remittances fuel solar energy

A couple of months ago, digging out my French, reading Tamar Ben Jelloun’s beautiful Partir on the way, I headed to Haiti to document a project of the MIF together with my colleague and friend Jimmy Chalk (browse through his other work here). I have posted some of my pictures, and the video is now ready.

About the life of the development community in Haiti has been written a lot (lately my colleague Nara, and Nora Schenkel). During the week in Haiti I peeled off only a few of the so many layers of life and culture of these proud people. Too few to talk, and form an opinion. But I can say that I loved the freshly painted, colorful walls of hair salons, the braids of school kids, the solar-powered street lights, the Kreol radio transmission of the Champions League semifinals – problem, problem, problem – and the people crowding around the tv’s at the market. But I couldn’t close my eyes observing that everything was being sold in the streets out of necessity, loose medicaments, cloths, pieces of fruit, the need for SUV’s to drive the streets, and no lightening up at night. So much potential, and a long way to go.

Working in Haiti was challenging, but also very gratifying thanks to the wonderful people that supported the little project, and with whom I could work with, Claud, our translator from Kreol to English, to the staff at SogeXpress, who were incredibly helpful in every little detail, of course our project partners at ArcFinance, especially Yara, and last but not least the stars of the film.

developing social impact through crowdfunding in Latin America

Crowdfunding in the US is buzzing. And while the crowdfunding crowd is anxious as to when the SEC will put JOBS Act regulations into place, there is few doubt that the market will grow even further. In Latin America, however, crowdfunding is just gathering momentum with about 40 online platforms established over the last couple of years.

That’s why I am excited to meet some of the leading and most interesting crowdfunding platforms next week, including Idea.me and Crowdfunder in Mexico, and Kiva, Global Giving and Solar Mosaic who have been working in the region. With CommunityLeader, Rebirth Financial and When you Wish, there will also be some US based platforms sharing their experiences. At a workshop at the Multilateral Investment Fund, we will discuss the potential of crowdfunding for Latin America. The different models that we’ll be looking at are those that offer non financial incentives, such as donations and rewards, and platforms that promise financial returns through equity or debt-based models. I am very grateful to Kevin Berg and Carl Esposti of crowdfunding think tank Massolution to have helped design the workshop and gather this great group of people for a surely inspiring day.

The crowdfunding market

The global crowdfunding market had raised about $1.5bn in 2011, with most of the money coming from North America and Europe according to research by Massolution. Still a relatively small amount comparing it with the microcredits market for example, that only in Latin America has reached a record high volume of nearly US$ 19bn in 2011.

Most platforms in Latin America are concentrated in Brazil, with the remaining based out of Chile, Mexico, Colombia, Argentina, and Uruguay. And while the development is only blossoming out, the first numbers of these platforms are encouraging.

The largest platform in the region, Idea.me already has funded 175 projects in Brazil, Chile, Mexico, Colombia and Argentina. Agreed, not that much, given that Kickstarter, the largest crowdfunding platform hosted 34,000 successful projects in 2012. But looking at some of the projects supported, I think these are 175 projects that would not have found funding otherwise.

Cumplo Chile, an equity lending platform in Chile, has had a transaction volume of US$ 500k in only half a year of its existence. It is struggling with regulators to keep in business, but it underlines that there is a need for alternative financing models.

The projects

This great infographic by leading Brazilian platform Catarse shows which areas received most interest. Generally, most of the projects looking for funding on these platforms are in the field of creative arts, films, books, music albums and the like. In Argentina, BananaCash funds only art and cinema projects. And how can you not love great design projects, or projects that connect visual design with urban development, such as the map of public transport in Dhaka that I supported last year. But not everything are creative projects, as this selection of the most interesting projects on Idea.me in 2012 shows, or what can be discovered on Mexican platform Fondeadora.

Working at a development organisation that supports economic development to, eventually, reduce poverty, one of the challenges that I am most curious about is how crowdfunding can be used to improve small businesses and entrepreneurs at the bottom of the pyramid.

Social impact of crowdfunding

Crowdfunding will definitely be an increasing opportunity for the growing middle class in the region to start businesses through equity and lending models, and fund creative projects, and help close the gap between microfinance, bank loans, and angel investors.

While Kickstarter has not included a category of projects that might affect social development, Indiegogo does so by the way, some reward-based platforms such as Idea.me allow to tick the social impact box. An interesting project funded last year on the website was a community workshop for bicycles, Enchúlame la bici. Other platforms, such as Acciones DF, provide a platform to crowdsource ideas to improve the urban development. And in Colombia, Donacciones is a donation-based model that looks exclusively at social projects. The Brazilian platform Impulso focuses on micro-entrepreneurs.

So how can these models trickle down to the poorer populations? Which are the sectors that could provide benefits?

While platforms of social crowdfunding such as Donacciones in Colombia is covering a multitude of sectors, on more general platforms areas such as solar energy, education and urban development seem to be the most promising ones.

Sustainability and Environment, especially solar energy, and funding for projects that bring solar energy to poor communities, is addressed by two main platforms: Sunfunder, that crowdfunds solar projects in off-grid communities around the world, and Solar Mosaic. With solar panels providing energy, Solar Mosaic is even exploring to deliver returns through creating a mutual fund. This model could very well be adapted to the developing world. Green projects seem to be popular and successful as well.

Urban development is an area I care a lot about. I think community driven projects that benefit both poor and less poor populations can have big impacts, such as local infrastructure for basic services, energy, bus maps, a bike shop that employs young people in the community with their first job, or classes for young handicapped people. In Chile, UrbanKIT supports community based projects, such as street lights and news boards. In this field, the line between crowdfunding, crowdsourcing, and community projects and platforms such as Acciones DF or Viral is becoming less clear.

Education and supporting higher education for students is a field that has been around for longer. The social enterprise Lumni for example, also funded by the MIF and present in Chile, Colombia and Mexico in Latin America, allows investors to support students through loans.

Diaspora financing: Another concept is to engage the diaspora. Through this model, the crowdfunding platform Zafen, counting on support from the MIF, allows to donate money to projects in Haiti, as well as support small businesses through loans.

These are just a couple of ideas how crowdfunding can be applied to social development, and bring financing and projects to people who have less access to it. As with microfinance, it probably will not be a silver bullet for development.

But it seems to me that there is a huge potential to explore this emerging form of peer-to-peer economic development, and create benefits for an even larger population. Especially the next generation, young entrepreneurs with innovative ideas, a sense for the social world of the internet, and the wish to take the future in their own hands, might just use crowdfunding to start off their business.

What do you think? How can crowdfunding benefit poorer populations and informal businesses? What sectors will best benefit from these new funding models? What needs to happen to make this work?

I hope to have some new insights next week, after the workshop!

By the way, for those who understand Spanish, last week I did a short interview on crowdfunding in Latin America for CNN en español.

Too many walls

There are still too many walls on the world.

Erected to divide a city on 13 August 1961, the Berliner Mauer would have been 50 this year. Thankfully, the existing pieces only exists for tourists nowadays.

There are two famous quotes by American presidents on the wall. One, by J.F. Kennedy, who said 1963 in front of the Schöneberger Rathaus, “Ich bin ein Berliner”. The other, by Ronald Reagan in June 1987, can be watched here (go to minute 12 for the quote): “Tear down this wall”.

[youtube=http://www.youtube.com/watch?v=5MDFX-dNtsM]

During his electoral campaign in 2008 Obama was not allowed to speak at the Brandenburg Gate but at the Victory column (here a transcript). He has since been invited by Chancellor Merkel to come back.

I am sure he’s keeping this second speech for his election campaign 2012.

Both speeches now sound belonging to another era. I hope, this will be true for many of the walls existing still today. Which other walls should be torn down?

What to do in 7 hours São Paulo

On my way back from Asunción. The third time coming through São Paulo Guarulhos. I had enough of this most boring airport ever, no internet, no news or books stand, nothing. But 7 hours time. So, leaving the airport, into a taxi and visiting a friend in Vila Madalena. Here’s some photos that I took when walking through the neighborhood, mostly of the graffiti around (in the Batman’s alley). Interesting, in the taxi back to the airport, very fancy with a TV screen in the seat, they aired a documentary on the graffiti that I just saw.

Hopefully I’ll be back. To tell you more about the bars, the streets, the city as a whole, not just seen through a couple of hours lense.

collecting panini’s

I haven’t done this for about 20 years but somehow got excited this time: I am collecting Panini-stickers and I know, it’s very commercial and everything and there are very cool and independent one’s in Switzerland, but here I am.

It’s actually really fun in Colombia: you can get and change them (2 for 1) at every corner, and sometimes you simply have to open the trunk…

Anyone having doubles? Let me know!

at every corner...

...and in every trunk.

Obama’s inauguration speech

Obama's speech

There can much be said about yesterday’s day, but the most important was said by Barack Obama in his inauguration speech, as 44th President of the USA.

Maybe just to highlight two sentences relating to my recent Moroccan work experience:

“To the Muslim world, we seek a new way forward, based on mutual interest and mutual respect.”

and

“To those who cling to power through corruption and deceit and the silencing of dissent, know that you are on the wrong side of history — but that we will extend a hand if you are willing to unclench your fist.”

Image created with Wordle and a nice overview of a similar analysis on the New York Times. His speech can be found here (and on youtube).

Gathering voices

Here’s the idea. I like music, film, books and experiencing cultures. I find it exciting to discover how people live all over the world. My work allows me to travel to some places and work in some countries for some time. But often, I just hear a song, read a book or a news story that I want to share because it gets me thinking. Or I met someone who challenges my view of the world. That’s what this blog is about.

I’ll be working in Morocco for six weeks end of this year. More detail to come once the final arrangements are made.

This experience will be exciting and challenging. And there will be lots of new impressions that I want to share. Maybe conversations and discussions will emerge. And getting people talking about things they know and don’t know is the best way to understanding us better. An ambitious aim that I will not accomplish with a little blog. But it’s worth starting the conversation.