Microconsignment models have recently been brought to my attention as being a superior model than microfinance for people in emerging economies.
One very successful example of a microconsignment model is ‘Vision Spring’ – a programme which trains up potential entrepreneurs in communities to be able to conduct eye tests for those suffering from near-sightedness, which affects large numbers of people, especially from their mid 40s onwards (actually I have worn glasses since the age of 7, but for short-sightedness. I am steadfastly refusing to get varifocals, because that is a definite admission of being old). Getting back to these entrepreneurs who carry out the basic eye tests …..well, they are only allowed to sell glasses to correct short-sightedness, any other eye conditions have to be referred to a more specialised person. The benefit to the community is that many people are provided with affordable spectacles, and no longer have to strain to read; the entrepreneurs conducting the eye tests and selling the spectacles are given a leg-up to build a sustainable business, so everyone wins. The entrepreneurs need to pay off the initial capital cost of setting up their business, but once that is done, they are able to stand on their own two feet, and to support themselves and their families. I like that model a lot. I know the object of microfinance is also to ‘lend to help people out of poverty’, but from what I can see, that very often isn’t the case, with the borrowers seeming to be in an endless cycle of paying off one loan, only to have to take out another one.
The work we’re doing in the agricultural sector is of increasing interest to me. There are so many models in place, all involving loans, agricultural produce being recorded upon pick-up or delivery, being paid for produce, paying off of loans – sometimes linked to agricultural cycles and integration with agromerchants, but all of these models are effortlessly supported within our system.
Almost all of the implementations link to a mobile money solution, or mobile wallet. With so much of Africa reliant on agriculture, and with so many of the women now farming (their husbands working in the towns and cities), there is much to be done in this space to help the farmers with their finances and cash flow problems. As always, the technology to do this is reasonably straight-forward; it’s the implementation that determines the take-up and success of the solution. We’re always looking for new business partners and co-operatives to help us expand the agricultural solutions we have in place.
And then we come to MoWoza, which has nothing to do with microfinance or mAgriculture but slap, bang in the international remittance space. Having been part of the M-PESA phenomenon, I’m probably as guilty as the rest of the team of wanting to be part of another success story. It’s quite addictive, seeing a product take off and become an integral part of so many peoples’ lives, like M-PESA in Kenya. I cannot deny that it would be wonderful to create something similar, but different. MoWoza is a ‘send goods’ proposition, initially aimed at cross border models, but this is not necessarily the case. The same model could be adopted in-country, for people in the cities to send goods to their families in the rural areas. I LOVE the MoWoza model, and I’d love to see it make a difference to everyday people who have problems getting goods back to their families in the homelands from where they come. Migrant workers are living and working away from their families for one reason only, and that is to make money for their families to live on. Why should they spend so much of that hard earned money trying to get goods back to their families? I can see the black market folk not being terribly happy when they see their profits being eroded, but let’s see what happens. I’ll be sure to keep you all updated…
Liz is the author of the recently published ''Will there be another M-PESA?''