist: How to decide whether to use m-money and choose a provider

How do you assess the bene!t of using m-money?

Competitive advantage If your company faces competition consider whether using m-money would create a unique-selling point/competitive advantage.

Potential revenue gain Evaluate whether leveraging m-money would allow you to reach more customers and if so, adapt your payment design accordingly.

Potential cost reduction Determine whether using m-money saves you costs, compared to handling cash or utilizing traditional banking. Research whether the costs savings are suf!cient to justify adopting or switching to m-money.

Do your target clients already use m-money?

Yes/Don’t knowConduct a market survey to establish what percentage of your existing/potential clients use m-money, which m-money providers they use and if they would use m-money in connection with your product/service.

No

Identify the reasons (such as lack of affordable m-money services, lack of awareness). Depending on the reasons, consider if it is feasible to conduct an awareness and consumer education campaign on m-money and perhaps offer trials in cooperation with m-money providers.

Which m-money provider should you choose?

There is only one m-money provider in the country

Approach the m-money provider, determine the cost-bene!t ratio and consider potential partnership models (such as for branding or revenue-sharing).

There are at least two m-money providers

Compare the following aspects of each m-money provider:

Costs of services

Reach within your target market

Relevance and extent of m-money agent network (for example if you want to pay employees using m-money, are there m-money agents in their vicinity)

m-money interoperability between providers exists

Identify which m-money provider best suits your needs and partner accordingly. Financial transactions can then be conducted on and between any of the m-money systems even if your clients use a different m-money provider to yours.

Does your preferred m-money provider offer the particular !nancial service your business requires?

Yes Go ahead and partner. Identify the necessary technical requirements to connect your sales, delivery and payment channels to the mobile operators systems.

No

If your business can offer enough scale (high number of transactions, current or future) then negotiate with mobile operator on launching tailored !nancial services starting with your company.

To increase your bargaining power, consider the cumulative value of m-money transactions that your service and/or product may require. For example, if you have 3,000 customers that are billed monthly, this amounts to 36,000 transactions per year.

Approach Status Key questions


Kilimo Salama

CASE STUDY 9

Linking farmer location to weather data and automating insurance premium payment and payout

Kilimo Salama was launched in 2009 and offers a micro-insurance product for smallholder farmers. It protects farmers’ investment in farm inputs (seed, fertilizer and chemicals) against extreme weather risk such as drought or excessive rainfall. Through Kilimo Salama over 100,000 farmers are insured in 2013, and it is now the largest agricultural insurance program in Africa. The service is an initiative of the Syngenta Foundation for Sustainable Agriculture in cooperation with Kenyan UAP Insurance. Kilimo Salama insurance covers the value of inputs or harvest for a range of crops including maize, beans, sorghum, wheat, potatoes, millet, soybeans, and coffee.

Smallholder farmers in Kenya previously did not have access to insurance products, since traditional agricultural insurance relies on farm inspections of losses for the claim adjustment. Whereas the transaction costs of insuring one acre are similar to those of insuring a 200-acre farm, the premiums from the one-acre farm would never cover the related inspection costs. Kilimo Salama replaces these costly farm visits with measurements from solar-powered weather stations to indicate drought conditions. The weather stations measure the rainfall and these measurements are compared with a pre-determined agronomic model specifying crops’ rainfall needs. If the pre-determined needs are not met, all farmers insured in the vicinity of that station receive a payout. Kilimo Salama is planning to use satellite imagery to be able to monitor droughts or rainfall on a larger scale.

In addition, Kilimo Salama has also used mobile technology for automated premium collections and payouts to farmers. For some of the farmers insured, the local stockists enter in the value insured, crop, and farmer details as well as register a policy with UAP by using a specially-developed mobile application.

The farmer pays the cost of the insurance as an additional fee added to the original purchase of the seeds or fertilizer. An SMS message con!rming the policy is then sent to the farmer’s mobile phone. The policy is referenced to the farmer’s nearest weather station, which transmits its data over the mobile network. All insurance payouts are processed using m-money.

The success of Kilimo Salama was established during the pilot phase. Following the drought that season, weather stations showed that there was a payout and all farmers were promptly and automatically compensated depending on the extent of the drought as measured at their weather station. Farmers who insured 10-20% of their input purchase in the pilot, increased the sum insured to 50% of inputs in the next year. In addition to providing the farmers with greater con!dence in their purchases, the insurance product has motivated more farmers to purchase higher quality inputs including hybrid seeds, fertilizer and chemicals. The use of quality inputs can more than double or triple yields. However, if uninsured, farmers stand to lose their entire investment if there is a drought. Kilimo Salama insurance therefore gives farmers the peace of mind to invest in their farming.

Key takeaways:

How the market maker model works;

How to reduce cost and automate processes through the innovative use of mobile technology; and

How the use of m-money facilitates the collection of payments and the disbursement of payouts.

The Kilimo Salama initiative uses mobile technologies to automate micro-insurance premium collections and insurance payouts.

http://www.kilimosalama.com/


40

Marketing is obviously connected with the product or service to be marketed and must emphasize the key attractive attributes for the target market. For the BoP markets this means proving the bene!ts of the given product or service, gaining the trust of the consumers and demonstrating a long-term presence in the market. New technology options, in particular mobile messaging and social media, appear to be potential channels that can create brand and product awareness. Initial research suggests that low-income households cannot be so easily reached via mobile phones and that there is still an important role to be played by trusted intermediaries. A mix of clever marketing and channel mix, combining on and of#ine approach, is likely to meet with most success.

Nevertheless, there are ways to add mobile marketing to the mix. Also, while social media alone is unlikely to be effective, they can be integrated into the marketing campaigns of inclusive business models. In addition, creating powerful partnerships can help create awareness, increase trust and improve the effectiveness of the marketing campaign.

41

Expand marketing and deepen consumer relations

Key takeaways

Companies can combine on- and of#ine marketing strategies, by using word of mouth recommendations from personal networks of product champions and complementing this with social media activities to drive adoption.

Companies should not underestimate the importance of face-to-face interaction and building trust in marketing to low-income consumers.

Companies can create partnerships that boost customer loyalty and marketing reach for both parties if their value propositions complement each other.

Planning customer relationships for the long haul, and deepening them over time, ensures that companies receive regular feedback, referrals and repeat sales.

Company and product positioning to appeal to BoP marketsLow-income consumers prefer to purchase products that have immediate and well-proven bene!ts. Moreover, low-income households tend to avoid potential risks associated with investing in the purchase of a product or committing to a regular service and bills. Instead, they are usually willing to pay premium prices to reduce the risk of buying a faulty or low-quality product or receive bad service. Companies can bene!t if they focus more on offering their clients the best product or service for their money. This means good quality and low risk, so it is competitive compared to alternatives.39 All the above factors and considerations make the product or service positioning and its successful marketing so important.

Companies can build trust and thereby improve their marketing position and campaigns by:

demonstrating the bene!ts of products and services early-on;

enabling clients to test the products;

offering quality products and services, and

providing after-sales-care support.

Companies should seek to build trust and long-term relationships with their clients, as low-income customers are more dif!cult to acquire and are typically risk-averse. They need to be assured that the service provider ful!lls his responsibilities in case anything goes wrong. A clear and simple guarantee scheme that covers maintenance or after-sales support is perceived as a crucial advantage by low-income consumers. In this context, there are several characteristics that differentiate inclusive business models:

Long-term view - The majority of companies serving BoP markets aim to create a long-term relationship with customers as this has the following bene!ts:

> Increased likelihood of having repeat customers;

> Possibility to up-sell additional products or services; and

> Potential to collect data on consumers using the product which provides a feedback loop on quality and improvements.

Local content – Products targeting the BoP markets are unlikely to succeed if they are not adapted speci!cally for low-income consumers in a particular region.

Payments – Companies ensure that consumers can pay using small and frequent payments over a period of time rather than being confronted with high up-front costs.

Free trials - Many business models rely on showing the bene!ts of the product via a free service/product and then selling value-added additional products/services (the freemium model).


Source: Wikimedia Foundation study 2013 https://tinyurl.com/m86jpow

FIGURE 15

What is your preferred source of factual information (4,500 respondents from 9 developing countries)?

Source: UNESCO Institute for Statistics www.stats.uis.unesco.org/unesco/TableViewer/tableView.aspx?ReportId=201

FIGURE 14

Adult and youth literacy rates (%) by region, 2011

27%Family and friends

16%Wikipedia

12%Other websites

12%Newspaper

11%Radio

4%Books

17%Mobile news service

Understanding illiteracy challenges and how to adapt marketing When designing for and marketing to low-income consumers, companies need to consider that some might be semi-literate or illiterate, depending on the country and intended clients. Furthermore, some countries have an of!cial second language like English or French, but many of its citizens prefer to speak their local or regional languages and dialects. Companies’ marketing approaches and materials need to take these factors into account. Written SMS or social media are not effective for illiterate or semi-literate clients. However, there are some ICT-based tools which can support companies interacting with such clients. Available technologies include Voice SMS where voice-recordings can be received and sent, and Interactive Voice Response (IVR) which is an automated pre-recorded information which can be accessed via a help-line. Also, call-centres or helplines which are manned by company staff can assist illiterate and semi-literate people in their local languages.

Combining SMS and social media marketing with word of mouthThe assumption that one can reach and serve low-income consumers by using direct communication to their mobile phone by voice or data only is a bit too simplistic. Companies have to identify and connect with trusted !rst adopters that are likely to spread the word about the product or service. Working with !rst adopters can be integrated with social media to drive adoption but only within the context of existing relationships and driven by product champions and their personal networks.

Companies need to establish trust or use trusted intermediaries to market their products and services effectively to the low-income consumer.40 This is especially the case for new and unknown products or services, or where the product is not tangible (like insurance) or the bene!ts are not fully known or yet proven: for example, a product that requires some upfront investment but promises savings over time, such as a solar power panel.44 Because it still needs trusted intermediaries to create awareness and credibility, and to drive adoption, customer acquisition costs can remain a challenge: the costs are high and the process of consumer adoption is slow. 41

Recent large-scale multi-country research has shown that in developing countries word of mouth serves as a very powerful means to spread product awareness and knowledge. Latest data from a study42 shows that in Africa, 50% to 81% use word of mouth and advice from family and friends to make (consumer) choices.

In a survey of 4,500 online respondents in 9 developing countries, 27% stated that their preferred source of factual information (in other words reliable and trustworthy information) is family and friends, con!rming the importance of trust through personal connections.

Regional youth (15-24) literacy rate (%)Regional adult (15+) literacy rate (%)

97%Latin America &The Caribbean 92%

89%Northern Africa 73%

77%Oceania 71%

97%South-Eastern Asia 93%

81%Southern Asia 63%

69%Sub-Saharan Africa 59%

94%Western Africa 87%

involving regional languages and voice SMS

https://tinyurl.com/m86jpow


Social media can be used to !nd employees and connect teamsSocial media, as a tool that links friends and family together, is showing massive take-up in developing countries. In a survey completed in June 2013 in Botswana and Uganda, 90% and 76%, respectively, stated that the main activity on their mobile phone was accessing social media. The study shows further that respondents use mobile Internet access for similar activities in both Uganda and Botswana, despite strong socio-economic differences between the countries.

Social media is seen as a way to rapidly get information about products to consumers. It has become clear that social media is not a panacea for low-income consumers but rather an additional tool that companies can use to increase market awareness. Social media has an alternative role to play in helping companies recruit employees, especially if the company is in a labour-intensive industry. Social media can be used to leverage existing relationships between family and friends.

42 43

Source: Wikimedia Foundation study 2013 https://tinyurl.com/m86jpow

FIGURE 16

For which type of activity do you use the Internet on your mobile most?

“ICT is the precious gift to the humanity and its adoption by farmers makes their life easier as well as conserving important resources like water and energy.”

- Santosh Ostwal, CEO & Founder of Nano Ganesh

90%Social networking (e.g. Facebook)

36%Research (e.g. jobs)

35%Find information about current events

27%Information for studies

25%Games

24%Video

7%Skype calls

4%Other

50%Music

Botswana Uganda

4%

76%

58%

54%

45%

29%

28%

13%

66%

https://tinyurl.com/m86jpow


Nano Ganesh

CASE STUDY 10

Remote monitoring of water pumps but close-up marketing and trust buildingNano Ganesh, headquartered in Pune, India, sells mobile-based wireless automation systems for controlling and monitoring water pumps used for agricultural irrigation. Since the initial version of the Nano Ganesh invention in 2001, the company has sold over 16,000 units in over 9 Indian states. Nano Ganesh has over 200 dealers and more than 2,000 trained local technicians. The product has seen over 32 improvement cycles throughout the 12 years, both due to changes in technology as well as from user feedback. Simplicity and ease of use of the product is critical for farmers. The company has 15 different models of the product, ranging from a basic model at USD 12 to the high-end version of USD 300; the mid-range model costing USD 70 is the most popular.

The application was created to address the challenges for farmers in accessing and operating the water pumps. These could be their distant location (which could be up to 10$km), dif!cult terrain, wild animals, odd electricity schedules, night operations, shock hazards, bad weather and the costs of transport. Many farmers often run their water pumps continuously in order to avoid the frequent and exhaustive trips to the pumps to switch them on or off. This then leads to wastage of water, electricity, soil erosion, fuel, labour and time. There was a demand for a simple remote control solution to control the water pumps.

While Nano Ganesh is a technology product itself and the company uses call centres, installation videos via youtube and other mobile technology for its operation, marketing to farmers cannot simply be done by electronic means, despite the technology being available. Experience and research has shown that low-income people place their trust in persons and institutions that they already know. This means that existing webs of trust cannot easily be replaced by new, electronic

means. Nano Ganesh’s experience shows how to build on existing relationships of trust to market a new product.

Even though the bene!ts of Nano Ganesh were obvious, farmers did not buy the product immediately. This is because farmers in India tend to be cautious when it comes to new products and need to see that the product is working, creates bene!ts and is thus worth the investment. They will often only make a decision to buy a new product based on the recommendations of people that they trust. In order to build that relationship of trust, Nano Ganesh identi!es a respected and in"uential farmer in a certain village as its !rst customer and makes sure that this customer experiences very good service. For example, Nano Ganesh ensures that any problems are solved within a week. Based on the track record with this farmer, who now acts as a champion for Nano Ganesh, other farmers are then more likely to sign-up.

In addition to identifying in"uential and trusted farmers, Nano Ganesh spreads awareness of its services through national and local exhibitions, where up to 100,000 farmers are present, and between 5,000-10,000 farmers visit the Nano Ganesh booth.

Key takeaways:

How to supply a robust technology that is simple yet tailored to famers needs;

How to build trust among lower-income consumers by assured support before and after sales;

How the power of word of mouth can in"uence sales;

How an advocacy program can help to make farmers aware of energy savings and the impact of technology.

Indian farmers can control their water irrigation pumps using Nano Ganesh’ mobile-based product.

Founder Santosh Ostwal demonstrates the remote control technology.

http://www.nanoganesh.com/


44 45

Partnering for marketing successMany low-income customers are likely to be !rst-time users of certain products and services, such as micro-insurance or solar-powered lighting. Therefore, not only customer awareness needs to be raised, but also customer education undertaken on features and functionalities of new services or products, their bene!ts and payment modalities. Levels of formal education can be low, as some low-income customers are semi-literate or illiterate. Partnerships can help with awareness creation, marketing and customer education.

The crucial ingredient in creating powerful partnerships is to form alliances with suitable companies that complement a companies’ value proposition. NGOs, MFIs or civil society organizations can also be partners, but sometimes come with the challenge of different organizational cultures and overall objectives. The main weakness of many companies is the lack of a local presence in the target market, especially in the case of start-ups. So, the !rst step is to form partnerships with local companies that have established a trust relationship with the target clients. In the low-income market, there may be !eld extension workers (for example, Grameen’s Community Knowledge Workers in Uganda43) who have already built up a relationship of trust. If the product complements the work done by extension workers, these relationships can be leveraged for marketing, client education and possibly even as a distribution channel.

Managing partnerships can be a time-consuming process, especially between equal joint venture partners, as the decision-making process can become more complex. Fostering and maintaining relationships can be hard work. Deciding and communicating responsibilities clearly between partners is essential. Furthermore, critical issues like negotiating revenue-

sharing models need to be handled with great care, respecting the bargaining powers of the different parties while at the same time making business sense. Companies should also be careful not to overestimate their bargaining power, since there may be only one or two potential partners serving speci!c areas. However, if the incentives are aligned, partnerships can generate signi!cant bene!ts, including helping to reach scale faster, creating awareness, leveraging existing trust, and reducing the costs of getting the product to market.

A potentially important partner is the mobile network operator. Mobile operators typically have a very large network of prepaid airtime agents in each country reaching far into rural areas. These agents sell SIM cards and airtime. Safaricom in Kenya famously used their dealer and agent network to become m-money agents, but they also added additional independent shops and distribution networks like pharmacies and petrol stations. Safaricoms M-PESA had over 45,000 agents at the beginning of 2013.

Furthermore, they have brands that are very well-known country-wide. These two assets – known brand and extensive agent network – can be leveraged by other companies targeting the BoP markets. Mobile operators also have ample customer data – both in terms of customer spending and cell-phone usage, which can be utilized to better understand potential clients. However, mobile operators are sought-after partners and need to be offered an attractive business model that delivers value to them.

A partnership that successfully leveraged a mobile operator’s customer data to tailor a speci!c product (micro-insurance coverage) and used their agent network to market and sell the product, is Tigo Family Care Insurance in Ghana.

*

*


CloudFactory

CASE STUDY 11

Using ICT tools for scalable job creation

CloudFactory, a company headquartered in HongKong, but with a large team based in Nepal, is a unique company that aims to connect one million people in the developing world to basic computer work and raise them up as leaders to address poverty in their own communities by 2018. CloudFactory leverages ICT tools and social media to recruit workers and drive employee well-being. CloudFactory is a distributed workforce company for outsourcing and automating business processes. Repetitive computer work, involving large volumes of data entry, collection or processing, such as transcription, is broken down into micro-tasks that are completed along “virtual assembly lines” by CloudFactory’s on-demand workforce and then sent on to the client after being quality assured.

In many ways this sounds similar to the other micro-work outsourcing models. However, CloudFactory believes that the traditional outsourcing model is broken. Churn rates among the workforce are extremely high and skills are dif!cult to upgrade. CloudFactory invests in developing each worker so that they have a premium workforce that can deliver results to customers with a high level of accuracy on a consistent basis. In contrast to other micro-work models where workers need to !rst spend time to !nd tasks to work on, the CloudFactory system matches the right tasks to the right workers (called Cloudworkers) so that they can earn an income. Workers can login and there is a task waiting for them. CloudFactory uses machine learning to !nd out the type of work that each Cloudworker is good at, what their accuracy level is, how much money they earn in order to match the right type of work to the right worker. As a result, CloudFactory churn rate is very low

and the average Cloudworker is on a weekly retainer (a small amount of work that CloudFactory guarantees each worker) and is paid earnings each week.

To achieve these results, cohesion between Cloudworkers is critical. The company uses Facebook as a tool to encourage interaction between itself and potential employees, as well as among teams. Potential employees contact CloudFactory through Facebook and take a test to determine their individual accuracy on a range of selected tasks. They are then required to put together a team of !ve of their friends and take a more in-depth skill test. If the team does well and passes an interview, it begins 6 weeks of orientation as a new CloudFactory team. Based on this system of organic growth, the key role is the Cloudseeder, who is responsible for 100 people (20 teams of 5). Once a Cloudseeder is recruited, they have 12 weeks to ramp up to 100 people. CloudFactory’s goal is to expand from 10 to 12 developing countries and employ a million Cloudworkers by the end of 2017.

Key takeaways:

The use of ICT tools for scalable job creation;

How social media can be used to recruit workers;

How ICT tools can be used to improve employee relations.

Cloudworkers stay connected, both virtually and in-person, and organize community projects.

http://www.cloudfactory.com/


46 47

MicroEnsure and Tigo Family Care Insurance

CASE STUDY 12

Powerful partnerships creating instant marketing channel and rapid take-upMicroEnsure, headquartered in the UK, and with operations in Bangladesh, the Caribbean, Ghana, India, Kenya, Malawi, Malaysia, Mozambique, Pakistan, Philippines, Rwanda, Tanzania and Zambia, is a company focusing on insurance for the mass market. The company was founded in 2002 by Opportunity International, was supported in 2007 by the Bill and Melinda Gates Foundation, and is now a for-pro!t entity with investors including the IFC, Opportunity International, Telenor, Omidyar Network, and company management. From 2011-2013 MicroEnsure grew its African client base from 100,000 to 3,000,000, and launched 12 micro-insurance products with seven mobile operators in eight countries.

MicroEnsure launched its !rst mobile insurance in Ghana, jointly with the mobile operator Tigo. Ghana has a very elaborate funeral ritual and burials can be very expensive. Tigo Family Care Insurance provides funeral coverage, free of charge to the subscriber, based on the value of airtime purchased in the previous month. If a customer buys less airtime the next month, the cover will be reduced; as a result the product incentivizes customer loyalty. Individual existing mobile usage data is thus used to automatically determine the eligible insurance coverage amount for each subscriber. Funeral insurance cover ranges from USD 104 – requiring USD 2.60 airtime spent in a month – to USD 520 – requiring expenditure of USD 20.80 airtime from the previous month. There is no monthly charge apart from the airtime usage requirement. The customer can further decide to move from this free product to a paid subscription model by paying a fee of USD 0.68 per month for what is called Xtra-Life, which doubles the monthly insurance cover. Tigo Family Care Insurance has been very successful in Ghana with nearly one million lives assured - effectively more than doubling the entire insurance market in its !rst year. Around 40% of customers have migrated to the paid insurance product. The product was subsequently launched in Tanzania in 2011 and Senegal in 2012.

Two important elements of the success of Tigo Family Care Insurance are

1. Simplicity and ef!ciency of the product:

No enrolment form or claim form;

No waiting period or medical examination;

No proof of relationship requirement, no ID numbers at enrolment;

No exclusions for HIV/AIDS or other pre-existing conditions;

Easy, customer-centric claims process (2,500 claims paid across all markets);

Loss ratios stable due to large volumes, low sums involved.

2. Existing brand, trust and marketing channels of the mobile operator.

The mobile operator receives multiple bene!ts through offering the mobile micro-insurance product including subscriber churn reduction (which in MicroEnsure’s global experience has been 10-25%), increased average revenue per user (ARPU), customer loyalty and competitive edge through value-added services.

The incentives for each company were aligned and this resulted in the innovative Tigo Family Care Insurance product.

Key takeaways:

An innovative way to use mobile subscriber data to create a new product;

Leverage of an existing subscriber base, trusted brand and established marketing channel of a mobile operator to launch a new micro-insurance product;

The value of forming complementary partnerships.

The !rst client receives her insurance payout from Tigo Family Care Insurance.

http://www.microensure.com/


Checklist: How to use ICT to market your products and services and deepen customer relations

What media and technologies do your target clients use?

Radio Radio is generally a popular medium among low-income consumers. Consider a paid advertisement in a local radio-station.

TV

While TV is popular, low-income consumers are very unlikely to own a TV, but rather gain access to it in public places like open shop stalls. As TV campaigns are much more expensive than other forms of advertising, you need a strong rationale to use this medium. This might include the greater national coverage offered by TV advertisements compared to radio, which may allow you to more effectively reach your target clients. If you have entered into a partnership with other companies or institutions, TV advertising costs can be shared.

Mobile phones

Consider developing an SMS application for marketing to your target clients. Try to combine the marketing message with some value-added information for your customers. If your target clients include a high percentage of semi-literate or illiterate persons, you can also use a voice recording sent via SMS. Consider consulting with an SMS integrator in your country of operations about how to best use SMS to achieve your marketing objectives.

Internet

The Internet is not yet widely used by low-income consumers. It is mainly used for speci!c applications and accessed via mobile phones. Align your marketing activities with these usage patterns. For products and services targeted at businesses and institutions, consider expanding your web-presence to increase publicity and credibility. If there is an online business directory in your country of operation, make sure that you are registered.

Social media Consider using social media for your recruitment efforts. Encourage customers that have a social media presence to recommend your product or service on their site.

Does your company use word of mouth recommendations and leverage the personal networks of clients to market your products and services?

Yes

Review your activities regularly and introduce small enhancements over time. Consider taking your of"ine word of mouth initiatives online as well. For example, your advertisements could ask satis!ed customers to actively recommend products or services to family and friends, including via social media or SMS.

No

Consider introducing strategies that leverage word of mouth where appropriate. Offer monetary or other incentives for bringing new customers. Consider conducting product introductions in local communities. This could also be done by satis!ed customers. Align these activities with your online marketing strategy.

ApproachKey questions Options

*

*


48 49

Transform sales and delivery channels

Finding less costly sales and distribution channels is critical when serving BoP markets and aiming to bridge the “last mile”. One of the most costly and challenging aspects can be to establish a sales and distribution channel, which is capable of dealing with customer care, such as maintenance or repair, and also CRM.

There are many ways ICT can assist companies in improving sales functions including e-commerce platforms, supply chain software and mobile sales management applications. With increasing mobile data use among low-income clients, some products and services can now also be delivered digitally.

Companies need to !nd lower-cost sales and distribution channelsA good product offering alone will not translate into much revenue if there is no effective and tailored means to sell and distribute the product to the target market. But sales and distribution channels for BoP markets have to deal with the challenge that the retail sector is less organized in developing countries. In industrialized countries there are usually chain stores managed by a central entity. Relative uniformity and standardization are the main features of organized retail.44 In contrast, the share of unorganized retail – that is, individual small shops and more importantly informal shops - in developing countries is typically much higher. This means that companies cannot simply approach a single retailer to carry and distribute their product. Small individual shops are unlikely to be the avenue to launch a new product, since managing contracts and logistics with so many of them is too costly and time-consuming. The country examples below illustrate the different situation of the retail sector in various countries.

Key takeaways

Lower-cost supply-chain software that is used by a variety of stakeholders can enable innovative cost-sharing models so that small suppliers (for example, smallholder farmers) can afford to participate. Supply-chain software can increase transparency and reduce transaction costs to the bene!t of all. Some supply-chain software providers are cloud-based and available as pay-as-you-go options on a transactional basis.

Emerging m-commerce platforms for low-income consumers can be an additional sales channel for products and should be considered on a country-by-country basis.

Simple SMS-based platforms and tools can be used to create effective marketing and Customer Relations Management (CRM) systems.

Free and Open Source Software (FOSS) can be used to create simple and low-cost mobile sales management tools that can improve sales performance.

There are several products and services that can now be delivered electronically to low-income consumers as they increasingly use Internet-capable phones – however, Business to Customer (B2C) companies need to !nd the appropriate aggregator platform(s).

Source: Unorganized and Organized Retail: A Global Comparison, David Fitzpatrick, August 2012

FIGURE 17

A less organized retail sector limits distribution options

4%

96%

India

20%

80%

China

30%

70%

Indonesia

33%

67%

Russia

36%

64%

Brazil

40%

60%

Argentina

40%

60%

Thailand

55%

45%

Malaysia

66%

34%

Japan

85%

15%

USA

Organized retail (%) Unorganized retail (%)


Furthermore, organized retail in developing countries is more likely to be found in urban areas, catering to the emerging middle class rather than the BoP markets, though there are, of course, exceptions.

Two options: to build or partner Companies planning to serve BoP markets have a harder time !nding the right sales and distribution channel. There are no homogeneous, high-volume options. They either:

develop their own sales and distribution channel; or

!nd a retailer or other business partner that serves their target market or is setting out to do so.

Establishing a dedicated physical distribution network with storage facilities, shops and sales people is expensive, especially for a company just starting to serve low-income consumers. It is more feasible if the company is already operational in the country and is adding a few products to a portfolio tailored to low-income consumers. Another option is to start with a pilot approach, serving only a small region !rst, and then to grow organically. In some industries this may not ensure reaching scale fast enough and !nance can become an issue.

However, partnering with another company or organization can also be challenging as there are fewer companies reaching rural areas where many low-income consumers live, especially in Africa and Asia. Poverty is compounded by the remoteness of some rural areas and lack of infrastructure such as electricity, roads and transport. Companies intending to serve these customers have dif!culty !nding and retaining distribution partners, especially if they are individual local agents. There may be challenges related to their ability to deliver, based on their skills, commitment, reputation and reliability. Other challenges include managing the timely payment of local distributors or agents, and cash management.

For both channel options, there is the cost of training, either of their own sales team/agents, or those of the partner.

Tangible products like medicines, cooking stoves, fertilizers, solar power or similar items need a physical distribution network. In addition, certain services like insurance or other financial services, may also need physical customer-facing presence, in particular at the launch of a new product. This can be required for trust-building measures and customer education.

PharmaSecure

CASE STUDY 13

Creating customer engagement and future sales through tailored value add-ons using SMS technologyPharmaSecure, a US-based software and technology corporation, leverages ICT to provide drug veri!cation services to users in developing countries, including low-income users. Launched in India in 2007, PharmaSecure also operates in Nigeria and is planning to expand into sub-Saharan countries. The company’s initial service provides pharmaceutical products with a unique ID tag. This allows end-users to verify whether their medication is authentic by sending the ID code via SMS to a special database and receiving an instant reply. In many developing countries counterfeit medicines are a serious problem: in parts of Africa, Asia, and Latin America there are areas where more than 30% of the medicines on sale can be counterfeit.

PharmaSecure’s service is free for users and in most cases the SMS is free too – pharmaceutical companies pay PharmaSecure directly as it helps them with sales and brand name protection. On top of the drug veri!cation service, PharmaSecure has added psConnect, which is an opt-in service for users to receive a menu of additional value-added services. These services are tailored directly to the customer based on their drug treatment and needs, and are also paid for by the pharmaceutical companies. They could be health tips: for example, if someone has veri!ed a drug for high

blood pressure, they may receive related health advice and also a daily reminder to take their drug, or to renew their prescription, helping with drug adherence. Between 6-10% of users have opted to receive these additional services. The psConnect platform is an additional way for pharmaceutical companies to do marketing, connect and engage with their customers: to disseminate important drug safety information, educate patients about their particular ailments, and to provide quality medical advice tailored to the speci!c medicine pack and particular needs of the consumer. As a result of the value-added services, PharmaSecure mediates a two-way information "ow between pharmaceutical companies and their customers.

Key takeaways:

How to build customer loyalty and engagement by providing value-added services using simple SMS technology; and

How technology can be used to reduce the perceived risks of buying counterfeit drugs.

http://www.pharmasecure.com/


50 51

Technologies that connect and improve sales functionsCompanies serving low-income consumers can take advantage of the following ICT tools to improve their sales process:

E-commerce or m-commerce platforms to bring buyers and sellers of commodities or other items together;

IVR technology with standardized and automated customer support, for example, for Frequently Asked Questions (FAQ);

Software that manages the supply chain for a product; and

Mobile platforms to manage and support the sales team.

M- and e-commerce platforms as additional sales channelsCompanies can investigate if their products can be sold on an existing m-commerce platform or if they can tap into a supplier network through an e-commerce platform. Online trading platforms for buyers and sellers of commodities, in particular for agriculture, exist in many countries, both developing and developed. Some of these platforms also offer additional market information or other value-added services.

If a commodity sector is fragmented, the prospect of success for an online trading platform is better as it creates value by aggregating a large share of trading volume in one trading platform. It is easier for buyers and sellers to meet each other and simpli!es the selling and buying process. The agricultural industry, especially in developing countries, is highly fragmented, particularly on the sellers’ side, and thus well suited to an online trading platform. However, challenges relating to transport logistics and lack of established and veri!able quality

CellBazaar

CASE STUDY 14

m-commerce platform suitable for low-income consumersCellbazaar allows users to buy or sell any item over mobile phones. Many items on Cellbazaar are very inexpensive (below USD 5 and even USD 1), though it also sells higher-end items. Cellbazaar operates in Bangladesh and has generated signi!cant usage since its launch in 2006. It currently has more than 4 million users and was acquired by the mobile operator Telenor/Grameenphone in 2010.

Users wishing to sell an item post the relevant information via SMS on CellBazaar. Buyers can search on CellBazaar, acquire additional information by directly calling the seller and meet the seller to complete the transaction. Potential buyers can use their phones to browse the Internet website or use their SMS functionality. Cellbazaar also has an IVR platform.

Revenue is generated through the following channels:

Cellbazaar shares in the data or texting fees, and the generated voice revenues;

Cellbazaar also receives income through targeted advertising as well as classi!eds from several local newspapers;

Grameenphone (owned by Telenor) gets additional revenue generated by Cellbazaar users.

Advantages for buyers and sellers using Cellbazaar are clear:

Buyers only pay the usual fees for web browsing, SMS or airtime;

Sellers acquire wide exposure quickly and simply;

Buyers can quickly browse a wide range of products and services.

Key takeaways:

creative ways to earn revenue, without having to transfer the costs directly to the buyers/sellers;

m-commerce platforms that can work if they are designed with low-income users’ phone capacities, preferences and capabilities in mind:

> Affordability – no additional fees; > IVR – voice assistance; > Adequate for basic phones.

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Case studies using

http://www.cellbazaar.com/


standards remain. Furthermore online trading platforms need a critical mass of users in order for their business model to be viable and cover the operating costs. Successful e-commerce platforms also offer integrated payment channels.

In many cases these marketplace platforms are for bigger farmers and exporters or food companies and are business to business (B2B) oriented. But the emergence of these platforms offers the opportunity to mix and match B2B apps with mass-scale consumer-demanded applications, a common payment mechanism, and additional features such as advertising and market research apps. These platforms create a critical link between demand and supply, creating the potential for a much larger user-market and opportunities for achieving scale.45

As many low-income clients become more proli!c in using their mobile phones, there are also end-user m-commerce platforms emerging, not only for agriculture, but national shopping websites comparable to eBay, where consumer goods are sold and traded online.

Tailored supply-chain management software at lower costsIn the past, most supply-chain software had to be developed and customized for a certain client and sector individually, making it very expensive and out of reach for supply chains with lower volumes or more fragmented players, such as smallholder farmers, to adopt such solutions. Cloud computing facilitates the development of supply-chain software that is more generic and can be used more widely.

The challenge with developing software for supply-chain management is that it typically needs a high degree of customization. For example, the supply chain for coffee and tea is different compared to dairy: the latter is based on daily deliveries whereas products like tea or coffee have growing and delivery cycles of several months. More generic supply-chain software needs to take into account the unique features of the various commodities they plan to serve, and possibly also varying framework conditions in different countries. This can be done through various modules and features of the software, which allow the client to choose the appropriate supply-chain component.

However, time and cost investments are quite high when developing supply-chain software that is generic enough to apply to several commodities and countries, but detailed enough to cater for the needs of the unique client. Therefore a company developing supply-chain software needs to create scale: either through software that is applicable to a number of supply-chain commodities or through focusing on one commodity but selling it across a range of countries. The former is done by AgriManagr and the latter is the approach of SAP. Both companies use cloud computing to deliver their supply-chain software.

Bene!ts that supply-chain software can create for the sales process:

Transparency for farmers with regard to their produce, amount and origin, sale prices, payment and other data. It is all recorded and captured electronically. This reduces incidences of fraud and creates more trust and improved relationships between the growers, buyers, processors and exporters.

Reliability for the buyer: suppliers that are registered are likely to supply their produce again.

Increased ef!ciency at the collection centre is created through electronic recording of produce weight, obviating the need for manual data entry and reconciliations.

Fraud is reduced at collection points due to electronic weight data collection. No adding, editing or deleting of records can be done without proper authority.

Data from the !eld is instantly available higher up the supply chain to organize transport and other sales logistics. The cost of delivery is reduced as more exact and timely data on quantities is available.

Product origin data also provides an audit trail that can help with traceability: consumers and governments increasingly demand information about the origin of food, under which conditions it was produced, whether it has been fairly traded. Also certi!cation companies need this data to, for example, certify a product as organic.

It is also important to note that supply-chain software can bene!t all players involved, and fees for its usage at the smallholder farmers level does not need to be as high, as there are players higher up the supply chain, who have an interest in supply-chain software capturing the entire process, such as big food companies, national buyers, exporters and certi!cation companies.

The introduction of new technology and control systems can lead to increased ef!ciency and simpli!ed business processes.

See SAP

on page 52


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SAP and the African Cashew Nut Initiative

CASE STUDY 15

Ensuring sales and supply through integrating farmers into supply-chain management software

The African Cashew Initiative (ACi), funded by the German Federal Ministry for Economic Cooperation and Development (BMZ), the Bill & Melinda Gates Foundation as well as private companies and public partners, is aiming to increase incomes of 330,000 farmers by USD 90 per year and therefore achieve a sustainable reduction in rural poverty. Furthermore, the initiative focuses on promoting local cashew processing and to improve market linkages along the value chain. ACi is active in the !ve project countries: Ghana, Côte d’Ivoire, Burkina Faso, Benin, and Mozambique.

ACi started partnering with the software company SAP to provide cashew farmer cooperatives with ICT applications to enable them to do collaborative business in a transparent and sustainable way. SAP is a multinational company headquartered in Germany that specializes in enterprise software. SAP’s role in the ACi is to develop applications for participants across the supply chain, including farmers, cooperatives, buyers, exporters and food companies. Despite differences across the !ve countries in which the ACi operates, the key challenge remains the same: recording huge amounts of repetitive transactions and ensuring that each party to the transaction has access to the database. The SAP-developed software supports high-volume transactions and enables farmer registration, pre-!nance, purchase, logistics and payments as well as advanced functionality such as data analysis and product traceability.

How does the system work? The system electronically tracks all cashew transactions by !rst assigning a unique barcode to each smallholder and then tagging each cashew bag with the appropriate bar code. Buyers scan the supplied bags with their smartphones and enter the weight into the mobile application, which calculates the unit price for the bag based on a centrally-broadcasted so-called farmgate price. This is the price at which the farmer sells his raw cashew nuts. Together with further transactional information, the purchase is saved and synchronized via the mobile network, while the cashew smallholder and the farmer cooperative immediately receive a digital receipt of the transaction. Farmers and buyers have access to an accurate transaction balance ensuring timely and correct payment.

The primary value proposition is the creation of a reliable supply chain, which generates the security – for both buyers and farmers - of being able to buy predictable amounts of produce at a stable quality the following year. Supply chain

bottlenecks can be easily identi!ed and addressed. This focus on creating long-term relationships along the entire supply chain has substantial bene!ts. By building a relationship with the buyer, the farmer is more integrated into the buyer’s supply chain and is more likely to repeatedly sell to this buyer: the farmer is now registered, learns techniques to improve quality and has better access to !nance. For example, if a farmer can prove that he has an ongoing buying contract, then he can use that contract as collateral to receive a loan from a local bank. SAP’s software thereby makes the entire process more ef!cient for all players.

In terms of system adoption the following has been achieved (as of October 2013):

Registration of 20,000 farmers across seven different organizations in Ghana, Burkina Faso and Uganda;

Transactional recording of 1,600 metric tons of produce via smartphones;

Availability and usage of customized versions covering 4 different crops (cashew, cocoa, coffee and shea) and 3 languages (English, French, Luganda).

Key takeaways:

Software focusing on all participants rather than the needs of a single player reduces individual costs at the lower levels of the value chain;

Smallholder farmers are supported and gain from long-term planning;

ICT tools contribute to ef!cient and simpli!ed business processes.

Each smallholder receives a unique barcode that is tagged to their cashew bags, which buyers scan with their smartphones.

http://www.africancashewinitiative.org


Managing sales teams and engaging customers with mobile technologiesCompanies increasingly integrate mobile phone software into their intranets and develop special strategies to support their workforce while on the move. This can be particularly valuable for the sales force. Advantages are the same for companies addressing low-income populations:

Companies can provide their sales team with timely product updates, promotions, and information on training opportunities; and

Sales managers and supervisors can enhance their management ef!ciency and sales results, by receiving daily updates and performance reports from their sales team, thus enabling them to support them in a more timely fashion, and respond quicker to any problems.

CRM is also an important element of sales strategy as good CRM can create future and follow-up sales.46 CRM is usually complex software used by larger companies that pay licence fees for it. But companies can also develop their own CRM tools using FOSS and provide simple mobile interfaces for data entry and retrieval using simple SMS.

The case study below demonstrates how a company combines customer care, providing value-added free services with marketing and new sales generation.

Living Goods

CASE STUDY 16

Managing sales agents, creating sales leads and managing customer relationships through open-source mobile platformLiving Goods, headquartered in the USA, is a micro-franchise organization that empowers micro-entrepreneurs to sell a wide range of life changing products such as anti-malaria medication, forti!ed foods, solar lamps and clean-burning cooking stoves to the BoP markets. Local entrepreneurs purchase products from Living Goods and sell them directly to their communities. Living Goods is operational in Uganda, where it has 7 branches and over 350 franchise entrepreneurs. In August 2013, it launched in Nairobi, Kenya, where it has 30 agents. Living Goods also supports another 600 entrepreneurs in Uganda through its joint venture with BRAC.

Living Goods has built a mobile platform based on open-source software that operates on basic phones to manage its agent network, market its products and generate customer sales leads. This platform is a mobile-based customer relationship management application. How does it work? An entrepreneur sells malaria pills for a mother to treat her child. The entrepreneur enters the following data into his phone: ‘m’ code for malaria, phone number of customer and age of person treated. These three pieces of information are then sent to Living Goods via SMS. The system logs the treatment including the time, agent and district of the customer. The SMS report also triggers automated treatment reminders to the customer. For the next two days the customer receives SMS adherence reminders to complete their child’s malaria course. For example, 24 hours after the customer received their treatment they will receive an SMS that reads “Your child may feel better but you have not killed all the malaria. Give the full course of treatment: 2 times a day for 3 days“. Living Goods also provides free health advice via SMS, targeted to the particular customer and based on their past purchase or family situation (such as recent childbirth for mothers). It mixes this with marketing and sales leads for follow-on products, for example, information on a clean cooking stove to improve the health environment for a newborn.

When an entrepreneur registers a new client’s phone number on the system, the customer’s phone number is tagged to the agent’s phone number, so that every customer is linked to a local entrepreneur. The bene!t of this system is that the marketing and promotions SMS includes a call to action with the phone number of the customer’s local agent so that the customer can call to seek advice, purchase a product, or ask for help with a health concern. Because the system is tracking information in real-time, Living Goods also knows immediately if it is meeting performance targets.

Key takeaways:

The ability to improve sales force management using basic phones with simple, low-cost open source software;

The opportunity to increase future sales by linking valuable health advice with marketing;

The linkage of entrepreneurs to customers through the application of a simple database using basic mobile phones ensures easy and effective customer follow-up.

Local entrepreneurs receive training from Living Goods and are supported through a mobile platform that facilitates sales leads.

http://www.livinggoods.org/


Increased opportunities for digital delivery The ICT sector has many products and services which are electronic and as such do not always rely on traditional physical distribution. Foremost among examples which address BoP markets are digital services, such as agricultural information and data services, digital media (e-books, newspapers, music, video), certain mobile applications and software. All of these can be distributed via the Internet which people can access via their mobile phones. This is increasingly feasible as more and more mobile networks in developing countries are upgraded for broadband capabilities.

Business Process Outsourcing is already a massive global industry, and the market is expected to grow to USD 209 billion in 2017.47 In recent years, several companies emerged that use the Internet to distribute, manage and facilitate micro-work across several locations and workers.

Furthermore, the Internet has become a storage facility through cloud computing, requiring less high-powered end-user computing devices as software and applications can be accessed via the cloud rather than having to be individually installed on every computer.

The electronic delivery of information or content products and services clearly lowers costs, allowing businesses to reach low-income customers with more offerings at more affordable prices.

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Checklist: How to integrate mobile and other information technologies that improve sales and distribution

If maintaining your company’s sales and distribution channels is too expensive…

...then identify which steps and processes could be improved through quicker, more ef!cient mobile and other technologies and consider introducing them for managing sales and record-keeping.

If you would like to improve the transparency, ef!ciency and supply reliability of your supply chain…

... then consider introducing supply-chain software that enables your company to:trace products through the entire supply chain;have an integrated database of suppliers, produce and prices;increase your supply reliability by providing training on quality and standards to your suppliers.

If no ready-made software solutions ful!ll your needs, consider partnering with a local IT company to implement some of these functions. Ensure compatibility with already existing systems early on.

If your product or service can be delivered electronically…

…then determine whether your country of operation has an m-commerce site used by low-income consumers. If this is the case, consider selling your product or service through such a platform. In addition, establish whether your target clients are using an aggregator platform, through which you could distribute your product/service.

If your company needs to improve sales force management and performance...

...then evaluate the bene!t of introducing a mobile-based sales force management tool. Carefully compare existing software offerings and also consider FOSS. If no solution that suits your needs exists, consider investing resources to tailor existing FOSS solutions to your needs.

If you would like to increase sales…

....then consider complementing or combining the promotional messages you send to clients with value-added services. In addition, evaluate whether targeted SMS or Voice-SMS could increase sales. Finally, explore partnerships with mobile operators in order to increase awareness of your product/service.

If… …then:

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biNu

CASE STUDY 17

Offering fast, cheap and easy access to Internet services and apps for basic mobile feature phones biNu, headquartered in Australia, is practically a “smartphone in the cloud” – its cloud-based software platform delivers Internet content and services (like Facebook, Twitter, Google search, Wikipedia, news, sports scores, weather forecasts, e-book reader) in any language to low-end mobile phones, with fast response times and low bandwidth usage. It therefore greatly increases the functionality and value of feature phones, and is able to operate on slower networks through data compression technology. biNu became operational in 2011 and currently has 5 million monthly active users. biNu is most used in the following ten countries: India, Nigeria, Indonesia, Ethiopia, Pakistan, Mexico, Brazil, Bangladesh, Zimbabwe and Turkey. It also offers global research services to companies by rewarding its users with airtime for completing surveys. Furthermore, biNu is a platform for mobile content publishing and other services for the mobile industry. Lastly, biNu has added communication features and is including more content from publishers globally.

biNu’s platform and its content is uniquely tailored towards the interests of lower-income feature phone users in developing countries.

At the current stage the company focuses on building a larger user-base and becoming a social platform. They are well !nanced, including TomorrowVentures, an investment company founded by Google’s billionaire Executive Chairman, Eric Schmidt.

Developing countries face the following challenges, to name a few: slow, expensive and congested wireless networks; feature phones with few capabilities; and people with varied language and literacy skills, who can pay less than USD 10 per month.

biNu solves this problem by giving people:

Instant access to search, news, social networking, reference and health information;

Local and relevant applications;

Content in their own language;

Easy and fast service.

biNu does this through innovative technology that can be downloaded onto a feature phone. Its technology works the same way as the virtualisation software, CITRIX. Communication from the server to client is a proprietary technology and consists of a series of “pictures” that are sent to the client. The screen map is very ef!cient as it is sent down to the client with predictive technology that pre-builds a screen (for example, a news article is predictively created by biNu). The size of the application on a Java phone is about 150KB.

Key takeaways:

How to use cloud computing to provide a technology service targeting the global low-income market;

How to build a social platform and vast database of subscribers as quickly as possible;

How to aggregate and integrate an increasing number of services, applications, and mobile content attractive to the low-income market.

Finding a !tting aggregator platform to supply digital servicesFor a B2C company a good avenue to deliver any content or information to low-income consumers is to provide the services through an aggregator: a platform provider where content and services from multiple suppliers are aggregated. This is very similar to the developed world where mobile applications, depending on the platform, can typically only be sold via an application store (typically referred to as an app store, app marketplace). This is a type of digital distribution platform for application software, often provided as a component of an operating system on a personal computer, smartphone, or tablet. However, companies need to !nd a special platform or aggregator that caters for low-income consumers. This means a mobile or online platform with a wealth of information and services which attract and are relevant to low-income clients. This often includes several free offerings such as messaging, e-mails, games and info-services. Companies can also choose to become an aggregator platform themselves. This will allow them to source additional content and complementary services and supply them, in addition to their own products, to customers.

A good example is the company biNu. They offer a “thin” client installed on the mobile phone with data compression capabilities. This basically allows feature phone users to access smartphone apps such as Wikipedia, Facebook, eBooks and many other apps, and caters to all low-income clients who cannot afford a smartphone, but want to use the advanced services. It has created a social media and app platform around its product. For more details see the case study.

http://www.binu.com/

K E Y P L AY E R S A N D P O T E N T I A L P A R T N E R S

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Key players and potential partners

Photo Credit: © Samrat35 | Dreamstime.com

Often several players and partners need to come together to ensure that ICT can be leveraged successufully in BoP markets.


Mobile operators are sought-after partnersWhile there are typically a range of ICT players in a country, such as Internet Service Providers (ISPs), satellite service providers and !xed telecom operators, BoP telecommunications markets are typically dominated by mobile operators. These operators not only provide low-income people with voice services, but also offer broadband Internet and often m-money services. Mobile operators can therefore be partners in inclusive business models. As most countries have several mobile operators, companies must decide whether they would like to partner with a certain mobile operator exclusively, or instead engage with several or all mobile operators. Exclusive partnerships with an operator can create stronger bonds, but they also limit the company to that operator’s existing subscriber base and thus exclude potential consumers of other networks.

Partnership options are also in#uenced by the market and operator structure:

If there is strong competition, consumers bene!t, especially low-income consumers. Prices tend to be more affordable, offerings more tailored and networks reach further into rural areas. As a result it is easier for companies to engage with their clients or employees via mobile phones.

If there are more operators than the market can support and some operators make losses, they may be less willing to invest in setting up new partnerships. On the other hand, mobile operators may feel pressure to differentiate themselves through a partnership that adds a unique selling point. It is therefore important for companies that want to partner with a mobile operator to understand the operators’ perspective and position themselves accordingly.

If the market is highly concentrated and one or two operators dominate, there may be exclusivity issues. It is common in these situations that operators insist on being the exclusive partner.

If the mobile operator is active across several countries and regions, it might be a good partner for later expansions into other international markets.

Mobile operators arguably have the most extensive national sales and distribution networks in many developing countries. Typically over 90% of mobile subscriptions are pre-paid, meaning subscribers do not have a contract with the mobile operator, but rather buy pre-paid vouchers to top up their airtime. Mobile operators therefore have a large number of agents – often street sellers – across the country, who sell these pre-paid vouchers. In some instances, the mobile operator outsources the recruitment and management of the pre-paid voucher sale and distribution. In addition, mobile operators typically have local stores and other sales outlets, such as small mom and pop shops. Mobile operators in several countries have trained some agents to become m-money agents. The case study on Tigo Family Insurance shows how this sales network was leveraged to sell a micro-insurance product.

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Companies targeting BoP markets can bene!t from partnerships with other companies. In some cases they might even depend on partnerships, for example with distribution and logistics companies, in order to reach the low-income consumers. NGOs or government organizations, such as a health NGO or government agricultural extension workers, can also be valuable partners. Companies seeking to leverage ICT for their inclusive business model should consider partnering with the following key players and institutions within the ICT industry.


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iCow

CASE STUDY 18

Mobile application that increases dairy farmers’ productivity in milk and calf production

iCow is an SMS-based m-app created for the agricultural industry. It is operated and managed by a small agricultural company, Green Dreams TECH Ltd. Launched in 2010, iCow provides dairy farmers with information and professional advice on the rearing of their animals. iCow users can register their cow via SMS, after which voice prompts help farmers monitor their dairy cow fertility cycle from the time the cow is inseminated until she delivers. The m-app teaches farmers how to make appropriate feeds, reminds them to ‘dry’ off the cow two months before calving and prompts them to take certain actions during the cycle. iCow thereby helps the farmers achieve the best productivity out of his/her cow, whilst ensuring the cow and calf are healthy and treated well. Most recently the m-app has been expanded to include tips on poultry management.

In June 2013, Kenya’s leading mobile operator, Safaricom, launched a partnership with iCow to help more farmers access the application via SMS as a USSD-based application. The app is available in Kiswahili as well as English. The service is simple to use. The farmer accesses the app by dialing *285# using his/her mobile phone and the services can be accessed and displayed using a range of handheld devices from very basic to advanced smartphones.

The services include:

Mashauri – Farmer tips which provide dairy tips and poultry tips on best practice and yield maximisation.

Kalenda – a service that provides updates for the owner’s cow, heifer or calf. As the world’s !rst mobile phone gestation calendar for cows, it gives tips regarding care for expectant cows as well as how to have safe, healthy deliveries.

Calf Kalenda – helps the owner rear their calf following best practices, enabling the calf to reach her full potential as an adult cow.

Vetenari – enables users to locate and !nd a local veterinary of!cer or Arti!cial Insemination (AI) provider.

A cow can be registered by insemination date or by birth date. By simply sending their location to the platform, farmers are able !nd the nearest vets and AI providers; they receive an SMS with the Vet or AI contacts. iCow’s services cost the farmer three Kenyan shillings (approximately USD 0.03) per SMS. In partnership with two international aid agencies, iCow has seen the number of farmers using the app grow from 300 in 2011 to 45,000 in 2013, as well as replication to other countries. According to iCow survey data, Kenyan farmers who have been on iCow for 7 months experience an increase in milk output of between 2 to 3 litres per animal per day. This is an increase of about 610 to 930 litres per year, which translates into an average increased income of KSh. 25,000 to KSh. 30,000 (USD 310-375) per animal per year. According to iCow data, farmers have also reduced cow and calf mortality, thus enabling farmers to grow their greatest asset base.

Key takeaways:

Simple low-cost SMS or voice-enabled apps can provide valuable information services in local languages, which bene!t small-scale farmers and improve their livelihood; and

A mobile operator can increase accessibility of and value for subscribers by promoting and enabling SMS-based services to operate on its company platform.

iCow helps dairy farmers in Kenya to better rear their cows and increase milk output.

http://www.icow.co.ke/


SMS integrators can be a one-stop shopIn addition to mobile operators, SMS integrators can be good potential partners for companies. As most countries have multiple mobile operators, it can be dif!cult and time-consuming to negotiate, contract or partner with all of them. However, a company’s customers will most likely be subscribers of different mobile network providers. To overcome this challenge, companies should consider approaching SMS integrators. As businesses that specialize in providing a single contact point for all SMS needs in a country, SMS integrators have agreements and technical arrangements with the mobile operators already arranged. They purchase SMS capacity from the operators and sell it on to their clients. This allows them to facilitate:

Seamless messaging;

Bulk purchases of SMS;

Management of billing across several mobile operators;

Technical integration;

SMS scheduling;

Multi-lingual messaging.

SMS integrators typically also provide additional value-added services (VAS) as well as functions such as system integrators, software customization or content providers. Both PharmaSecure and Living Goods work with SMS integrators to send their SMSes to subscribers from different mobile operators. Handygo in India is an SMS integrator offering services to rural farmers in India.

Local IT sector and incubators provide valuable networksA company planning to develop or launch a product or service involving ICT, may need to access local talent for development, support, maintenance, customization and other tasks. Potential partners are local IT talent, like local software companies, software developers and programmers, and IT-based businesses. A local IT sector is key for companies in order to have partners and suppliers that can help to leverage ICT. Many countries have IT clusters (that is areas where IT companies are concentrated) and ICT associations which can support !nding and hiring local IT talent.

Companies that do want to leverage ICT for their inclusive business model may need to access local talent for software development, implementation of ICT-supported processes and solutions, as well as for support and maintenance. Partners that can help these tasks are local software companies, software developers and programmers, and other IT service providers. It is crucial for companies to navigate the local IT sector in order to engage partners and suppliers that can help leverage ICT. Many countries have IT clusters (physical areas where IT companies are concentrated and in some instances provided with tax exemptions) and ICT associations which can support !nding and hiring local IT talent.

In addition, technology innovation hubs are popping up around the globe, typically referred to as “innovation hubs” or “ICT hubs”. In Africa alone, there are over 90 hubs in 20 countries to date. For example, AfriLabs is a pan-African network of 19 technology innovation hubs in 13 African countries.48 Similar developments can be observed in Asia and South America. Such hubs and their networks foster and promote local technological innovation, as well as serving as incubators, meeting places for the local technology community and points of knowledge exchange. Their purpose is to encourage collaboration and act as physical nexus points between investors, academia, technology companies, and the wider private sector. Companies can connect with these ICT hubs to not only !nd local talent, but also identify co-investors and partners who are interested in piloting new ICT innovations on a commercial basis.


Assessing the country contextThe policy and investment climate in#uences the overall business environment. While a good ICT policy can be helpful, it is not a requirement for successfully leveraging ICT for inclusive business models. Many developing countries now recognize the enabling role of ICT for socio-economic development and the opportunities associated with broadband Internet. Governments are therefore developing special policies with the intention of ensuring affordable access to high quality ICT solutions and creating enabling environments for public and private sector innovation. An enabling ICT policy environment includes the following:

An progressive ICT policy;

A broadband policy/plan or digital strategy;

An independent telecommunications industry regulator;

Active measures to increase local ICT capacity; and

A universal access or service fund (USF), which is a funding programme to increase access and usage of ICT in rural areas and for poor people.

While the existence of these policies, plans and measures is a good sign, their effectiveness depends on the quality and actual implementation progress. Another relevant indicator may be the ease of doing business in a country. For example, the International Finance Corporation (IFC) and World Bank ranking49 provides a comparative overview of business regulations across countries.

In addition to assessing a country’s general ICT policy context, investment climate, and conditions for doing business, companies should also consider the following factors:

Indicators for potential partners

The presence of several mobile network operators in the country implies a competitive market, resulting in lower prices and faster network expansion. However, selecting the right mobile operator to partner with is more dif!cult when there are more operators to choose from.

If the mobile operator’s distribution network is already being used for other services or products and has a good national reach, it could be a potential distribution partner.

If the country has an SMS, content or VAS integrator, this could serve as a good single point partner for any inclusion of ICT into company operations that require SMS or content management.

The existence of a developed m-money infrastructure with many active users can ensure easy facilitation of electronic payments.

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Assessing relevant ICT status for companies targeting BoP markets

What is the country’s mobile penetration rate? The higher the mobile penetration rate is, the more likely it is that a large proportion of low-income people is reached.

What is the country’s mobile network coverage of the population? A high percentage indicates that a large part of the rural population is covered and groups such as smallholders have mobile access.

What part of the population is covered by mobile broadband coverage? The higher it is, the more applications requiring higher data transmission rates can be deployed.


Whether the aim is to provide training for local employees, promote the use of climate-friendly technologies or improve social standards at production facilities, the objectives of private enterprises and actors involved in development cooperation often overlap. develoPPP.de was set up by the BMZ to foster the involvement of the private sector at the point where business opportunities and development policy initiatives intersect.

In the context of a develoPPP.de partnership, companies will always cooperate with one of the three of!cial partners responsible for implementing the programme on behalf of BMZ: Deutsche Investitions- und Entwicklungsgesellschaft mbH (DEG), Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH and sequa gGmbH.

Companies bene!t from the decades of professional and regional experience of these organisations in developing and emerging countries, as well as from their contact to governments, business associations and companies at the local level. A development partnership can help lower the costs involved in pioneering inclusive business models for sustainable development. It can also help reduce risks and facilitate the transfer of know-how needed to upscale successful pilots.

Through the develoPPP.de programme, BMZ provides companies investing in developing and emerging countries with !nancial and, if required, also professional support. The company is responsible for covering at least half of the overall costs; BMZ contributes up to a maximum of EUR 200,000. These development partnerships with the private sector may last up to a maximum of three years and cover a wide variety of areas and topics – from eco-certi!cation in Serbia to vocational training in India.

Companies are invited to register their interest with DEG, GIZ or sequa by participating in one of the ideas competition held four times a year. These are open to all German and European companies and their subsidiaries in developing countries and emerging economies.

For more information visit: www.develoPPP.de

develoPPP.de – Development partnerships with the private sector

Spotlight

Photo Credit: Reuters Market LightRML joins hands with GIZ to create impact at the grass root level.

http://www.develoPPP.de

S U P P O R T D I R E C T O R Y A N D F U R T H E R R E A D I N G

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Support directory and further

reading

Photo Credit: Mobisol

Sometimes not only customers need support - companies can bene!t from a wide range of existing experience, data, partners, !nancing tools and networking opportunities.


BUSINESS SUPPORT SERVICES

The following business support services allow companies to engage with peers, test out product strategies and build capacity for leveraging ICT in inclusive business.

BoP Innovation Center: An incubator space where organizations can develop business strategies for BoP markets. www.bopinc.org

Business Fights Poverty: This forum enables its members to engage in peer-to-peer knowledge exchange, as well as providing up-to-date news and insights on harnessing business for social impact. www.business!ghtspoverty.org

Ideo.org: This US-based organization seeks to bring human-centered design to people facing poverty, and works with nonpro!ts, social enterprises and foundations to create solutions (also mobile-based) to poverty-related challenges. www.ideo.org

Massachusetts Institute of Technology (MIT) D-Lab: This MIT-based project fosters the development of sustainable ICT-based solutions, by promoting affordable technologies that improve the quality of life of low-income households. www.d-lab.mit.edu

Practical Action: International NGO that uses technology to address poverty issues, often working in collaboration with the private sector. www.practicalaction.org

SME Toolkit: A IFC program that provides free business management information and training for small and medium enterprises (SMEs). www.smetoolkit.org/smetoolkit/en

The Practitioner Hub: A practice-oriented forum that provides a space for practitioners to connect, share experiences and gain new insights to help their inclusive business ventures grow. www.businessinnovationfacility.org

William Davidson Institute (WDI) at the University of Michigan: A non-pro!t research and educational institute that publishes relevant research on BoP markets and inclusive business strategies. www.wdi.umich.edu

INNOVATION HUBS

Innovation hubs provide the services and support required to incubate new ICT ventures. One of the many advantages of partnering with local developers is their nuanced understanding of the local ecosystem.

21212: A U.S-based startup incubator that also operates a facility in Brazil, offering software development and business development support for entrepreneurs and start-ups. www.21212.com

AfriLabs: A pan-African network organization of 19 technology and innovation hubs in 14 countries that promotes the development of the African technology sector, by providing resources, mentoring and networking opportunities to emerging labs. www.afrilabs.com

Grameen Foundation AppLab: Using research and on-the-ground testing, the AppLab develops mobile phone-based solutions to empower low-income people to break the cycle of poverty. www.grameenfoundation.applab.org

iHub, Kenya: Nairobi’s Innovation Hub for the technology community is an open space for the technologists, investors, tech companies and hackers in the area. www.ihub.co.ke

Launchgarage: A six-month accelerator program that assists Philippine ICT start-ups by providing seed funding, mentoring and expert-led start-up workshops. www.launchgarage.com

mLab East Asia: The infoDev-sponsored mLab runs the Mobile Innovation Challenge, which provides opportunities for the mobile applications development community to realize their innovative ideas and approach investors. www.mic.mlab.vn/en/

StartupChile: A program created by the Chilean Government that seeks to attract early stage, high-potential entrepreneurs to bootstrap their start-ups in Chile, by using the platform to go global. www.startupchile.org

Wayra: Telefonica-sponsored Wayra offers incubator services in several European and South American countries; based on the project’s level of maturity and need, successful applicants can receive funding up to EUR 50,000. www.wayra.org

NETWORKING

Networking platforms and multi-stakeholder initiatives provide opportunities for knowledge exchange and collaboration.

Alliance for Affordable Internet: A coalition of private sector, public sector and civil society organizations launched in October 2013 with the aim to make broadband Internet affordable and accessible for all. ww.a4ai.org

Business Call to Action: Fosters progress on the Millennium Development Goals by challenging companies to develop inclusive business models. www.businesscalltoaction.org

Internet.org: A Facebook-initiated global partnership between technology leaders, nonpro!ts, local communities and experts who are working together to bring the Internet to the two thirds of the world’s population that have no access. www.internet.org

The Practitioner Hub: Developed by the Business Innovation Facility and Innovations Against Poverty, this hub provides space for practitioners to connect, share experiences and gain new insights to help their inclusive business ventures grow. www.businessinnovationfacility.org

World Business Council for Sustainable Development (WBCSD): A CEO-led organization of forward-thinking companies that galvanizes the global business community to create a sustainable future for business, society and the environment. www.wbcsd.org

The support directory highlights organizations and platforms that can assist companies during the implementation, !nancing and research stages. In addition, a list of suggested further reading provides links to useful ICT-related websites and publications. Please note that this section is neither exclusive nor exhaustive, but rather provides a general overview of ICT and BoP market-relevant resources for further exploration.

Implementation support and networking

http://www.bopinc.org

http://www.businessfightspoverty.org

http://www.ideo.org

http://www.d-lab.mit.edu

http://www.practicalaction.org

http://www.smetoolkit.org/smetoolkit/en

http://www.businessinnovationfacility.org

http://www.wdi.umich.edu

http://www.21212.com

http://www.afrilabs.com

http://www.grameenfoundation.applab.org

http://www.ihub.co.ke

http://www.launchgarage.com

http://www.mic.mlab.vn/en/

http://www.startupchile.org

http://www.wayra.org

http://ww.a4ai.org

http://www.businesscalltoaction.org

http://www.internet.org

http://www.businessinnovationfacility.org

http://www.wbcsd.org


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PUBLIC DONORS AND DEVELOPMENT FINANCE INSTITUTIONS

Public donors offer challenge funds, public-private partnership programmes, and preferential debt and equity !nancing.

African Development Bank (AfDB): Supports efforts in Africa to reduce poverty in a sustainable way through projects, !nancing, technology assistance and other services. www.afdb.org

The Africa Enterprise Challenge Fund (AECF): Private-sector fund hosted by the Alliance for a Green Revolution in Africa (AGRA). Its aim is to encourage competition among private-sector companies in investment support for new and innovative business ideas. www.aecfafrica.org

BMZ: The German Federal Ministry for Economic Cooperation and Development (BMZ) is responsible for formulating the principles and strategies underlying German development policy. These form the basis of cooperation projects and programmes developed in conjunction with BMZ’s cooperation countries and other international organisations. www.bmz.de/en

DANIDA: The Danish International Development Agency coordinates humanitarian and other types of assistance in developing countries. www.um.dk/en/danida-en

Department for International Development (DfID): A UK development agency for promoting development and reducing poverty. www.gov.uk/government/organisations/department-for-international-development

Deutsche Investitions- und Entwicklungsgesellschaft (DEG): German development agency !nancing private-sector investments in developing countries. www.deginvest.de/deg/EN_Home/index.jsp

European Bank for Reconstruction and Development (EBRD): Promotes environmentally sound and sustainable development from Central Europe to Central Asia. www.ebrd.com

Inter-American Development Bank (IADB): Supports efforts in Latin America and the Caribbean to reduce poverty in a sustainable way through projects, !nancing, technology assistance and other services. www.iadb.org

International Finance Corporation (IFC): Supports developing countries’ private sectors through investment and advisory services. www.ifc.org

Swedish International Development Cooperation Agency (SIDA): Responsible for the bulk of Swedish development assistance to developing countries. www.sida.se

Swiss Agency for Development and Cooperation (SDC): Responsible for the overall coordination of development activities and humanitarian aid delivered by the Swiss Confederation. www.sdc.admin.ch

USAID: U.S. government agency providing economic and humanitarian assistance worldwide. www.usaid.gov

PRIVATE FOUNDATIONS AND FUNDS

There are multiple venture capital (VC) and impact investing funds that support companies serving BoP markets, as well as a range of private foundations that provide seed grants.

Acumen: A non-pro!t organization that uses entrepreneurial approaches to change the way the world tackles poverty, by raising charitable donations to invest in innovative companies, leaders, and ideas. www.acumen.org

Africa Enterprise Challenge Fund (AECF): A USD 205 million private sector fund that provides grants and interest-free loans to businesses who wish to implement innovative projects in Africa. www.aecfafrica.org

Bill & Melinda Gates Foundation: As one of the largest private foundations in the world, the Bill & Melinda Gates Foundation provides !nancing and support to ICT initiatives such as roll-out of M-PESA in Tanzania. www.gatesfoundation.org

GrayGhost Ventures (GGV): An impact investing company dedicated to providing market-based solutions to entrepreneurs who are addressing the needs of low-income communities in emerging markets. www.grayghostventures.com

GSMA Mobile for Development: This initiative brings together mobile operators, the wider mobile industry and the development community to drive commercial mobile services for underserved people in emerging markets. www.gsma.com/mobilefordevelopment/overview

Omidyar Network: A philanthropic investment company whose initiative on consumer Internet and mobile technologies aims to help innovative ICT companies align incentives, form passionate communities and build trust. www.omidyar.com

Rockefeller Foundation: This foundation supports work that expands opportunities and strengthens resilience to social, economic, health and environmental challenges, including through ICT programs like its “Digital Jobs Africa” project. www.rockefellerfoundation.org

Financing

http://www.afdb.org

http://www.aecfafrica.org

http://www.bmz.de/en

http://www.um.dk/en/danida-en

https://www.gov.uk/government/organisations/department-for-international-development

https://www.gov.uk/government/organisations/department-for-international-development

http://www.deginvest.de/deg/EN_Home/index.jsp

http://www.ebrd.com

http://www.iadb.org

http://www.ifc.org

http://www.sida.se

http://www.sdc.admin.ch

http://www.usaid.gov

http://www.acumen.org

http://www.aecfafrica.org

http://www.gatesfoundation.org

http://www.grayghostventures.com

http://www.gsma.com/mobilefordevelopment/overview

http://www.gsma.com/mobilefordevelopment/overview

http://www.omidyar.com

http://www.rockefellerfoundation.org


Savannah Fund: A seed capital fund specializing in USD 25,000-500,000 investments in early-stage high-growth technology (web and mobile) startups in sub-Saharan Africa. www.savannah.vc

Syngenta Foundation For Sustainable Agriculture (SFSA): SFSA is a non-pro!t organization established by Syngenta, which aims to help small farmers become more professional growers (by developing mobile-based solutions such as the insurance program Kilimo Salama). www.syngentafoundation.org

CROWD FUNDING

The following crowd-funding platforms enable organizations to obtain !nancing for innovative ideas and projects.

Appsplit: A crowdfunding platform for apps that enables clients to raise funds or sell their mobile apps, as well as enlist additional technical assistance to develop a mobile app. www.appsplit.com

FundedByMe: A crowdfunding platform with of!ces across Europe that connects investors and entrepreneurs through reward-based crowdfunding or with equity offers. www.fundedbyme.com/en/

FundRazr: A fundraising site for anyone and anywhere to raise money online for any project or cause, such as crowd funding or Facebook fundraising. www.fundrazr.com

Indiegogo: Launched in 2008, Indiego is one of the largest international crowd-funding sites, with the aim to empower people by enabling them to easily raise money for !lm, music, small businesses etc. www.indiegogo.com

MicroPlace: A for-pro!t PayPal company that provides a brokerage platform where US individuals can invest in companies creating positive social impact anywhere in the world and earn a !nancial return. www.microplace.com

Pi-Slice: A web-based social platform that offers a unique system that links individuals and companies who wish to invest in MENA-based MFIs, which in turn use the funds to provide micro-credit to their customers. www.pi-slice.com/en

RocketHub: An international, open community designed to enable artists, scientists, entrepreneurs, and social leaders to raise money via crowdfunding. www.rockethub.com

SeedUps: A crowdfunding matching engine for startups wishing to raise up to $500,000 from quali!ed high net worth investors. Seedups was established to help early-stage startups solve the sub-$500k equity gap problem, which regularly exists when attempting to raise smaller amounts of equity capital. www.seedups.com

Zidisha: A US nonpro!t organization that allows individuals in developing countries to raise small loans at low interest rates from individual investors worldwide. www.zidisha.org

COMPETITIONS

Competitions can be useful guides in identifying innovative developers and entrepreneurs, and also represent a potential source of start-up funding.

Apps4Africa: This innovation accelerator was launched in 2009 to support African social entrepreneurs that use technology to solve societal problems. The program runs in partnership with the U.S. Department of State and enables technology entrepreneurs to compete for up to $10,000. www.apps4africa.org

GSMA Global Mobile Awards: These awards recognize the mobile industry’s innovators and leaders from all around the world in a range of categories such as best mobile services, apps of the year and government mobile excellence. www.globalmobileawards.com

infoDev Dragon’s Den: This Pitching Competition brings together promising entrepreneurs from developing countries to compete for awards and connect them with mentors, angels, corporate partners, and other high-growth entrepreneurs worldwide. www.infodev.org/infodev-!les/lowres05122013dragonsden-brochure.pdf

Manthan Award: Launched in India in 2004 by a range of stakeholders, the annual Manthan Award recognizes South Asian entrepreneurs on exceptional digital content creation. www.manthanaward.org

mBillionth Award South Asia: This award provides a platform to explore, recognize and honor best practices in the mobile and telecommunications industry across South Asia. www.mbillionth.in

Pivot East: An m:lab East Africa mobile startup competition to amplify and consolidate the gains of East Africa’s mobile developer and entrepreneurship ecosystem. www.pivoteast.com

The Webby Awards: Presented annually by the International Academy of Digital Arts and Science, the Webby Awards honor excellence on the Internet in categories such as websites, interactive advertising, online !lm and mobile technologies. www.webbyawards.com

http://www.savannah.vc

http://www.syngentafoundation.org

http://www.appsplit.com

http://www.fundedbyme.com/en/

http://www.fundrazr.com

http://www.indiegogo.com

http://www.microplace.com

http://www.pi-slice.com/en

http://www.rockethub.com

http://www.seedups.com

http://www.zidisha.org

http://www.apps4africa.org

http://www.globalmobileawards.com

http://www.infodev.org/infodev-files/lowres05122013dragonsden-brochure.pdf

http://www.infodev.org/infodev-files/lowres05122013dragonsden-brochure.pdf

http://www.manthanaward.org

http://www.mbillionth.in

http://www.pivoteast.com

http://www.webbyawards.com


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MARKET RESEARCH AND DATA COLLECTION TOOLS

Public initiatives, research centers and think tanks conduct research on market data, business models and mobile technologies. The following list provides an overview of potential partners conducting such market research.

Business Monitor International: A data and intelligence tool that helps companies manage operating risks and exploit business opportunities. Covering 195 markets and 24 industry sectors, it also includes a section on information technology. www.businessmonitor.com

CINTEL: The Center for Research and Development in Information and Communications Technology is a non-pro!t ICT development centre based in Colombia that provides advisory and consulting services on a wide range of ICT issues. www.cintel.org.co

DataDyne Magpi: Magpi (formerly EpiSurveyor) allows users to quickly design free data collection forms (www.datadyne.org/magpi-mobile/) and then access them on a mobile device to use in the !eld. www.datadyne.org

EMIT: A cloud-based service allowing text data to be gathered via Java-based handsets. EMIT is run by CellLife, which provides technology-based solutions for managing health in developing countries, and openXdata, an open-source software for data collection. www.emitmobile.co.za

Frontline SMS: An open source software that builds professional SMS management tools for BoP markets. www.frontlinesms.com

Jana: A platform that can instantly reward over three billion emerging market consumers in 70 local currencies with prepaid airtime, in exchange for information on their preferences and spending habits. www.jana.com

LIRNEasia: The Learning Initiatives on Reforms for Network Economies Asia is an Asian-focused regional ICT and regulation think tank, which provides independent and practice-oriented research, training and advisory services. www.lirneasia.net

Mobenzi Researcher: A cloud-based service that enables data collection via SMS, wireless application protocol, and/or HTML. www.mobenzi.com/researcher

Mobile Metrix: As a marketing partner for companies and governments, Mobile Metrix gathers data to tailor products to low-income consumers and build distribution networks. www.mobilemetrix.org

RapidSMS: A free and open-source framework for dynamic data collection and communication, leveraging basic SMS technology. www.rapidsms.org

Research ICT Africa: Consisting of a network of researchers in 20 African countries, Research ICT Africa conducts public-interest research on ICT policy and regulation that responds to national, regional and continental needs. www.researchictafrica.net

DATA AND INDICATORS ON ICT

The following websites, platforms and tools provide useful ICT-related data, statistics and trends for developing and emerging markets.

Cisco Visual Networking Index and Global Cloud Index: A Cisco website that includes the Cisco Global Cloud Index (GCI), which forecasts data centre, cloud traf!c and related trends, and the Cisco Visual Networking Index (VNI), which forecasts and analyzes the growth and use of IP networks worldwide. www.cisco.com/en/US/netsol/ns705/networking_solutions_solution.html

CrunchBase: A free database of technology companies, people, and investors that anyone can edit. www.crunchbase.com

Distimo: A free app analytics platform which publishes reports on the state of the mobile app industry, app/platform market share, how to monetize mobile apps and the impact of pricing strategies on app success. www.distimo.com/publications

Ericsson Consumer Lab: The research arm of Ericsson studies behaviours and values – including the way people act and think about ICT products and services – as well as providing insights on the global ICT market and relevant business models. www.ericsson.com/thinkingahead/consumerlab

GSMA Mobile for Development Intelligence: A GSMA site that provides a range of time series data, relevant to mobile-enabled products and services in the developing world. www.mobiledevelopmentintelligence.com/statistics

GSMA Mobile World Live GSM Coverage Maps: GSM Coverage Maps are a resource containing global network coverage, services and roaming information. www.maps.mobileworldlive.com

Internet World Stats: A website featuring Internet user statistics and Facebook subscriber numbers for individual countries, regions and globally. www.internetworldstats.com

ITU ICT-Eye portal: The ICT-Eye website is a source for ICT indicators and statistics, regulatory and policy information, national tariff policies and costing practices. www.itu.int/net4/itu-d/icteye/

Research and data

http://www.businessmonitor.com

http://www.cintel.org.co

http://www.datadyne.org/magpi-mobile/

http://www.datadyne.org/magpi-mobile/

http://www.datadyne.org

http://www.emitmobile.co.za

http://www.frontlinesms.com

http://www.jana.com

http://www.lirneasia.net

http://www.mobenzi.com/researcher

http://www.mobilemetrix.org

http://www.rapidsms.org

http://www.researchictafrica.net

http://www.cisco.com/en/US/netsol/ns705/networking_solutions_solution.html

http://www.cisco.com/en/US/netsol/ns705/networking_solutions_solution.html

http://www.crunchbase.com

http://www.distimo.com/publications

http://www.ericsson.com/thinkingahead/consumerlab

http://www.ericsson.com/thinkingahead/consumerlab

http://www.mobiledevelopmentintelligence.com/statistics

http://www.mobiledevelopmentintelligence.com/statistics

http://www.maps.mobileworldlive.com

http://www.internetworldstats.com

http://www.itu.int/net4/itu-d/icteye/


ICT4D NEWS, BLOGS AND COMMUNITIES

AllAfrica: An ICT news daily website covering articles from over 130 African news organizations. www.allafrica.com/ict/

Balancing Act: An organization that publishes news articles and reports on the telecoms, Internet and audio-visual media industries in Africa, and provides consultancy services on a range of ICT-related topics. www.balancingact-africa.com

CGAP Blog: This blog looks at evidence-based market developments that advance poor people’s access to !nance. www.cgap.org/blog

GSMA Mobile Business Brie!ng: A website that publishes daily news, analysis and blog features on m-apps, mobile devices, mobile health and m-money. www.mobilebusinessbrie!ng.com

GSMA Mobile for Development Blog: A blog that provides research and news articles on efforts to drive commercial mobile services for underserved people in emerging markets. www.gsma.com/mobilefordevelopment/blog/

Next Billion: A blog bringing together business leaders, social entrepreneurs, NGOs, policy makers and academics who want to explore the connection between enterprise and development at the BoP. www.nextbillion.net

Scidev.net: This site posts news and analysis on science and development, with a focus on different industries including technology. www.scidev.net/en/new-technologies/

The Economic Times – Emerging Businesses: This section of the Indian newspaper focuses on SME and ICT developments in India. www.economictimes.indiatimes.com/news/emerging-businesses

Think!: This blog of the non-pro!t think-tank Think Innovation circulates knowledge on how digital technologies can enable innovation and sustainable development. www.thinkinnovation.org/en/blog/

World Bank IC4D Blog: This World Bank blog explores the impact of ICT on development. www.blogs.worldbank.org/ic4d/

Zunia: This website provides a space for development practitioners to share knowledge and includes a section on Science and Technology and, more speci!cally, ICT. www.zunia.org

GENERAL LITERATURE ON ICT IN DEVELOPING AND EMERGING COUNTRIES

Bilbao-Osorio, Beñat; Dutta, Soumitra; Lanvin, Bruno (editors) (2013) The Global Information Technology Report 2013: Growth and Jobs in a Hyperconnected World Overview of the current state of ICT readiness in the world. www3.weforum.org/docs/WEF_GITR_Report_2013.pdf

BMZ (2013) Information and communications technology (ICT) - Key Technologies for Sustainable Development, BMZ Strategy Paper 2013 Outlines framework and guidelines for supporting effective ICT use and dissemination in partner countries of German development cooperation. www.bmz.de/en/publications/type_of_publication/strategies/Strategiepapier331_02_2013.pdf

Brown, Brad; Chui, Michael; Manyika, James (2011) Are you ready for the era of ‘big data’? Looks at ways big data could change competition. www.mckinsey.com/insights/strategy/are_you_ready_for_the_era_of_big_data

Brynjolfson, Erik; Hitt, Lorin M., Kim, Heekyung Hellen (2011) Strength in Numbers: How does data-driven decision-making affect !rm performance? How companies using data-driven decision-making have shown higher performance. www.ebusiness.mit.edu/research/papers/2011.12_Brynjolfsson_Hitt_Kim_Strength%20in%20Numbers_302.pdf

Chikweche, Tendai; Fletcher, Richard (2009) Is customer relationship management a useful approach to tapping the market at the BOP? Looks at the potential of CRM with reference to low-income consumers. www.handle.uws.edu.au:8081/1959.7/504430

Cooper, Ansulie; Kubzansky, Michael (2013) m-Enabled Inclusive Business Models: Applications for Health Presenting four case studies on m-enabled health-care solutions. www.shopsproject.org/resource-center/m-enabled-inclusive-business-models-applications-for-health

Endeva (2011) Energize the BoP! Energy Business Model Generator for Low-Income Markets. A Practitioners’ Guide This practitioner guide provides empirically based information and frameworks to develop, improve and scale inclusive energy business models. www.giz.de/Wirtschaft/de/downloads/giz2011-0617en-endeva.pdf

Further reading

ITU Measuring the Information Society: This annual report presents two benchmarking tools to monitor information society developments and compares the cost and affordability of ICT services in more than 160 countries globally. www.itu.int/ITU-D/ict/publications/idi/

Net Index: This website provides upload and download speed statistics by country, along with a service quality index, a value index (measuring affordability) and a promise index (actual vs. promised Internet speed by operator). www.netindex.com

Nokia Siemens Networks Connectivity Scorecard: This scorecard provides a global ICT index that ranks 52 countries on their deployment of ICT infrastructure, as well as the extent to which governments, businesses and consumers make use of connectivity technologies to enhance social and economic prosperity. www.connectivityscorecard.org

UNCTAD Measuring ICT website: The UNCTAD-run website assesses the development of ICT statistics and indicators worldwide, with an emphasis on supporting ICT policies and information economies in developing countries. www.new.unctad.org/default____575.aspx

VisionMobile: A research company that publishes reports on the app economy and mobile business models for developing, emerging and developed economies. www.visionmobile.com

World Bank Little Data Book on Information and Communication Technology: This book illustrates ICT progress in 216 economies and provides comparative statistics on the technology sector between 2005 and 2010 across several sectors. www.web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTINFORMATIONANDCOMMUNICATIONANDTECHNOLOGIES/0,,contentMDK:23239755~pagePK:148956~piPK:216618~theSitePK:282823,00.html

Xyo: The Global App Download Reports 1.0 provide data on paid and unpaid app downloads by app, OS, publisher and country, covering all regions except Africa. www.xyo.net/app-downloads-reports/

http://www.allafrica.com/ict/

http://www.balancingact-africa.com

http://www.cgap.org/blog

http://www.mobilebusinessbriefing.com

http://www.gsma.com/mobilefordevelopment/blog/

http://www.mobilebusinessbriefing.com

http://www.nextbillion.net

http://www.scidev.net/en/new-technologies/

http://www.economictimes.indiatimes.com/news/emerging-businesses

http://www.economictimes.indiatimes.com/news/emerging-businesses

http://www.thinkinnovation.org/en/blog/

http://www.blogs.worldbank.org/ic4d/

http://www.zunia.org

http://www3.weforum.org/docs/WEF_GITR_Report_2013.pdf

http://www3.weforum.org/docs/WEF_GITR_Report_2013.pdf

http://www.bmz.de/en/publications/type_of_publication/strategies/Strategiepapier331_02_2013.pdf



http://www.mckinsey.com/insights/strategy/are_you_ready_for_the_era_of_big_data

http://www.mckinsey.com/insights/strategy/are_you_ready_for_the_era_of_big_data

http://www.ebusiness.mit.edu/research/papers/2011.12_Brynjolfsson_Hitt_Kim_Strength%20in%20Numbers_302.pdf



http://www.handle.uws.edu.au:8081/1959.7/504430

http://www.shopsproject.org/resource-center/m-enabled-inclusive-business-models-applications-for-health

http://www.shopsproject.org/resource-center/m-enabled-inclusive-business-models-applications-for-health

http://www.giz.de/Wirtschaft/de/downloads/giz2011-0617en-endeva.pdf

http://www.giz.de/Wirtschaft/de/downloads/giz2011-0617en-endeva.pdf

http://www.itu.int/ITU-D/ict/publications/idi/

http://www.netindex.com

http://www.connectivityscorecard.org

http://www.new.unctad.org/default____575.aspx

http://www.visionmobile.com

http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTINFORMATIONANDCOMMUNICATIONANDTECHNOLOGIES/0,,contentMDK:23239755~pagePK:148956~piPK:216618~theSitePK:282823,00.html





http://www.xyo.net/app-downloads-reports/


GIZ, BMZ (2011) Promoting inclusive business models for sustainable development – experience from development cooperation Many different terms are used to describe business solutions for reducing poverty. BMZ and its implementing organizations support many of the concepts that underpin these terms. This overview presents the key terms and explains their different emphases. www.giz.de/Wirtschaft/de/downloads/giz2011-en-sustainable-development-business-model.pdf

GIZ, BMZ (2011) IT Sector Promotion in Developing and Emerging Countries. Manual The Manual on IT Sector Promotion in Developing and Emerging Countries seeks to address the following question: how to maximise the contribution of the IT industry in developing and emerging countries towards sustainable economic development and poverty reduction. In order to achieve this, the Manual analyses the obstacles impeding the competitive development of this innovative industry in developing and emerging countries. www.ict.ez-blogs.de/wp-content/uploads/2011/12/Manual_IT-Sector-Promotion_blog.pdf

GIZ, BMZ (2011) IT Sector Promotion in Developing and Emerging Countries. Toolbox The Toolbox on IT Sector Promotion in Developing and Emerging Countries seeks to address the following question: how to maximise the contribution of the IT industry in developing and emerging countries towards sustainable economic development and poverty reduction. www.ict.ez-blogs.de/wp-content/uploads/2011/11/Toolbox_IT-Sector_Druck_Lesez_1.pdf

GIZ, BMZ (2012) Growing Business with Smallholders A Guide to Inclusive Agribusiness This practitioner guide provides company representatives with practical guidance on how to develop successful business with smallholders. www.agribusiness-with-smallholders.net/!leadmin/user_upload/publications/Guide-Growing_Business_with_Smallholders_large.pdf

GIZ, BMZ (2012) Bringing Medicines to Low-income Markets. A guide to creating inclusive business models for pharmaceutical companies The 4A+1 Framework developed for this practitioner guide enables companies to develop solutions and product ideas for supplying patients among poorer segments of the population. www.giz.de/Wirtschaft/de/downloads/giz2012-0025en-medicines-low-income-markets.pdf

GSMA (2012) Striving and Surviving: Exploring the Lives of Women at the Base of the Pyramid Explores the lives of women at the Base of the Pyramid (BoP), those living on less than two US dollars a day. www.gsma.com/mobilefordevelopment/gsma-mwomen-striving-and-surviving-exploring-the-lives-of-bop-women

Haapkylä, Heli (2011) Review of Bene!ts of Mobility in the Base of the Pyramid (BoP) Markets Investigates the bene!ts of mobile phones for low-income consumers. www.management.aalto.!/en/research/groups/bop/publications/haapkyla_2011_mobility.pdf

Hilbert, Martin (2013) Big Data for Development: From Information- to Knowledge Societies Reviews literature and empirical evidence on big data. www.papers.ssrn.com/sol3/papers.cfm?abstract_id=2205145

HYSTRA (2011) Leveraging ICTs for the BOP How ICT can provide access to education, healthcare, agro-services or !nancial services for low-income consumers. www.tno.nl/content.cfm?context=overtno&content=persbericht&laag1=37&item_id=201109140047&Taal=2

Iansiti, Marco; Richards, Gregory L. (2005) Information Technology Ecosystem Health and Performance Investigates the health and wellbeing of the Information Technology industry. www.docstoc.com/docs/42029429/Information-Technology-Ecosystem-Health-and-Performance

infoDev ICT Regulation Toolkit The ICT Regulation Toolkit is a live resource for policy-makers, regulators, the telecom industry, and consumers. www.ictregulationtoolkit.org

Meeker, Mary; Wu, Liang (2013) Internet Trends Provides an overview and statistics on global Internet, computing and mobile trends. www.slideshare.net/kleinerperkins/2012-kpcb-internet-trends-yearend-update

McKinsey Quarterly (2013) On-demand marketing How emerging technologies are radically personalizing the consumer experience. www.mckinsey.com/insights/mckinsey_quarterly/digital_newsstand/2013_number_2

Opera (2012) State of the Mobile Web, March 2012: Africa’s mobile web atlas Provides statistics on top 10 Internet domains and top 10 handsets for African countries. www.media.opera.com/media/smw/2012/smw062012.pdf

Opera (2012) State of the Mobile Web, July 2012: The mobile web atlas of Asia Paci!c Provides statistics on top 10 Internet domains and top 10 handsets for Asian Paci!c countries. www.media.opera.com/media/smw/2012/smw072012.pdf

Opera (2012) State of the Mobile Web, August 2012: The mobile web atlas in Latin America Provides statistics on top 10 Internet domains and top 10 handsets for Latin American countries. www.media.opera.com/media/smw/2012/smw082012.pdf

Opera (2012) State of the Mobile Web, September 2012: India’s favorite shopping mall: the mobile phone Provides statistics on international and Indian domains and top 10 devices per region and major city. www.media.opera.com/media/smw/2012/smw092012.pdf

Opera (2012) State of the Mobile Web, October 2012: A world atlas of social media usage Provides statistics on social media usage per country. www.media.opera.com/media/smw/2012/smw102012.pdf

Research ICT Africa, Intelecon (2012) Mobile Usage at the Base of the Pyramid in South Africa Investigates the demand for mobile applications, services and products by low-income consumers. www.infodev.org/articles/mobile-usage-base-pyramid-south-africa

Strategic Business Advisors (Africa) Ltd. (2011) Impact Investing: Challenges and Opportunities in the East African ICT Sector Identi!es the impediments to socially impactful technology investments in the region. www.scribd.com/doc/49583439/Impact-Investing-Challenges-Opportunities-In-The-East-African-ICT-Sector

UNCTAD, BMZ Promoting IT Sector Development through Public Procurement This study seeks to address the lack of information about the link between public procurement and local IT sector development in developing and emerging economies and to provide decision makers with an improved basis for understanding when and how public procurement can be leveraged for the development of a vibrant IT sector. www.unctad.org/en/PublicationsLibrary/dtlstict2012d5_en.pdf

UNICEF, Boakye, Kojo; Scott, Nigel; Smyth, Claire (2010) Mobiles for Development Review of the global mobile telephony landscape in emerging markets. www.unicef.org/cbsc/!les/Mobiles4DeReport.pdf

VisionMobile (2012) Telco Innovation Toolbox: Economic Models for Managing Disruption and Reinventing the Telco www.visionmobile.com/product/telco-innovation-toolbox-report/

Yonazi, Enock; Kelly, Tim; Halewood, Naomi; Blackman, Colin (editors) (2012) eTransform Africa: The Transformational Use of Information and Communication Technologies in Africa The report captures the existing use of ICT in six sectors: agriculture, climate change, education, health, !nancial services and government. www.siteresources.worldbank.org/ EXTINFORMATIONANDCOMMUNICATION ANDTECHNOLOGIESResources/282822- 1346223280837/MainReport.pdf

68 69

http://www.giz.de/Wirtschaft/de/downloads/giz2011-en-sustainable-development-business-model.pdf

http://www.giz.de/Wirtschaft/de/downloads/giz2011-en-sustainable-development-business-model.pdf

http://www.ict.ez-blogs.de/wp-content/uploads/2011/12/Manual_IT-Sector-Promotion_blog.pdf



http://www.ict.ez-blogs.de/wp-content/uploads/2011/11/Toolbox_IT-Sector_Druck_Lesez_1.pdf



http://www.agribusiness-with-smallholders.net/fileadmin/user_upload/publications/Guide-Growing_Business_with_Smallholders_large.pdf



http://www.giz.de/Wirtschaft/de/downloads/giz2012-0025en-medicines-low-income-markets.pdf

http://www.giz.de/Wirtschaft/de/downloads/giz2012-0025en-medicines-low-income-markets.pdf

http://www.gsma.com/mobilefordevelopment/gsma-mwomen-striving-and-surviving-exploring-the-lives-of-bop-women



http://www.management.aalto.fi/en/research/groups/bop/publications/haapkyla_2011_mobility.pdf

http://www.management.aalto.fi/en/research/groups/bop/publications/haapkyla_2011_mobility.pdf

http://www.papers.ssrn.com/sol3/papers.cfm?abstract_id=2205145


http://www.tno.nl/content.cfm?context=overtno&content=persbericht&laag1=37&item_id=201109140047&Taal=2



http://www.docstoc.com/docs/42029429/Information-Technology-Ecosystem-Health-and-Performance

http://www.docstoc.com/docs/42029429/Information-Technology-Ecosystem-Health-and-Performance

http://www.ictregulationtoolkit.org

http://www.slideshare.net/kleinerperkins/2012-kpcb-internet-trends-yearend-update

http://www.slideshare.net/kleinerperkins/2012-kpcb-internet-trends-yearend-update

http://www.mckinsey.com/insights/mckinsey_quarterly/digital_newsstand/2013_number_2

http://www.mckinsey.com/insights/mckinsey_quarterly/digital_newsstand/2013_number_2

http://www.media.opera.com/media/smw/2012/smw062012.pdf










http://www.infodev.org/articles/mobile-usage-base-pyramid-south-africa


http://www.scribd.com/doc/49583439/Impact-Investing-Challenges-Opportunities-In-The-East-African-ICT-Sector



http://www.unctad.org/en/PublicationsLibrary/dtlstict2012d5_en.pdf

http://www.unctad.org/en/PublicationsLibrary/dtlstict2012d5_en.pdf

http://www.unicef.org/cbsc/files/Mobiles4DeReport.pdf

http://www.visionmobile.com/product/telco-innovation-toolbox-report/

http://www.visionmobile.com/product/telco-innovation-toolbox-report/

http://www.siteresources.worldbank.org/EXTINFORMATIONANDCOMMUNICATIONANDTECHNOLOGIESResources/282822-1346223280837/MainReport.pdf





M-MONEY AND FINANCIAL SERVICES

Bill & Melinda Gates Foundation, Radcliffe, Dan; Voorhies, Rodger (2012) A Digital Pathway to Financial Inclusion The authors depict what digital !nancial inclusion would look like and investigate its bene!ts. www.papers.ssrn.com/sol3/papers.cfm?abstract_id=2186926

GSMA GSMA Mobile Money for the Unbanked programme The programme involves working with mobile operators and the !nancial industry to accelerate the availability of affordable !nancial services that provide safety, security and convenience to the unbanked. www.gsma.com/mobilefordevelopment/programmes/mobile-money-for-the-unbanked

Heyer, Amrik; Mas, Ignacio (2011) Fertile Grounds for Mobile Money: Towards a Framework for Analyzing Enabling Environments Seeks to understand the ecosystem dynamics affecting the uptake of mobile money. www.papers.ssrn.com/sol3/papers.cfm?abstract_id=1593389

IFC (2011) IFC Mobile Money Study, 2011, Summary Report The IFC Mobile Money Study was developed to increase understanding of mobile money and help address key issues in scaling up further development of m-money ecosystems globally. www.ifc.org/wps/wcm/connect/fad057004a052eb88b23ffdd29332b51/MobileMoneyReport-Summary.pdf?MOD=AJPERES

Jimenez, Alberto, Vanguri, Prasanna (2010) Cash Replacement through Mobile Money in Emerging Markets: The FISA Approach This short paper looks at how m-money can be faster, safer, and more accessible. www-05.ibm.com/za/of!ce/pdf/g-cash.pdf

Stuart, Guy; Cohen, Monique (2011) Cash In, Cash Out Kenya: The Role of M-PESA in the Lives of Low-Income People Using a Financial Diaries methodology, Micro!nance Opportunities undertook a study to examine how low-income Kenyans use M-PESA. www.micro!nanceopportunities.org/docs/cash_in_cash_out_kenya.pdf

MOBILE APPLICATIONS

Corral, Luis; Janes, Andrea; Remencius, Tadas (2011) Potential advantages and disadvantages of multiplatform development frameworks - A vision on mobile environments The authors present a position on potential advantages and disadvantages that may rise after the utilization of multiplatform frameworks for creating mobile applications www.sciencedirect.com/science/article/pii/S1877050912005303#

PriceWaterhouseCoopers (2010) Leveraging Mobile Technology as a Game Change for Development This presentation uses case studies to look at government service delivery through mobiles, !nancial inclusion and identity authentication through mobiles, and evolving education delivery mechanisms through mobiles. www.siteresources.worldbank.org/EXTEDEVELOPMENT/Resources/PriceWaterhouseCoopers.pptx

Sharma, Chetan (2011) Sizing up the Global Mobile Apps Market The paper presents the results of a study on the mobile apps market, and discusses the future of mobile apps and how the app economy is likely to evolve. www.telecomcircle.com/wp-content/uploads/2009/05/Sizing_up_the_Global_Mobile_Apps_Market.pdf

SIDA (2010) The Innovative Use of Mobile Applications in East Africa Overview of the current state of mobile phone usage and services in East Africa. www.sidapublications.citat.se/interface/stream/mabstream.asp?!letype=1&orderlistmainid=2861&print!leid=2861&!lex=4053423378442

Smith, Fiona (2010) Key Trends in Mobile Applications Bottom of the Pyramid Market data and brief descriptions of apps used at the BoP. www.kiwanja.net/database/document/document_key_trends_mobile_apps_FionaSmith.pdf

VisionMobile (2011) Mobile Platforms - The Clash of the Ecosystems A critical analysis of mobile platforms and the battle for dominance. www.visionmobile.com/blog/2011/11/new-report-mobile-platforms-the-clash-of-ecosystems/

VisionMobile (2012) Developer Economics 2012 This report focuses on !ve main areas: the rede!nition of mobile ecosystems, developer segmentation, revenues vs. costs in the mobile economy, app marketing and distribution and regional supply vs. demand for apps. www.visionmobile.com/product/developer-economics-2012/

ICT IN AGRICULTURE

Commonwealth Telecommunications Organization CTO ICT Update Features a selection of commissioned articles on ICT in agriculture. www.ictupdate.cta.int

Karippacheril, Tina George; Srivastava, Lara; Diaz Rios, Luz (2011) Global Markets, Global Challenges: Improving Food Safety and Traceability while Empowering Small Producers Several case studies of mobile traceability solutions used by small producers in developing countries. www.ictinagriculture.org/ictinag/sites/ictinagriculture.org/!les/!nal_Module12.pdf

Mittal, Surabhi; Gandhi, Sanjay; Tripathi, Gaurav (2010) Socio-Economic Impact of Mobile Phones on Indian Agriculture Discusses evidence that mobiles are being used in ways which contribute to productivity enhancement in agriculture. www.icrier.org/pdf/WorkingPaper246.pdf

Payne, Judy; Shulte, Bruce; Ferris, Shaun; Sergeant, Andrew; Davies, Mark (2010) Designing Scalable and Sustainable Market Information Services for Grain Markets in Malawi Describes USAID’s Market Linkages Initiative (MLI), which sought to integrate market information with Malawi’s grain bulking systems. www.communities.usaidallnet.gov/ictforag/node/18

USAID (2010) Brie!ng Paper: ICT Applications for Distribution and Supply Chain Management in Sub-Saharan African Agriculture Provides information on ICT applications that support distribution and supply chain management. www.gsma.com/mobilefordevelopment/ wp-content/uploads/2012/04/ictapplications fordistributionandsupplychainmanagement insubsaharanafricanagriculture.pdf

Vodafone, Accenture (2011) Connected Agriculture: The role of mobile in driving ef!ciency and sustainability in the food and agriculture value chain The twelve speci!c opportunities explored in this study could increase agricultural income by around USD 138 billion across 26 of Vodafone’s markets in 2020. www.vodafone.com/content/dam/vodafone/about/sustainability/2012/pdf/connected_agriculture.pdf

The World Bank Group (2011) ICT in Agriculture Sourcebook Provides lessons learned, guiding principles, and hundreds of examples and case studies. www.ictinagriculture.org/sourcebook/module-12-improving-food-safety-and-traceability



http://www.gsma.com/mobilefordevelopment/programmes/mobile-money-for-the-unbanked

http://www.gsma.com/mobilefordevelopment/programmes/mobile-money-for-the-unbanked



http://www.ifc.org/wps/wcm/connect/fad057004a052eb88b23ffdd29332b51/MobileMoneyReport-Summary.pdf?MOD=AJPERES




http://www-05.ibm.com/za/office/pdf/g-cash.pdf

http://www.microfinanceopportunities.org/docs/cash_in_cash_out_kenya.pdf

http://www.microfinanceopportunities.org/docs/cash_in_cash_out_kenya.pdf

http://www.sciencedirect.com/science/article/pii/S1877050912005303#

http://www.sciencedirect.com/science/article/pii/S1877050912005303#

http://www.siteresources.worldbank.org/EXTEDEVELOPMENT/Resources/PriceWaterhouseCoopers.pptx



http://www.telecomcircle.com/wp-content/uploads/2009/05/Sizing_up_the_Global_Mobile_Apps_Market.pdf



http://www.sidapublications.citat.se/interface/stream/mabstream.asp?filetype=1&orderlistmainid=2861&printfileid=2861&filex=4053423378442



http://www.kiwanja.net/database/document/document_key_trends_mobile_apps_FionaSmith.pdf

http://www.kiwanja.net/database/document/document_key_trends_mobile_apps_FionaSmith.pdf

http://www.visionmobile.com/blog/2011/11/new-report-mobile-platforms-the-clash-of-ecosystems/

http://www.visionmobile.com/blog/2011/11/new-report-mobile-platforms-the-clash-of-ecosystems/

http://www.visionmobile.com/product/developer-economics-2012/







http://www.ictupdate.cta.int

http://www.ictinagriculture.org/ictinag/sites/ictinagriculture.org/files/final_Module12.pdf

http://www.ictinagriculture.org/ictinag/sites/ictinagriculture.org/files/final_Module12.pdf

http://www.icrier.org/pdf/WorkingPaper246.pdf

http://www.communities.usaidallnet.gov/ictforag/node/18

http://www.communities.usaidallnet.gov/ictforag/node/18

http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2012/04/ictapplicationsfordistributionandsupplychainmanagementinsubsaharanafricanagriculture.pdf




http://www.vodafone.com/content/dam/vodafone/about/sustainability/2012/pdf/connected_agriculture.pdf



http://www.ictinagriculture.org/sourcebook/module-12-improving-food-safety-and-traceability


A P P R O A C H

70 71

ApproachGoals and methodThe purpose of this guide is to assist companies in adopting state-of-the-art mobile technologies, in order to create more inclusive business models and successfully serve BoP markets. The guide showcases in which business functions and how companies can leverage ICT to improve their inclusive business models and create more innovative products and services for low-income clients. The practitioner guide is based on an extensive literature review, a diverse range of case studies and high-level interviews with experts and company representatives. It also summarizes research on key technologies and trends, and evaluates their relevance for BoP consumers and companies serving them. Based on this input, four key areas are identi!ed in which companies can leverage ICT to improve their business functions and hence better serve their clients. For each of these four areas, key lessons and practical advice were developed for companies to consider.

Case studiesIn addition to reviewing existing literature and research, a strong focus was placed on researching and studying companies that successfully leverage ICT. After screening over 90 such companies, it was decided to focus on 40 that met the following criteria:

companies that are beyond the pilot stage and have attained a certain level of success – to be understood as either or all of the following: being pro!table, attracting signi!cant investors or having achieved signi!cant customer numbers; and

companies that have a strong but not necessarily exclusive focus on BoP markets.

The companies included in this guide span a range of different sectors, regions and business models (including both B2B and B2C). In particular, the focus is on companies that might not have been featured before and which leveraged ICT in new and innovative ways.

A total of over 40 case studies were researched in detail by collecting information from news articles, existing literature and their websites. These case studies were entered into a database format, capturing consistent data for each, including:

Key information: countries of operation, sector, technology used, type of application, number of customers, year of company start-up;

Description: lead company, partners, target market, detailed description of how the ICT-enabled product or service works, product/services provided, innovative elements;

Business model: main costs, revenue sources, type of pricing, commercial viability, other !nancial information, value proposition.

InterviewsA total of 17 interviews were conducted, primarily with the companies themselves as well as additional experts. The questionnaire consistently covered key topics and questions related to: market assessment, product or service development, pricing models, customer access devices, scaling the business, marketing and awareness, sales and distribution channels, payment channels, investment horizon and !nancing, partners and plans for the future.

FIGURE 18

Case studies by sector (% of total)

Source: Intelecon, 2013

Utilities

Agriculture

EmploymentEducation

Finance / Insurance

Health

Retail9.5

33.3

11.911.9

14.3

7.1

2.4

Software

4.8

4.8m-Commerce


Name of Application Country or Region Sector Technology Type of Application

AgriManagr Kenya Agriculture Mobile app: SMS Value chain data & software

B2Bpricenow.com Philippines Agriculture Mobile app: SMS e-commerce platform

Babajob India Employment Mobile app: SMS Job matching site

Behtar Zindagi (Handygo) India Agriculture LBS: SMS, WAP, voice Information services, some education

biNu Global (most used in: India, Nigeria, Indonesia, Ethiopia)

Software Cloud Boost capacity & functionality of phones

Bozza South Africa m-Commerce Mobile app: feature phones and smartphones

Digital content distribution

Cellbazaar Bangladesh m-Commerce Mobile app: SMS, WAP, voice "Craigslist/e-Bay" via mobile phones

CloudFactory Nepal, Kenya - eventually global Employment Cloud: computer/Internet Microwork platform

Dialog Tradenet Sri Lanka Agriculture Mobile app: SMS, USSD, web e-commerce/price information

Dimagi Over 30 countries Health Cloud e-health services (ECG)

Drishtee India Retail Computer kiosks Retail plus Internet kiosk, e-services

eChoupal India Agriculture Computer/Internet Information, products, services, Internet kiosk retail outlet

Esoko Sub-Saharan Africa Agriculture Mobile app: SMS Information & service portal for entire value chain

Grundfos LIFELINK Kenya Utilities/Water Mobile app: USSD Water supply prepaid by mobile

Hollard-PEP Funeral Insurance South Africa Insurance Mobile app: SMS Funeral insurance

iCow Kenya Agriculture Mobile app: SMS Specialised service

IKSL India Agriculture Voice services Information and extension services

Jana Over 80 countries Employment Cloud: Universal Cellular Messaging Protocol (UCMP)

Microwork, data & surveys

Kilimo Salama Kenya, Rwanda Insurance Mobile money: M-PESA Weather indexed - for small farmers

Living Goods Uganda, Kenya Retail Mobile app: SMS Value-added service, sales and marketing

M-Farm Kenya Agriculture Mobile app: SMS Information service, some supply-buyer linkage

M-Kopa Kenya Utilities Mobile money: M-PESA Solar lighting via prepaid m-payment

Mambu Global Finance Cloud Software/MIS for MFIs

Mango Learning India, USA Education Mobile game Educational game

Medafrica Kenya / East Africa Health Mobile app: Available on smartphone operating systems

Information services

Microplace Global Finance Computer/Internet Facilitates micro-investment

Mobisol Kenya, Tanzania, Ghana Utilities Mobile money: M-PESA Solar lighting via prepaid m-payment

mPedigree Ghana, Kenya, Nigeria, India, Cameroon, Tanzania, Uganda, Bangladesh

Health Mobile app: SMS Drug veri!cation

Nano Ganesh India Agriculture Mobile app: GSM remote control system

Remote irrigation control

Narayana Hrudayalaya Hospitals

India Health e-health technologies e-health services (ECG)

Nokia Life India, Indonesia, China, Nigeria Agriculture Mobile app: SMS Information services, some education

PharmaSecure India, Nigeria Health Mobile app: SMS Drug veri!cation

Reuters Market Light India Agriculture Mobile app: SMS Information services

Samasource Gambia, Ghana, Haiti, India, Kenya, Nigeria, Pakistan, South Africa and Ugands

Employment Cloud Microwork platform

SAP African Cashew Initiative Global Software Mobile app: mobile and computer app

Value chain data & software

Simpa Networks India Utilities Mobile money Solar lighting via prepaid m-payment

Souktel Palestian Territories, Africa Employment Mobile app: SMS, voice, web Job matching site

SourceTrace India, Costa Rica, Mexico, Uganda Agriculture Mobile app: mobile and computer app

Value chain data & software

Sproxil Nigeria, Kenya, India, Ghana Health Mobile app: SMS Drug veri!cation

Sustainable Harvest Relationship Information Tracking System App

Of!ces in: USA, Tanzania, Mexico, Colombia, Peru. Does business in 15 countries.

Agriculture/Retail Mobile app: mobile and computer app

Information tracking, training

Tiendatek Latin America Retail Mobile app: Android app POS software for small shops

Tigo Family Care Insurance Ghana Insurance Mobile app: SMS Life insurance

72 73

Case study references

No Case Study Sources Webinars

1 AgriManagr

2 Grundfos Grundfos LIFELINK

3 Sustainable Harvest Webinar with David Griswold, President, Sustainable Harvest @ www.giz.de/connect-the-boP

4 Handygo

added-services-to-rural-communities-in-india

5 Jana Webinar with Benjamin Olding, COO, Jana @ www.giz.de/connect-the-boP

6 Mobisol

launches-optimised-version-of-its-sms-based-pay-as-you-go-solar-home-

7 M-PESA & TrueMoney

industries/!nancial+markets/publications/mobile+money+study+2011

8 Mambu Webinar with Eugene Danilkis, CEO and Founder, Mambu @ www.giz.de/connect-the-boP

9 Kilimo Salama

Agriculture%20Kilimo%20Salama%20contribution%20Marc%202012.pdf

Webinar with Benjamin Njenga, Analytic and IT Manager for Kilimo Salama, Syngenta Foundation @ www.giz.de/connect-the-boP

10 Nano Ganesh Webinar with Santosh Ostwal, CEO and Founder, Nano Ganesh @ www.giz.de/connect-the-boP

http://www.virtualcity.co.ke/portfolio/agrimanagr-solution/

http://www.virtualcity.co.ke/wp-content/uploads/2013/07/Agrimanagr-Brochure-010313.pdf

http://www.slideshare.net/herbo85/bds-conference-automation-of-agri-value-chains

http://www.grundfoslifelink.com

http://www.grundfoslifelink.com/pdf/lifelink_concept_brochure.pdf

http://www.sustainableharvest.com

http://www.sustainableharvest.com/mobile-tech/

http://www.sustainableharvest.com/introducing-sustainable-harvests-cupping-app/

http://www.handygo.com/handy/NewSite/index.html

http://www.telecomindiaonline.com/lets-talk-telecom-e-magazine-mvas-edition.pdf

http://www.gsma.com/mobilefordevelopment/a-call-towards-a-better-life-marketing-agri-value-added-services-to-rural-communities-in-india

http://www.gsma.com/mobilefordevelopment/a-call-towards-a-better-life-marketing-agri-value-added-services-to-rural-communities-in-india

http://www.jana.com

http://www.plugintheworld.com

http://www.pv-magazine.com/services/press-releases/details/beitrag/mobisol-launches-optimised-version-of-its-sms-based-pay-as-you-go-solar-home-system_100010322/#axzz2fl2Z6mgc



http://www.safaricom.co.ke

http://www.mambu.com

http://www.diversity.net.nz/mambu-aiming-to-power-a-banking-disruption/2012/10/25/

http://www.kilimosalama.wordpress.com

http://www.syngentafoundation.com/content/api/org_files/PPP%20opportunities%20in%20Agriculture%20Kilimo%20Salama%20contribution%20Marc%202012.pdf

http://www.syngentafoundation.com/content/api/org_files/PPP%20opportunities%20in%20Agriculture%20Kilimo%20Salama%20contribution%20Marc%202012.pdf

http://www.syngentafoundation.org/index.cfm?pageID=562

http://www.nanoganesh.com


No Case Study Sources Webinars

11 CloudFactory Webinar with Mark Sears, Founder and CEO, CloudFactory @ www.giz.de/connect-the-boP

12 MicroEnsure and Tigo Family Care Insurance

model-to-mobile-insurance/

Webinar with Peter Gross, Regional Director – Africa, MicroEnsure @ www.giz.de/connect-the-boP

13 PharmaSecure

id-codes-to-take-on-counterfeit-drug-problem/

Webinar with Keith Nalepka, Global VP Sales and Marketing, PharmaSecure @ www.giz.de/connect-the-boP

14 CellBazaar

v3.0.pdf

15 SAP and the African Cashew Initiative Markets, SAP

helps-small-scale-farmers-in-ghana-through-it

16 Living Goods

17 biNu

googles-eric-schmidt-invest-in-binu-mobile-via-2-million-round/

18 iCow

development/%2867%29/1343644746

ow/-/1248928/1516098/-/nh0ebk/-/index.html

partnership-with-icow

http://www.CloudFactory.com

http://www.crunchbase.com/company/CloudFactory

http://www.microensure.com

http://www.cgap.org/blog/can-phones-drive-insurance-markets-initial-results-ghana

http://www.cgap.org/blog/freemium-spawning-insurance-market-ghana

http://www.gsma.com/mobilefordevelopment/tigo-bima-and-microensure-bring-a-freemium-model-to-mobile-insurance/

http://www.gsma.com/mobilefordevelopment/tigo-bima-and-microensure-bring-a-freemium-model-to-mobile-insurance/

http://www.pharmasecure.com

http://www.forbes.com/sites/jenniferhicks/2012/02/16/pharmasecure-uses-mobile-device-and-id-codes-to-take-on-counterfeit-drug-problem/

http://www.forbes.com/sites/jenniferhicks/2012/02/16/pharmasecure-uses-mobile-device-and-id-codes-to-take-on-counterfeit-drug-problem/

http://www.cellbazaar.com

http://www.grameenphone.com/mobile-lifestyle/marketplace/cellbazar

http://www.lirneasia.net/wp-content/uploads/2008/05/Mobile-2-0-CellBazaar-e-marketplace-v3.0.pdf

http://www.lirneasia.net/wp-content/uploads/2008/05/Mobile-2-0-CellBazaar-e-marketplace-v3.0.pdf

http://www.africancashewinitiative.com

http://www.scn.sap.com/community/research/blog/2011/07/29/african-cashew-initiative-helps-small-scale-farmers-in-ghana-through-it

http://www.scn.sap.com/community/research/blog/2011/07/29/african-cashew-initiative-helps-small-scale-farmers-in-ghana-through-it

http://www.giz.de/en/mediacenter/682.html

http://www.livinggoods.org

http://www.healthmarketinnovations.org/program/living-goods

http://www.binu.com

http://www.balancingact-africa.com/news/en/issue-no-623/top-story/social-media-content/en/

http://www.techcrunch.com/2012/12/12/binu-state-dept/

http://www.forbes.com/sites/mfonobongnsehe/2012/08/20/africas-savannah-fund-and-googles-eric-schmidt-invest-in-binu-mobile-via-2-million-round/

http://www.forbes.com/sites/mfonobongnsehe/2012/08/20/africas-savannah-fund-and-googles-eric-schmidt-invest-in-binu-mobile-via-2-million-round/

http://www.ictupdate.cta.int/en/Feature-Articles/Track-your-cow-s-development/%2867%29/1343644746

http://www.ictupdate.cta.int/en/Feature-Articles/Track-your-cow-s-development/%2867%29/1343644746

http://www.businessdailyafrica.com/Farmers+milk+benefits+of+technology+through+iCow/-/1248928/1516098/-/nh0ebk/-/index.html

http://www.businessdailyafrica.com/Farmers+milk+benefits+of+technology+through+iCow/-/1248928/1516098/-/nh0ebk/-/index.html

http://www.safaricom.co.ke/personal/value-added-services/social-innovation/icow

http://www.cio.co.ke/news/main-stories/kenyan-dairy-farmers-to-benefit-from-safaricom%27s-partnership-with-icow

http://www.cio.co.ke/news/main-stories/kenyan-dairy-farmers-to-benefit-from-safaricom%27s-partnership-with-icow

74 75

Endnotes 1 Different de!nitions exist, the most

prominent de!nition put forward by the World Resources Institute (WRI) and International Finance Corporation (IFC), using the purchasing power parity (PPP) methodology to account for differences in costs of living and in#ation between countries, de!nes the BoP as the 4 billion people living on less than USD 3,000 or approximately USD 8 per day. www.ifc.org/wps/wcm/connect/as_ext_content/what+we+do/inclusive+business/news+and+highlights/de!ning+the+base+of+ the+pyramid

2 The G20 Challenge on Inclusive Business Innovation was awarded to innovative inclusive businesses that have scaled successfully. More information on the challenge and the winners can be found online at www.g20challenge.com

3 For sector-speci!c information on successful business models, see the following practitioner guides which are available online at www.giz.de/inclusive-business:

- Energize the BoP! Energy Business Model Generator for Low-Income Markets, Endeva, 2011;

- Bringing Medicines to Low-income Markets, A guide to creating inclusive business models for pharmaceutical companies, GIZ, BMZ, 2012;

- Growing Business with Smallholders, A Guide to Inclusive Agribusiness, GIZ, BMZ, 2012

4 Segmenting the Base of the Pyramid, V. Kasturi Rangan, Michael Chu, and Djordjija Petkoski, Harvard Business Review, 2011

5 IFC, The World Bank, 2012, www.web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTFINANCIALSECTOR/0,,contentMDK:23174014~pagePK:210058~piPK:210062~theSitePK:282885,00.html

6 Subscriptions are the active SIM cards reported by mobile operators. As some people have multiple phones and/or multiple SIM cards (typically to take advantage of better rates), actual subscription penetration is lower, but this data is unknown.

7 Mobile Usage at the Base of the Pyramid in South Africa, Research ICT Africa, Intelecon, 2012, www.infodev.org/articles/mobile-usage-base-pyramid-south-africa; Mobile Usage at the Base of the Pyramid in Kenya, iHub Research, Research Solutions Africa, 2012, www.infodev.org/articles/mobile-usage-base-pyramid-kenya

8 Figures are annual and based on PPP; The Next 4 Billion: Market Size and Business Strategy at the Base of the Pyramid, WRI and IFC, 2007, www.wri.org/publication/next-4-billion

9 It is important to differentiate between three different concepts here. Mobile penetration refers to the number of active mobile phones (active SIM cards) per 100 inhabitants of a country. Mobile network is a radio network distributed over land areas called cells. Each cell has a !xed-location transceiver, known as a cell site or base station. Mobile coverage refers therefore to how much land or what percentage of population is covered by these cells. This is not the same as subscriber numbers but it refers to how many people have access to the mobile network theoretically by living within the cell coverage of a country. Lastly, mobile broadband coverage refers to the population living within the upgraded, broadband-enabled cells. This is typically a smaller number as some networks are not fully upgraded for broadband yet. Mobile broadband refers to wireless Internet access that supports voice, video and other data-intensive applications at very high speeds.

10 Forthcoming Research ICT Africa report.

11 Mobile Usage at the Base of the Pyramid in South Africa, Research ICT Africa, Intelecon, 2012, www.infodev.org/articles/mobile-usage-base-pyramid-south-africa

12 Teleuse@BOP4: Preliminary !ndings, Rohan Samarajiva, LirneAsia, 2011.

13 Authors visit to Uganda June 2013.

14 Mobile Usage at the Base of the Pyramid in South Africa, Research ICT Africa, Intelecon, 2012, www.infodev.org/articles/mobile-usage-base-pyramid-south-africa

15 See for example the Facebook-led initiative “internet.org” (www.internet.org), Google’s Loon Project (www.google.com/loon/) and the multi-stakeholder initiative “Alliance for Affordable Internet” (www.a4ai.org).

16 Socialbakers 2012, www.socialbakers.com/blog/1290-10-fastest-growing-countries-on-facebook-in-2012

17 There has been little research on how social media are used among low-income users. One of the few available studies looked at Facebook usage among rural Kenyans. The study was limited to 24 qualitative interviews. “Facebook is a Luxury”: An exploratory study of social media use in rural Kenya, Susan P.Wyche, Sarita Yardi Schoenebeck, Andrea Forte, 2011.

18 Socialbakers 2012, www.socialbakers.com/blog/1290-10-fastest-growing-countries-on-facebook-in-2012

19 USSD is a protocol used by GSM cellular phones to communicate with the service provider’s computers.

20 Smart Communications, www1.smart.com.ph/money/

21 State of the Industry: Results from the 2012 Global Mobile Money Adoption Survey, GSMA 2013, www.gsma.com/mobilefordevelopment/wp-content/uploads/2013/02/MMU_State_of_industry.pdf

22 Visual Networking Index: Global Mobile Data Traf!c Forecast Update, 2012–2017, Cisco, 2013, www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-520862.html

23 ICT in Agriculture, Module 12: Improving Food Safety and Traceability, World Bank Group, 2012, www.ictinagriculture.org/sourcebook/module-12-improving-food-safety-and-traceability

24 Big Data for Development: From Information - to Knowledge Societies, Martin Hilbert, UN ECLAC, USC, 2013, www.papers.ssrn.com/sol3/papers.cfm?abstract_id=2205145

25 Are you ready for the era of ‘big data’?, Brad Brown, Michael Chui, and James Manyika, McKinsey Quarterly Nr. 4, 2011

26 Is the Bottom of the Pyramid really for you? Harvard Business Review, March 2011

27 See for co-creation concept: The Base of the Pyramid Protocol: Toward Next Generation BoP Strategy, Erik Simanis and Stuart Hart, 2008, www.bop-protocol.org/docs/BoPProtocol2ndEdition2008.pdf

28 GSMA Mobile Money Tracker, www.mobileworldlive.com/mobile-money-tracker

29 State of the Mobile Money Industry, GSMA, 2012, www.gsma.com/mobilefordevelopment/wp-content/uploads/2013/02/MMU_State_of_industry.pdf

30 Cash Replacement through Mobile Money in Emerging Markets: The FISA Approach, Alberto Jimenez, Prasanna Vanguri, IBM 2010, www-05.ibm.com/za/of!ce/pdf/g-cash.pdf

31 Who are the Unbanked, The World Bank, 2012, www.siteresources.worldbank.org/EXTGLOBALFIN/Resources/8519638-1332259343991/world_bank3_Poster.pdf

http://www.ifc.org/wps/wcm/connect/as_ext_content/what+we+do/inclusive+business/news+and+highlights/defining+the+base+of+the+pyramid




http://www.g20challenge.com

http://www.giz.de/inclusive-business

http://www.web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTFINANCIALSECTOR/0,,contentMDK:23174014~pagePK:210058~piPK:210062~theSitePK:282885,00.html






http://www.infodev.org/articles/mobile-usage-base-pyramid-kenya

http://www.infodev.org/articles/mobile-usage-base-pyramid-kenya

http://www.wri.org/publication/next-4-billion

http://www.wri.org/publication/next-4-billion





http://www.internet.org

http://www.google.com/loon/

http://www.a4ai.org

http://www.socialbakers.com/blog/1290-10-fastest-growing-countries-on-facebook-in-2012






http://www1.smart.com.ph/money/

http://www1.smart.com.ph/money/

http://www.gsma.com/mobilefordevelopment/wp-content/uploads/2013/02/MMU_State_of_industry.pdf



http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/white_paper_c11-520862.html








http://www.bop-protocol.org/docs/BoPProtocol2ndEdition2008.pdf

http://www.bop-protocol.org/docs/BoPProtocol2ndEdition2008.pdf

http://www.mobileworldlive.com/mobile-money-tracker

http://www.mobileworldlive.com/mobile-money-tracker




http://www-05.ibm.com/za/office/pdf/g-cash.pdf

http://www.siteresources.worldbank.org/EXTGLOBALFIN/Resources/8519638-1332259343991/world_bank3_Poster.pdf





32 Branchless Banking 2010: What Price?, Claudia McKay, CGAP, 2010. www.cgap.org/blog/branchless-banking-2010-what-price

33 State of the Mobile Money Industry, GSMA, 2012. www.gsma.com/mobilefordevelopment/wp-content/uploads/2013/02/MMU_State_of_industry.pdf

34 Is M-PESA Replacing Cash in Kenya? Daryl Collins, Julie Zollmann, Peter Fleming, CGAP, 2012. www.cgap.org/blog/m-pesa-replacing-cash-kenya

35 Digital Money: Agents are the Key to Mobile Money Transfer, Telco 2.0 Research. www.telco2research.com/articles/AN_M-PESA-agents-mobile-money-transfer_Full

36 What Is Keeping Kenya From Becoming More “Cash Lite”?, Daryl Collins, Julie Zollmann, Peter Fleming, CGAP, 2012.www.cgap.org/blog/what-keeping-kenya-becoming-more-“cash-lite”

37 The power of social networks to drive mobile money adoption, CGAP, 2013.www.cgap.org/publications/power-social-networks-drive-mobile-money-adoption

38 Safaricom Ltd., H1 FY14 Presentation 5th November 2013. www.safaricom.co.ke/images/Downloads/Resources_Downloads/Half_Year_2013-2014_Results_Presentation.pdf

39 Marketing innovative devices for the Base of the Pyramid, Hystra, 2013

40 Marketing innovative devices for the Base of the Pyramid, Hystra, 2013

41 M-Enabled Inclusive Business Models: Applications for Health, Primer, USAID, 2013

42 13,000 Africans across ten nations living in largest cities, See McKinsey Quarterly, On-demand marketing, 2013, No.2

43 Community Knowledge Worker, Grameen Foundation, www.ckw.applab.org/section/index

44 Unorganized and Organized Retail: A Global Comparison, David Fitzpatrick, 2012. www.reurbanist.com/2012/08/unorganized-and-organized-retail-a-global-comparison/

45 Mobile Applications for Agriculture and Rural Development, Christine Zhenwei Qiang, Siou Chew Kuek, Andrew Dymond and Steve Esselaar, World Bank, 2011, www.siteresources.worldbank.org/INFORMATIONANDCOMMUNICATIONAND TECHNOLOGIES/Resources/MobileApplications_for_ARD.pdf

46 CRM is a model for managing a company’s interactions with current and future customers. It involves using technology to organize, automate, and synchronize sales, marketing, customer service, and technical support.

47 Worldwide and U.S. Business Process Outsourcing Services 2013–2017 Forecast, IDC, 2013

48 Afrilabs www.afrilabs.com

49 Doing Business. Measuring business regulations, IFC and The World Bank www.doingbusiness.org/rankings

Acronyms2G Second Generation of mobile

telecommunications technology

3G Third Generation of mobile telecommunications technology

4G Fourth Generation of mobile telecommunications technology

AC Alternating Current

ATM Automated Teller Machine

B2B2BoP Business-to-Business to Base of the Pyramid

B2BoP Business-to-Base of the Pyramid

B2C Business-to-Customer

BMZ German Federal Ministry for Economic Cooperation and Development

BoP Base of the Pyramid

CGAP Consultative Group to Assist the Poor

CRM Customer Relationship Management

EFTPOS Electronic Funds Transfer at Point Of Sale

F2F Farmer-to-Farmer

FAQ Frequently Asked Questions

FMCG Fast Moving Consumer Goods

FOSS Free and Open Source Software

GIZ Deutsche Gesellschaft fuer Internationale Zusammenarbeit GmbH

GPS Global Positioning System

GSM Global System for Mobile communications

GSMA GSM (Global System for Mobile communications) Association

ICT Information and Communications Technology

IFC International Finance Corporation

IP Internet Protocol

ISP Internet Service Provider

ITU International Telecommunication Union

IVR Interactive Voice Response

KB Kilo Byte

LBS Location-Based Services

LED Light-Emitting Diode

M2M Machine-to-Machine

ME Java Micro Edition

MFI Micro-Finance Institution

MVAS Mobile Value-Added Service

P2P Person-to-Person

POS Point-of-Sale

PPP Purchasing Power Parity

PV Photovoltaic

SaaS Software-as-a-Service

SIM Subscriber Identity Module

SME Small and Medium Enterprises

SMS Short Message Service

USAID United States Agency for International Development

USF Universal Access or Service Fund

USSD Unstructured Supplementary Services Data

VAS Value-Added Services

VC Venture Capital

http://www.cgap.org/blog/branchless-banking-2010-what-price

http://www.cgap.org/blog/branchless-banking-2010-what-price




http://www.cgap.org/blog/m-pesa-replacing-cash-kenya

http://www.cgap.org/blog/m-pesa-replacing-cash-kenya

http://www.telco2research.com/articles/AN_M-PESA-agents-mobile-money-transfer_Full

http://www.telco2research.com/articles/AN_M-PESA-agents-mobile-money-transfer_Full

http://www.cgap.org/publications/power-social-networks-drive-mobile-money-adoption

http://www.cgap.org/publications/power-social-networks-drive-mobile-money-adoption

http://www.safaricom.co.ke/images/Downloads/Resources_Downloads/Half_Year_2013-2014_Results_Presentation.pdf



http://www.ckw.applab.org/section/index

http://www.ckw.applab.org/section/index

http://www.reurbanist.com/2012/08/unorganized-and-organized-retail-a-global-comparison/

http://www.reurbanist.com/2012/08/unorganized-and-organized-retail-a-global-comparison/

http://siteresources.worldbank.org/INFORMATIONANDCOMMUNICATIONANDTECHNOLOGIES/Resources/MobileApplications_for_ARD.pd




http://www.afrilabs.com/

http://www.doingbusiness.org/rankings

About the training “Connect the BoP”An interactive training programme is available for company representatives intending to leverage ICT for inclusive business.

The workshop builds upon the !ndings from the practitioner guide. It offers participants

Introduction to up-to-date ICT usage trends at the BoP as well as an overview of key technologies.

Guidance on how to make your business model more inclusive by leveraging ICT.

Interactive sessions that allow participants to actively work on their business models and explore partnerships.

http://www.giz.de/inclusive-business

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Published by Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH Sector Programme Cooperation with the Private Sector and CSR

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Authored by Intelecon Research & Consultancy Ltd. Sonja Oestmann, Steve Esselaar, Andrew Dymond

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Printed by Rheinische Druckerei GmbH, Worms

Photo credits Credit for the cover page photo: © Samrat35 | Dreamstime.comCase study photos have been supplied by the respective companies.Other photo credits are indicated on the respective photo.

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Publication date December 2013

How can companies leverage Information and Communications Technologies (ICT) to improve their inclusive business models and contribute to sustainable development? Based on an analysis of over forty ICT applications and in-depth expert interviews, this guide provides practitioners from various industries with the necessary tools to answer this question. It identi!es the main opportunities and challenges related to ICT-based solutions for companies targeting consumers or working with distributors and suppliers at the Base of the global income Pyramid (BoP).

For more information please visit: www.giz.de/connect-the-bop

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