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Make Education Bigger

The four ideas I stress in teaching social entrepreneurship are these: Big Picture Design (which, itself, encompasses "designing everything," and "stealing shamelessly" the ideas of others); Making It Appropriate; Making It Stick; and Making It Bigger.

Most people have a handle on the last item -- Making It Bigger -- equating this with the important idea of taking a small business or non-profit activity and then "scaling it up." But this definition does not go far enough.

Importantly, another kind of scaling up involves increasing awareness--even if that only indirectly leads to an increase in size of a business or some other social endeavor. A wonderful example of this is the well-known series put on at, where free talks introduce us to remarkably informative video-bites from people with big ideas. But recently, TED expanded its focus to include educators whose powerful ideas can be enhanced via animation and then shared with the world on YouTube.  

What is taught without animation can be brought to fuller life through animation. And this animation-enhanced great lesson can spill well beyond a single classroom to be viewed by anyone, any time. 

TED-ED's role is soliciting ideas for lessons (and the person who can deliver it) and recruiting animators whose work may help crystalize the idea. The award-winning, fee-based program, Hey Math!, is one demonstration of the power of animation in teaching math. Ted-ED promises to extend the range of topics that become more accessible through animation and deliver them to the world without charge.

The launch of this effort is fast approaching. Take a look at this simple, but powerful, way to Make It Bigger.


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Juhudi Kilimo

Two key questions about microfinane and then an amazing model for extending credit to poor, rural African farmers:  

1. Does microfinance reduce poverty?

A recent CGAP study reviewed the evidence from field experiments.  Recently published randomized control studies of microcredit variously found: 
  • business creation as well as increases in non-business (i.e., "consumption") spending (India); 
  • improvements for farmers but not others; and business owners increasing savings but non-owners increasing only their consumption (Morocco); 
  • increases in income and food consumption in general (South Africa); 
  • a decrease in business activity and employment (Philippines).

Ambiguity, at least surprise, also surrounds experiments that explore non-credit applications of microfinance, including savings, technical support, and insurance.  For instance, 
  • providing advice to business owners to keep their  personal accounts separate from their business accounts helped them more than when they got more detailed accounting advice;  
  • farmers recognize that droughts are the most significant risk they fact, but they are very reluctant to purchase insurance, even when they receive information explaining how it works and its benefits.

Three other randomized studies focusing on the design of microfinance products showed that 
  • allowing a grace period before a borrower's first loan payment is due helps some but hurts others; 
  • borrowers with individual versus group liability were just as likely to repay;  
  • fingerprinting borrowers caused borrowers with marginal credit worthiness to take smaller loans and be more likely to repay them.

To summarize: we don't know enough to generalize about what works and in what circumstances.  And, although we are far from certain about what design features are likely to "take," design considerations seem to matter.

If the situation is not uncertain enough, let's also ask ...

2. Should microcredit be for business-building loans only?

There is ample reason to believe that the poor need credit to help them through the unpredictable, uneven (and, of course, low-income) financial lives they lead to make their lives manageable.  Still, from the perspective of alleviating poverty, are loans for businesses most important?  The very framing of the question seeks opinions, not facts; and there is no consensus here.

The relatively recent trajectory of extending credit seems to be away from business-only loans, as even Grameen II now permits borrowing for reasons other than starting or expanding a business.  In many respects, this may reflect the reality that, after someone receives a loan, how do you prevent them from doing what they want with it?  

Yet fears about poor people becoming over-indebted remain prevalent and valid.  And the arguments that rising out of poverty comes from building (a business, your home), rather than consuming, has much resonance.  

My microfinance class was lucky enough to hear from Nat Robinson,  CEO of Juhudi Kilimo the past week.  The microfinance organization's lending model is no less a revolution than being able to have a real-time, interactive conversation with Nat, at his office in Kenya, as my class and I did with him over Skype video.  Juhudi's model directly addresses the issues of using microfinance to lift people out of poverty, ensuring that loans go towards business rather than consumption, and preventing over-indebtedness.  All are baked into the design of its microfinance products.

Juhudi Kilimo (Effort in Agriculture, in Swahili) provides loans in the form of durable assets to rural Kenyans.  For instance, smallholder farmers may receive a milk cow, instead of cash.  Farmers can then immediately begin to improve their income.  To make this loan most productive, Juhudi provides technical training and ongoing support.  By making loans in-kind, a struggling farmer has a real asset that can be sold (with Juhudi's help) if he can't repay his loan, and Juhudi also insures the cow against theft or death to provide further protection against over-indebtedness.

Juhudi Kilimo began in 2004 as a non-profit initiative after observing the low productivity of Kenyan farmers.  Five years later, after proving its model, it became a for-profit organization in an effort to serve as many clients as possible.  As it has grown, it has added supporting technology to improve efficiency.  It uses Kenya's wildly popular M-PESA system to collect payments, and is beginning to use an open source application on Android phones to replace  cumbersome, manual record keeping in the field.  

By raising capital, including grants and quasi-equity, within three years, Juhudi Kilimo expects to become sustainable and help lift 100,000 farmers and others with small agri-businesses out of poverty.

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Evolution and Invention

How can we make sense of all the changes taking place around us?  More importantly, how can we create the change necessary to attack our most pressing societal problems?


Short answer:  building blocks.  I will return to this theme again and again in other posts.  But for now: a preview.


Eric Beinhocker's Origin of Wealth leans on the theory of complex systems to show how, little by little, a small thing like a wheel gets incorporated into increasingly complex components and systems.  First we see carts, then bikes, then the Audobon.  More building blocks mean more complex combinations built from them.  And these combinations give rise to greater variety, greater sophistication, and greater wealth.


Brian Arthur's The Nature of Technology provides a related account, up to a point, but emphasizes how change is not always gradual and continuous.  For instance, piston-powered propeller airplanes began as rather simple machines and performed well for short flights.  But when these planes began to fly at higher speeds at higher altitudes, their limitations became evident.  To address them, engineers began making a series of increasingly complicated modifications until, finally, an entirely new means of powering a plane appeared:  the first jet-engine.  This invention was not further evolution of the piston-propeller arrangement but, instead, was based on entirely different principles.  It was much simpler too, the original prototype of the jet engine having just one moving part!


In my book, Design Your Life, Change the World: Your Path as a Social Entrepreneur, I have examined how similar ideas apply to social enterprises.  Often, social enterprises evolve gradually, becoming increasingly effective as they become ever more complex.   As an illustration:  Once, local banks were as much fixtures of communities as mom and pop grocery stores (been to one of those recently?).  Over time, they began to add remote branches and, as regulation allowed, expanded their reach to increasingly distant locales.  These changes were intended to create more efficiency, more competition, and more choice.


Overseas, a similar evolution began to include poorer and poorer customers as first, nonprofit organizations and later, for-profit banks began to offer microcredit and other microfinance offerings.  Still, microfinance excludes ten times as many customers as it serves.  Poor clients are expensive to serve, even more so when they are at a distance.  Branches are too expensive in many parts of the world.


Yet in Kenya, an invention has dramatically changed the situation.  Much like the jet-engine, which overcame the deficiencies of propeller planes by incorporating a completely new principle, M-Pesa overcame financial exclusion, especially created by distance, by creating an alternative form of money.  Kenyans buy this currency, which is installed on their cell phones.   This e-currency can then be safely, conveniently, and affordably transferred to someone else by sending a financially secure text message.  Urban workers can remit money to relatives in the countryside.  Micro-entrepreneurs can buy trinkets or agricultural products to resell without the insecurity of relying on bus drivers to transport their payments or the inconvenience of taking the bus to make payments themselves.




How successful is M-Pesa?  Over half of all Kenyans use it, nearly three times as many as have bank accounts.  M-Pesa has created similar services in Tanzania, Afghanistan, and South Africa.  It recently created a partnership with Western Union that allows funds transfers to Kenyan M-Pesa customers from 45 countries. 


Is this a "one-off," relevant only to citizens without ready access to banking services?  Not at all.  Mobile wallets (as they are known) are moving "up market" to the United States and the rest of the developed world.  Tech stalwarts (Apple, Google, and others), mobile carriers (including Deutsche Telecom, China Unicom, Verizon), and financial institutions and credit card companies (among them Chase and Visa) are all exploring how they can capture this huge, potential market.


What was created by the invention of alternative currency has begun to evolve.


Let's consider this illustration from an evolutionary perspective.


The banking system changed in ways that resemble biological evolution.  New variations (say, bank branches) are tested for their performance (would people use them?) and, when successful, they proliferate. 


Producing societal-level change isn't under the control of any single organization.  Consider the environment.  No company or government, of course, "controls" efforts to address climate change.  Yet there are many ways organizations play roles in striving to stem our environmental problems. 


How can we stack the odds so that they are successful?


By encouraging variation, creating fair and effective tests, and ensuring that winning ideas truly proliferate.  These are not abstract ideas without application.  For instance, the tests performed in the marketplace (profit, sales) give distorted results that fail to account for environmental (mis-)behavior.  As the adage goes, you get what you measure, and we are measuring the wrong things.  Similarly, proliferation can come from replication, but exposing winning ideas to others provides another means to increase their scale.


But we must be cognizant, too, that invention is sometimes necessary to spark progress when we are at an impasse.  Methods like recycling, just like propeller-powered planes, can't evolve far enough to achieve our environmental ambitions.  Recycling is better than tossing, but as a practice it still fails to promote better, inherently green methods of creating products in the first place.  That is where invention becomes critical, to create "jumps" in evolution rather smooth, gradual refinements.  Markets in carbon avoidance, for instance, are built on the premise that you can buy the benefits of others' good behavior.  From this new premise various ways to create and operate these markets emerge, themselves subject to variation, testing, and proliferation.  Invention begets evolution.


These two forms of change - gradual, continuous; and radical; discontinuous - operate by creating and re-organizing building blocks.  We can think of building blocks as fundamental elements that underlie the process of creating change.  To be architects of change, we must learn to recognize and harness them.  I intend this blog entry itself to be a conceptual building block which we return to, and build on, as we understand how to improve society.








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