It is estimated that less than 20 percent of the population of Myanmar uses formal financial services, says Eric Duflos in the CGAP blog.
|Axel talks about his trip to Myanmar in a video below.|
You can feel the energy in Myanmar today—from the streets of Yangon, in the offices of government ministries and in rural villages. Dramatic political and economic changes are sweeping the country.
Building on the story about rural electrification in Laos, let me talk to you about an innovative concept under the electrification program umbrella that focused on those more disadvantaged and with fewer opportunities. This new concept is the Power to the Poor program (P2P).
The P2P scheme was launched in September 2008, although it was identified a few years earlier, in 2005. At that time, a social impact survey was carried out and among all data analyzed, one indicator was outstanding: the pick-up rate in the villages recently electrified was on average only a 70%. What was happening with the remaining 30% of households that were not being connected? It was not a design problem as those households were just a few meters from the electric post. It was, as with many problems in life, a financial problem: the connection fee charged by the power utility, Electricité du Laos (EdL), was too expensive to be paid upfront by the poorest households.
The history of the power sector in Lao PDR is relatively new. 15 years ago, Laos counted with just a couple of large hydropower plants, and a meager 16% of the households throughout the country counted with electricity access, mostly concentrated in Vientiane, the capital city, and few provincial towns such as Luang Prabang and Savannakett.
Infrastructures needed an urgent push to help the economy start up and reduce the extreme poverty rates of the population. During the beginning of the 90’s, several donors including the World Bank and the Asian Development Bank (ADB) began different infrastructure development programs, including roads, water supply and electrification.
The founders of a microfinance website I came across a few months ago are giving an interesting, benevolent twist to social networking. At least, that’s one way of looking at Wokai.org, a non-profit organization benefiting entrepreneurs in rural China.
Wokai has been dubbed by some as a “Facebook for farmers,” yet it may be more comparable to well-known microfinance sites like Kiva, which allow people with an Internet connection to give loans directly to entrepreneurs in developing countries. Wokai, however, focuses solely on impoverished people living in rural China.
It’s now evident that people in developing countries have access to the internet and mobile phones like never before, which (as I recently wrote about) may lead to increased economic growth, job creation and good governance. A huge piece of this broad puzzle is mobile banking, and utilizing mobile phones to bring financial services to people who wouldn't otherwise have access to banks ("unbanked").
A new study, released last month by the Consultative Group to Assist the Poor (CGAP) and GSMA, estimates that there are more than one billion people worldwide who are unbanked, yet have access to mobile phones. And by 2012, that number is expected to grow to 1.7 billion people.
|Women entrepreneurs in Nias, Indonesia, describe how they manage community loans and expand business ventures.|
In our visit to Hiliweto village of Gido district of Nias, the mission team visited the home of one of the women's group leaders to chat with informal women entrepreneurs on how they manage their community loans and expand their business ventures. At first, the group was reluctant to even answer a question, but Joachim broke the ice by agreeing to have the women ask about him – for example, where he comes from, married or not, children, etc. As the discussion went into a more relaxed mode, we asked what specific program benefits them the most. They all hailed microfinancing. Getting small loans is a common problem in Indonesia because credit is difficult to obtain from banks without having any collateral as a guarantee.