Mobile Point-of-Sale (mPOS) Devices for Financial Inclusion: Motivating Merchants in Indonesia to Switch to e-Payments

square credit card reader

Mobile point-of-sale (mPOS) devices – such as Square and iZettle – use smartphones to process digital transactions. Photo by Shardayyy via Flickr.

The last time you bought something from a street market vendor, you probably didn’t swipe your credit card through a small white cubical reader set atop the vendor’s smartphone when it came time to pay.

But that might change soon. Mobile point-of-sale (mPOS) devices – such as Square and iZettle – use smartphones to process digital transactions. They are mobile, operating on wireless networks, and are significantly cheaper than traditional credit card payment devices.

mPOS systems are not only more accessible for small businesses, but can also increase access to financial services for many customers around the world (including 60% of the population in Indonesia) who remain unbanked.

Despite the benefits of mPOS systems, however, the vast majority of small merchants in developing countries use cash or traditional transaction devices instead.

Indonesia Market

In Indonesia, over 99% of all transactions by volume occur in cash. Photo by Mo Riza via Flickr.

In Indonesia – where over 99% of all transactions by volume occur in cash – a Dalberg team recently worked with CGAP, Telkomsel, and frogDesign to find out why merchants haven’t adopted mPOS devices, and what might motivate them to do so.

The team spoke with over 40 traditional merchants, including restaurant owners, taxi drivers, and electronics retailers, and other micro and small entrepreneurs who typically handle cash transactions daily with their customers to better understand their motivations.

Dalberg’s Gaurav Gupta and Swetha Totapally, who worked on the study, explain what they found:

“While the responses varied significantly by merchant and merchant segment, three key themes emerged from our findings:

  • Value-added services providing business solutions increase merchant interest in mPOS. Most of the merchants interviewed had already been offered traditional POS by Indonesian banks and were less interested in mPOS for its payment acceptance features alone. Many had POS devices that were infrequently used, others didn’t care about being able to accept card payments, and some simply believed the technology was too new for them.Instead, we found that merchants are excited by value-added applications on the smartphone, such as data analytics, marketing and inventory management that are complementary to mPOS and provide business linkages to Telkomsel. Indeed, they saw these applications as potentially transformative business solutions. Specifically, they were excited by features that would improve business processes and relationships with customers.
  • Merchants prioritize accuracy, speed and transparency. Traditional merchants were concerned about how safety, security, and network quality could impact their business and cash, as well as the need to build consumer trust in digital transactions. Their personal experience with dropped calls and lost SMS messages made them cautious about adopting a device that relies on wireless technology. This was especially true for rural businesses, where the signal was less reliable.Additionally, when there were occasional glitches during prototype demonstrations, participants simply became disengaged. Merchants who use POS devices, for example, are used to generally reliable service and fast transaction times, so are hesitant to move to a new device that could be more risky, resulting in lost income for the merchant or client. The product at minimum needs to be at least as high quality as existing solutions.
  • Trust is an issue: Strong preference exists for at least a partial association with bank and transaction receipts. There is a trust deficit around security of new payment systems, especially those which are offered by telcos rather than banks. mPOS is seen as a money-related solution, and merchants consistently said that they would feel more comfortable if the product was offered by a bank instead of a telecom provider. Some merchants were comfortable with the idea of a co-branded product, given the offering also relies on wireless technology, which a telecom is better suited to provide than a bank.We also heard stories about people who have fallen victim to SMS scammers and credit card manipulation. People fear that when they use a card they will be charged more than they should be without knowing about it. While this may largely be an urban myth, this concern was expressed by many of the merchants we spoke with. As such, many merchants specifically stated that SMS or e-mailed receipts would be insufficient and physical receipts would be an important part of any mPOS solution. Similarly end-clients have trust issues with traditional merchants, which they consider less professional than modern retailers.”

Read the rest of Gaurav and Swetha’s article on CGAP >>

For more on Dalberg’s financial inclusion work, click here. You can also read the second blog in this CGAP series, “Using Human-Centered Design for e-Payment Systems in Indonesia” here.

Posted in Access to Finance, Human-Centered Design, Mobile for Development | Tagged , , , , , , , , , , , | Leave a comment

How to Be an International Dealmaker: Building global vaccine markets

By Angela Rastegar Campbell and Ya’ir Aizenman

Vaccines are among the most effective and high return-on-investment health interventions in global development. However, while the work of innovative health actors such as the GAVI Alliance and its donors has massively expanded access to basic lifesaving vaccines over the past decade, many potential vaccines are never developed, distributed, or tailored to work effectively in the Global South, causing millions of children and adults to suffer from ailments that could have been prevented.

For-profit pharmaceutical companies in both developed and developing countries should be the best placed actors to remedy this situation, given their extensive experience with vaccine research and development (R&D) and production. But pharmaceutical companies often do not enter these markets because developing and expanding vaccine production lines is both extremely expensive (with costs in the hundreds of millions of dollars over several years, including high up-front costs) and risky (given potential adverse outcomes such as failed R&D, lack of funds in the Global South for purchases, or competitor entry). Companies selling other products in developing markets often employ a basic low-cost, high-volume business model, but this method is less feasible in the case of vaccines because success is usually dependent on reaching scale in the tens of millions of doses.

What can be done to build global vaccine markets?

Measures to reduce the costs and risk of developing global vaccines can take a number of forms; all of these methods allow third-party donors such as developed country governments, foundations, nonprofits or consolidated groups of private donors to lubricate global vaccine markets and accelerate vaccine production for the Global South.

The most basic of these methods is for donors to directly subsidize the purchase of vaccines by health nonprofits or governments in the Global South. Subsidies can be complex, however, as it is still unclear how to most effectively balance paying pharmaceutical companies prices that are high enough to motivate further development, while also prioritizing reasonable costs and good value-for-money for the purchasers of these vaccines.


Many potential vaccines are never developed, distributed or tailored to work effectively in the Global South. Photo via DFID on Flickr.

Measures that reduce risk for pharmaceutical companies offer a more promising solution; they often achieve the same results as subsidy models, at a much lower cost for global donors. One common example of risk reduction is for donors to provide some form of insurance to a pharmaceutical company – in case its R&D efforts do not pan out – in exchange for better pricing when the product is released. Effectively, this method allows donor programs to use their large size and balance sheets to act as insurance agents for pharmaceutical firms, especially smaller companies. To help pharmaceuticals manage upfront capital investments, global donors can increase the transparency of market sizes by providing pharmaceutical companies with improved market intelligence (such as GAVI’s Strategic Demand Forecasts) or can help reduce unpredictability in funding flows (with programs such as the Pledge Guarantee for Health).

Donors can also leverage volume guarantees to lower vaccine prices and jump-start markets. Volume guarantees commit nonprofits or donors to purchase a predetermined, minimum number of vaccine units from a particular pharmaceutical company, guaranteeing that supplier a certain market size.

The GAVI Alliance has used volume guarantees to achieve a record low price for human papillomavirus (HPV) vaccines with Merck and GlaxoSmithKline, lowering it from the U.S. price of about $130 per dose to under $5 per dose in developing countries. The Jadelle Access Program has reduced the price for a best-in-class contraceptive implant from $16.50 to $8.50 by providing a purchase guarantee of 27 million doses over five years. Additionally, GAVI’s Advanced Market Commitment (AMC) for Pneumococcal Vaccines provided a guarantee to would-be manufacturers of pneumococcal vaccines that if they developed and produced the product, the demand would be there. In the end, the AMC secured a price per vaccine of $3.50 instead of the earlier price of more than $100 per dose.

How can donors deploy these innovative methods of market creation?

When done right, insurance, volume guarantees and market interventions are extraordinarily powerful mechanisms to drive markets for vaccines.

When done right, insurance, volume guarantees and market interventions are extraordinarily powerful mechanisms to drive markets for vaccines. Photo via GAVI Alliance on Flickr.

Dalberg’s evaluation of the Pneumococcal AMC revealed several specific lessons on how to negotiate and partner with international vaccine manufacturers to reduce their risks while setting affordable prices for vaccines in the developing world. Providing commitments such as insurance or volume guarantees to pharmaceutical companies can be difficult for donors, however. Such commitments require donors to put substantial funds on their balance sheet years before they are actually spent, which can be challenging for governments or organizations with budgets allocated on an annual basis. Moreover, guarantees need to be well-tailored in timeline, scope, price and structure. Yet, when done right, insurance, volume guarantees and market interventions are extraordinarily powerful mechanisms to drive markets for vaccines.

Often, the dialogue on how to increase innovation and reduce costs of expensive pharmaceuticals for low-income countries focuses on how much donors should directly subsidize product development. In the past, donors focused on the price and negotiation process rather than considering a broader suite of risk mitigation strategies that can encourage pharmaceutical company interest. A new approach – reducing risk for manufacturers by using donors’ balance sheets and the promise of future purchases – may more effectively entice pharmaceutical companies to enter and compete in the market.

Recent risk reduction measures such as the GAVI Alliance’s deal for HPV vaccines, the Jadelle Access Program and the GAVI Alliance’s Advanced Market Commitment (AMC) for Pneumococcal Vaccines show the promise of such approaches to reduce prices and increase access while engaging manufacturers and stimulating innovation in the vaccine market.

This article originally appeared in NextBillion.

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Improving sanitation: It starts with the community

By Lucy Johnson

Leaders from around the world gathered in 2000 to establish the Millennium Development Goals (MDGs) in an effort to reduce extreme poverty by 2015. As we near the expiration date for these goals, one particular target – to halve the number of people without basic sanitation by 2015 – is the furthest from being met.

Proper sanitation is critical for public health; it prevents the bacteria, viruses, and parasites found in excrement from infecting water, soil, and food. Yet by 2015, an estimated 2.4 billion people, or one-third of the world’s population, will lack improved sanitation, which has been defined by the WHO/UNICEF Joint Monitoring Program as (1) a facility, such as a flush latrine or pit latrine with a concrete slab over it, to prevent human contact with excreta, and (2) hygiene practices that help prevent the fecal-oral route of infection, such as hand washing at critical times including after using the toilet or before preparing food.

Creating an environment free from the health risks of open defecation requires cooperation from the entire community. Photo by WSSCC via Flickr.

A community hygiene committee meets in Malawi; Creating an environment free from the health risks of open defecation requires cooperation from the entire community. Photo by WSSCC via Flickr.

According to a recent report from Water Aid, progress toward improved sanitation lags for a few reasons. First, aid is not well-coordinated between donors. Second, political priorities have led recipient governments to allocate funding to other sectors traditionally more popular with voters, such as education, or to improve sanitation in areas with existing infrastructure rather than focusing on unserved regions. Finally, governments have not given sufficient attention to ensuring that the sanitation services that they do provide are sustainable, correctly used, and otherwise actually addressing sanitation concerns.

UN Secretary-General Ban Ki Moon discusses sanitation in Haiti. Photo by Minustah Photo via Flickr.

UN Secretary-General Ban Ki Moon discusses sanitation in Haiti. Photo by Minustah Photo via Flickr.

In light of these hurdles, world leaders and industry experts in water and sanitation gathered in New York in February 2014 to discuss how the post-2015 development agenda can better drive progress toward universal sanitation. According to Ban Ki Moon, the Secretary-General of the United Nations, access to safe drinking water, sanitation, and hygiene is “a matter of justice and opportunity” and the development community must take action.

One voice in the post-2015 sanitation debate is the Water Supply and Sanitation Collaborative Council (WSSCC), a United Nations-based organization of individuals and groups. The WSSC aims to accelerate the availability of sanitation, hygiene, water, and waste management services to all people of the world. To further this objective, a multi-donor financing mechanism within the WSSCC, the Global Sanitation Fund (GSF), was created in 2008 to gather and direct finance toward helping poor people attain safe sanitation services and adopt good hygiene practices.

Most national or donor-supported programs to improve access to sanitation focus on subsidizing latrines, but GSF mandates that its funding recipients use a non-subsidized approach and focus on creating demand for sanitation. Most often this is done through a method called community-led total sanitation. The rationale for community-led total sanitation is that unless people understand the importance of using and maintaining hygienic latrines, they will not reap sustained benefits from them. Accordingly, community-led total sanitation programs educate community members on the importance of good hygiene practices and latrine use, rather than simply providing them with latrines – thereby avoiding some of the pitfalls other latrine-providing programs have faced, such as recipients using sanitation facilities for other purposes, like food storage.

A woman from the village of Antanambaobitavola in Ampasanimaningory commune, Madagascar, stands next to the latrine her community built. Photo by WSSCC/ Katherine Anderson.

A woman from the village of Antanambaobitavola in Ampasanimaningory commune, Madagascar, stands next to the latrine her community built. Photo by WSSCC/ Katherine Anderson.

Community-led total sanitation requires that community members analyze their sanitation conditions, decide on a plan to improve the status quo, and take action accordingly. Because they develop solutions tailored to their community and build their own latrines, people feel ownership over the project and gain skills to maintain the latrines in the future. Community ownership of the effort is essential to success; creating an environment free from the health risks of open defecation requires cooperation from the entire community.

Over the long-term, the best chance for local sanitation practices to take root is if they are consistent with national sanitation strategies. For this reason, GSF also establishes a Program Coordinating Mechanism in each country to convene government, civil society organizations, and donors to set the vision and strategy for the GSF country program.

Since 2008, GSF has used these strategies to improve access to sanitation for 2.7 million people in 11 developing countries. WSSCC and Dalberg recently worked to help GSF expand its country programs and start several new ones. As a result of this engagement, GSF anticipates that, by 2016, it will have helped 16.28 million people gain access to improved sanitation and 24.58 million people live in healthy and safe environments free from open defecation.

In other words, GSF will have made a significant contribution towards achieving the MDGs’ sanitation target if these numbers are realized. The target of universal access to sanitation and hygiene is still ambitious – but as GSF’s efforts show, with greater global aid coordination, prioritization of sanitation in national-level policy, and the continued creation of sustainable sanitation services, it can be achieved.

Posted in Water and Sanitation | Tagged , , , , , , , , , , | 1 Comment

D. Talks – The “Sweet Spot” of Social Impact and Business Value: CSR Lessons from Christine Bader

By Sneha Sheth

Traditionally, corporate social responsibility (CSR) has ranged from donations to a CEO’s favorite nonprofit to company-sponsored employee volunteer days. But in recent years, CSR has started to change. Growing awareness of corporations’ potential to help solve global challenges has spurred innovative CSR practitioners to shift from the “charity” CSR model, in which CSR programs operated in a silo apart from the core business, toward CSR initiatives that make investments in areas central to a business’ strategy. These CSR programs tend to proactively solve problems rather than merely ameliorate the effects of those problems, and to be mutually beneficial to corporations and others.

Forward-looking global business leaders have already begun to make this shift; according to a survey of 250 global business leaders, at least half of their companies are already integrating CSR into business strategy, expecting that integrated efforts will help grow revenue streams or control costs.

Girl Meets Oil pic

Christine Bader gives a D. Talk at Dalberg’s New York Office.

Christine Bader, author of The Evolution of a Corporate Idealist: When Girl Meets Oil, recently gave a D. Talk in Dalberg’s New York Office. Bader urged CSR leaders to identify the “sweet spot” in which incentives to carry out CSR initiatives are aligned with a company’s overall business goals. Drawing on nine years of experience helping oil giant BP manage the social impact of projects in developing countries, Bader offered the following guidance to companies:

  1. Seeing is believing – Give executives first-hand experience with the environmental or social issues linked to your company so they are willing to commit resources to CSR. Bader shared a story about Darryl Knudsen, Senior Advisor on Business and Human Rights at Gap. After a factory fire in Bangladesh, Knudsen met with survivors and their families. He told Bader that witnessing the people and situations affected by his company strengthened his commitment to the company’s CSR work. “I need to be confident in representing the choices we’re making as a company, and I need to know I’m going to fight hard for the right choices,” he told her. Bader noted that in lieu of physical visits, sharing photos and stories about the people and places affected by a company can also help senior leaders feel confident in their decision to commit resources to CSR and even integrate CSR efforts into their business’ strategy.
  1. Align incentives and create ownership – Listen to your employees’ goals and help them see where CSR fits in. Rather than evangelizing about sustainability and social issues, said Bader, CSR leaders should understand what employees care about, what they are paid to do, and what motivates them. While some people might be intrinsically motivated to champion CSR initiatives, others might get on board only after seeing that CSR efforts will give their project world-class status. Bader’s point echoes advice from Amir Dossal, founder and chairman of the Global Partnerships Forum, at a D. Talk in February 2013: companies will help lead social change if they can identify “what’s in it for them.”
  1. Baders b

    Bader’s book on CSR

    Embed CSR efforts throughout your organization’s policies. According to John Ruggie, the United Nations Special Representative on business and human rights (whom Bader advised), “The era of declaratory CSR is over.” In other words, it is no longer acceptable for companies to make verbal commitments to achieve social good – without corresponding actions. Companies should track, assess, and report on CSR activities and investments with the same rigor they use to track business metrics – and embed this rigor into standard practices. For example, some companies have begun to require that project proposals and third-party contracts incorporate a social and environmental risk assessment. When tactics like these become standard policy, there is less risk that they will fall by the wayside, even if a particularly supportive leader or employee leaves the organization.

  1. Recognize that progress will be slow and difficult to measure – but don’t get discouraged. While CSR practitioners may prevent human rights violations or disasters, they rarely get rewarded for what doesn’t happen. Scrutiny tends to coincide with accidents like Deepwater Horizon, but Bader contends that CSR leaders are dealing with thorny issues at the heart of global development every day. Despite leaders’ best efforts, it is possible that things will go wrong. Even so, Bader urges the CSR field to recognize that progress is incremental – and even tiny steps can move giant companies in the right direction.

Dalberg has helped many organizations – from a large pharmaceutical company to an Indian chamber of commerce – align their business goals with social impact activities. Indeed, Dalberg Asia Regional Director Gaurav Gupta commented  earlier this year, “The more strategically you think about CSR, the more you can start to think of creating a business impact while creating a social impact. When you disconnect the self-interest, it’s not sustainable.”

Gupta’s comments come on the heels of a new law that has brought CSR into the spotlight in India. As of April 1, 2014, Indian corporations that fall above specific revenue, net worth, and net profit thresholds are required to contribute 2% of their net profits from the preceding three years to CSR initiatives. The new law has been called everything from “vague” to a “one-of-a-kind legislation,” raising both hopes and questions about the role of Indian corporations in charitable ventures. In light of these new regulations, Indian corporations have a chance to incorporate strategic CSR of the kind touted by Bader and Gupta – if they, too, seek out “the sweet spot.”

To contact Gaurav Gupta regarding CSR activities in India, click here

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Inspiring Innovation: Dalberg Alumna Gayatri Datar Wins Echoing Green Fellowship

Gayatri Datar is a Dalberg alumna and co-founder of EarthEnable, a social enterprise with a mission to improve the health of low-income Rwandans through the use of earthen flooring created by locally trained masons. Last week, Gayatri was awarded an Echoing Green fellowship for her work with EarthEnable. We sat down to chat with Gayatri before she heads to Rwanda to work on EarthEnable full-time.

Tell me a little bit about yourself. How did you become interested in global development?

Gayatri Datar

Gayatri Datar

When I was in my sophomore year of college, a tsunami hit Southeast Asia. I was in India at the time (thankfully, nowhere near where the tsunami hit) and decided to take a semester off from college to do relief work. I worked at a local NGO, and it became painfully obvious to me how inefficient the development sector was in many ways. My experience at the NGO showed me that the sector needed help, and that as a 19-year-old, I was already positioned to make a difference – it was shocking, for example, how much money I could raise for the organization just because I could write grant proposals in fluent English. I realized that development was my calling. After taking more semesters off college to work on development issues, it took me nearly six years to graduate. But because I learned so much during those years working in various developing countries, I knew it was the right choice.

What inspired your social enterprise, EarthEnable?

I was in business school at Stanford and had the chance to take a class at the design school ( called “Design for Extreme Affordability” that focused on human-centered design for the base of the pyramid. Human-centered design approaches the world’s poorest people with respect – they are clients, rather than beneficiaries. That way of thinking truly resonated with me.

Durable, dry, and easy-to-clean floors can reduce unnecessary health risks that dirt floors create. Photo from Gayatri Datar.

Durable, dry, and easy-to-clean floors can reduce unnecessary health risks that dirt floors create. Photo from Gayatri Datar.

Part of the’s methodology is that students spend their spring break learning and gathering information in the field, so my team and I went to Rwanda for two weeks and spent time speaking with people in their own homes. We would search for “pain points” as we spoke with residents, and we found many. Through these discussions, we realized that the floors in people’s homes were causing huge problems. During the wet season, floors were mired in puddles – these would sometimes be covered with mats, but they would get moldy and wet. During the dry season, people would sweep their floors, causing dust – which contains pathogens, parasites, and bacteria – to fly up everywhere. Kids would start coughing and entire families would be susceptible to respiratory disease, parasitic infections, and diarrhea. People’s own homes were causing them significant, unnecessary health risks. But these risks could potentially be mitigated by durable, dry, easy-to-clean flooring. However, concrete floors cost up to $500 for a small Rwandan home. The desire to design a healthy but affordable floor is what inspired EarthEnable.

What was the design process like after you came back from Rwanda?

It was long, and consumed the vast majority of my energy and time. The d. school encourages students to “Fail early and fail often,” and we definitely did a lot of that. After many bad ideas in the search for a cheaper solution, we came across earthen flooring, which has actually been around for generations. We wanted to see if it was a feasible solution, so we played in the mud and experimented by building a bunch of tiles. While it was a labor intensive process, it was surprisingly easy to master! Additionally, almost all of the components necessary for earthen tiles—gravel, clay, sand, and labor—existed in Rwanda. There was no reason this solution couldn’t work there. The most expensive component was actually the drying oil that hardens to form a plastic-like resin on the surface of the floor. To get around this problem,  we brought on EarthEnable cofounder Rick Zuzow – a brilliant Ph.D candidate in biochemistry at Stanford – who developed a way to dramatically reduce the cost of drying oil. This meant that the total cost of materials to install an earthen floor was only $30!

earthen tile flooring

A man creates tiles that form earthen flooring. Photo from Gayatri Datar.

What are some of the most important lessons you learned through your experience with EarthEnable?

One lesson I’ve learned is that it’s important to keep your plans open and fluid. As recently as nine months ago, I honestly had no intention of working on EarthEnable full-time, but I’m glad I allowed myself the flexibility to change my plans, or I would have missed out on an opportunity to make a big impact.

A second lesson I’ve learned is to be completely honest with yourself and your team about any frustrations or obstacles that may arise. I took a class in business school nicknamed “Touchy Feely,” where I sat with a group of twelve students and two facilitators for five hours a week, and talked in an unstructured format. The goals were to understand how you are perceived, how you can give more effective feedback, and how to develop better working relationships. This was an important class for me. I think I am now much better at giving and receiving feedback, even when it’s negative.

I’d say a third lesson is to always remain humble in what you can learn from other people, especially your customers. Spend a lot of time with your customers. Don’t undervalue empathy—this is part of the’s core philosophy.

Do you have any advice for young aspiring social entrepreneurs?

Gayatri Datar working with earthen flooring, the centerpiece of Earthenable.

Gayatri Datar working with earthen flooring, the centerpiece of Earthenable. Photo from Gayatri Datar.

Recognize that your youth is often full of moments when you can take a lot of risks; take advantage of those moments. There is likely going to be a time when you will have less freedom and flexibility, so capitalize on this moment to do meaningful work! I’ve seen many friends start a corporate career right out of college with the intention of leaving after a couple of years to pursue social impact work, but that path that can be very difficult to leave and a social impact career can be difficult to break into. If social impact work is something you’re passionate about, do it! And if you are passionate about the developing world, go spend a lot of time in a developing country. You will gain empathy and be humbled by communities different from your own.

Lastly, social entrepreneurship can be very tough and often thankless. While there are moments of glory and success, there are also many moments of failure and near-failure. So remember why you’re doing the work you’re doing, find inspiration in your customers, and keep fighting the good fight!

Interview conducted and condensed by Monica Dey.

Posted in Dalberg Community, Global Health, Human-Centered Design, Social Enterprise | Tagged , , , , , , , , , , , | Leave a comment

INFOGRAPHIC: What is the (Particulate) Matter?

By Mayuresh Patole, Jyothi V. Oberoi, and Gaurav Gupta

The World Health Organisation (WHO)’s recently updated database of ambient air pollution in cities caused quite a stir when its findings revealed that air quality in most cities of the world is getting progressively worse. Several news outlets ran reports that focused on the top 10 most polluted cities of the world – but the most interesting data from WHO’s latest release is not only which cities are at the top of the “most polluted” list, but also how pollution is affecting humans at the population level.

A new infographic from Dalberg examines the impact of particulate matter (PM) – tiny particles suspended in the earth’s atmosphere – on human life.

Why should we care about PM? While PM is not the only air pollutant, it is a key indicator of long-term air quality and health risks. In fact, our lives could depend on it; the WHO estimates that “reducing annual average PM10 concentrations from levels of 70 micrograms, common in many developing cities, to the WHO guideline level of 20 micrograms, could reduce air pollution-related deaths by around 15%.” (PM10 particles are smaller than 10 microns in diameter).

Our analysis of the WHO’s latest data suggests that, of the 100 most polluted cities in the world, the human impact of PM pollution is greater in the top 20 cities than in the next 80 cities combined. PM pollution in these top 20 cities (all of which are located in developing countries) is also responsible for over half of the overall PM pollution impact on human life.

Take a look at the infographic, “What is the (Particulate) Matter?” below to learn more about how PM pollution is affecting humans and how some countries are taking action to reduce PM levels:


Particulate Matter Infographic Dalberg

Data note: According to WHO, “many cities in the world, including some expected to be among the most polluted, do not collect information or report on its ambient air quality.” Primary sources of data for the WHO ambient air quality database include publicly available national/subnational reports and web sites, regional networks such as the Asian Clean Air Initiative and the European Airbase, and selected publications.

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International remittances and technology: promising, but no silver bullet

By Matt Frazier

mWallet cash out

Migrant workers from developing countries sent home over $400 billion in 2013. Photo via IMTFI on Flickr.

The sheer scale of international remittance flows to developing countries is remarkable. Remittances, or financial transfers from a migrant to his or her country of origin, have grown by more than 10% a year for several decades and now represent nearly three times total foreign aid flows to the developing world. In fact, remittances represent a substantial portion of GDP in some top recipient countries: 10% in the case of the Philippines, for example, and nearly 20% in Lebanon.

Developing countries have not fully reaped the benefits of these flows, however, because the fees that money transfer operators apply to remittances have remained high. Although the volume of remittance flows to developing countries has increased by more than 30% since 2009, the weighted average price of sending remittances has only fallen by 11% over the same period. This modest drop is surprising, because a sizeable portion of the operating costs for international remittances are fixed costs or costs such as commission fees that typically decrease in economies of scale.

If the cost of sending remittances were lowered by just 5%, remittance recipients – who often belong to the world’s poorest households – could receive over $16 billion each year.

Many observers assume that new mobile money and branchless banking technologies will play an important role in lowering prices of remittances. The favorable cost structure of these new services contrasts with the cost-intensive processes behind traditional money transfer organizations (such as Western Union and Moneygram), which make up roughly two-thirds to four-fifths of the overall remittances market and typically require agents in brick-and-mortar shopfronts to handle cash in transfers.

But while new international remittance technologies are indeed exciting and constantly changing, we urge the development community to approach them with a tempered, cautious optimism, as their ability to improve the lives of the world’s poor is still unclear.

New uses of technology in remittances

Research from Dalberg and CGAP over the past four years has examined new deployments, or companies providing remittance services in a given corridor, including 1) mobile cash-out services that allow users to store funds in an mWallet until they cash out, 2) prepaid cards on which a user stores funds that he can cash out at an ATM or spend at retail stores within the card company’s network, and 3) direct transfer services, in which the sender makes payments directly on behalf of a beneficiary.

If the cost of sending remittances were lowered by just 5%, remittance recipients  could receive over $16 billion each year.

If the cost of sending remittances were lowered by just 5%, remittance recipients could receive over $16 billion each year. Photo via Daniel Lobo on Flickr.

When Dalberg and CGAP first looked at the remittances market in 2010, we found only 11 examples of deployments offering mobile cash-out and prepaid cards. By 2013, we identified over 40 – a fourfold increase in just three years.

Why the apparent increase? One reason is that many mobile-based deployments have begun working with global and regional partners to circumvent operational challenges such as difficult regulations, unfamiliarity with the money transfer ecosystem, and a lack of brand recognition. Almost 50% of the 31 mobile-based deployments that we identified, in fact, have partnered with Western Union, allowing them to benefit from Western Union’s  established network of nearly half a million agents in hundreds of countries. Another 20% of mobile-based deployments have contracted to use HomeSend, a hub for mobile-centric money transfers between sending and receiving operators that provides technology interoperability and regulatory know-how in an open platform.

Another reason we saw an increase in deployments is that new models have emerged. Companies such as MFS Africa, for instance, act as “white label” intermediaries for mobile deployments and enable phone companies operating in sending and receiving countries to brand remittance services as their own to users on both ends. Some deployments are enabling users to send in-store gift cards and pay recipients’ bills directly rather than allowing the recipient to redeem the fund transfer for cash, and still others are integrating remittances services into social media. Singapore-based fastacash, for example, has piloted a social platform through which users can send a personal message along with their international money transfer to add a sense of trust to the transaction.

But wait… : Why we’re approaching new applications of technology with caution

Ultimately, while we believe these technology-enabled deployments can benefit the remittance market in various ways, we recommend approaching these new models with caution for two reasons:

1. The new uses of technology have not yet led to dramatic price decreases of remittances

In theory, new business models should lead to greater competition in the remittance market and, thus, lower prices. But so far, smaller remittance providers have not been able to compete with larger providers when it comes to geographic coverage, so prices have not dropped. Even when smaller providers partner with the larger money transfer organizations, they often sign exclusively agreements that prevent disruptive pricing.

Furthermore, operators have not prioritized lowering their prices; most consumers choose a remittance provider based on reliability and credibility, rather than price, and may actually be suspicious of providers whose costs are too low.

2. It is not yet clear that these uses of technology promote financial inclusion

New technology-enabled deployments can certainly benefit the end customer because they support smaller transaction sizes (under $100) and extend the reach of money transfers to locations unserved by banks or brick-and-mortar establishments. But it remains unclear whether these technologies will actually improve low-income customers’ access to other financial services, such as savings and credit. It does not appear, for instance, that these new services focus particularly on serving the unbanked.

Mobile money and other technology-enabled remittance deployments are promising, yet their ability to dramatically change the sector is still to be determined. But watch this space with cautious optimism: the landscape is evolving rapidly – from new deployments to changing consumer behaviors – and ultimately its evolution is likely to have profoundly positive implications for the battle against global poverty.

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Roadblocks to Bridges: How municipal governments, NGOs, and companies can unlock inclusive cities

By Oren Ahoobim, Laura Goldman, and Shanti Mahajan

Our recent article in Stanford Social Innovation Review outlined a new urban vision – one that centers on inclusive cities that foster growth through safe living conditions, greater integration within cities and improved legal protection and dignity for informal workers.

“We want to redefine the ‘world-class city’ as an inclusive city,” we wrote. “All people have a fundamental right to live with basic dignity, in decent conditions and with prospects for economic mobility and social inclusion.”

But just who is responsible for making this new “world-class” city a reality?

Groups including Slum/Shack Dwellers International (SDI) are building upon existing local-level data to aggregate, standardize, and disseminate data about slums to urban decision-makers. Photo via Flickr.

Groups including Slum/Shack Dwellers International (SDI) are building upon existing local-level data to aggregate, standardize, and disseminate data about slums to urban decision-makers. Photo via Flickr.

Ultimately, municipal governments must lead in making investment and policy decisions that support all urban citizens. However, additional steps can support municipal governments in this endeavor, including increased information availability, expertise in implementing inclusive urban models and greater empowerment of informal workers. In these areas, urban planners, multilateral organizations, non-governmental organizations (NGOs) and academics are natural contributors; indeed, as highlighted in the examples below, some of them have already begun to help.

Municipal Catalyst 1: Increase information availability and use for decision-making.

Problem: Data about informal economies and settlements is limited, restricting municipalities’ ability to make informed, inclusive urban planning and investment decisions.

Collecting data about slums can help inform inclusive community development strategies. Photo via Shack Dwellers International on Flickr.

Collecting data about slums can help inform inclusive community development strategies. Photo via Shack Dwellers International on Flickr.

Progress: Through innovative research and technology, a few players have reduced this information gap. For example, Nairobi-based Spatial Collective uses hand-held GPS devices to collect detailed data about slums to inform community development strategies. At a more macro level, Santa Fe Institute and Slum/Shack Dwellers International (SDI) are building upon existing local-level data to aggregate, standardize, and disseminate data about slums to urban decision-makers.

Next Steps: While these data collection and analysis efforts are promising, too few municipalities and other key decision-makers are taking advantage of it. The next big challenge for multilaterals and NGOs is to inform inclusive urban decision-making by creating incentives for municipalities to use available data, and increasing awareness of the contributions informal settlements and economies make to urban economies.

Municipal Catalys​t 2: Support implementation of inclusive urban planning models.

Problem: Municipalities often lack the expertise to implement inclusive urban development strategies.

Progress: NGOs and multilaterals such as UN-HABITAT and Cities Alliance promote inclusive approaches to urban development, emphasizing that inclusivity helps cities address urban challenges such as safety, security and disaster management. In some cases, organizations have worked directly with municipalities to develop inclusive urban planning strategies. For example, Cities Alliance, the World Bank and USAID are working with the Mumbai government to support more inclusive plans for the city, including extensive slum upgrades and a re-engineered road transport system. In Africa, Global Communities worked with the Sekondi-Takoradi Metropolitan Assembly in Ghana to prepare a more inclusive City Spatial Development Plan, which proposed upgrading historic areas to support both formal and informal economic activity, as well as a road network to connect underdeveloped areas on city outskirts to other parts of the city.

Next Steps: Organizations should continue to forge partnerships with municipalities to fundamentally rethink and reshape global urban planning practices. In the long term, urban planning schools can have significant influence by incorporating inclusive design theory and practical, hands-on experience into their curricula.

Municipal Catalyst 3: Empower informal workers.

Organizing and empowering informal workers can increase their voice, helping them demand change from municipalities. Photo via ILO on Flickr.

Organizing and empowering informal workers can increase their voice, helping them demand change from municipalities. Photo via ILO on Flickr.

Problem: Informal workers often lack legal power and political voice, restricting their ability to advocate for fair wages, safe working conditions and job security. Bottom-up approaches focused on organizing and empowering informal workers can increase their voice, helping them demand change from municipalities. Greater informal worker organization and empowerment can also help municipalities engage informal workers in their plans for inclusive growth.

Progress: Several organizations, such as Women in Informal Employment: Globalizing and Organizing (WIEGO) and StreetNet International, promote informal worker organization as a means of increasing visibility and power with governments. While these efforts have gained traction, informal worker organizations need to continue to scale and raise their visibility.

As we noted in SSIR, the city of Pune, India, has switched from using private contractors with trucks for the majority of its waste management to using informal unions of self-employed waste-pickers who hand-sort the city’s garbage. That arrangement raises the waste-pickers’ income, saves the city money and reduces the amount of landfill trash.

Next Steps: Technology, particularly mobile phones and the Internet, offers opportunities to organize and raise awareness of informal worker issues. For example, existing informal worker organizations can connect via social media to share best practices and increase pressure on municipalities to adopt more inclusive urban planning and policy decisions.

Cities can accelerate global economic development. They bring diverse groups of people and resources together, spurring creativity, entrepreneurship and innovation. Municipalities are ultimately responsible for assuming a new “world-class” vision that is inclusive of all urban citizens. However, by engaging with municipalities and informal workers, non-government entities can accelerate this shift towards more inclusive urban planning.

For more on Dalberg’s work related to cities, click here.

This article originally appeared in NextBillion.

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On World Oceans Day, Using the Ecosystems Approach – and Good Measurement – to Remove Obstacles to Ocean Sustainability

By Wijnand DeWit

Wijnand DeWit

Wijnand DeWit

Oceans and seas cover more than 70% of the Earth’s surface. These bodies of water regulate weather and climate, sustain the water cycle, absorb 30% of emitted CO2, recycle nutrients, and provide food resources – critical aspects of our global ecosystems. In fact, oceans and seas are so intertwined with human existence that 50% of the world’s population lives within 60 km of a shoreline.

Having so many humans in such close proximity to oceans and seas has an ever-increasing impact on the marine environment. Human activities such as overfishing, coastal development, and pollution have altered marine ecosystems and eroded their capacity to provide the benefits integral to the lives of many humans — those who extract food from oceans, for example, or make a living through ocean-related activities such as fishing or seaside tourism.

World Oceans Day – on June 8 – marks an important time to remember the critical value of oceans and consider ways to better protect them.

Managing the parts isn’t as effective as managing the whole

Solutions to marine environmental issues tend to focus on managing specific parts of an ecosystem, such as protecting a species, mitigating a particularly harmful human activity, or preventing water pollution. But the ocean is a complex ecosystem, and each part is interrelated. Moreover, it’s a resource invaluable to the natural environment and to human development – two aspects sometimes pitted against each other in traditional conservation approaches.

The case of Bocas del Toro, Panama – a marine archipelago with a range of mangrove and coral-reef habi­tats – is one example of conservation efforts that failed to consider the whole ecosystem. A government policy in the late 1980s to support commercial fishing resulted in overfishing that left Panamanian fishing stocks severely depressed. While the government has attempted to help the fishing industry recover, these efforts have been hindered by the destruction of the very marine ecosystems in which the region’s fish live; many mangroves, for example, are being replaced with buildings, golf courses, and marinas to support the area’s growing tourism industry.

Bocas del Toro Mangroves

The mangroves in Bocas del Toro, Panama are crucial for coastal ecosystems, but many are being replaced by buildings and marinas to support tourism in the region. Photo by Rita Willaert on Flickr.

To avoid sacrificing nature’s benefits or mankind’s needs – and thereby achieve sustainable impact on the preservation of the world’s oceans – conservation efforts need to take a more pragmatic and holistic approach.

The “ecosystems approach,” endorsed by the United Nations Environment Program (UNEP) Convention on Biological Diversity, is “a strategy for the integrated management of land, water and living resources.” This method of protecting the marine environment considers the needs of the natural environment and of mankind.While this approach is a step forward for oceans management, it relies heavily on the concept of “ocean health” without providing enough guidelines for how to measure it.

The Ocean Health Index can measure the total marine ecosystem

In 2012, a team of scientists, policymakers, and conservationists devised a way to assess “ocean health” called the Ocean Health Index. The Ocean Health Index yields a standard, quantitative, transparent, and scalable measure that could inform the “ecosystems approach.” The Index gives each marine ecosystem a score between 0 and 100 by accounting for major factors that influence the ecosystem’s quality, such as fisheries, biodiversity, tourism, and carbon storage. This data allows scientists, managers, policy makers, and the public to understand, track, and communicate the status of ecosystems so they can design solutions to improve overall ocean health.

Reliable, holistic measurement can lead to reliable, holistic management of oceans

UNEP’s Mediterranean Action Plan is one of 13 regional seas programs that aim to slow degradation of the world’s oceans and coastal areas through sustainable management and use. Each regional action plan involves specific actions from neighboring countries to protect their shared marine environment.

Through the ecosystems approach, the Mediterranean Action Plan is integrating programs as diverse as pollution prevention, emergency preparedness and response, biodiversity, sustainable production, and coastal zone management to manage oceans effectively. (Dalberg provided the Mediterranean Action Plan with recommendations on structure and resource management to facilitate its use of the ecosystems approach.)

The Mediterranean Action Plan is one sea program using the ecosystems approach to conservation. Photo via AudreyH on Flickr.

The Mediterranean Action Plan is one sea program using the ecosystems approach to conservation. Photo via AudreyH on Flickr.

Adoption of the ecosystems approach by the Mediterranean Action Plan (and others) has shifted the focus within the oceans management conversation away from humans’ negative impact on nature toward achieving healthy balance between needs of both humans and nature. However, the ecosystems approach cannot help scientists, managers, and policymakers prioritize interventions unless it is combined with the ability to clearly assess and quantify the health of oceans. That is why combining it with the Ocean Health Index is so important.

The innovative combination of the ecosystems approach with the standardized measure of the Ocean Health Index can help environmentalists overcome the objections they face when human activity is framed only in negative terms – thereby removing at least one obstacle toward advancing sustainable management of the oceans.

World Oceans Day is on Sunday, June 8. To read more about Dalberg’s work to protect the environment, including coastal ecosystems, click here.

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Working for Dalberg in Afghanistan: A Q&A with Jordan Fabyanske

Jordan Fabyanske, a project leader in Dalberg’s Washington, DC office, helped complete a project for the German Federal Ministry for Economic Cooperation and Development (BMZ). He and his team developed a strategy to increase incomes and create jobs in northeast Afghanistan as part of Germany’s five-year strategy for economic cooperation in the region. As part of the project, the team conducted field research and met with public, private, and civil society contacts in Afghanistan. 

Below, Jordan shares what it was like working in Afghanistan and how the project helped him grow as a development professional.


A recent Dalberg project brought project leader Jordan Fabyanske to Afghanistan. Photo by Jordan Fabyanske.

Tell us a bit more about your project in Afghanistan. How did it differ from a typical Dalberg project?

As with other Dalberg projects, we incorporated a wide variety of perspectives into our analysis. But the spectrum of perspectives on this project was wider than most. We needed not only to identify promising opportunities for Germany to contribute to job creation, income growth, gender inclusion, and peace building needs in Afghanistan, but also to ensure that those opportunities were complementary to other German programs and programs of other donors in Afghanistan. Lots of needles to thread!

We also had much less data to work with than usual. In a place like Afghanistan, data is hard to find, and existing data is often unreliable. Thus, even our initial questions – how many farmers are there in the Northeast and where do they work? – were tough to answer.

How did Afghanistan’s post-conflict environment affect how you went about the project?

Well, logistically speaking, we took special precautions for security. In Kabul, we rode in armored vehicles and held our meetings in fortified facilities. In the northeast, we rode with local drivers in less conspicuous vehicles.

In terms of the work itself, we had to be particularly sensitive to the question of “who benefits.” To create jobs and grow incomes while contributing to peace building, we needed to ensure the benefits of a strategy would be distributed equitably. In a post-conflict environment, if one element of the population benefits more than others from a strategy, the risk that perceived inequity will reinforce harmful social divisions is more acute. In Afghanistan, this interaction between the security situation and the country’s development prospects is always present.

Jordan Fabyanske Afghanistan

Jordan and his team conducted six weeks of field research in Afghanistan for a Dalberg project with BMZ. Photo by Jordan Fabyanske.

Can you tell us more about some of the entrepreneurs you interviewed in the field?

I used to think I appreciated the claim that “entrepreneurship requires risk-taking,” but now I can say I’ve seen it firsthand. And by that standard, some of the most remarkable entrepreneurs are in Afghanistan.

One memorable entrepreneur was a yogurt and cheese processor we spoke to in Baghlan. He started his own company because he likes independence and enjoys the work. He told us that entrepreneurship was not typical in his family – nearly all of his 50 cousins chose the stability of working on donor-funded projects over the risk of starting their own projects.

As his example shows, in a country with so much insecurity and an influx of donor-funded development projects, there is little incentive for people to start their own businesses. So, whenever I met people who managed to start their own businesses in Afghanistan using only their savings to “bootstrap” them, I knew those people were extremely sharp and resourceful. It’s as if entrepreneurship is coded into their DNA – and entrepreneurs are an important driver of economic growth.

How do you feel you’ve grown as a development professional through this project?


Jordan and his team recommended funding priorities within agriculture and agribusiness to help BMZ create sustainable jobs and drive income growth in Afghanistan. Photo by Jordan Fabyanske.

I gained experience working in an extremely complex environment with many political sensitivities. We helped build a common agenda for multiple arms of German development cooperation to support job creation in Afghanistan, which required coordinating with related international and local organizations, too—the full range of development actors.

For me, this project reinforced the idea that sometimes the most valuable role a consultant can play is to bridge differing perspectives about a complex problem. Especially in a country like Afghanistan – where there are exceptions to every rule and hard data is so difficult to gather – it is more important (and also more feasible) to create ways for different people working on similar problems to diagnose those problems and coordinate to address them than to establish a common base of “facts.”

I also had the opportunity to refine my interviewing skills. We interviewed 170 people, many of whom were senior executives such as mayors, ministers, and country directors. It takes a lot of practice to develop judgment and to sense, in real-time, opportunities to probe complex issues with senior interviewees. Often, getting good answers requires framing and articulating questions very carefully; it was satisfying to feel myself improve in these skills over such a short time. I also find that this sort of field-based opportunity to “learn by doing” is part of what distinguishes Dalberg as an incubator for future leaders in global development.

Germany has committed $536 million per year to Afghanistan from 2012-2016 and, at time of publication, is the fourth largest bilateral donor to Afghanistan. Jordan and his team recommended specific funding priorities within agriculture and agribusiness to help BMZ use part of that sum to create sustainable jobs and drive income growth in the northeastern provinces of Afghanistan.

Read more about Dalberg’s work in Inclusive Growth.

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