@Prepaid_Africa Connecting Dots – August 2015

Insurance is rapidly capturing mindshare as the next big opportunity space in sub Saharan Africa, if only a way could be found to address the challenge of the vast & undocumented informal sector. London is calling African startups to apply for an insurance incubator programme. Deadline October 31st 2015.

 

Prepaid economy characteristics are popping up across OECD. Germans prefer using cash to cards, while cash strapped Greeks are reverting back to barter. Uncertainty has become prevalent enough in the first world, leading to the release of an app that claims to help you minimize the volatility between income and expenses. Are these the behaviours of resilience in face of trembling formal structures?

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GIIN Research on the Landscape for Impact Invesing in East Africa

Kenyan investment firm Amalgamated Chama Limited – a “super chama” composed of 20 chama groups – has bought 30 per cent stake in clothes exporter Ethical Fashion Artisans EPZ Limited which assembles clothes locally for international fashion labels. These 250 people have also advanced a loan of 7 million Kenyan shillings to boost working capital. While Kenya may lead impact investing in Eastern Africa, according to the GIIN landscape report, the analysis seems to overlook the potential impact of local, cooperative capital in the entire region.

 

“The analytical foundations of public policy have traditionally come from standard economic theory.” G. Sampath writes strongly in The Hindu on behavioural economics being used and misused as a tool for policy making, and from South Africa comes a cry for better policies for the informal traders in economically challenged townships. The frameworks of the privileged may not offer the best lenses by which to understand the barriers faced by the less privileged.

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Open Sesame – Alibaba rolls out the red carpet of online shopping to rural China. They’ve designed a human computer interface to lower the barriers for their new customers – its a model worth imitating for other such untapped markets, such as in Africa.

“We don’t know when our rural e-commerce operations will become profitable, but there’s value in what we’re doing, there’s consumer demand,” Gao Hongbing, director of Alibaba’s research arm.

Before it can reap the rewards, Alibaba is having to teach a rural population – which tends to be older, poorer and less comfortable with technology – how to browse and buy.

Alibaba has been on a recruitment drive to find and train local ‘partners’, who set up service centres in their home villages, helping locals shop online.

Partners – mostly younger, educated, and more familiar with navigating websites like Taobao, Alibaba’s online emporium – go through a written exam, computer test and interview. More than 1,000 applied for one batch of 50 jobs, said one applicant from Henan. Training takes place at local government business offices over 2-3 days in groups of around four dozen. Trainees are asked about their aspirations and how they can reach their potential.

“My dreams aren’t that big,” said Cheng, 29. “I just want to live in the countryside and give back to the people there so they can have the same quality of life as people in cities.”

Having some of its surplus of university graduates return to the countryside also fits government policy for developing the rural economy.

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