digital finance sourcesIt is no secret that cash is becoming more and more obsolete in developed nations. Venmo, Cash App, Square, PayPal, Zelle and Google Pay — none of these popular money transfer services require a physical transfer of cash. The onslaught of a global pandemic has only accelerated the shift to cashless transactions amid efforts to minimize physical contact. China is rapidly moving forward with central bank digital currency (CBDC) trial rollouts while the United States Federal Reserve is conducting ongoing research to potentially develop its own CBDC, a “Digital Dollar.” In lower-income nations, digital finance sources have the potential to transform economies.

Digital Finance in Developing Countries

In developed countries, the notion of an entirely cashless society is not far out of reach. However, the story is very different in developing nations. Many individuals are excluded from participating in even the most basic financial systems and instead rely primarily on physical cash. As of 2017, about 1.7 million adults globally were “unbanked.” This means they lacked any account with a financial institution or mobile money provider. This is nearly one-fourth of the world’s population.

Some of the most commonly cited barriers to account ownership include insufficient funds and inaccessible banking services. Virtually all unbanked adults live in developing economies, with women over-represented among this cohort. Digital finance services delivered via mobile phones, the internet or cards, function as a means of including these unbanked populations. The benefits of digital financial inclusion are prolific.

Digitizing Financial Inclusion

The strong link between financial inclusion and a wide array of global development goals is becoming increasingly clear. Significantly, seven of the 17 U.N. Sustainable Development Goals for 2030 explicitly mention financial inclusion as central to achieving these objectives.

Digital technologies offer financial services at lower costs, fostering opportunities for large-scale inclusion by enabling institutions to serve lower-income customers profitably. Such broadened financial access can sustainably transform emerging economies. A 2016 report by the McKinsey Global Institute estimated that digital finance alone could boost the annual GDP of all emerging economies by $3.7 trillion by 2025 due to productivity gains of businesses and governments.

Digital services include those such as M-PESA, a mobile phone-based transfer, payment and micro-financing service. Mobile money has lifted an estimated 196,000 Kenyan households out of extreme poverty from 2008 to 2016.

The Benefits of Digital Finance Sources

  • Increased Security: Digital footprints provide greater transparency and hold individuals and institutions accountable, reducing vulnerability to fraud and corruption.
  • Time and Cost Savings: Digital services are quicker and more efficient, lowering costs for both providers and consumers.
  • Financial Inclusion: The lower costs and convenience of mobile services make them accessible to more people, including those living in remote or rural areas.
  • Women’s Empowerment: Women with access to financial services like loans, savings accounts and mobile payments can achieve independence. It has been found that women with digital savings accounts also spend more on development endeavors like education.
  • Higher Tax Revenues: Digital finance has been proven to increase tax-paying compliance, and in turn, government revenues.

Given the wide-ranging benefits of digital finance sources, it is clear why many organizations are attempting to accelerate the transition from cash-based to digitized economies in the developing world. A growing number of groups such as the U.N.-based Better Than Cash Alliance are working to extend the reach of financial services by using digital technologies to go where physical banks cannot, bringing access to mobile money, savings accounts, credit and insurance to the under and unbanked. Digital finance is more than a trend of modern societies. It is a vital tool for achieving inclusive and sustainable development in emerging economies that are still far from being cashless.

Margot Seidel
Photo: Flickr

Gigafactory,Over the last few years, there has been a lot of turbulence between the U.S. and China, especially in the areas of business and trade. Through all of the challenges though, U.S. car company, Tesla, managed to erect one of its famed Gigafactories in China in 2018 — one of the world’s largest emerging markets. Other than reducing the price of Teslas globally, the Shangai Gigafactory will also continue to raise employment in China and allow the Chinese economy to better develop.

What is a Gigafactory?

Tesla has been revered for its innovation in the electric vehicle (EV) market. Every year, the company seems to attract higher demand from around the world. With demand showing no signs of slowing down, Tesla was forced to rethink how it handles production. The Gigafactory serves as a production powerhouse to resolve the demand problem.

With the addition of the Shanghai Gigafactory, or Giga Shanghai, Tesla now says that it can produce roughly half a million vehicles per year. Gigafactories centralize production and allow for more parts to be made in-house. This cuts time and costs which ultimately results in lower prices for the consumer.

Tesla also made it paramount to make the Gigafactories as environmentally friendly as possible. All three Gigafactories are zero net energy. This means that they only rely on energy from renewable sources. In the case of Gigafactories, this means lots of solar power and no harmful byproducts.

How Giga Shanghai Helps Impoverished Chinese Citizens

Perhaps the most obvious way that Giga Shanghai helps is by providing jobs in China. Since its completion in 2019, the Gigafactory has employed roughly 2,000 people. Many of the jobs are in the production line so they are attainable for everyday citizens with no formal secondary education.

In addition to jobs, Giga Shanghai serves as a solution to the city’s immense pollution problem, with the most impoverished citizens living in the hardest-hit areas. Shanghai usually has an air quality index (AQI) that hovers around 150. Good air quality levels mean an AQI of between zero and 50. In a country where up to 1.24 million people die from pollution-related illnesses every year, Giga Shanghai proves that factories can still operate on a massive scale without relying on fossil fuels and other non-renewable energy sources.

If the energy technology used in Giga Shanghai is applied to other factories in the city, thousands of lives can be saved every year, especially the lives of the most impoverished citizens who cannot afford to move out of the most polluted areas.

Cutting Costs and Bolstering Relations

Before Giga Shanghai, the price of the world’s most popular EV (Tesla Model 3) remained too high for many people in China and abroad. Now, with the ability to produce the Model 3 in China, production and transportation costs have been slashed across Asia and Europe. Compared with the U.S. models, the production cost of the Chinese Tesla Model 3 has dropped by up to 28%. Now more than ever, Chinese citizens can access clean and reliable personal transportation that does not pollute their cities.

Giga Shanghai has also opened the door for new trade opportunities with European nations. Now, countries such as Germany, France, Italy, Portugal and Sweden prefer to purchase Teslas from China since the cost is lower. Trading in higher volume with developed economies means that China is inching closer to becoming a fully developed economy.

Giga Shanghai and the Future

Tesla CEO, Elon Musk, has stated that he would like to see 10 to 20 Gigafactories built over the course of the next couple of decades. Giga Shangai is the “guinea pig” since it is the first Gigafactory outside of the United States. So far, things appear to be running smoothly.

Soon, Gigafactories could be popping up in other emerging markets like Argentina, Mexico and Morocco. Gigafactories may be a stepping stone to help emerging markets become better developed. Job creation is a significant benefit of a Gigafactory. They advance industry, create new opportunities to trade with other countries and offer a clean alternative to gas-powered vehicles. Ultimately, Gigafactories can serve as a catalyst for global poverty reduction.

Jake Hill
Photo: Flickr

Vanuatu's Graduation Vanuatu is a southwestern Pacific Ocean country made up of about 80 islands with a small population of around 300,000. Vanuatu has recently graduated from the list of least developed countries (LDC) despite setbacks due to ongoing natural disasters and other factors. Vanuatu’s graduation from LDC status took place on December 4, 2020. It was first recognized as an LDC in 1985.

What is the Least Developed Country List?

Less developed countries are countries that struggle with maintaining sustainable development, causing them to be low-income countries. In 1971, The United Nations created a category list of the least developed countries in the world. The United Nations reviews and checks the list every three years based on the country’s economic vulnerability, income per capita and human assets. There are currently about 46 countries on the least developed country list. Angola is another country that will be scheduled for its graduation in 2021. Vanuatu has recently joined the five other countries that were able to graduate since the creation of the least developed country list.

Although less developed countries are economically vulnerable, they receive special international aid to help with creating sustainable development. These countries also have specific trade with other nations that are not accessible to more developed nations. This is why less-developed nations are sometimes referred to as “emerging markets.” The majority of the support that countries in the least developed countries list receive is either directly from or set up by the U.N. Committee for Development Policy.

The Success Behind Vanuatu’s Graduation

Vanuatu graduates form the least developed country list despite major setbacks due to climate change, natural disasters and the COVID-19 pandemic. Similar to other countries that graduated, most of Vanuatu’s success is as a result of the international aid which enabled the country’s stable economic growth. In addition to the aid, Vanuatu has also had success in its strong agriculture sector. The increased diversification in agricultural crops and stocks has helped with the per capita income and human assets criteria for the least developed countries list.

When it comes to the economic vulnerability criteria, Vanuatu is still at risk despite graduating. The risk of economic vulnerability stems from the prevalent natural disasters. Even though the country has shown consistent economic growth, the external shocks from natural disasters are out of the country’s control as it faces about two to three disasters a year. However, there is still a great chance that Vanuatu will have continued success in maintaining sustainable development.

Maintaining Sustainable Development

The most well-known source of maintaining sustainable development for less developed countries is through international aid. Even though Vanuatu has graduated from the least developed country list, the country still is able to receive aid and continue its trading relationships with countries it was given priority to when classified as a less developed nation. For instance, Vanuatu had still received $10 million in emergency aid from the World Bank organization. The funding was for the impact that both COVID-19 and a tropical cyclone had on Vanuatu earlier in 2020.

Significant Success for Vanuatu

Vanuatu’s graduation from the least developed country list is a significant achievement that demonstrates the country’s ability to maintain consistency in its economic growth, while also overcoming challenges such as the COVID-19 pandemic and natural disasters. Although the graduation signifies major growth, there is still more economic stability that is needed before the country can significantly reduce its economic vulnerability.

– Zahlea Martin
Photo: Flickr

Global Economy Could Expand
In 2020, the global economy plummeted 4.3% as poverty, death and illness afflicted millions. But, according to January’s Global Economic Prospects, 2021 bears better news. The World Bank states that the global economy could expand by 4%. This economic growth relies on policymakers’ ability to widely and rapidly distribute the COVID-19 vaccine. It also depends on the ability to contain this virus in the following months, but this alone will not be enough. David Malpass, The World Bank President, said “there needs to be a major push to improve business environments, increase labor and product market flexibility, and strengthen transparency and governance” in order to reach economic recovery. Here is some information regarding how the global economy could expand in 2021.

The 2020 Economic Collapse

The COVID-19 pandemic and the restrictive measures to prevent the spread resulted in a severe contraction of the global economy. In a report by The World Bank in June 2020, predictions initially determined that this contraction would be 5.2%, which would have resulted in the deepest recession since World War II.

However, experts are now saying it may have been less severe than some previously projected due to a more robust recovery in China and shallower contractions in advanced economies overall. Experts predicted that these advanced economies would shrink by 7% in 2020 because of disrupted domestic demand, supply, trade and finance while others anticipated that emerging markets and developing economies (EMDEs) would contract by 2.5%. Luckily, the impact on EMDEs was also more acute than estimates determined.

Economic Growth 2021

Currently, it is not certain if the global economy will increase by 4%. With delayed rollouts of the COVID-19 vaccine and increasing infection rates, this increase could be as low as 1.6%. That amount is not nearly enough to reach a recovery status in 2021. However, if the vaccine process proceeds at a rapid rate and governments control the pandemic, economic growth could reach almost 5%.

In the United States, GDP decreased by 3.6% in 2020. In the Eurozone, this contraction was 7.5% and activity in Japan shrunk by 5.3%. However, 2021 brings hope. Predictions have determined that the United States’ GDP will increase by 3.5%. Meanwhile, in the Eurozone, experts anticipate that output will grow 3.6%. Meanwhile, in Japan, forecasts have determined that its economy will grow by 2.5%.

In China and other emerging markets and developing economies, aggregate GDP could grow by 4.2% in 2021, after a 2.6% decrease in 2020. On the other hand, EMDEs could expand 3.5%, after a 5% contraction in 2020. This means that a 1.6% increase is necessary to reach economic recovery. Meanwhile, in 2020, China’s economy grew by 2% and may expand an additional 7.9% in 2021. Also, low-income economies may not only economically recover, but also grow by 3.3% after a contraction of only 0.9% in 2020.

Long-Lasting Effects

According to The World Bank’s press release, unless policymakers issue a series of reforms to improve the fundamental drivers of sustainable and equitable economic growth, the next decade could experience growth disappointments due to underemployment, labor force declines in several advanced economies and underinvestment.

To reduce these adverse effects, “policymakers need to continue to sustain the recovery, gradually shifting from income support to growth-enhancing policies. In the longer run, in emerging market and developing economies, policies to improve health and education services, digital infrastructure, climate resilience, and business and governance practices will help mitigate the economic damage caused by the pandemic, reduce poverty and advance shared prosperity.”

Fortunately, it looks like 2021 will bring hope due to the fact that the global economy could expand. Even with the expansion of the global economy, however, much work is necessary to eliminate long-lasting effects and fully recover.

Victoria Mangelli
Photo: Flickr

Economy in Croatia
While beautiful, Croatia is not the most affluent in terms of economic standards. As of 2015, 19.5 percent of the Croatian population was below the poverty line. The financial crash of 2008 stunted the development of gross domestic product the country experienced since 1998. The convergence gap widened by 3 percent, launching the country into a recession. Luckily, RIMAC and its car, the Concept Two, is impacting the economy in Croatia in a positive way by offering Croatian’s jobs and allowing Croatia to compete in the international market.

Croatian Economic Slump

Various key issues lead to a poor economy in Croatia including labor shortages, minimal pay, lack of adequate education and subsequent lack of skill. Such domestic problems are integral to why many Croats are unable to find opportunities that match up to wealthier Western European countries such as the United Kingdom, Germany, Sweden and/or Switzerland. According to the Croatian Employers Association (HUP), firms in Croatia are unable to fill some 30,000 jobs. Most of these openings exist in the tourism industry, making up at least 20 percent of Croatia’s gross domestic product.

Potential for a Great Economy

Despite the current state of the economy in Croatia, an emerging market may turn it around. Croatia, along with many other European Union member states, has benefited from the integration and trade of modern goods and services, specifically in technology.

Concept Two’s Impact

In 2018, a zoomer of a car sped onto the world’s tech radar at the Geneva Motor Show called the Concept Two. This car may support the development of a thriving economy in Croatia. Some have deemed the vehicle as “alive with technology,” elevating the bar as the fastest electric car around the globe.

The CEO of RIMAC, Mate Rimac, developed the lightning-fast vehicle. Mate Rimac began the development roughly 10 years ago when he turned his gas-powered vehicle into an electric car. The CEO has also discussed his desire to create opportunities in Croatia, “a country where people usually emigrate from,” to keep citizens from leaving. Further, Mate Rimac has already hired individuals of 22 different nationalities to work at his company.

The company manufactures all components of the Concept Two in-house. With the pricey, technologically loaded unit selling for more than $2 million, the average Croat would not be able to afford such a speedster. although, this hefty price tag could bring in a large influx of stimulation for the economy in Croatia.

RIMAC’s Impact

According to recent reports, the manufacture and production of the Concept Two are now employing many. The company has listed 429 full-time employees as of October 2018. Prior to this report in 2017, a venture capital funding organization noted the availability of 100 new jobs at RIMAC. These efforts have resulted in a growth of nearly double.

Further, the European Investment Bank (EIB) notes RIMAC as a good investment. In 2018, the EIB provided a direct loan to expand the research and development department, in part due to RIMAC introducing jobs and growth of the economy in Croatia.

Investment in Innovation

Often, the best way a country can improve the national economy is to grow business that can compete on an international level. Countries in the Baltic have been able to improve the internal business climate by increasing competition at the global playing field. One can promote allowing businesses to start and grow through investment in innovation, much like the Concept Two with RIMAC. One of the most productive methods to increase economic growth is through research and development in modern technology.

Companies like RIMAC should improve the business climate and economy in Croatia. With enough investment and support, companies with bravery and innovative force have the potential to be a major player in promoting Croatia into the international economy.

– Robert Forsyth
Photo: Wikimedia

Coding in Ethiopia

Ethiopia is primarily an agricultural country, with more than 80 percent of its citizens living in rural areas. More than 108.4 million people call Ethiopia home, making it Africa’s second-largest nation in terms of population. However, other production areas have become major players in Ethiopia’s economy. As of 2017, Ethiopia had an estimated gross domestic product of $200.6 billion with the main product coming from other sources than agriculture.

Today, 1.2 million Ethiopians have access to fixed telephone lines, while 62.6 million own cell phones. The country broadcasts six public TV stations and 10 public radio shows nationally. 2016 data showed that over 15 million Ethiopians have internet access. While 15 percent of the population may not seem significant, it is a sharp increase in comparison to the mere one percent of the population with Internet access just two years prior.

Coding in Ethiopia: One Girl’s Success Story

Despite its technologically-limited environment, young tech-savvy Ethiopians are beginning to forge their own destiny and pave the way for further technological improvements. One such pioneer is teenager Betelhem Dessie. At only 19, Dessie has spent the last three years traveling Ethiopia and teaching more than 20,000 young people how to code and patenting a few new software programs along the way.

On her website, Dessie recounts some of the major milestones she’s achieved as it relates to coding in Ethiopia:

  • 2006 – she got her first computer
  • 2011- she presented her projects to government officials at age 11
  • 2013-she co-founded a company, EBAGD, whose goals were to modernize Ethiopia’s education sector by converting Ethiopian textbooks into audio and visual materials for the students.
  • 2014-Dessie started the “codeacademy” of Bahir Dar University and taught in the STEM center at the university.

United States Collaboration

Her impressive accomplishments continue today. More recently, Dessie has teamed up with the “Girls Can Code” initiative—a U.S. Embassy implemented a project that focuses on encouraging girls to study STEM. According to Dessie, “Girls Can Code” will “empower and inspire young girls to increase their performance and pursue STEM education.”

In 2016, Dessie helped train 40 girls from public and governmental schools in Addis Ababa, Ethiopia how to code over the course of nine months. During those nine months, Dessie helped her students develop a number of programs and projects. One major project was a website where students can, according to Dessie, “practice the previous National examinations like SAT prep sites would do.” This allows students to take practice tests “anywhere, anytime.” In 2018, UNESCO expanded a similar project by the same name to include all 10 regions in Ghana, helping to make technology accessible to more Africans than ever before.

With the continuation of programs like “Girls Can Code” and the ambition of young coders everywhere, access to technology will give girls opportunities to participate in STEM, thereby closing the technology gender gap in developing countries. Increased STEM participation will only serve to aid struggling nations in becoming globally competitive by boosting their education systems and helping them become more connected to the world in the 21st century.

– Haley Hiday
Photo: Flickr

The Role and Scope of Microenterprise in Developing Countries
Microenterprises — businesses with fewer than ten employees and often a sole proprietor — might not ordinarily come to mind when thinking of what drives an economy. However, in places where opportunity is most lacking, innovation abounds. In her course syllabus for a class entitled “Entrepreneurship in Developing Countries”, Stockholm University associate professor Birgitta Schwartz calls entrepreneurship fundamental to the organization of societies. She asserts that microenterprise in developing countries mobilizes people, resources and innovation. “It is about generating ideas, organizing and hands-on action that can have many different effects,” says Schwartz.

How Is Microenterprise in Developing Countries Unique?

The answer to this lies partly in motivation. For many Western societies, entrepreneurship eyes opportunity, while in developing countries, it is borne out of necessity. According to a 2017 report by the Global Entrepreneurship Monitor (GEM), 76.2 percent of Africans see entrepreneurship as a good career choice, as opposed to around 65 percent for developed nations like the United States.

What is the reason for this? Well, with factors like extreme population growth and an increasing life expectancy, keeping the working age constant means having to create many additional jobs. As a result, microenterprise in developing countries represents a large percentage of employment. In Ghana, for example, household or micro-businesses tally 57 percent of the country’s total workforce.

Added Challenges

While entrepreneurship presents challenges enough, the added factors associated with living in poverty create a special dynamic all its own. These challenges may include:

  • Adequate access to financing
  • The risk involved with political and economic imbalance, and
  • A lack of the skill set necessary to create a successful market

Lacking alternative sources of financing, the successful entrepreneur living in poverty may use internally generated cash flow from one business to fund his or her other businesses. Perhaps surprisingly though, research suggests that countries that have experienced economic instability are more likely to have higher rates of private saving. In a manner of speaking, crisis provokes a necessity to save.

Microenterprise may play more of a role in poverty alleviation than was previously thought. Entrepreneurs in developing countries look at risk differently. Whereas Western business strategy sees a competitive threat from the well-established incumbent businesses, such a threat doesn’t exist in developing countries. And while urbanization threatens this advantage, entrepreneurs look to the more rural areas of their country to start and grow their businesses.

Microenterprise in developing countries can be made even more difficult without the added benefits of mentorship and apprenticeship. Many of these emerging markets have few people with the necessary skills to effect the kind of change that can be the impetus for large-scale economic strides. With a lack of accountability, trust becomes even more important. Micro-businesses in these countries are often family-owned and much more attuned to the local market environment, which results in higher returns to capital and a larger potential for growth.

Success in Spite of Circumstances

An example of microenterprise at its finest is Hanan Odah, a Palestinian refugee whose husband died in the civil war in Syria. She rebuilt her micro-business, selling stationery and perfume and now helps her new community and her family of three to survive. Despite conflict and economic collapse, Odah continues to build her brand, thanks in part to a steely will and in part to microfinance programs that loan small amounts of money at low interest rates.

This is the kind of presence that microenterprises can have in developing countries. Whereas external forces may cause economic instabilities, small startups with low overhead and little opposition, like Odah’s, continue to thrive and grow.

Entrepreneurship in developing markets depends not necessarily on the traditional tenets of opportunity and vision, but rather on necessity and provision. For every stereotype of countless roadside stands selling nearly-identical wares, there is a provocative truth lurking beneath the surface of this dormant economic volcano.

– Daniel Staesser
Photo: Flickr

Labour Behind the Label
The Clean Clothes Campaign’s United Kingdom-based nonprofit, Labour Behind the Label, is taking action to improve the deplorable work conditions found in factories across the world and provide support to workers in the garment industry. The organization promotes ethical clothing and collaborates with brands and trade unions to push for the reform of systemic problems found in the clothing business.

Change Your Shoes and Labor Rights

Recently, Labour Behind the Label held campaigns to uphold worker rights, such as the “Change Your Shoes” campaign, a project that called for shoe brands to provide greater transparency in their production process. Through its tireless efforts, Labour Behind the Label is working to amend the garment industry, combatting low wages, unsafe working conditions and abusive treatment, thereby holding brands accountable.

According to the organization, Labour Behind the Label is the United Kingdom’s only campaign group dedicated solely to labor rights in the worldwide garment industry. Past activity has included urging retailers to sign the Bangladesh Accord on Fire and Building Safety, pushing for living wages for Cambodian garment workers, and bringing victims of the Rana Plaza factory disaster compensation.

Clean Clothes and Living Wages

The nonprofit was founded in 2001 as part of the Clean Clothes Campaign, the garment industry’s most prominent alliance of labor unions and non-governmental organizations (NGOs). Labour Behind the Label’s endeavors include raising awareness and putting pressure on companies to support workers’ rights, as well as lobbying governments and policymakers.

The group is currently advancing programs such as the “Living Wage” campaign, working with the Asia Floor Wage Alliance to demand a living wage in Asian garment producing countries. The campaign would help provide garment workers, 80 percent of whom are women, with living wages to cover their basic needs.

Worker Safety and the Shoe Industry

The organization is also holding a “Worker Safety” campaign,” providing compensation for victims of Pakistan’s 2012 Ali Enterprises factory fire. In addition, it has led actions such as a weeklong initiative to lobby brands to ban dangerous practices such as the sandblasting of jeans.

Labour Behind the Label launched the “Change Your Shoes” campaign to look specifically at the operations of the shoe industry. Twenty-four billion pairs of shoes were produced in the year 2013, with 87 percent of them manufactured in Asia. The program has called upon leading shoe brands in the United Kingdom, as well as brands such as Prada, Birkenstock and Camper, to provide information pertaining to their production processes.

The program also asks members of the shoe industry to publish the names and addresses of suppliers, report on steps taken to move away from dangerous chemicals and demonstrate that the companies are providing fair wages and safe working conditions. The campaign has led research and investigations into the manufacturing processes of major shoe brands, observing that the system involves high-intensity labor, short deadlines and worsening living conditions of exploited workers.

Ending Fear and Silence

In many countries, there is a climate of fear and silence in the production chains. The project acknowledges that some companies, such as Nike and Adidas, have already begun to publish information about its processes and will hand its petition to brands to promote change.

Through projects such as the “Change Your Shoes” campaign, Labour Behind the Label is taking action to bring about fairer conditions in the garment industry worldwide. The organization is working to hold companies more accountable and create transparency in the industry, demanding living wages and calling for safer work environments in the clothing manufacturing business.

Ongoing Positive Change and Accountability

Labour Behind the Label’s activism has led to the creation of “codes of conduct” for companies, as well as “ethical trading” initiatives, which have promoted the annual inspection of factories. Labour Behind the Label acknowledges that sweatshop abuses are an elusive and deeply ingrained problem, as there are no easy solutions. But through its advocacy, campaigning, and research, Labour Behind the Label is taking steps to galvanize change in the clothing business on an international scale.

– Shira Laucharoen
Photo: Flickr

chatbots in Africa
Businesses are slowly introducing chatbots in Africa, as more local users opt for mobile interactions through social media. At the end of 2015, 46 percent of the African population subscribed to mobile services, which is equivalent to more than half a billion people; interestingly, this percentage is expected to increase to 54 percent in 2020.

With such a growing use of smartphones, a chatbot revolution in Africa is not very far away.

 

The Chatbot Revolution

For starters – a chatbot simulates human conversation and are interactive. Using Artificial Intelligence (AI), a chatbot is supported across different messaging platforms including Twitter and Facebook. Here are three chatbots in Africa automate services that are convenient and available 24/7 to users.

 

1. Leo

Recently, the United Bank of Africa (UBA), the Nigerian multinational financial institution, hired Leo — a chatbot. At the launch, Leo displayed a unique way of how bank customers could use social media platforms to carry out their banking activities.

UBA’s chat banker is a Facebook bot, something which the company says is “necessary in today’s fast-paced world with demands for quick-time transactions.” Customers will be able to carry out basic banking facilities like opening a new bank account, checking balances, transferring funds and receiving instant alerts. Additionally, customers will be able to pay bills, get answers to loan queries and applications and check balance statements.

 

2. Nuru

Nuru is created by UXstudio, a Budapest-based Hungarian start-up, and currently is available to users in Kenya and Ghana. This AI chatbot assists users in matters relating to agriculture, classified ads, finances and healthcare.

African farmers looking to sell can use Nuru to set prices. The chatbot automatically configures a price based on the type and the amount they have. The activation of the deal can only occur once the farmers are satisfied. Once activated, the buyers can reach out to the farmers through message or phone call.

For mobile money transactions, users in Kenya heavily rely on mPesa. Nuru integrates the transaction through Messenger — the chatbot asks for a password and, once authenticated, the transactions can successfully take place. Nuru also provides health tips based on questions asked by users.

 

3. Keirabot & Hazie

Keirabot is one of Botsza’s six tailor-made chatbots in Africa.

Botsza’s chatbots currently work across many industries like hotel reservation, flight booking, e-commerce, banks, finance, insurance and customer services. Currently supported on multiple messaging platforms, two chatbots are already operational for users — Haziebot and Keirabot.

Keirabot relieves users from the tiring process of searching homes by utilizing browsing functions via Facebook Messenger or Skype. Various tasks are performed using AI including credit checks, tenants, and comparisons between selling and buying a home.

Hazie, on the other hand, is a recruitment chatbot in Africa that allows job seekers to acquire ideal jobs. Users can simply apply for jobs using social media platforms like Facebook Messenger and Twitter.

 

Challenges

Despite extensive benefits, the revolution of chatbots in Africa faces challenges.

According to The World Bank, African mobile and wireless markets are highly concentrated; in 27 countries, one player has more than 50 percent market share. Monopolies are still present in Africa: eleven in international gateway services and six in wireless internet services.

Additionally, with more than half of the population yet to subscribe to a mobile service, a big challenge for Africa is to connect the unconnected and unleash the economic potential of increased connectivity. Such challenges would also involve the problems of moving text-based interactions to chatbot technology.

 

The Potential Solution

But the African youth may be the answer to such challenges. Sixty percent of Sub-Saharan Africa’s population is under the age of 25, making Africa the world’s youngest region, according to World Economic Forum. Social media giants like Facebook and Google are already developing programs for the people in Africa.

In September 2016, Facebook founder, Mark Zuckerberg visited Nairobi to learn more about mobile money and meet entrepreneurs and developers. The U.S. social media giant later announced that the center would host an “incubator program” to help develop technology start-ups while simultaneously training 50,000 Nigerians in digital skills.

In 2017, Google expanded its Africa initiatives following CEO Sundar Pichai’s visit to Nigeria. Alphabet also plans on increasing the funding for African startups by providing $20 million in grants to digital nonprofits. In April 2016, the company also launched Digital Skills for Africa, an initiative to provide free training (online and face-to-face) to people across 27 countries in Africa.

With such promising ventures, innovative technology in Africa could allow the country to stay on par with the rest of the world.

– Deena Zaidi

Photo: Flickr

electricity access for the urban poorIndia is a nation of major economic growth and a huge population. The biggest cities of India like Mumbai, Hyderabad, Bangalore and Kolkata provide many opportunities, including to immigrants from rural areas who come in search of a better life. These immigrants mostly find their place in the slum areas of big cities.

In India, there are almost 64 million slum dwellers who suffer from lack of basic necessities like clean water, sanitation and electricity. To compensate for the deficiency of electricity, they light kerosene oil lamps, which is dangerous, costly and damaging to the environment.

Indo-Australian nonprofit Pollinate Energy came up with an innovative solution of providing electricity access for the urban poor of India. Pollinate Energy is a social business, a model of self-sustainable business that aims to address social problems.

Solution for Electricity Access for the Urban Poor

The organization provides its solution through small, efficient solar panels with the ability to light LED lamps and also charging mobile phones. The system comes as a toolkit consisting of an easy-to-install solar panel, LED lamps and a rechargeable battery

The product is available in various types as torch, desk lamp, hanging light and even fixed light for separate rooms.

Method of Operation

The organization employs local men and women as salespeople, also known as pollinators, who help to sell the product in slum communities. These pollinators work on a commission basis and receive training, transport allowance and a smartphone to conduct their business. Along with selling the product, installing, servicing and collection of payment are part of their duties.

Customers are mainly families from slum communities who earn less than $2 per day, so they are able to pay in weekly installments over five to eight weeks. The customers are also given a trial period of one week to see whether the product fits their requirements.

The impact of the solution

To date, Pollinate Energy has serviced almost 953 communities, most of which were in slums. Pollinate Energy helped to save an average of $1.52 per week for each family by reducing kerosene use by 90 percent. It also prevented 2.97 million kilograms of carbon dioxide emissions. In the whole process, it is also empowering the youth by training them in local entrepreneurship. This is a huge positive impact on the community as well as the environment.

Future Prospect

Pollinate Energy started in Bangalore, expanded to Hyderabad and Kolkata and will eventually target the other cities of India. Apart from providing electricity access for the urban poor, it sells other sustainable and innovative products like water filters, wind fans and cookstoves.

Pollinate Energy is taking revolutionary steps in bringing social business as part of regular life and fulfilling a number of key aspects of the United Nations Sustainable Development Goals.

– Mahua Mitra

Photo: Flickr