Kiva should co-brand with microfranchises

I have been a fan of Kiva from their early days. They had another recent surge of success when they introduced Group Lending and Partial Loan Repayments, both brilliant moves in my opinion on multiple fronts: driving consistent traffic to their site, engaging their citizen base in a frequent and meaningful way, and leveraging natural networks.

However, I am still anxiously awaiting the day when Kiva moves into the next realm of innovation, when they are using their platform to strategically inspire change in the market. Right now they are focused exclusively on microcredit and simply support the normal activities of their partners and the microcredit borrowers. It could be argued that that is their expertise and value-add, however, I do not see the innovation nor the value of Kiva as a funder of microcredit, which is partly why I agree with people who say that Kiva should not be focused on providing a financial ROI for lenders. Even if Kiva continues on their projected growth their financing of microcredit will be minuscule compared to the capital being raised for microcredit through integration in the financial markets and through microcredit accelerator's such as Unitus.

The innovation of Kiva is that they have created a platform that allows a broad base of average citizens to become miniature philanthropists. Kiva has never had to spend a dollar on marketing, people find Kiva and become inspired: bloggers picked it up early, when people find Kiva they blog about it, they showcase their loans, Kiva even had to create an entire site, KivaFriends, to handle all the interest of their constituents to discuss the issues.

Therefore, as a platform and in the position of inspiring and shaping grassroot philanthropy I think Kiva is extremely well-positioned to strategically shape the local marketplace of their borrowers. One way they could shape the marketplace would be to partner with microfranchise operations. Kiva could be the platform, the broker, that connects microcredit organizations with the best microfranchise solutions, and then together they offer a financing mechanism for the expansion of new business and innovatin in the marketplace.

This would provide value to the microcredit borrower, providing them a new business model, a great potential source of income as opposed to simply increasing their inventory in the same business as their neighbor. It would provide value to the community in which the microcredit borrower lives, bringing a service such as VisionSpring eyeglasses or HealthKeepers pharmaceutical products or a technological product such as Kickstart's waterpump. It could probably be structured so that the MFI gets a cut as a distributor of products. Kiva could provide value to these fantastic innovations by being a catalyst for the best models. It would provide value to the Kiva Lender because they would feel they are being innovative in their lending and philanthropy.

Kiva needs to think beyond scaling up microcredit and more about being a platform for change.

Franchises for Kids in U.S., could it work elsewhere?

It looks like microfranchising has found a place in the U.S. in the form of mini-franchises for kids, as recently reported by Springwise.

Franchild takes the childhood lemonade stand up a notch with packaged franchises for beeswax candles, organic soap, and jewelry/apparel businesses. The $25 USD price tag is what caught my eye in terms of being a microfranchise. These exact businesses might not be viable in other countries but the model certainly shows that the idea of franchising can be packaged into smaller operating units with a non-traditional franchisee.

This also brings up the issue of youth being a potential untapped population of entrepreneurs. Last week I saw a great presentation showcasing the work that is coming out of Ashoka's Youth Venture program. The population pyramid what it is in many poor countries coupled with the improvements in education yet persistent lack of jobs has created a perfect storm that can either be destructive or a perfect opportunity for the rise of microfranchises.

Preserving Family History as a MicroFranchise

I saw this story on the Business Opportunities blog about a man who has a business video taping interviews with grandparents and producing DVD's for all the family. Ignoring the fact that this could be a great business in the U.S. with the baby boomers approaching retirement, a simplified version of this business could serve as a wonderful microfranchise that would simultaneously preserve oral traditions, culture or even dying languages. I think about the poor spending large sums of money at the time of death/funeral of their elders and the efforts they spend commemorating the dead in many countries. Perhaps this energy can be directed towards paying for video or audio recordings of their elders before they die. The business could recruit multiple interviewers/salesman and process/edit the videos from a central location. The equipment could be very basic.

Has anyone seen an operation like this work in the field? Do you think it would work?

Tool Libraries

This is a concept which is not new (the apparently famous Berkley Tool Library” has been around since 1979) but the idea seems to be catching on in the United States and could have potential as a microfranchise. There was a recent post on Treehugger, which has been posted by EcoRealty. Kevin Kelly over at Cool Tools also spotted it a few years ago. There is also a Wikipedia entry which seems to have collected a list of operating tool libraries.

The concept could work beautifully in poorer communities given the right structure. My first thought is to combine it with a microcredit service. (I perhaps appeal to the 'combine it with microcredit' thought too often but the structure and scale of microcredit just begs for piggyback ventures.) When we traditionally think of libraries in the West we think of library cards, getting notices in the mail, etc., which would be obvious barrieres at the bottom of the pyramid. The microcredit innovation of group collateral could serve as the check on accountability and the established record keeping of microcredit institutions would be a great resource. Some microcredit groups I visited in Ghana already had a system of collective purchasing with group savings. Elect one of the women to be the tool librarian that way the MFI staff aren't burdened. The group can grow their library of tools collectively and rent them out to the community and then use the proceeds to buy mosquito nets, bam, and it comes back to my field of public health. See dad, I'm using my degree.

I can picture a tool library in Ghana having the FullBelly Peanut Grinder or KickStart's Brick Press, just to provide two quick examples. The idea of a tool library might also be appealing to financial donors who like to see their contribution touch multiple lives on a recurring basis. It's got potential.

Squarefoot Gardening goes micro

I was at a presentation last Friday where the founder of the concept of Square Foot Gardening, Mel Bartholemew, presented his company's newest product: a prepackaged, no-tool-required, easy-assembled squarefoot garden designed to be distributed through humanitarian efforts. In the lecture he said they intended to “give” them away which made me immediately hesitant thinking about problems created by other free handouts bednets, clothing, etc. I would instead see squarefoot gardening as an excellent business opportunity that microentrepreneurs should be anxious to adopt. I would feel more comfortable selling them the package, one could subsidize it in some manner or offer a flexible payment schedule, but having them invest in it would give them a sense of ownership and stewardship that would lead to greater success and dignity than a free handout. That's where I weigh in on that debate.

I get most excited about the multiple aspects of squarefoot gardening that could be fantastic microfranchises, either as distributors/educators/seed distributors/compost makers.

If you haven't heard of it before, square-foot gardening (or outside of the U.S. 1 meter squared gardening) is a simple gardening technique that is more efficient than traditional row gardening. The organization claims the same crop yields can be obtained in 20% the space with 10% the water usage over tradtional methods.

The organization is extremely socially minded and focused on empowering the poor to get themselves out of poverty. They have had amazing success in multiple countries around the world, showing great adaptability across cultures and conditions. Their stories also show great confidence in the poor themselves, who have seen the value of the idea, sought education about it, and ran with it. Including one case of a loose book finding its way from Nepal into the hands of an entrepreneur in India who used the methods to subsequently launch a training school for square foot gardening.

For more info:
Their book over at Amazon
A website endorsement from a Purdue gardener of the concept
Post at Get Rich Slowly
Wikipedia entry

Increase skills of the poor through Instructional Videos

One element that will be a challenge with any microfranchising venture will be training. I think technology can play a major role in this regard. Internet cafes, computer kiosks, and products such as the $100 computer are bringing computing access to more marginalized communities and, most critical for this current discussion, access to cd or dvd players/drives.

However, beyond worker training, I think training through VCD’s or DVD’s has the potential to its own microenterprise. Consider the skills taught through video by the company SmartFlix that could bring income and skills to the poor: Soapmaking, smelting iron in africa, Infant and Toddler First Aid, plumbing and electricity, welding basics, homeade biodiesel and the list goes on and on. Just think of the possibilities if the subjects, language and learning style were catered to the needs of the poor. A microenterprise could be established to rent videos to people about to enter an internet cafe. Microfinance institutions could offer the videos to their clients to increase productivity and diversity in the marketplace. The videos could be coupled with mobile movie businesses.

Product Franchising Irrigation Kits and Mobile Movies

This is an old article that shows two possible franchising opportunities. First the “ready-to-use, prepackaged irrigation kits” are a possible candidate for product franchising. Explore around on IDEI's website and particularly look at their product list.

The Bollywood-style instructional video is also a potential franchise business. A franchisee could acquire one of these modified vans and travel to villages to show movies. A primary source of income could be from companies who wanted to run ads before the movie. This could also be a wonderful mechanism to share public health messages.

A worm store

It's not everyday one can take inspiration from the movie Dumb and Dumber, but Llyod's “I've Got Worms” store could be a wonderfully simple and low-cost microfranchise in rural areas in the developing world. Vermicompost, an excellent organic fertilizer, uses earthworms to convert organic waste such as kitchen waste, animal waste, and agricultural residues into compost. A vermicomposting franchise would train franchisees to properly 'feed' the worms and how to construct proper holding containers. Franchisees could then sell worms and holding containers to their neighbors. It would not be an all-consuming business but it could be an additional revenue stream, much like Honey Care Africa beehives can be an additional revenue for farmers in Kenya. I also think it is a microfranchise that could be particularly suited for rural women.

Source: Where the are No Jobs Vol. 4

Latrine Designs

Two new latrine designs that I can across: the Eloo and Cemforce.

The Eloo was designed in South Africa and has won numerous design awards. It was also reviewed in the Stanford Review of Innovative Products Benefiting Humans. I could see a manufacturing plant in the main city of a poor country and then microfranchises of installation services. The U.S. distributor is Cleanup America.

Cemforce offers a few different products. The one that caught my eye was their VIP (Ventilation Improved Pit) because it advertises as being able to build in less than 10 minutes, with no special cranes or tools. I'm always a sucker for simplicity.

This is another case where the microfranchisees would more likely be installers or distributors.

Online business consultants for the BOP

I recently came across a new website via NetSquared called Nabuur.com. They are attempting to connect people in the developed world with those in the developing world, particularly to generate information exchange/advice. I think this could be a valuable tool for a microfranchise operation. Perhaps a partnership could be established with a franchise in the U.S., for example Subway, in which the franchise owners could volunteer their time to be personal business consultants to microfranchisees of, for example, a bakery in the Philippines. What do you see as the potential problems of such partnerships? Do you think it is something that could be valuable to the Microfranchise movement? I wonder if websites like Kiva plan on incorporating the concept of Nabuur into their operations.

Fridge for the Poor

This technology has been featured on AIDG, the Rolex Awards, and Treehugger.

"The pot-in-pot consists of two earthenware pots of different diameters, one placed inside the other. The space between the two pots is filled with wet sand that is kept constantly moist, thereby keeping both pots damp. Fruit, vegetables and other items such as soft drinks are put in the smaller inner pot, which is covered with a damp cloth. The phenomenon that occurs is based on a simple principle of physics: the water contained in the sand between the two pots evaporates towards the outer surface of the larger pot where the drier outside air is circulating. By virtue of the laws of thermodynamics, the evaporation process automatically causes a drop in temperature of several degrees, cooling the inner container, destroying harmful micro-organisms and preserving the perishable foods inside."

Brillant design. Simple. Affordable for the poor. Impact of Health and Malnutrition. Job Creation. As of 2005 the inventor had delivered over 90,000 pots. How many more places around the world can benefit from this product? How can we get it to them?

Practical Action Technical Briefs

Formerly known as ITDG (Intermediate Technology Development Group), Practical Action has collected a wide range of technological solutions that are appropriate for people at the bottom of the pyramid. Some of the greatest resources on the site are the technical briefs that give details about projects ranging from an improved donkey plough to compost toilets to bicycle ambulances. The question becomes-how can we get these products and the technical information out to the people.

Hippo Roller Alternative

I recently came across this product called the Q-Drum which is quite similar to the Hippo Roller I highlighted in a previous post. The Q-Drum has been around since 1997 when it was in an issue of TIME. A retailer could market test the two products side by side in a given area and see which is more suitable or perhaps both would be successful products. A microfranchise in association with this product would be a manufacturing operation.

Malnutrition Microenterprise

This food processing microenterprise is called VitaGoat and has been developed by the folks over at Malnutrition Matters: Food Technology Solutions. Their system was previously recognized as a Tech Museum Award Laureate in 2005. I like that the system is self-contained, but I do wonder if a more sustainable fuel can be incorportated into the system, perhaps the charcoal innovations from MIT that I highlighted in a previous post.

Recharging Cell Phones

A very simple microfranchise could be based on an idea I have heard about on a podcast, but was unable to find in a quick search online, which is a cell phone recharging business that using a solar panel to charge car batteries to subsequently charge cell phones. It would be such a simple business with low startup costs. Buy the solar panels in bulk, stick a brand on it, market it to microcredit borrowers, and you have a franchise.

On ChangeMakers there is a wonderful model of renting solar panels spearheaded by Fabio Rosa in Brazil.

Mobile Library

I have highlighted a number of potential microfranchises that could be termed mobile services. Here is another example from Brazil that partnered with the largest bus company in South America, itapemirim, to create mobile libraries. Also similar to many of the successful models I have highlighted, this project's success is aided by direct association with a private company. If I were to start such a mobile library I would be sure to include Books of Hope in my library which I think is a fantastic model of education and particularly health education.

Ice cream man meets microfinance savings

Another operation that I have envisioned is a savings collection system. I see it as a combination of the ideas of Susu collectors, old-style film drop off kiosks, mobile banking vans and perhaps ice cream trucks.

I think the poor have a greater need for safe savings as opposed to credit, which currently dominates financial services to the poor. From a financial health point of view I would rather have a poor family save and earn interest as opposed to taking on debt and paying interest.

I have seen success in Ghana through Susu collectors. Even large commercial banks in Ghana are trying to harness the power of Susu collectors. The daily savings mechanism allows them to remove the temptation to spend the money themselves or, perhaps an even larger issue in a number of countries, it prevents the money being available for relatives to borrow or 'share'.

The drop box could be placed in area that would both promote ease of deposits as well as security. The drop box would help to lower the transaction costs that are often high for microcredit institutions. I think the security issues could easily be resolved.

The mobile banking units would have to be associated with a reputable bank. They would follow a circuit to pick up from the deposit boxes and then provide some basic financial services. There are a number of successful models and mobile units, both by mini car engineers and armored car manufactures.

All of these points would need to be further discussed and refined but I think the core concept would work. I realize it is much more complicated than this outline as well. But I put it out there for discussion.

Indoor Smoke Solutions

Another microfranchise could be a business targeting indoor smoke pollution. I think a successful business will be based on selling people on the idea that they will save money on fuel costs and be able to save time by cooking faster. The benefits of reduced indoor smoke pollution and reduced ARI in children will simply be a wonderful byproduct. It must also be a solution that is well tested, approved, and/or developed in the community in which it is being introduced. Cooking preferences and needs will vary by area. What I think is really needed is a clear, standardized, one-stop cataloge of products in a kind of open-source/creative commons exchange that allows entreprenuers to learn how to build the stove themselves and start a business. A quick browsing shows a wide range of designs but no standouts in terms of scaling up in production and distribution:

Charcoal Innovations
Simple stoves
AIDG stoves
Rocket Wok
Another rocket stove
Multiple stove models
A long list of examples
Ashden award winner
Issues of Mass Production
Examples from India

Traveling Movie Theatre with Educational messages

One simple business in a box would be a traveling movie projector. Equipment required by the franchisee would be a charged car battery, a white sheet, and a projector. The franchisor would have a library of movies, provide training on marketing and collections, as well as secure standardized projectors in bulk at a discounted price. But the greatest aspect of such a business in my mind is the ability of getting promotional spots highlighting good health practices or a myriad of educational messages out to rural areas. The could play like previews before the movie. Getting trainers and teachers out across the rural areas to conduct in person sessions is much more difficult and costly than producing a video clip, replicating and tagging it onto a functioning business with a captive audience.

Groundnut (peanut) shelling

This is a simple design that can lead to huge increases in productivity. I could have sold this machine like hotcakes in Ghana as I went to microfinance borrower group meetings. Individual woman could have used their loans to buy it or the group could have used their group savings to buy it. But it would have been a huge hit. It could easily be designed into a retail franchise. Here is their website and youtube video.

Full Belly

youtube video