Friday, August 20, 2010
Friday, August 13, 2010
It begins to dawn on me with some dismay that my time in Zambia is drawing to a close and I have yet to visit Victoria Falls. I seem to be running of out of time to do everything I had planned and, as my last weekend in here creeps up on me, I think to myself that a 6 hour bus trip each way may be trying to fit too much in. Unsurprisingly, the Seventh Wonder of the World turns out to be totally worth the slightly hectic start at Lusaka bus station at 5:30 on a Sunday morning. There is a moment of weakness when I thought I might give up and go home when faced with the prospect of a long trip in half an aisle seat at the back of the bus next to a rather large lady. Luckily, I managed talk my way into a window seat and slept through several hours of religious pop, waking from time to time to an electric guitar version of “God is an awesome God”, before arriving at our destination.
The world’s largest waterfall lies nestled between Zambia and Zimbabwe, not far from the small border town of Livingstone which, in recent years, has been benefiting hugely from its neighbour’s economic and political difficulties. It is a spectacular display of nature with 1 million litres of water spilling over the 1.7km lip every second and plunging 108 metres into the Zambezi Gorge. As if on cue, while I am standing in the thundering spray of the falls (in a much needed raincoat), I turn around to see a huge, vivid rainbow disappearing into the rapids below. The significant difference between resident and visitor rates for entry into the National Park means that it has the pleasing atmosphere of somewhere that as a local you might bring your family or girlfriend for the day rather than a more contrived set-up that only tourists can afford.
While in Livingstone, I took the opportunity to visit one of our busiest agents, who runs an internet cafe in the centre of town. Although Alan was not there, I was warmly welcomed by Precious despite turning up at quite a busy time. I also stopped by to meet one of the partner organisations that works with the UN World Food Programme in the distribution of food parcels to beneficiaries with TB, HIV/AIDS and malnourished children. They have been using the Mobile Transactions system since last November to make the process more efficient so that rather than the local NGOs distributing the food themselves (and therefore having to source and store it), they register beneficiaries in the electronic system based on their national identification numbers, and hand out scratch cards. Beneficiaries can use these vouchers to collect their food at certain retail outlets which have been trained by Mobile Transactions and WFP staff to use the system. As soon as these agents successfully enter the ID number, voucher reference number and PIN number into the system through their mobile phones, their account with Mobile Transactions is immediately topped up and these funds can easily be transferred to their bank accounts using a function on their phones.
Wednesday, August 11, 2010
In my last post I was excited about having seen a couple of elephants from afar. I have now seen more elephants and from closer quarters than I ever thought would be advisable. Farmer’s Day makes a long weekend of the first weekend of August and a few of us headed down to a lovely riverside lodge in Lower Zambezi, a few hours’ drive southeast of Lusaka. While the girls I was with have lived in Zambia for years, I was full of wonder at every twitch of a hippo’s ear, as they sat observing us curiously from their pods. There were moments of slight trepidation as a large herd of young bull elephants prevented us getting back to camp for over an hour at the end of our walking safari. An early morning canoeing trip, with a half-way stop in Zimbabwe, was another highlight of the weekend, particularly when a couple of elephants chose to cross the stream right in front of us.
The reason for the public holiday on the Monday is the Agriculture and Commercial Show, an annual event held in Lusaka over the weekend, which involves exhibitors from all sectors of the economy and provides a good opportunity for networking. Government departments, civil society organisations and international businesses are also represented. I stopped by on Monday, the last day of the event, and found the Commercial Showgrounds packed with colourful stands, business people and families enjoying a day out. I was keen to pay a visit as it is an important event in the Zambian calendar and many of the Mobile Transactions team had worked hard setting up our stand. I hesitate to call it that because it turned out to be a very large building painted in our distinctive bright green and branded all over. Inside, there were staff members speaking to potential corporate clients about our payments services and one of our Champion Agents doing money transfers.
The week before, I attended the presentation of a government commissioned survey, conducted by Finscope, on financial inclusion. The conference was hosted by the Bank of Zambia and included representatives from Government Ministries, Parliament, the Bankers’ Association, financial sector businesses and the media. The survey is intended to provide policy makers with market information as they focus on financial inclusion as a poverty alleviation tool. Given that I spent last semester writing papers on Zambian development, I was very interested to see the Financial Sector Development Plan in action.
There seemed to be a general awareness that banks and financial products have to be relevant to people’s lives if the country, particularly the rural areas, is to be transformed. There is also an understanding that certain underlying barriers to financial access must be addressed, such as general financial literacy and access to standard KYC (Know Your Customer) requirements that are difficult to come by for many (such as proof of address). The presentation made clear the challenges that Zambia faces. A majority of people live in rural areas where most do not have access to safe drinking water, 1 in 5 do not have access to toilet facilities and more than 90% rely on wood and charcoal to cook. Most people have no more than primary education and own just basic assets such as agricultural hand tools.
I thought it was significant that in his opening remarks the Minister of Finance described the worrying situation in which many government employees find themselves when it comes to getting paid in rural areas - he described a teacher having to leave his classroom and walk for a couple of days to pick up his pay and then walk back. For example, Northern Province, which has a larger area than Greece and a population of around 1.5 million, has 9 ATM machines and 17 bank branches. Western Province is only slightly smaller and has 5 ATMs and 6 bank branches. In Zambia only 14% of people have bank accounts (less than this in rural areas), 9% rely on financial products from non-bank financial institutions (e.g. micro finance) while another 14% rely on informal financial products. This leaves 63% of the population financially excluded, which is in stark contrast with somewhere like Kenya where 33% of the population falls into this category.
These statistics suggest a clear role for mobile payment systems, micro-insurance as well as low-cost transaction and savings products and underline the importance of a regulatory framework that supports financial access by promoting a more risk based approach. Although less than 30% of the population in rural areas owns a mobile phone (the figure is 60% for urban areas), there are still many ways that businesses can have a social impact and help reduce risk in these areas. For example, Mobile Transactions works with a large cotton company that does ‘out grower’ schemes (it lends seeds and fertilizer to thousands of farmers at the start of the year and buys back the cotton at the end of the year, deducting the loan from the purchase price). Mobile Transactions has piloted a payments system for Dunavant that allows farmers to be paid more quickly and which should ultimately have an impact on their crop yield and the price at which they can purchase inputs.
Several people have asked me about the food in Zambia. The staple food is called Nshima and is made from ground maize (not dissimilar to Italian polenta) and can be eaten with some meat and sauce or a nice vegetable relish. The tricky bit is eating it in the right way by rolling bits up in your right hand and dipping it in the sauce without using up all the napkins at your table and having to ask the table next door for theirs (much to the amusement of those around you).
Thursday, August 5, 2010
After concluding my interview with Dineshbhai Charan, one of the most prolific dairy farmers in the Panchmal district of Gujarat, I closed my notebook and asked, through an interpreter, whether he had any questions for me. The conversation up to this point had been entirely one-sided; me asking probing questions about Dinesh’s family, his livelihood and his thoughts about the future and he answering candidly and thoughtfully to a virtual stranger. Though the warm faces around me gave no indication that they shared in my awkwardness, I felt somewhat sheepish and was relieved when Dinesh looked me straight in the eye and asked, “Well, what can you do for us?” At that very moment, the sky broke into a deluge of rain and a gust of grass-scented wind swept past us. I thought: this is a moment I’ll remember for the rest of my life.
“I realize I’ve asked you a lot of questions and I appreciate how wiling you’ve been to share”, I said, stalling. I went on to explain that I was interning for an impact investment fund that provides capital and technical assistance to companies like SKEPL and that impact investing is a growing field because people see sustainable business as a way of generating substantial and lasting economic opportunities for people. I waited for the translator to finish and saw that, though Dinesh and the crowd around him appreciated the sentiment, it wasn’t resonating as I had hoped. Feeling somewhat intimidated by the question and all of its inherent complexity, I turned up my palms, smiled and said, “I can tell your story.” Impact investing, I continued, isn't simply creative finance with an orientation towards social and/or environmental returns but rather a channel through which financial and capacity building assistance touch the lives of real people like you and your family. Storytelling is one way to make a concept that sometimes defies definition tangible and personal, and can attract people and funding to the industry.