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Focus on coming regulatory framework and constraints in rural areas at the “Regional Workshop China” in Beijing, organized by the World Microfinance Forum Geneva (WMFG)

February 28^th, 2008

One of the keywords heard on the Regional Workshop China organized by WMFG, was the word “trust”. On one side there should be trust granted by the peasants who will borrow the money, to the microfinance institutions who lent the money on the other side. Especially with new technologies that 51give is introducing, trust is also a very important issue. A trust, which can only exist, if a right regulatory framework is provided for the correct implementation of microfinance in China. A reserved promise for this was made by the People’s Bank of China (POBC) at the end of the day.

The morning program had interesting speakers from UNDP, China Agriculture University and the Rural Development Institute of CASS (Prof. Du Xiaoshan). The attendance of Prof. Du made the discussion very lively and focused a lot on the existing problems on providing microfinance solutions in the rural sectors (time consuming, accessibility, practical problems that occur for simple financial transactions). The story of SDR Consulting, followed upon this by explaining the upcoming possibilities in microfinance by the use of new technologies as mobile networks.

As 51give always emphasizes mobile networks should be more explored; as according to market research 50 percent of the peasants in rural areas already have a mobile phone. Mobile phones can be used to make communications to remote areas easier, but can also be used for mobile payments and in the near future even cash transactions. An area which 51give supports in the future by providing their internet and mobile platform for microfinance (for more information look at www.51give.com). One of the existing problems with mobile payments is off course that there should always be a unique identification of the client. Which is quite hard with all the prepaid phones going around. Off course there are already some solutions available for these practical problems.

A very detailed contribution to the workshop came from Mr. Bold Magvan from XacBank Mongolia about this subject. He told that they already did a project in Mongolia in which they used mobile phones to make transactions so peasants could do there repayments by mobile phone through a network of agents. This makes it possible that farmers for example do not have to travel for two days to make repayments. Off course mobiles phones also offer the possibility to function as informationportals. For example the service that Cellbazaar is providing can be extended to use for more microfinance purposes; let’s say the availability of all kinds of agricultural information about the region.

The overall feeling amongst the participants of the workshop was that, due to the efforts made in the last two to three years, now everything will fall into place very quickly; ‘ We are almost there … ’ as GTZ mentioned. The wishes about the new regulatory framework, necessary for providing the right settings for enabling microfinance in China, are clear and on their way and with the new coming technologies available we just have to do it. That means a new interesting year for microfinance has started.

At the end of May of this year there will also be a new interesting conference held in Ulaanbaatar, Mongolia, the 11^th Conference of Microfinance Institutions organized by the Microfinance Centre. For more information about 51give, please look at www.51give.com.

This is the forum website for World Microfinance Forum Geneva http://microfinanceforum.org/

On the second day of the recent Davos World Economic Forum Bill Gates called on corporate executives to pair two seemingly incompatible forces. A company’s need to earn revenue with an individual’s interest in the welfare of others. He acknowledged this idea would likely be received with skepticism at first but would eventually be accepted as people become more aware of successful projects with these two aims. Prior to his complete departure from the Microsoft giant that has earned him billions he announced a new venture with Dell computers to join Bono’s Product Red campaign. Certain Dell computers with Window’s Vista pre-installed will result in $60-80 being donated to help fight AIDS in Africa and has resulted in over 2 million people receiving AIDS drugs.

Many times he referenced how important it was to extend low-cost wireless networks into developing countries. He sees these efforts as being capable of being the impetus to vast economic and social changes. “There are billions of people who need the great inventions of the computer age,” he asserted. “Breakthroughs change lives only where people can afford to buy them.” Despite these assertions, Microsoft currently has no announced plans for any type of fee-reduced versions of its software and remains a target of many advocating for changes in software pricing structures. High prices result in the 3rd world being priced out of the market for software and leads to rampant piracy in many countries.
His assertion that “Once you get a country bootstrapped, it’s amazing what happens” can be seen in microcosm through the effects of microlending’s proliferation. Through the expansion of low-cost high speed internet connections and the booming internet cafe business in once remote villages has brought millions of new users into interaction with each other. Technology’s ability to easily and cheaply connect people from such great distances has contributed to the growing social venture movement across the world. It has enabled computer users to learn about people they would otherwise never be able to meet, empathize with their disparate situation, and motivated them to take action to reach out.

Although Bill Gates is not presenting a new bold idea that was previously unknown, his endorsement brings with it welcome recognition to the many who have been laboring with the same visions. Nicholas Negroponte’s attempt at provide one laptop per child, the Muhammed Yunas venture into cell phones for poor rural villagers, and the Tata Group’s new $2500 USD car are all success stories that Bill Gates is calling on CEO’s to wake up and take notice of. They show that a company earning money need not preclude its ability to radically change peoples’ lives for the better.

Do you know of examples of companies doing this in China, if so please write a comment

N.B. It doesn’t matter which country the company HQ is in.
More on Davos 2008 here