Student Loans as Development Aid

While I am a supporter of the microfinance concept, namely, the access of basic financial services such as loans, savings, money transfer services and microinsurance by underserved populations, I am critical of the application strategies employed by microfinance institutions (MFIs). I am pleased, however, to discuss the workings of an organization that is effectively administering small loans to help students in the developing world achieve a college education or vocational training.

Vittana recognizes that the students benefiting from microloans ordinarily could not receive loans to finance their education from local banks. The Seattle, Washington-based nonprofit organization partners with local microfinance organizations to establish student loan programs—often providing the only access to college loans. Through Vittana’s website, individuals are able to lend $25 and $50 at a time to individual students. Currently, Vittana, which is an Indian word for “seed,” has active partnerships in five countries: Mongolia, Nicaragua, Paraguay, Peru and Vietnam.

I had the opportunity to attend an event organized by SeaMo in November 2009 that featured Vittana’s co-founder and chief executive officer, Kushal Chakrabarti. One issue Mr. Chakrabarti discussed was the focus to provide student loans rather than scholarships. He said, “Students do not want a hand-out, they want a hand up. A loan enables them to go to school without feeling beholden.” He explained that small monthly payments provide an easy way for students (borrowers) to repay the money. In fact, many students actually begin repaying ahead of schedule, which represents their personal drive for financial responsibility.

Recognizing the impact of education, Mr. Chakrabarti said, “Education is income generating; more than microfinance (small loans for entrepreneurs).” In the developing world, a college graduate can earn 200-300 percent more than they would have otherwise. However, there are less quantifiable measurements that have an equal impact to the college graduate, their family and surrounding community. Single mothers gain self-confidence by receiving a college education or vocational training. Not only is she acquiring the skills to obtain a skilled job with a higher income, but she is becoming a role model to her children and perhaps other single mothers in the community. Moreover, communities become stronger by having some of its residents possess an education in high-valued professions such as teaching, medicine, engineering or law.

During his presentation, Mr. Chakrabarti noted that the typical borrowers are 18-25 years old, loan amounts range from $500-$1,500 and repayment periods last from 6-24 months with a successful repayment rate of 97-98 percent. While the interest rates vary from region to region, Vittana’s partners usually charge a 10-15 percent annual rate. And to mitigate the loss of the loan, most partners require that a close relative co-sign on the loan. It is rare that a student is unable to repay the loan him or herself, but in the case that the student has difficulty making a payment, a parent, grandparent, or spouse will ensure that the student repays on schedule.

It is important to note that donors providing funds (loans) to students through Vittana are not making a charitable donation; the loan will be returned to the donor upon repayment by the student. Upon repayment, the donor will have the option keep their money or make a loan to another student. How does Vittana generate revenue? Although not required, many people make a donation beyond the loan amount help Vittana cover their costs. Vittana also received direct financial support from individuals and foundations such as the Peery Foundation, the Mitchell Kapor Foundation, and the Crystal Springs Foundation.

Here is a video that highlights Vittana’s operations through testimonials of students receiving loans through this innovative application of microlending:

The World’s First Bio-Sourced SIM Cards

Gemalto, a digital security company, announced at the Mobile World Congress in Barcelona, Spain, the launching of a pilot of bio-sourced SIM (subscriber identity module) cards for SFR, a French mobile phone company with 20 million clients. Gemalto’s press release dated February 16, 2010, explains, “The bio-sourced SIM card is made from a new renewable material derived from corn, sugarcane or potato starch. This material is easily recyclable and compostable through small scale industrial units and reduces the global ecological footprint of the production process.”

The recyclable and compostable card body is made from plant-based bioplastics, which can be incinerated without emission of toxic fumes. The Amsterdam-based company says it also supplied SFR with packaging made from recycled paper and plant-based inks and SFR will begin distribution of the bio-sourced SIM cards to its customers this spring. This program is the first trial of bio-sourced cards in the world.

Worth noting is Gemalto’s effective tactics of incorporating environmental sustainability into the product’s value proposition. From the company’s website, here is a list of the product’s Operator Benefits and End-User Value:

Operator Benefits

• Security: Ensuring SIM card safety
• Eco-friendly: Fully committed to environmental protection
• Brand: the perfect company brand and image booster
• Competitive: Improving cost saving packaging solutions
• Peace of mind: Gemalto manages complex logistic processes

End-User Value

• Security guaranteed to the access of the PIN and PUK code
• Simplified end user access and understanding to maximize the use of mobile services
• 2nd life for your product with re-usable packaging and card body: the gift concept!

E-Waste: A Small Component of the 2010 Olympic Medals

Like many of you, I am enjoying watching the 2010 Olympic Winter Games that are taking place in Vancouver, British Columbia. There are reports about the unique design of the medals awarded at the 2010 Winter Games, but a sustainable component to these reports is worth discussing on this blog. Making Olympic and Paralympic history, the medals will be the first to contain metals recovered from end-of-life electronics (e-waste) otherwise destined for the landfill. The medals are comprised of metals provided by Teck Resources Limited (Teck). (Photo: VANOC)

In describing the process of making the metal into medals, Teck says, “Historically, metal for the medals has been sourced only from mineral deposits that are mined from the earth and refined for commercial use. Teck has created a recycling process to recover metal from end-of-life electronics (e-waste) such as TVs, computers and keyboards. This process provides a practical solution to the challenge of reducing the amount of e-waste material destined for landfills and is part of the company’s pursuit of sustainability—a core value that drives its approach to business.”

Furthermore, according to the Vancouver-based mining, mineral processing and metallurgical company, “Metal can be sourced from many manufactured metal products, including household appliances, electronics or cables. Teck’s process involves recovering metals contained in cathode ray tube glass, computer parts and circuit boards through smelting. The process involves shredding, separating, and heating of the various electronic components to recover a variety of metals.”

The gold, silver and copper used in the medals were recovered from e-waste and then combined with the metal from other sources for the medal production. The content of recovered metal from the e-waste material in the specific metals is: Gold: 1.52%; Silver: 0.122%; Copper: 1.11%. While the percentages of reused metals are minimal, manufacturing the medals with recycled metals creates an inspiring initiative to reducing the Olympic Games' carbon footprint.

In addition to providing the metals, Teck worked with Vancouver Olympic Committee (VANOC) and the Royal Canadian Mint in the development and production of the medals. Click here to watch a video, “The Making of the Vancouver 2010 Medals.”

EatWell: Building a Community through Mobile Phones to Live a Healthier Lifestyle

A researcher at the Georgia Institute of Technology has created a system that allows community members to build a support system and live a healthier lifestyle by using mobile phones. According to news release dated February 17, 2010, “The system, known as EatWell, uses mobile phones to record and share audio stories with other members from their community. The idea is that people working together can encourage each other with their stories of how they’ve successfully overcome temptation in an effort to live a healthier lifestyle.” (Photo of Andrea Grimes courtesy of Rob Felt/Georgia Tech)

Presenting her research at the Conference on Computer Supported Work in Savannah, Georgia, Andrea Grimes, Ph.D. candidate in Georgia Tech’s College of Computing, said, “I wanted to make a system that was able to harness the community-held expertise, not just bringing in outside expertise. With mobile phones, I saw an opportunity to use technology to make that information even more visible.” Ms. Grimes conducted her pilot study with 12 participants from a working class background in Southwest Atlanta.

Georgia Tech’s announcement explains that Ms. Grimes “decided to create the system on a mobile platform because she knew it was a pervasive device that is owned by people from all income levels. She also knew that people could leave messages much faster than typing into a desktop computer or into the mobile phone would allow.”

“People talk about being engaged with the content in EatWell because they actually hear the emotion in people’s stories,” Ms. Grimes said. “They could hear the pride and excitement people felt when they tried a new smoothie recipe, or when this guy talks about trying out the veggie burger at Burger King and coming back later that day bringing his girlfriend.”

Ms. Grimes’ research produced some surprising results. One result is people reported feeling a connection with others in the study, although though they did not know the other participants. Another result is the transcriptions contained very little in the way of statements of encouragement or talk of collective action. Ms. Grimes explains, “Most of the research says that for you to have a strong thriving community there needs to be a lot of interaction between the community members. But from our study, we saw that people felt a sense of community even though there wasn’t a lot of interaction.”

Free Mobile Health Service for Pregnant Women, New Mothers Launches in U.S.

Pregnant women and new mothers in the United States are now able to receive health information delivered to their mobile phones by text message at no charge through a public service program by a coalition of mobile phone service providers, health professionals, and federal, state, and local agencies. The White House Office of Science and Technology Policy’s (OSTP) press release explains, “The new program, called text4baby, is a free mobile information service that provides timely health information to women from early pregnancy through their babies’ first year. The service sends important health tips that are timed to the mother’s stage of pregnancy or the baby’s age.”

One of the primary objectives of text4baby is to improve prenatal and infant care by providing pertinent information to pregnant women and new mothers. OSTP says that “in the United States more than 500,000 babies – 1 in every 8 – are born prematurely and an estimated 28,000 children die before their first birthday, a rate among the highest in the industrialized world. Premature babies can face lifelong health and intellectual development problems.”

Providing women with information about prenatal care through text messages will, hopefully, reduce the risk of delivering premature babies. OSTP says that “medical expenses for babies born prematurely average about ten times those for babies born after a full-term pregnancy. All told, premature births cost the Nation tens of billions of dollars—at least $26.2 billion in 2005, according to the U.S. Centers for Disease Control and Prevention.”

How does text4baby work? Women who sign up for the service online or by texting BABY to 511411 (or BEBE for Spanish) receive three free SMS text messages each week timed to their due date or baby’s date of birth. The messages focus on topics critical to the health of moms and babies, which include: immunization, nutrition, seasonal flu, prenatal care, emotional well being, drugs and alcohol, labor and delivery, smoking cessation, breastfeeding, mental health, birth defects prevention, oral health, car seat safety, exercise and fitness, developmental milestones, safe sleep, family violence, and more. Text4baby messages also connect women to public clinics and support services for prenatal and infant care.

The OSTP announcement notes that several “U.S. government agencies are involved in the design, outreach, and evaluation of text4baby, and will serve women and babies who learn about their services through the program. These include the Department of Health and Human Services, the Department of Defense Military Health System, and the Office of Science and Technology Policy. Participating carriers include: Alltel, Assurance Wireless, AT&T, Boost Mobile, Cellular South, Cellcom, Centennial Cellular, Cincinnati Bell, Metro PCS, N-Telos, Sprint Nextel, T-Mobile, U.S. Cellular, Verizon Wireless and Virgin Mobile USA.” This represents a majority but not all mobile operators in the United States. Approximately 90 percent of all mobile subscribers in the United States are able are to receive the free text4baby messages.

The text messages were developed by the National Healthy Mothers, Healthy Babies Coalition with support from the Centers for Disease Control and Prevention and the Health Resources and Services Administration. Following message development, they underwent a vigorous review process by several government organizations including the Centers for Disease Control and Prevention, the Health Resources and Services Administration, the Center for Disease Control and Prevention, Health Resources and Services Administration, the Department of Health and Human Services, the Office on Women’s Health and the National Institute on Child Health and Human Development. Text4baby is an educational program of the National Healthy Mothers, Healthy Babies Coalition (HMHB), made possible through a public-private partnership that includes more than 100 entities.

The Gates Foundation claims that 10 million kids under the age of five died in 2005 and the United Nations International Telecommunications Union reported that the number of mobile cellular subscribers worldwide reached the four billion mark by the end of 2008, which represented over 60 percent of the global population. Given these statistics, I see great value in implementing a similar text message system to reduce the global infant mortality rate.

People in Burkina Faso to Receive Food Vouchers via Text Message

On November 5, 2009, I wrote about United Nations World Food Programme (WFP) launching a pilot project that allows Iraqi refugees in Syria to receive food vouchers electronically via mobile phone text messages. Another example of using information and communications technology in delivering sustainable solutions to underserved populations may be found in a report by Voice of America’s Kate Thomas. Ms. Thomas writes about a joint project between the WFP and The Vodafone Foundation, which is the charitable division of the UK-based mobile telecommunications company “that will allow shopkeepers in” two towns “in Burkina Faso to manage food vouchers by text message.” (Photo: WFP/Eva Stoffels)

Approximately 30,000 people receive food vouchers in Burkina Faso. “Until now,” explains Ms. Thomas, “the hologram-imprinted vouchers were distributed to families who need them. They are then exchanged for goods in shops and shopkeepers are reimbursed in cash by the World Food Program once a month. If the pilot is successful,” she added, “shopkeepers will be able to validate the vouchers by cell phone on the spot. In theory the World Food Program would then be able to reimburse them the next day, either by bank transfer or by check.”

It would be useful to know how much money the WFP will save in using text messages for food vouchers rather than traditional paper vouchers. Shopkeepers having the ability to instantly validate vouchers via mobile phones will see a reduction of fraud and misuse of the vouchers. Furthermore, shopkeepers, getting reimbursed more quickly by the WFP, will be able to manage their inventory and control costs more effectively. Click here to listen to Ms. Thomas’ report.

Decade of Vaccines: Gates Foundation Pledges $10 Billion to Fight Childhood Diseases

At the 40th annual World Economic Forum held in Davos, Switzerland, the Bill and Melinda Gates announced “that their foundation will commit $10 billion over the next 10 years to help research, develop and deliver vaccines for the world’s poorest countries,” according to a Gates Foundation press release. “The Gateses said that increased investment in vaccines by governments and the private sector could help developing countries dramatically reduce child mortality by the end of the decade, and they called for others to help fill critical financing gaps in both research funding and childhood immunization programs.”

The Seattle, Washington-based philanthropic organization said that it “used a model developed by a consortium led by the Institute of International Programs at the Johns Hopkins Bloomberg School of Public Health to project the potential impact of vaccines on childhood deaths over the next 10 years. By significantly scaling up the delivery of life-saving vaccines in developing countries to 90 percent coverage—including new vaccines to prevent severe diarrhea and pneumonia—the model suggests that we could prevent the deaths of some 7.6 million children under 5 from 2010-2019. The foundation also estimates that an additional 1.1 million children could be saved with the rapid introduction of a malaria vaccine beginning in 2014, bringing the total number of potential lives saved to 8.7 million.”

An article by Seattle Times writers Sandi Doughton and Kristi Heim says that the Gateses’ pledge “ranks as the biggest philanthropic pledge ever to a single cause….The $10 billion pledge represents a doubling of Gates Foundation spending on vaccines. The Chronicle of Philanthropy said the amount is more than the entire assets of the Ford Foundation, America's second wealthiest foundation — after Gates.”

The foundation’s announcement notes that the new funding “is in addition to the $4.5 billion that the Gates Foundation has already committed to vaccine research, development and delivery to date across its entire disease portfolio since its inception.” The foundation's initial vaccine investments created an organization called the Global Alliance for Vaccines and Immunisation, or GAVI, which was launched at the World Economic Forum ten years ago.

The GAVI Alliance, the Gates Foundation explained, “has reached 257 million additional children with new and underused vaccines, and prevented 5 million future deaths. In the coming years, GAVI will focus on rapidly introducing vaccines to tackle diarrhea and pneumonia.” Billions more are needed, however, “from other donors to achieve the goal of 90 percent coverage of childhood immunization. Critical funding gaps exist at GAVI and in the global polio and measles programs, and more support is needed for the research and development necessary to produce new vaccines.”

The Gates Foundation occasionally receives criticism for not doing enough to help impoverished adults in the developing world. Responding to this issue during the January 29, 2010 press conference, Melinda Gates said that the foundation, with the help of Warren Buffet’s financial support, contributed to the “Green Revolution” in Africa that increases the productivity of small farms, moving tens of millions of people out of extreme poverty and significantly reducing hunger. In addition, said Mrs. Gates, the foundation is supporting innovative microsavings programs to help those who do not have access to traditional financial services to deposit funds in safe and secure bank accounts. For additional information about the foundation’s support of microsavings, please read “Gates Foundation to Help Poor People Save Money.” The press conference may be viewed in its entirety in the video below:

worldeconomicforum03 on livestream.com. Broadcast Live Free

“Global Challenge” Competition to Reward Graduate Students for Developing Business Solutions that Support International Development

College students worldwide are receiving an education not to solely benefit financially in a future career, but to make a social difference as well. Aspiring business leaders are reevaluating success not on the basis of a financial return on investment, but on the social return on investment and the impact on the environment and surrounding communities. And more than ever are we seeing the need to understand the critical role of the private sector in international development. The Global Challenge, a collaborative effort by the University of Maryland’s Robert H. Smith School of Business and the U.S. Agency for International Development (USAID), will reward graduate students from across the United States to employ their creativity, research skills, business acumen and passion for seeking solutions that advance growth and reduce poverty.

According to a press release dated January 28, 2010, the Global Challenge is “a first-of-its-kind competition that challenges teams of MBA (Master of Business Administration) and other graduate students to develop business solutions that support international development. Teams will be tasked with devising a new public-private alliance that allows a private enterprise to meet its long-term business goals while contributing to international development initiatives in a specified region.”

G. “Anand” Anandalingam, dean of the Robert H. Smith School of Business, said, “We invite MBA and graduate students from across the nation to employ their creativity, research skills, business acumen and passion for seeking solutions that advance growth and reduce poverty. It is our hope that future business leaders balance profit-making with social impact and take all stakeholders into account when making decisions, values we are committed to fostering at the Smith School.”

In describing the format of the innovate competition, the Smith School’s announcement explains, “In round one of the competition, teams will submit written proposal in response to a specified Global Challenge prompt, then up to eight groups will be invited to compete in the oral presentation final-round competition at USAID’s headquarters at the Ronald Reagan Building and International Trade Center in Washington, D.C. on April 23, 2010. Judges will include representatives from USAID, industry-leading private sector companies, and academia.”

Teams will compete for $8,500 in cash prizes: $5,000 for first place, $2,500 second place, and $1,000 third place. Furthermore, students will have the opportunity to establish relationships and receive guidance from business leaders, international development experts, and other students. Winners of the Global Challenge will have their work published and distributed to international development professionals worldwide. Teams may register online through February 5, 2010.

The Global Challenge is sponsored by USAID’s Business Growth Initiative and the Smith School’s Center for International Business Education and Research (CIBER) and Center for Social Value Creation. Launched in 2009, the Center for Social Value Creation’s mission is to engage students in courses and experiential learning programs to enable them to become global leaders who understand how to use business as a vehicle for both economic prosperity and transformative social change, and to support faculty research in related areas.

U.S. Government Allocates $320 Million for Rural Broadband Projects

I occasionally blog about the digital divide that exists in developing nations; namely, the issue of that many people in the world’s financially impoverished nations do not have access to the Internet. While the United States is certainly not financially impoverished, a digital divide does exist when comparing Internet access by remote or rural communities to those residing in urban areas. Many people and businesses located in rural America are increasingly becoming dependent on modern information and communications technology (ICT) services to obtain education, financial, and health services. Therefore, I was pleased to read a recent announcement by the United States Department of Agriculture (USDA) to improve the ICT infrastructure in specific rural areas located throughout the United States. (Photo of Cherryvale, Kansas (population 2386) courtesy of U.S. Department of Agriculture)

In a press release dated January 25, 2010, USDA Secretary Tom Vilsack “announced the selection of fourteen Recovery Act Broadband Infrastructure projects that will receive $309,923,352 through funding made available by the American Recovery and Reinvestment Act (ARRA). An additional $3,551,887 in private investment brings the total to $313,475,239. Altogether, Congress awarded USDA $2.5 billion in Recovery Act funding to help bring broadband services to rural un-served and underserved communities.”

Here is a sampling of the 14 projects receiving grants and loans: Providing middle mile connectivity to 65 communities in Southwestern Alaska, expanding high speed DSL broadband service to remote, unserved households in rural Alabama and fiber-to-the premises broadband service to unserved homes and businesses in North Dakota. Furthermore, people residing in remote and rural communities in Tennessee will see an upgrade to the infrastructure that provide advanced voice, video, and data services exceeding 20 megabytes per second (Mbps), an expansion of fiber-based broadband access to approximately 1,500 households, local businesses and anchor institutions in central California, and extending existing fiber network by building out from the nearest fiber splice point through the funded service area in Oregon, which will provide broadband connectivity to residential and business end users.

USDA explains that “funding of individual recipients is contingent upon their meeting the terms of the loan, grant or loan/grant agreement.” While I continue to be concerned with the increase debt the U.S. government is incurring, I am encouraged to see some the funds provided by ARRA invested in ICT infrastructure to close the digital divide that exists in rural America.

EpiSurveyor: A Data Collection Tool Transforming Public Health for Underserved Populations

Mobile phones are widely used throughout the African continent and we are seeing unique services in health care, banking, and education. This blog has presented different telemedicine services and I think there is value in discussing an innovative solution that uses mobile phone technology and the Internet “to deliver more effective public health services throughout the developing world,” according to a Voice of America (VOA) report by Natalia Ardanza. This report provides another prime example of using information and technology (ICT) solutions in providing essential services for the world’s underserved populations. Click here to watch Ms. Ardanza’s video report. (Photos: DataDyne.org)

Joel Selanikio and Rosa Donna co-founded DataDyne.org, a nonprofit dedicated to providing sustainable information technologies in poor areas. Ms. Ardanza says that with financial support from the United Nations Foundation and the Vodafone Foundation, Selanikio developed EpiSurveyor -- a free, mobile, Web-based and open-source data collection tool that is transforming the way public health is practiced in under-served areas of the world.” EpiSurveror was developed in collaboration with the Kenyan Ministry of Health and DataDyne’s website notes that its “multiple-award-winning EpiSurveyor.org is the first web 2.0 application for international development and global health.”

Furthermore, according to Ms. Ardanza, “EpiSurveyor replaces cumbersome and costly paper-based data collection that can take months, and sometimes years to produce results. ‘Instead of collecting data today to plan for a campaign next year, changing from that to collecting data today to plan for what we do tomorrow,’ Selanikio explained. ‘That is a pretty radical change.’ Public health relies on the rapid collection of accurate data to track disease outbreaks, monitor vaccine supplies and other similar functions.” Watch a demonstration video of EpiSurveyor on YouTube at http://www.youtube.com/watch?v=5aS6R1fUCBU.

DataDyne provides consulting services combining information technology, mobile phones, epidemiology, public health, and clinical medical care into a valuable service in treating underserved populations in developing nations. According to DataDyne’s website, the Washington, D.C.-based organization creates and implements ICT solutions for a clinical setting, evaluating a public health program, or building a SMS-based drug notification system.

DataDyne’s EpiSurveyor is now used as a World Health Organization (WHO) standard method of data collection. In addition, more than 500 organizations in over 100 countries are using EpiSurveyor in areas such as agriculture and public opinion polling. In 2009, Dr. Selanikio was the recipient of the $100,000 Lemelson-MIT Award for Sustainability.