> Posted by Susy Cheston, Senior Advisor, CFI
In a challenge to luminaries gathered at the Clinton Global Initiative, President Clinton asked the following question: in a world where nearly everything has been solved by someone somewhere, why can’t we bring more solutions to scale?
Jim Yong Kim, the new President of the World Bank, had a great answer. We need to design for scale from the start. For example, one of the biggest breakthroughs in addressing HIV/AIDS on a global level has been the success in negotiating with pharmaceutical companies to bring drug prices down. Thanks to work spearheaded by the Clinton Health Access Initiative alongside UNITAID and the U.K.’s Department for International Development, companies were persuaded to dramatically change their business model from one of low volume/high cost to high volume/low cost. The cost of life-saving medication dropped from thousands of dollars to, in some cases, $50 to $75 per person per year. The number of people with access to the medication rose from 200,000 to millions over a decade. A radical change in the business model meant the providers remained profitable while millions more have been served with treatment that not only prolongs their lives but also has an impact on prevention.
The Better Than Cash Alliance, through a collaboration with seven powerhouse players, looks to be another example of building scale in from the start. At the launch event, Florencio Abad, Budget Secretary for the Philippines government, told of the mandate he received when President Aquino took office in 2010: to provide Conditional Cash Transfers (CCTs) to all indigent households—immediately! Mr. Abad oversaw a national household survey that facilitated an increase from 800,000 to 3.8 million households within a couple of years, and shortly will transition from ATM card payments to mobile cash payments for the beneficiaries. Similarly, the shift to an electronic-based salary payment system for the Philippines National Payroll not only expedited government salary payments but also eliminated ghost employees. These are stories of technology’s impact on transparency and efficiency—but they also show the potential for making big changes at national scale.
Also at the Better Than Cash launch, Doug Michelman of Visa described a key shift in mindset taking place throughout the company. Before, Visa’s vision was to provide the best way to pay and be paid. Now, it’s to provide the best way to pay and be paid for everyone, everywhere. Their commitment to deliver value at scale is leading them into some new, technology-enabled business models.
Whenever we use technology to reach scale, we have to keep our sights on the human side, too. The pilot group lending project I ran in El Salvador way back in the early days of microfinance was so tiny that it would not be taken seriously today. With great effort, working long hours under difficult and sometimes dangerous conditions, my client base grew to 93 women. I knew every woman by name, and her children’s names as well. The thought of focusing on scale was so foreign to me that I could only think of one of my best clients, Rosa, and envision reaching Rosa’s sister in the next village.
But there are solutions that marry the grassroots with scale: witness CARE’s Access Africa project and the way village-based savings-led projects have grown to reach 3.1 million people, with a vision for reaching 30 million people and their families in the next decade.
Somehow, those of us in financial inclusion need to find the balance between innovative pilot projects that give us a glimpse of the way forward, and projects that are designed for scale. And, we need to remember that when we do that, services must be designed with grassroots realities in mind. From the start, as the Better Than Cash framework has outlined, there needs to be a multi-stage strategy to equip those at the bottom of the pyramid with the tools they need to slowly shift the way they run their financial lives toward a complete suite of services that meet their needs. See Beth Rhyne’s Huffington Post blog for more on this challenge.
Just before the CGI Opening Plenary on Sunday, I spoke at a breakfast hosted by Western Union—like Visa, a partner on our Financial Inclusion 2020 campaign. Their CEO, Hikmet Ersek, spoke of Western Union’s vision for serving the last mile. He didn’t just talk about financial inclusion, he talked about financial dignity. When a major corporation transforms its business models by focusing on the last mile and putting forth a vision of financial dignity, perhaps we have hope for an answer to President Clinton’s question.
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Image Credit: ZIMBIO
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