This is a guest post written by Fiona Robinson and Lisa Kienzle, Grameen Foundation.
The provision of mobile services presents an exciting opportunity to improve the lives of the poor. Doing so successfully and sustainably may require non-traditional, cross-sector partnerships – for instance, between mobile network operators (MNOs) and NGOs. Such engagements can be strained by the commercial goals of the private sector and the non-commercial goals of the not-for-profit. However, savvy partnerships can realise both objectives. This is our model for the Chama project, a partnership between Airtel Money and Grameen Foundation in Uganda.
Our experience has shown three areas to be key to successful partnerships:
- understanding and addressing each other’s motivations;
- recognizing and utilizing each other’s strengths and resources;
- and applying strong project management principles.
Understanding motivations:
Private sector goals always involve some level of bottom-line focus. However, as traditional commercial markets become saturated, corporations are looking for new pockets of growth. The poor were previously overlooked as unprofitable, but they are surfacing as an untapped source of growth. Further, the concept of corporate responsibility and shared value through the offering of services to the poor is a growing trend. In a world where four out of five new mobile connections occur in developing markets, the potential for commercial and social value for MNOs is high.
For non-profits, funding is an ever-present challenge. There is a need to create solutions that live on after project-based donor funding ends. However, this funding presents a unique kind of capital that NGOs can provide MNOs access to – philanthropic dollars focused on markets that are otherwise deemed too risky for traditional private sector investments. Through funded partnerships, MNOs can take a chance on serving the poor, though they may need to adjust typical investment criteria. The business case usually involves a long-term investment in a low-margin market. The upside is realized through scale, product upselling, and brand building – serving customers who will become a part of a richer middle class over time.
For the Chama project, the GSMA grant provided the required boost to Airtel’s business case to support the investment needed to develop a product for a potential market of more than 45,000 savings groups in Uganda. This focus on scale and sustainability, and the commitment shown by Airtel, gives Grameen Foundation comfort in terms of reach and impact long after the partnership concludes.
Developing these solutions can provide a unique opportunity for commercial gain through the acquisition of new customers, while helping NGOs ensure long-term success for their programs.
Recognizing each other’s strengths:
NGOs in developing markets know the poor well. They understand the challenges poor people face, and can pinpoint their critical needs. NGOs are also well-placed to support MNOs in developing new offerings for the poor – running the innovation process, providing market insights, and facilitating access to communities, which is key for product design. The consumer insights Grameen Foundation shared with Airtel have been key inputs to development of the Chama product and its pricing strategy.
Partnering with an MNO can help an NGO provide opportunities at a scale that may not be possible otherwise. By using the MNO’s existing infrastructure and their brand, they can reduce cost, increase awareness, and maximise market penetration. Profiting from this market may not be a specific NGO objective, but commercial viability will drive scale and sustainability. An NGO can represent and protect the consumer while driving toward the optimal economic outcome – profit for the partner and affordability for the poor. Airtel systems and expertise were essential in developing the Chama product; integration with an MNO’s platform was deemed the only feasible option from a cost and scale perspective. Awareness, trust and familiarity of Airtel will play a key role in product success, and existing infrastructure will support wide-scale roll-out at a lower cost to help realise both parties’ objectives.
Strong project management:
Usual project management rules apply but are arguably more important in cross-sector partnerships given the points noted above. Communication, team composition, and project structure are key.
Regular project meetings keep parties aligned on progress and issues. Even if one partner is the lead in a particular stage of the process, close communication is crucial to inform future work and planning, support alignment of goals, and provide a holistic view to both parties.
Ideally, the team will share project ownership and have both executive sponsorship and local oversight, to facilitate decision making and drive progress. Assigning dedicated cross-functional teams from each partner and involving them throughout the project can prepare all parties to support a new product for a new market segment.
Airtel and Grameen Foundation worked collaboratively, meeting on a weekly basis to review progress, share learnings and refine plans. Also, financial inclusion is a core strategic goal for Airtel which provided senior level input to drive decision making and overcome obstacles.
Finally, the project must be structured for success. Serving the base of the pyramid will likely involve a broad range of activities – a different channel, a new marketing strategy, and unique internal systems. It is important to build milestones and discrete deliverables rather than aiming to deliver an entire ecosystem at once. This helps to maintain momentum through the project, allow for iterations based on learnings, and enable manageable monitoring and evaluation.
The Chama Product will launch to Savings Groups in Uganda later in 2014. The development of products and services through such partnerships holds significant potential to address each partner’s goals while serving the underserved. The most impactful and lasting developments will not be loss-making or philanthropic; they will be sustainable to the partner and affordable for the base of the pyramid.
Fiona Robinson is Project Manager for the Airtel Chama Project, a partnership between Airtel Money and Grameen Foundation funded by GSMA mWomen to provide a mobile money solution to serve women in village and savings associations (VSLAs) in Uganda. Fiona also manages the Barclays-Grameen Foundation engagement, which focuses on delivering mobile ICT and financial services products to VSLAs.
Lisa Kienzle is Director of Mobile Financial Services and Co-Country Director for Grameen Foundation Uganda. In this capacity she provides oversight over all of Grameen Foundation’s VSLA engagements.
Photo: Courtesy of Grameen Foundation; user testing with members of savings groups in Iganga, Uganda. Photographer: Tanya Rabourn