Global Poverty

Kiva: pushing the envelope on “green”

May 1, 2011

You’ve probably heard of Kiva, the peer-to-peer microfinance website. Founded in 2005, Kiva has earned a reputation as an innovative nonprofit: It has enabled loans to be made to about 573,000 low-income entrepreneurs worth more than $210 million in 60 countries. More than 570,000 people, mostly Americans, have done the lending, and the repayment rate is more than 98%. This would be reason enough to cheer.

Not content with the status quo, though, Kiva lately has pushed into new arenas. Last fall, Kiva added “student microloans” to its range of offerings. Last month, Kiva, added a category called “green loans,” permitting businesses and individuals in poor countries to borrow as little as $25 to make their homes or workplaces more energy efficient, to recycle more or to convert to clean energy sources.

Premal Shah

Last week, I talked via Skype with Premal Shah, the 35-year-old president of Kiva about the new initiative. He’s smart and engaging, easy to talk with, and thoughtful about economics, his undergrad major at Stanford. He told me that Kiva, to magnify its impact, he explained, wants to take advantage of the fact that its  lenders are for the most part willing to take risks. People aren’t putting their kids college funds or retirement savings at risk here. So Kiva has the freedom and the opportunity to test new ideas in microcredit.

“The Internet community can come in, take risks, try something that’s unproven,” Premal told me. So Kiva should be constantly exploring the “risk and cost frontiers of microfinance,” pushing the envelope and then hoping that more risk-averse providers of capital, like conventional banks, will follow. [click to continue…]

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How GE learned to think small (and serve the poor)

February 23, 2011

GE is good at big: It makes big wind turbines, big jet engines, big locomotives. These businesses require lots of technology, they have high barriers to entry, and they are capital intensive.

But to generate growth in emerging economies, which have fewer resources, GE is learning to think small.

Recently, the global manufacturing giant (2010 revenues: $149 billion) gave its imprimatur to the Sunspring, a small, solar-powered, water purification machine that serves the global poor, costs just $25,000 and was invented by a self-taught engineer who owns a small business in small-town Colorado.

Interestingly, it was not just the business of GE that made the connection to Jack Barker, the 48-year-0ld inventor of the Sunspring, but the GE Foundation, which last year asked him to help with disaster relief in Haiti. It’s an example of how the company’s charitable endeavors can have an unexpected payback.

Bob Corcoran, who runs GE Foundation, told me the other day that its work has exposed GE to “different thinking about how we can adapt our technology and our products for an increasingly important market,” namely places in the global south that lack clean water and reliable electric power. [click to continue…]

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Chocolate that’s divine in every way

February 7, 2011

I hope my valentine is reading this blogpost because I’ve decided what I want for Valentine’s Day: a bar or two of Divine Chocolate.

Divine Chocolate says it is the first farmer-owned Fair Trade chocolate brand. About 35% of the shares in the U.S. company that produces, markets and distributes Divine Chocolate are owned by the Kuapa Kokoo farmers’ cooperative in Ghana, an association of  45,000 small-scale cocoa farmers. The coop also owns about 45% of  Divine Chocolate UK.

Kuapa Kokoo, the cooperative, has been around for nearly 20 years; it launched the Divine brand in the UK in 1998. A US affiliate brought Divine to this country three years ago; along with the farmers, owners include Lutheran World Relief, Oiko Credit, a Dutch fund that invests in microfinance and development efforts, and the UK Divine Chocolate company. [click to continue…]

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Can “serious games” help change the world?

January 26, 2011

I’m too old to have grown up with video or computer games and my daughters, thankfully, never got addicted. So I was surprised recently to learn about “serious games”–games designed to spur activism or educate people around social and environmental issues. Even the staid World Bank has come up with a game!

I wrote about serious games this week for the News@Cisco website. Here’s how the story begins:

Lagos, Nigeria, barely survived a maize shortage. Japan is down to its last month of rice reserves. London, meanwhile, has been without clean water for a couple of days, and a case of cholera has been confirmed.

No need to worry—this is just a game. On the other hand, maybe we should worry a little more about global food shortages, people without access to clean water and the threat of epidemics. All are part of a “serious game” called Evoke: a crash course in changing the world, created last year by the serious people at the World Bank.

Their goal? To educate young people, particulary those in Africa, about creative ways to combat poverty, famine and disease, and ideally inspire them to act.

“Instead of doing a generic website, we really wanted to engage people,” says Robert Hawkins, a senior education specialist at the World Bank’s headquarters in Washington, D.C. “We’re very interested in the potential of games to motivate people to learn.”

As broadband Internet connections spread, governments, businesses and nonprofits are deploying what are being called serious games. Serious games can be fun to play—they should be, in fact—but their purpose is to educate, motivate or train people. They’re being used to explore an array of complex social and environmental issues, ranging from pollution in the Chesapeake Bay to the refugee crisis in Darfur.

You can read the rest here.

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GoodWeave: fighting child labor

January 25, 2011

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A rug factory in Nepal, photographed by Robin Romano for GoodWeave

When confronted with a big, hard, seeming insoluble problem — today’s topic is the practice of child labor, in which an estimated 215 million children around the world are engaged —it’s helpful to recall the words of a rabbi cited in a Jewish text known as the Pirke Avot, or Sayings of the Fathers:

It is not incumbent upon you to complete the work, but neither are you at liberty to desist from it.

This is the approach that a nonprofit called GoodWeave USA is taking when it comes to child labor in the carpet industry. Since its beginnings in 1994, GoodWeave has rescued more than 3,600 children from rug-making factories, helped educate another 5,000 to 6,000 to keep them out of the workforce and, most important, developed a trusted label that assures retailers and shoppers that the carpets they buy and sell were not made by children.

These are modest gains, to be sure, but meaningful accomplishments for a non profit with a budget of just $3.5 million a year and staff of about 35 people.

What’s more, GoodWeave is gathering momentum.

“The goal is to transform the industry—to end child servitude,” says Nina Smith, the group’s executive director. [click to continue…]

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Clean energy for the global poor

January 20, 2011

Solar powered lights in India

Even as the world has become wealthier, an estimated 1.5 billion of our neighbors on this planet live without access to electricity. Think, for a moment, about what your life would be like for even a single day without an on-off switch, and you will grasp the problem that E + Co and its chief executive, Christine Eibs Singer, are trying to solve.

E + Co is a nonprofit investment fund that finances and supports clean-energy entrepreneurs in the developing world.  It’s been around since the early 1990s, and currently operates in Asia, Africa and Latin America. It invests relatively small amounts of money — $125,000 to $1 million per company, $7.3 million in all in 2009 — but it has had an out-sized impact, by backing companies that brought cleaner energy to about 6.2 million poor people in the last decade.

Of course, that’s not nearly enough given the scale of what’s sometimes called “energy poverty.”

“You can’t have economic development without energy,” Christine says. “They’re connected.”

But–and here’s the encouraging news–the experience of E + Co suggests that efforts to deliver clean energy to the poor have the potential to be scaled up, big time. Distributed, small-scale renewable energy technology is getting cheaper. Small and mid-sized companies, it turns out, can make money selling solar panels or cleaner cooking fuels.  Few things will drive change faster than a vast, untapped market that can be profitably served by entrepreneurs. [click to continue…]

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China, cappuccino and cell phones: reasons to cheer!

January 2, 2011

Let’s start the new year on an upbeat note:

When we focus on the day’s headlines, or get caught up in the petty frustrations of everyday life, it’s easy to overlook how dramatically the world has changed for the better in the last decade or two.

We get frustrated when a call gets dropped on the cell phone, forgetting that mobile phones were a luxury until the mid-1990s. I got my first phone–no texting! no photos! no maps! no web access!–in 2001.

We don’t like to wait in line for cappuccino, forgetting that few Americans had the chance to enjoy such brews until recently.  Hard as it may to believe, there were a mere 165 Starbucks’ stores in this great land of ours when the company went public in 1992. Today, there are more than 11,000. We forget, too, the magic that goes into the making of a cappuccino.

More importantly, we worry–as well we should–about the state of the U.S. economy, but we overlook the happier news that about half a billion people have emerged from poverty in China since 1990. Well, that’s China, you says, but even here in the U.S. — despite legitimate concerns about income inequality and declining social mobility — Americans are demonstrably wealthier, healthier and more free than we were at any time in our history.

Declinism–the idea that things are getting worse–has a long history, and it remains fashionable on the left and on the right.

But if history is any guide, and it is, there’s overwhelming evidence that life on this planet, and in this country, is, in the words of Lennon & McCartney, “getting better all the time.”

I’m feeling unfashionably upbeat at the moment because I’ve been reading The Rational Optimist (Harper Collins, $26.99) by Matt Ridley, a sweeping history that attempts to explain how prosperity evolves.  The book is controversial, especially around the issue of climate–here’s an attack by George Monbiot, and Ridley’s response–but its core argument is persuasive: That prosperity is driven by man’s unique ability to trade, specialize and innovate. (“The propensity to truck, barter and exchange one thing for another” is the way Adam Smith put it.) Ridley’s claim that the world is richer, healthier and kinder seems to me to be unassailable, based as it is on both statistical and anecdotal evidence:

Ridley writes:

In 2005, compared with 1955, the average human being on Planet Earth earned nearly three times as much money (corrected for inflation), ate one-third more calories of food, buried one-third as many of her children and could expect to live one-third longer….She was more likely to be literate and to have finished school. She was more likely to own a telephone, a flush toilet, a refrigerator and a bicycle. All this during a half-century when the world population has more than doubled, so that far from being rationed by population pressure, the goods and services available to the people of the world have expanded. It is, by any standard, an astonishing human achievement.

They had it right: It is getting better all the time.

He goes on to say:

The availability of almost everything a person could want or need has been going rapidly upwards for 200 years and erratically upwards for 10,000 years before that: years of lifespan, mouthfuls of clean water, lungfuls of clean air, hours of privacy, means of travelling faster than you can run, ways of communicating farther than you can shout. This generation of human beings has access to more calories, watts, lumen-hours, square feet, gigabytes, megahertz, light years, nanometres, bushels per acre, miles per gallon, food miles, air miles and, of course, cash than any that went before. They have more Velcro, vaccines, vitamins, shoes, singers, soap operas, mango slicers, sexual partners, tennis rackets, guided missiles and anything else they could even imagine needing.

Ridley’s book is an intellectually ambitious, touring 10,000 years of human history and building upon the insights of Smith and Charles Darwin. (The prologue is called “when ideas have sex.”) How prosperity evolves is through trade–simply put, the idea that people are always working for one another, whether they know it or not. Trade is among the most boring of journalistic topics, but if you set aside the back-and-forth about negotiations with Columbia or Korea, it is a marvelous thing. [click to continue…]

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Why acai? Ask the Sambazon guys

November 23, 2010

Jeremy and Ryan Black, with acai

Sometimes, for an entrepreneur, not knowing what you are getting into is a blessing.

If brothers Jeremy and Ryan Black had known what they were up against back in 2000 when they started Sambazon, a company that makes juices, sorbet and smoothie packs from tiny purple berries that grow in the Amazon forests of Brazil, they might not have bothered.

Few Americans then had heard of acai, or knew how to pronounce it. (It’s ah-sigh-ee.) The little berries from tall skinny palm trees can be harvested only once a year, they must be frozen right away to retain freshness and then shipped to the U.S. It’s a cash business, so importers must pay farmers long before the products are sold. And who, for goodness sakes, would sell them?

Harvesting acai

Nor did Jeremy or Ryan know much about the food business. Jeremy, the older bro, who’s now 37, was a financial planner. Ryan, who’s 35, was pursuing a professional football career as a defensive back, hoping to get to the NFL, after a season in the European football league.

All they knew was one thing. “Acai is amazing,” says Jeremy. And they had an idea that if they could figure out how to turn acai into a real business, they could not only do well for themselves but do some good for farmers in the Amazon. Says Ryan: “If this berry became a household word, it could be a really strong force for sustainability in the Amazon.”

It’s taken the Sambazon guys a decade, but things are looking up these days for their company. The No. 1 producer of organic acai, Sambazon doesn’t disclose sales–they were reported at $25 million in 2008–but the company says it is profitable. It employs about 150 people, half of them based in Brazil. You can find its products not only at smoothie bars and Whole Foods, but at mainstream retailers like Safeway and Giant. And the investors in the privately-held company include savvy food guys like Steve Demos, who founded White Wave and put Silk soy milk on supermarket shelves, and Gary Hirshberg, the CE-Yo of Stonyfield Farms. They also secured investments from Root Capital, a nonprofit social investment fund that’s intended to support sustainable livelihoods in the developing world, and from the EcoEnterprises fund run by The Nature Conservancy. [click to continue…]

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Glimpsing the future at Net Impact 2010

October 30, 2010

My favorite conference is Net Impact’s annual gathering, mostly because of the crowd—this weekend, about 2,500 people, most of them MBA students, undergrads and young professionals, gathered at University of Michigan’s Ross School of Business in Ann Arbor. These fare the smart, passionate and committed business leaders of tomorrow. I’m proud to be on the board of Net Impact, a nonprofit that helps its members harness the power of business for the greater good.

So much programming is crammed into the two-day event that it can’t be captured in a single blogpost or experienced by anyone, because dozens of sessions on different topics unfold simultaneously. But here are a few highlights:

What’s the future of recycling? It’s an unhappy fact that recycling rates haven’t moved up much since Earth Day. Yes, the original Earth Day, back in 1990. But innovative companies like TerraCycle, RecycleBank and Waste Management–yes, Waste Management, through a subsidiary called Greenopolis–are experimenting with clever and promising new ways to move the needle, by rewarding consumers for recycling.

I first wrote about RecycleBank in 2007. [See Turning trash into cash at Fortune.com] The company measures homeowners’ curbside recycling, and then rewards those who recycle with points that can be redeemed for stuff at more than 1,500 companies. “The idea of consumer behavior change is at the heart of our business,” said Ian Yolles, the chief marketing officer at RecycleBank, who previously worked at Nike and The Body Shop. The company is growing–it now operates in more than 300 communities in 26 states — and its investors include Coca-Cola,  venture capitalists Kleiner Perkins and Generation Investment Management (the fund led by Al Gore and ex-Goldman partner David Blood). RecycleBank generates most its revenues by saving municipalities money (lower tipping fees, higher revenue streams from recycling) and taking a share of the savings. [click to continue…]

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An “iPod” for the global poor

October 10, 2010

While we Americans  plug an ever-increasing number of gadgets into the wall, about 1.5 billion people in the world, most in sub Saharan Africa and south Asia, live without access to electricity, according to the International Energy Agency. It will take years, perhaps decades, to get electricity to all of them, so in the meantime a small London-based NGO called Lifeline Energy with big ambitions is rolling out new products called the Lifeplayer and Prime Radio.

Both operate off the grid. Powered by solar energy and/or a hand crank, the Lifeplayer is a multi-band radio, an MP3 player and a cell-phone charger that can be used to deliver information and education to the rural poor, farmers, teachers, government workers. Prime Radio is a simpler and less expensive radio, which is equipped with an LED flashlight as well. Both have powerful speakers and are designed for group listening.

Recently, I met with Kristine Pearson, the co-founder and CEO of Lifeline Energy, to talk about the group’s work, and especially its efforts to find support from  global corporations.

Lifeline is working with specialty coffee growers and an Wisconsin-based importer named Peter Kettler to get the radios to coffee farmers in Rwanda, who get timely market information as well as programming about agricultural practices. It recently worked out a similar arrangement with the SC Johnson Co. to provide radios to pyrethrum farmers, also in Rwanda. SC Johnson has been working with U.S. AID to help farmers improve their methods of collecting, drying and shipping pyrethrum, a natural insecticide used in such SC Johnson products as Raid.

The idea is to get the radios into the villages, and then give women and children an opportunity to use them, Pearson told me. “Culturally, radio has been a man’s preserve,” she said. Now, she says, “there are literally millions of children in Africa getting a high quality basic education from radio…I think of the Lifeplayer as an iPod for development.”

An American who spent three months traveling in Africa back in 1986, Pearson moved to South Africa soon after; today she lives in Cape Town, Johannesburg and London. “I’m an African American,” she jokes. She started Lifeline Energy (formerly known as the Freeplay Foundation) in 1999. Since then, Lifeline has distributed more than 215,000 radios since then, reaching anywhere from 20 to 250 listeners per radio. The group is currently distributing Lifeline radios in Haiti.

Lifeline has made friends in Hollywood, notably Tom Hanks, who was the prime funder behind the research and development of the Lifeplayer and Lifelights, which are LED flashlights powered by solar energy or wind-up technology. Hanks  has worked with the group since 2003, talking about its products on television, auctioning them on eBay and appearing in a YouTube video. The NGO has also received donations from foundations, Rotary clubs, the World Bank and individuals.

Even so, its current budget is less than $2 million a year,  Pearson told me. The Prime radio costs about $38 out of the factory, before shipping, and the Lifeplayer costs about $80. They are given to recipients, not sold, but in exchange people have to commit to maintaining and managing the radio and participating in follow up surveys. “There are lots of strings attached,” Pearson said. “They’re just not financial.”

The challenge for Lifeline Energy is getting to scale. Donations are will always be scarce. Business-oriented projects like the ones with SC Johnson and the coffee growers, where the companies gain by getting radios out to farmers in their supply chain, stand a better chance of getting the radios into the hands of a lot more people who can use them.

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