Technology-Enabled Development Hourglass: Micro-Finance Case Study

Posted in The Gnovis Blog

(Cross-posted on my fellowship blog – How International Values Shape Communications Technologies)

Slide 1: The ideas in this presentation will form the core of my first fellowship paper. So, if you understand micro-finance, or ICT4D, better than I do, do share your feedback with me. I’ll be grateful.

Slide 2: I see the development process as an hourglass. At the top of the ‘development hourglass’ are the more privileged societies and the challenge here is to build engagement in the development process. At the bottom of the ‘development hourglass’ are the less privileged societies and the challenge here is to enable access to the development process. The challenge in the middle of the ‘development hourglass’ is to connect the top with the bottom via an institutional infrastructure and enable flow, a role that has been traditionally performed by development aid agencies.

Slide 3: Technology can be a vital enabler in the technology hourglass. Web 2.0 and mobile 2.0 tools can help create engagement in the more privileged societies. Community telecenters and mobile phones can help enable access in the less privileged societies. Enterprise ICT and enterprise 2.0 solutions can help the institutions in the middle connect the top to the bottom in a more effective and efficient manner.

Slide 4: As an illustration of the technology-enabled development hourglass idea, let’s look at the use of technology in microfinance. At the top, change-bloggers increase awareness of micro-philanthropy platforms. In the middle, meta-MFI banking organizations use enterprise ICT or enterprise 2.0 solutions to help small micro finance institutions (MFIs) connect with each other to share best practices. At the bottom, community telecenters and mobile payment systems enable access to micro-finance.

Slide 5: Different types of technologies serve different functions in the development hourglass. In the ICT4D (information and communication technology for development) paradigm, computers and mobile devices are primarily used to provide computing power and connect to communications networks. In the SM4SC (social media for social change) paradigm, web 2.0, mobile 2.0 and enterprise 2.0 tools are used to help people to collaborate with each other to form communities and create content. The scale and scope of technology applications, in both these sets of discussions, varies significantly, from adopting tools already being used in other contexts to creating truly disruptive innovations. On the SM4SC side, micro-philanthropy is an example of SM4SC-Disruption whereas change blogging and MFI knowledge sharing networks are examples of SM4SC-Adoption. Similarly, on the ICT4D side, mobile money transfers is an example of ICT4D-Disruption, while enterprise ICT enabled meta-MFIs and community telecenter based MFIs are examples of ICT4D-Adoption.

Slide 6: Real world examples of all these use cases of technology already exist. On the SM4SC side, Kiva is the most well-known example of micro-philanthropy whereas Unitus and Mifos are examples of MFI knowledge sharing networks. Similarly, on the ICT4D side, GSMA and CGAP are leading important mobile money transfer initiatives, while Mercy Corps’ Bank Andara and CGAP’s SmartAid are pioneering the meta-MFI model. Finally, there are far too many examples of change bloggers and community telecenter based MFIs to list here.

Slide 7: So, all the parts of the micro-finance development hourglass already exist, albeit in isolation. The next step is to put it all together into a technology enabled, connected micro-finance ecosystem.

Slide 8: The development hourglass model can be similarly applied to other development areas. In subsequent versions of this presentation, my endeavor will be to develop case studies on education, health and activism and include examples of initiatives from BRIC countries. As I mentioned before, your feedback will be invaluable for me in refining both the framework and its application to different development areas.