Addressing Big Development Challenges with Financial Innovation
At CGAP, we believe that financial innovation has great potential to help solve big development challenges in access to energy, water, education, health and agriculture. We’re calling this concept Digital Finance Plus.
There is increasing evidence from Kenya, Tanzania, Pakistan, Bangladesh and elsewhere that shows that even a basic mobile wallet that allows people to save and transact brings benefits. But the story clearly is far from over. We all need this financial innovation to work harder and go further in order to really make an impact on people’s lives.
Earlier this year, CGAP CEO Tilman Ehrbeck blogged on Huffington Post about the exciting potential of companies and business models that link financial innovation with tangible benefits for the poor. He mentioned companies that ride on the ubiquity of mobile money in Kenya and Tanzania to provide basic electricity access (by providing solar lamps at a lower cost than kerosene) and water services. We have now identified 55 such companies and business models. They all share two key characteristics: they aim to solve a fundamental access problem and digital financing schemes (with or without mobile money) figure prominently in how their business works. There are many start-ups but there are also possibilities for public-private partnership models.
In subsequent posts in this series, we will introduce you to some of these business models from conversations with digital finance innovators and entrepreneurs.
Kabir Kumar and Camilo Tellez-Merchan are both with the Technology and Business Model Innvoation team at CGAP.
Watch this space for updates and tweet us what you think by using #dfplus.