On July 22, I got an email from Kiva saying, “…your loan to Karimbayli Mammadov
has been fully repaid….”

Who is Karimbayli? He’s the 50 year old welder from Azerbaijan that I loaned money to about a year ago (see this post and this post). You can check out his business page on Kiva here.

I’m glad Karimbayli was able to repay his loan. It means his business is sustaining and, hopefully, growing. So, what am I going to do now that Karimbayli has repaid me the $25 that I lended to his total $1000 loan. I’m going to reinvest in another entrepreneur. Of course.

Last time, I invested in one of the least loaned to demographics: “Male”, “Eastern Europe”, “manufacturing”. This time I’m going to reinvest the $25 in a completely different demographic: “Female”, “Middle East”, “retail”.

And, the entrepreneur I chose is Joumana.

Here’s her profile blurb on Kiva:

Joumana, 30 years old, is single and lives in Tripoli in the north of Lebanon.

Joumana’s enthusiasm and willpower allowed her to defy the community as she opened a shop to sell painting materials, a business traditionally managed by men. She requests a loan of $1,200 so she can purchase more goods to sell. This will allow her to attract more clients by offering them a larger variety of products.

Joumana has been a micro-credit client of Al Majmoua for the past 4 years. She has always repaid her debts on time.

Are you caught in Kiva’s addictive cycle? Holler your Kiva profile page in the comments. Find my lender page here.

d.light design’s goal is to make kerosene lanterns extinct as soon as possible. Why do they want to do this? They think they have a lighting solution that provides a safer, brighter and more affordable light to the widely-used kerosene lantern.

You’re probably saying to yourself, “But, I don’t own a kerosene lantern”. You’re right. But, according to d.light, about 1.6 billion people around the world depend on kerosene lanterns as their only lighting source.

Where do these 1.6 billion people live? Mostly in rural and urban areas that don’t have regular access to electricity.

Here are some strong reasons for eradicating kerosene lanterns pulled from d.light’s site:

Improved Health
Reduction of indoor air pollution, which causes acute lower respiratory infections, one of the biggest killers among children under 5 in India.

Access to Education
We will offer higher quality and brighter light for children to read by.

Saved Lives
Kerosene causes thousands of fires and burns annually.

More Savings
The average rural household in India spends 7.4% of their income on fuel and lighting, over three times more than is spent on education.

Higher Income
UNDP studies demonstrate that families with access to improved lighting have up to a 30% increase in income levels due to increased productivity at night.

So, what’s their big solution to the kerosene epidemic? It’s simple… LED lights (aka light-emitting diodes).

However, they’re not any old LED lights. Their LED lights have been tested over and over with real families living in the harshest of off-the-grid locations. The d.light team spent months and months perfecting what batteries to use, back-up power sources and different configurations.

They’re goal wasn’t to create only a brighter light but one that was durable and extremely affordable. And, one that could be easily manufactured and distributed all over the world.

Here are some of their light’s features pulled from their site:

Bright Light
Providing 10-20 times more light than a kerosene lantern.

World’s Highest Efficiencies
30-50% more efficient than compact fluorescent lights.

Long Lasting Power
Proprietary circuitry provides a minimum of 5 hours of light at the highest setting and over 200 hours of light at the lowest setting.

Flexible Charging
Charges by portable solar panel. Also, 110V or 220V AC charging available as a backup.

Battery Life Indicator
Indicator light signals level of battery charge, allowing customers to optimize usage.

The d.light was created by Sam Goldman (now CEO) and some Stanford students. After coming up with some prototypes, Sam and some fellow grad students at his MBA program presented their light venture at the 2007 Global Social Venture Competition (GSVB) and won 1st place.

This CNN article has some great additional info on the GSVB competition they won. After the competition, they went on to attract funding from top venture capital firms like Draper Fisher Jurvetson.

I’m hugely impressed with d.light’s effective and singular focus on eradicating one problem. Not only that, they are providing an affordable and highly beneficial solution to people living in underdeveloped areas. Plus, they are running this whole thing as a for-profit business.

Companies like this inspire me. You can read more about d.light at the blog Sam writes over at Social Edge or by perusing d.light’s site.

I enjoy reading about companies that are making strong efforts to understand and meet the needs of people in rural, underdeveloped areas of the world.

For the most part, people in rural, underdeveloped areas of the world are shortsightedly ignored by companies and as a result new products and services aren’t designed for them. I think this leads to a lose-lose situation for both companies and the people living in these underdeveloped areas.

Bosch a Germany company well-known for its auto parts and power tools launched in interesting expansion into the rural, underdeveloped areas of south India back in 2006.

In collaboration with some Indian banks, Canara Bank and Andhra Bank, they launched Bosch Vaahan, which is a mobile van that provides power tool demonstrations and training to artisans. The mobile van also travels with bank workers that provide info on small business loans and help the artisans through the application process.

In Summer 2006, while working for a microfinance organization I got to travel extensively through rural southern India visiting tons of artisans, craft makers etc.

As you’d expect, they all worked extremely hard but lacked efficient tools. The whole time I was traveling and meeting these rural entrepreneurs I kept thinking, “If only they had this tool they could increase their productivity 10x.”

According to the Bosch site, the southern India initiative has been successful. They launched a second mobile van in northern India in April 2007.

The Hindu Business Line reported this about the second van:

The van will reach Delhi and travel towards northern Uttar Pradesh, Haryana, Punjab and Jammu before returning to Delhi. The second phase will cover eastern and western Uttar Pradesh. “We aim to reach 4,000 artisans in north India,” says Navin Paul [Business Head, Bosch Power Tools India].

You can read more about the Bosch Vaahan initiative over at the Bosch site. And, Sagar Gubbi has some more insight into this initiative over at his blog.

Shukla Bose and her team are trying to accomplish big things in India.

They are tackling poverty in India by providing extremely impoverished children top-notch education at no cost. Parikrma accepts slum children into their schools whose parents make less than $30 per month and provides them with an education from age 5 until they get their first job out of college.

But, that’s not where their innovative Parikrma Model ends. Their model provides both top-notch education in the classroom as well as a 360-degree program out of the classroom, including nutrition, health care and family care.

For instance, they provide their students with breakfast, lunch and a protein shake before going home every day. I’ve actually tried both their lunch and after-school protein shakes and they’re both tasty.

They also provide immunizations and health check-ups to students and provide de-addiction programs and microfinance to parents. These are just a couple examples of their 360-degree program.

Why the out-of-the-classroom program? Because classroom performance and success is affected by outside elements just as much as inside elements. You can read more about the out-of-the-classroom elements here.

The team at Parikrma understand that knowledge and education are the two most important factors in overcoming extreme poverty. That is why Shukla Bose who at one time was India’s highest-paid female CEO dropped her highly lucrative real estate career and focused on creating an education model that would provide a sustainable and scalable model for India’s bad school systems.

How bad are the school systems in India? Here are some quick stats pulled from Parikrma’s site:

Drop out rates are close to 50% by class V and 70% by the time the child reaches class VII. Attendance is as low as 15%. The curriculum is sub-standard. Teachers are poorly trained and teaching methods are outdated.

I got to do some work with Parikrma when I was Bangalore in 2006 and she told me that the unofficial motto for India’s school systems was, “Literacy for masses, education for the classes”.

Parikrma first opened its doors to slum children in 2003. They’re currently operating four schools in Bangalore. Since Parikrma is a nonprofit each of the schools has a sponsor to cover operational costs, including Yahoo!, Adobe and Levi Strauss & Co. You can see more of their various sponsors, like Dell, here.

It didn’t take long before Parikrma’s schools starting getting recognition for educational excellence and national testing performance and their athletic teams start beating local schools at soccer and track.

Their track athletes from their schools just won 13 medals (3 gold, 5 silver and 5 bronze) at the KPMG Inter-School Athletics Meet with more than 4,000 athletes from over 140 mainstream schools.

They’ve decided that operating four schools is optimal while they build out a sustainable and scalable model. In the future, they plan to put Parikrma schools in major cities around India and let them serve as hub-and-spoke models for local public and private schools

Parikrma could easily raise funds to build tons of Parikrma schools all over the place, but they want to focus on partnering with public schools and private schools helping them implement the Parikrma model.

You can check out their site for more info. They love volunteers, so if you have a cool idea give them a holler or check out their volunteer page here.

In May 2007, we did a post on “How to Become an International Banker in Four Easy Steps”.

We had just made a microloan through Kiva to an Azerbaijan entrepreneur by the name of Karimbayli Mammadov to help expand his budding welding business. You can see Karimbayli’s Kiva page here or just view the screen capture below:

Today, the Kiva field partner (Komak Credit Union) who dispersed the welding business loan sent us a journal entry from Karimbayli.

His journal entry says that his welding business has been doing very well. He goes on to say that he was able to invest the welding profits in a new venture… breeding sheep!

I must say that is very cool. Good luck on your sheep breeding business, Karimbayli.

/////////

Kiva Field Partners like Komak Credit Union in Azerbaijan are what makes Kiva’s innovative online business-to-business lending work.

They are the ones who do all the dirty work on the ground selecting loan candidates, dispersing loans, traveling, collecting principal & interest every two weeks or so, more travelling, uploading financial data to Kiva and trying to run a sound microfinance outfit.

Kiva’s huge goal is to bridge conventional financial markets with 2nd- and 3rd-tier microfinance instutions.

To do this, they need implement standard accounting practices, build credit profiles and record financial histories etc etc for all the hard-working microfinance organizations out there servicing the Under $2 Crowd.

For those interested in learning more about Kiva you can visit their website or blog.

FYI: Kiva has been doing crazy things lately. They were on Oprah back in September 2007 (with fellow guest Bill Clinton). She crashed their site multiple times and around $300,000 was loaned in two days.

They have loaned around $22,000,000 through the site for all time. As I’m writing this, this week alone $590,000 has been loaned.

Driving through rural India you will run into thousands of village corner shops (or shacks) carrying everything from tea to rice to fruit to basic medicines and ointments.

These rural corner markets are all run by entrepreneurs that live on very small profit margins (as they usually get their stuff via a middleman’s middleman or make the long, expensive trek into a nearby city to buy their inventory).

All the retail they carry are packaged in really small portions. This is because their customers (fellow village residents) all make very small daily wages, if any (probably under $2 per day).

I was reading Sagar Gubbi’s blog over at Social Edge and I came across a recent post he wrote about 3A Bazaar.

3A Bazaar is so amazing.

Here’s why: They saw that modern retail wasn’t penetrating rural India so they decided to create an innovative retail solution: Retail on wheels.

Here’s how it works: 3A Bazaar packs their large vans full of retail items like grocery, personal care, health products, cosmetics, household items etc and drive from village to village on a routine basis serving rural customers straight from their vans.

They have over 10 vans and they serve over 700 villages each with less than 10,000 population on a daily, weekly, or monthly basis.

This benefits rural areas for many reasons:

1) Benefits both the rural BOP (bottom-of-the-pyramid) customer and the corner market entrepreneur by bringing them cheaper, quality products direct (cutting out the middleman).
2) Cuts out the expensive opportunity cost of traveling to the city or another rural village to buy your items
3) Allows modern retail to reach rural India since they don’t have to build unsustainable brick-and-mortar stores (this was a big reason they didn’t penetrate rural India before)
4) Rural customers are already “educated” on retail products due to the phenomenal prevalence of TVs (and plenty of TV ads) in their small, “rustic” village homes. This means that retail companies don’t need to spend more advertising money on these new rural customers and can instead offer better prices (because of greater economies of scale).

I’m pretty sure plenty of readers are saying to themselves, “Isn’t this bad for the local entrepreneurs with their small corner shops?”

I don’t think so. In fact, I think it’s better for their business.

Here’s why: They now have access to better, cheaper inventory instead of buying their inventory from cutthroat middleman or wasting a business day traveling to the city and back for reasonably priced inventory.

You might also be thinking, “But… now that the local entrepreneur’s local customers can buy directly from 3A Bazaar’s vans why would they buy from the local corner market?”

Oh, they definitely will keep buying from their local corner market.

Here’s why: Most rural villagers make under $2 per day. This means that they live financially from day-to-day.

They can’t budget and buy inventory for the long term. They focus on the short term. They spend their money on whatever they need for that day (sometimes week).

And, guess what?

3A Bazaar’s vans aren’t going to be sitting in their local villages every day. They will still depend on their local entrepreneur’s corner shop when they need to buy something for their immediate short term need.

Here are some other cool things that 3A Bazaar plans to do:

1) Organize health camps
2) Provide technical expertise to farmers
3) Provide info on education
4) Enhance the savings

Again, you might be thinking, “Isn’t 3A Bazaar just trying to bat their eyes at the media and bloggers like you with these good-but-not-profit-raising intentions?”

Maybe. I think its just smart, good business.

Here’s why: Smarter, healthier and more educated consumers is win-win for both companies and consumers. It translates well to both 3A Bazaar’s bottom line and the rural consumers’ bottom line.

Expect to find plenty more posts on this blog for the “Under-$2-Crowd.”

Other cool Social Edge blogs to check out: Kiva Chronicles. Matt Flannery updates it from time to time with inside looks at Kiva’s awesome microlending-to-entrepreneurs-around-the-world site. He is the CEO & co-founder of Kiva (a startup I tried to work for straight out of college).

Reality checks are healthy. They help you assess the actual situation and proceed with solutions that work in the real world.

I have had my fair share of hyping mobiles phones in Africa, Google Phones in India, and developing countries skipping low-cost laptops and jumping straight to mobile.

The future is bright for low-cost tech in developing countries. It will bring the leveraging power of information and Internet to the BOP (bottom of the pyramid). But, in most developing areas it just hasn’t arrived yet.

You hear successful stories hear and there of poor students using WiFi-enabled laptops etc, but the reality is sometimes much different.

Not bad. Just different.

About a month ago, Brian Forde who runs Llamadas call shops in Nicaragua emailed me about new “business they created for BOP entrepreneurs to provide service to BOP clients.”

Pedal-powered mobile call shops!

Check the Llamadas video explaining how they work (ironically, there is an iPhone cameo at the end):

At first, I thought “What?!”

Pedal-powered mobile call shops seem so clunky and impractical.

But, than I re-read Brian’s email and single sentence really jumped out at me:

“In Nicaragua people make national and international phone calls every day in call shops using their cell phones as address books instead of cell phones, although this may seem inconvenient to some the savings is worth it to many.”

Wow. People have cell phones but they only use them as address books because they are too expensive.

It was a big reality check smack in the face, but it was definitely refreshing.

Just goes to show how far “creative capitalism” needs to go before it makes sense for some people in Nicaragua to start using their mobiles as actual phones and not just as fancy address books (See this post on Bill Gates’ call for “creative capitalism”).

Sure, mobile phones with Internet-connectivity will be great for the under $2-a-day crowd. But, in some areas of Nicaragua reality calls for practical, clunky and oddly innovative solutions like Brian’s pedal-powered mobile call shops.

For more information on the mobile call shops you can email Llamadas at info@llamadas.com.ni.

If you have an interesting, clunky or just plain practical product or service aimed at the BOP give me a holler at andrew@buzzyeah.com.

We don’t just cover the latest low-cost laptop aimed at the “Under $2 Crowd” (new BUZZYEAH category that covers products and services aimed at the two billion or so people that make under $2-a-day). We will give your own “pedal-powered mobile call shop” a shout out too.

Update: Peter Sauer leaves a very interesting comment below (he just got back from Nicaragua).

Update: Brian at Llamadas leaves in excellent comment below about the debilitating costs of slow, inefficient communication options for the under-$2-crowd.

Bill will call for “creative capitalism” at the World Economic Forum in Davos today, WSJ reports.

What is “creative capitalism”?

Bill says that “creative capitalism” uses market forces to address poor-country needs that he feels are being ignored.

Wow. That is right up BUZZYEAH’s alley. We fully support “creative capitalism” around these parts.

Bill says, “We have to find a way to make the aspects of capitalism that serve wealthier people serve poorer people as well,” in the WSJ-previewed copy of the speech.

Later in the speech, Bill says he’s troubled that advances in technology, health care and education tend to help the rich and bypass the poor. (Note: These are areas that BUZZYEAH will cover in the future, especially technology.)

He also says that companies should focus on creating products and services for the poor. Bill notes, “Such a system would have a twin mission: making profits and also improving lives for those who don’t fully benefit from market forces.”

Awesome.

Look for a new BUZZYEAH category in the future called “Under $2 Crowd” that will spotlight innovative products and services aimed at the two billion or so people who make under $2 per day.

The WSJ article highlights an amazing book by C.K. Prahalad called “The Fortune at the Bottom of the Pyramid” that really influenced Bill’s thinking behind his “creative capitalism.”

The same book has really influenced my thinking, too. In fact, I spent my Summer 2006 working at a microfinance institution in Bangalore partly because of that book.

You can grab Prahalad’s excellent book at Amazon:

Here is a video of Bill Gates talking to WSJ’s Rob Guth about “creative capitalism.” It’s only 4min long, so definitely watch it:

Bill will be giving his official “creative capitalism” speech sometime today at Davos. I will post the Davos speech video below if I find it on YouTube.

Last week I posted on Tata’s new $2500 car called the Nano. It is the cheapest car ever built and Tata is aiming it at the developing nation market.

Near the bottom of the post, I said that I had messaged my friend Mike Murtaugh who is currently working in Delhi to leave a comment on the subject.

Well, he has left an excellent comment with some great points and I think he wins lengthiest BUZZYEAH comment ever. I have included his full comment below.

Here is my executive summary of his comment:

1. In reality, India’s growing middle class will be the only one’s who can afford the 1 lakh ($2500) price tag.
2. Tons of families drive around on scooters and this will continue to happen
3. Putting families into small cars instead of scooters will save lives
4. Nano’s “no power steering” and small wheels is not ideal for the rough roads that make up a large portion of Indian roads
5. Despite Nano’s small size and low emissions, it will still add more traffic and pollution

Here is Mike’s full comment (also, definitely check out his amazing photography):

“Great post Andrew, thanks for the shout out as well. I am currently living and working in Delhi and due to the nature of my job I am getting to see a good portion of India. I’ll do my best to fill people in with India’s take on the Nano. These days their is a general sense of optimism among Indians. In the media its a bit to overstated but none the less India’s is becoming a major global player and not just financially. In some ways the Nano is one of the spoils India is reaping due to the upsurge in growth. The growth in the market certainly has its winners and losers. Largely the winners are the expanding middle class. The losers are the lower class/casts.

So who will be buying new nanos? Largely it will be this middle class. As many of you know the retail price is about one “lahk” (2,500.00 USD). No car before in India has been sold at such a low price (the actual cost after taxes and registration will fall around 3,000-3,500). Part of the reason Tata can go so low is that Tata is one of the major steel manufacturers in India. A friend at work tells me that 80,000 have already been sold in advanced. In the future they project about one million units per year. Another friend at work said he is already going to buy two. As the tata founder stated he became inspired when he saw full families riding a motorbike. This is true. Walk around any city in India and you will most likely see this. It is not a new phenomenon and will certainly continue into the future. On a purely safety level the nano is going to put families into cars instead of on a bike. This will save lives so certainly a plus. The nano does have some minuses as well at least as I see it.

Driving in India is no joke. It takes special talent to survive any city. My own scooter record can attest to this fact. In less then a month I got into one minor accident, closely avoided another, and always say my prayers before going out. And I live in what could be considered a suburb of Delhi. As my friend told me the nano is geared for only “city driving”. The reason for this is most roads in India lack maintenance. When you travel outside of cities you can go a bit faster. This is nice but the quality of roads are at best sporadic. You can be going for 10 miles or so and get to the top of a hill or go around a bend and suddenly be on a dirt road or rock road. Not much warning at all. From pictures I’ve seen the nano looks like only the bare minimums to drive. Small tires and I’m guessing minimal shocks. Another road obstacle is the cow, goat, and the ever present dog. In every city I have been to cows will be roaming from the fields to the highways. Many times we have had to swerve suddenly to avoid hitting a cow. In any car you wouldn’t want to hit a cow and in India this goes double. Cows are considered “holy” and if you hit one you may be better off fleeing. A mob could easily form. What makes avoiding cows hard for the nano is its lack of power steering. You don’t need power steering to drive a car and tata saved significantly for scrapping this but give me the option in India I’ll opt for the power. So getting back to the city. Many times I’ve been in some massive traffic jams in Delhi trying to make a flight. In many places the roads are narrow and what should be a two lane suddenly becomes a 5-6 lane street. In India you have large trucks, smaller SUV’s, cars, scooters, bicycles, and “rickshaws”. A rickshaw is basically the size of a golf cart. Often the only thing moving in this mess is the motorbike. Lets fast forward to 2009. With a million more nanos on the road what will this mean for cities? I’m told Delhi is the fourth largest city in India. In the biggest cites I think this will be a problem. Where Delhi will have an advantage is that it is building a massive metro connecting all major parts of the city. I’ve ridden it once and must say it compares with any I’ve been on. Lastly what will more cars mean for the environment? Most times I go out jogging around my block my lungs burn. To put it lightly Delhi has a lot of smog and dirt flying around. The nano has a relatively small motor and low emissions but add say 1/5 of the million to a city like Delhi and you may have a bit more to choke on (each year add another million).

Am I being to hard on the nano? Maybe. It certainly does have its pluses. And who should decide what Indian’s should spend their money on other then themselves. When you get an automobile in India its a big deal. My friend said a party is standard not to mention the envy of all your neighbors. Is the nano the car that will define the future of India? This next year should be telling. I’ll keep you posted.”

I usually don’t post this frequently but I can’t help myself since so many new products are popping up in the news aimed at the lower brackets of the socio-economic spectrum.

This is definitely a space that I’m interested in and as you can see in the left sidebar BUZZYEAH has a whole Socio-Economic category devoted to news like this.

Yesterday I posted on Pixel Qi’s plans to join the low-cost laptop and mobile phone space.

And, today we have Tata’s long awaited $2500 car being unveiled at India’s biggest car show in Delhi. Both the NYT and BBC have excellent coverage.

Tata’s Nano is unofficially known as the “People’s Car” and it easily is the world’s cheapest car. They are targeting the car at very low income families providing them an option over their usual choice of feet, bike or scooter.

Now, I know bottom of the pyramid crowd who make under $2 a day won’t be able to afford this car but its great to see such a large car manufacturer target the “developing nation” market in such a innovative way.

Here are some quick specs on the Nano: 33bhp, 624cc, engine at the rear, no air conditioning, no electric windows and no power steering.

Supposedly, Tata engineers questioned each component of a conventional four-wheeled car to see what was ACTUALLY needed to drive down a road.

They even tested things like using three brakes instead of the normal four.

I really love that kind of thinking.

Tata has been talking about building this car for years. When I was in India two summers ago I heard plenty of buzz about this car. Its great to see it in the flesh.

I remember seeing plenty of four- or five-member families riding around the hectic streets of Bangalore on small scooters and thinking it was completely nuts. Mother’s would be holding babies on their laps and having the larger kids hanging off both the front and back of the scooter.

It was seriously nuts!

Most of my co-workers at the microfinance institution I worked at explained that it was perfectly normal behavior for families to ride around on scooters together.

It was hard for my mind to wrap around given the safety standards and concerns we have here in the States.

Well, according to Mr. Tata at the Nano unveiling ceremony he built the car with scooter-riding families in mind:

“I observed families riding on two-wheelers – the father driving the scooter, his young kid standing in front of him, his wife seated behind him holding a little baby.

It led me to wonder whether one could conceive of a safe, affordable, all-weather form of transport for such a family.”

I’m glad to see more and more products and services targeted towards the lower socio-economic brackets. They are definitely viable and I look forward to highlighting more products and services like this in the future.

If you know of something cool in this space give me a holler at andrew@buzzyeah.com.

Update: One of my good friends Mike Murtaugh has his first job in Delhi this year doing photo/design/etc work. I messaged him to leave a comment below about families riding around on scooters and whatever he wants to say. Definitely check out his excellent photography over on his Flickr.

Update: See Mike’s comment below. He brings up some excellent points. It’s lengthy so I gave the comment its own post.