Thursday, December 2, 2010

mHealth - a New Level of Maturity?

The who's who in mHealth gathered a few weeks ago at the second annual mHealth Summit in Washington, DC. Organized by the National Institutes for Health and the mHealth Alliance, the event featured globally-known keynote speakers including Bill Gates, Ted Turner and Dr. Judith Rodin (President of the Rockefeller Foundation). The mHealth Summit also attracted 2,400 attendees from 48 countries, 125 exhibitors and several hundred members of the media. This represents a dramatic change from just a few years ago when mHealth gatherings were small-group discussions and workshops on how to put this nascent field on the global radar. Yet it begs the question: has mHealth reached a new level of maturity, or just a new level of attention?
Collaboration with the broader eHealth community (of which mHealth is a sub-set) is a good indicator of maturation in the mHealth space. Indeed, eHealth and mHealth leaders are coming together to establish common principles and standards for implementations in the space. Another notable development is the increasing focus among mHealth organizations on Maternal and Child Health. This focus was inspired by the need to accelerate progress on the Millennium Development Goals. It has also prompted discussion on how mHealth could be used to improve the health of poor men, which is linked to maternal and child health indicators as well as to markers of community well-being. This subject was the topic of two recent workshops organized by the Collins Center for Public Policy.

Despite these achievements, true maturity of a field like mHealth can be measured by one concrete achievement: scale. From the inception of organizations like the mHealth Alliance and the mHealth Initiative, the goal of scale has been top-of-mind but elusive. mHealth pilots abound, but scale is necessary for market-driven sustainability of mHealth. Such drivers will come from private-sector involvement motivated by credible impact assessments and proof of potential profits (or at least financial sustainability). The development community and private sector alike would benefit from focusing on mHealth impact assessments, cost saving analyses, and market sizing, as well as the application of these research outputs to motivate the investments necessary for scale.

Monday, November 8, 2010

Microfinance Faces a "Quarter-Life" Crisis

Microfinance has been the darling of the international development community, and increasingly the financial services sector, for the past twenty-five years. The model of "banking for the poor" pioneered by Muhammad Yunus through the Grameen Bank became an international sensation when he won a Nobel Peace Prize for his work in 2006. Microfinance programs have evolved from the original Yunus-type model, focused on the betterment of society rather than profit maximization, to develop into a full-blown commercial micofinancing industry. Last week The Wall Street Journal reported the state of Andhra Pradesh - India's microfinance hub and one of the largest microfinance markets in the world - has enacted rules against lenders whose aggressive recovery practices have allegedly led to 30 suicides by poor borrowers. Critics claim that high interest rates and coercive loan collection by some institutions are responsible for this distressing trend. At the urging of government officials thousands of borrowers have stopped repaying lenders in protest, and India's commercial banks have frozen credit to microlenders. A group of India's largest microfinance institutions have sued the government in an effort to block the strict new regulations.

It may not be a coincidence that the Indian microfinance crisis comes on the heels of the hugely successful IPO of SKS Microfinance, India's biggest microlender. In August 2010, SKS Microfinance raised $358 million in an IPO that made millionaires of its founders while further proving the business case for microfinance, albeit raising serious questions about whether social or financial returns should be emphasized in the commercialization of 'social enterprises'. SKS Microfinance follows entities such as the highly controversial Compartamos Banco in the transition from non-profit to for-profit. While the returns from commercial microfinance are evident, the social impact of the model in alleviating poverty remains unclear. In fact, there is increasing evidence from academic researchers to validate anger expressed by the Indian government and microfinance clients. At the recent Microfinance Impact & Innovation Conference in New York City, more than 250 academics from institutions such as MIT, Harvard and Yale presented a sobering assessment of the industry. Researchers concluded that microloans that are often given at high interest rates and with strict repayment terms can actually further impoverish and indebt poor people. This is noteworthy given the growing size of the microfinance sector - at the end of 2009 there were 1,084 microfinance institutions serving 74 million borrowers, representing $38 billion in loans.

As commercial microfinance continues to scale and mature as an industry, there is a growing interest and desire to obtain market intelligence. Leading the way, Compartamos has agreed to provide its data to a group of Yale University Economics Professors in order to better understand the demand for its services. As Carlos Danel, co-founder of Compartamos Banco explained in New York, "There are more assumptions than evidence in the MFI industry. This was an industry born out of supply, not demand. (The loans) reflect what we can do, rather than what the client wants." Learning from microfinance's "quarter-life" crisis, social enterprises would be wise to conduct market research as they transition from non-profit to for-profit models to ensure the formation of sustainable business growth strategies.

Tuesday, October 19, 2010

Emerging Markets Go Social

Online users from emerging markets are more engaged in the Internet than their counterparts from developed countries. So concludes a recent survey of nearly 50,000 online users from around the world. User engagement - as determined by levels of usage, behavior and attitudes towards the Internet - is far higher in Egypt and China, for instance, than it is in countries such as Finland and Japan. Internet users in emerging markets are also more engaged in social networking, instant messaging and blogging than email and static Internet pages, which are more heavily used in developed counties. And people in emerging markets are becoming avid online users despite having less access to affordable and reliable high-speed Internet than in developed countries.

The results of this survey comes on the heels of a host of reports underscoring the increasing global importance of social networking. A recent report published by Intuit on the 20 trends that will shape the next decade cites social networking and collaboration as key trends that will infiltrate education, work and life. The McKinsey Quarterly spotlights the impact of digital communities, networks and collaboration on the business landscape while also focusing in on how Asian countries such as Malaysia, China and India differ in their Internet usage habits and content preferences. What is clear from these reports is that - while individuals in emerging markets have become increasingly digitally savvy and connected - they are still thirsty for content, tools and services that will enhance their experience as citizens, consumers and employees. 

Unleashing this demand will require creative product, partnership and promotional strategies with a little help from improving infrastructure. There is an opportunity for multinationals to make social networking tools available on low-end devices, still pervasive in the developing world, while fostering the development of localized applications. Bringing in new partners such as advertisers and other third parties to defray the cost of the device and services to the consumer can improve accessibility and catalyze further network effects. Finally, there may be opportunities to utilize the Internet as a sales channel and social networks as a promotional vehicle, but companies may want to tool their approach to local usage patterns and preferences.