There’s an explosion of mobile application companies (mostly startups) in East Africa, and especially in Kenya, and from what I’ve been able to gather most of them are very focused on the customer experience and the front-end technology. This is not unreasonable, as it’s the customer experience as provided by the front-end (on the phone) that is likely to make or break adoption of the app, especially in the early stages of a company.

However, a big part of the value that I see in mobile apps – both in general and specifically here in Kenya – lies in the ability to aggregate apps into “meta-apps” and in the potential value of the data that is flowing through the apps. Any app developer who moves data from the phone to somewhere else will have to do something on the back end to store and process that data, and structuring the data from the beginning with analytics in mind will prove beneficial in the long run.

Consider a health application that delivers pre-natal tips to pregnant women (such as Grameen Foundation’s MoTeCH initiative). The primary purpose of an application like this would be to provide information to women that helps them to ensure the best possible health outcomes for themselves and their children. Beyond that, though, the application could answer questions that the mothers ask via an SMS or USSD interface. There’s some complexity in building the parsing engine needed to interpret the questions and find the right answers to send back, certainly, but it would also be super valuable to build the back-end in a way that the organization could analyze the questions being asked, cross-reference that against the information being sent out, and make better decisions about how to further improve the outcomes of the app.

Apps that involve mobile commerce, or politics, or just about any other domain are likely to have very interesting analytics implications. Further, many apps may have interesting cross-referencing possibilities. For example, with a common back-end that serves both health and financial purposes (and gathers health and financial data), the aggregators of that data will have the ability to mine the data to find correlations (maybe between savings and health?) that can be used to improve the apps and to identify new potential apps for specific target markets.

The key thing in getting interesting use from the data – including usage patterns, data collected, and the like – is getting enough scale to make the analytics possible. Building for the back-end from the beginning rarely makes sense, and instead scale will come from killer apps that get hundreds of thousands or millions of users over time. A couple of apps at scale, integrated on the back-end, would provide an incredible dataset for the application developers and other stakeholders.

For my current work looking at Mifos possibilities in Ghana and Kenya, this becomes very interesting. Mifos could become the back-end platform for a wide variety of microfinance-oriented apps (and eventually for other poor-focused apps). These might include access to account information for microfinance clients, loan officer apps to improve productivity and security, and management tools that tell MFI executives what’s happening in their organization and where their attention is needed. Mifos could be the back-end for those apps even if the MFI wasn’t using Mifos as its core technology platform.

The business model, like most technology ventures, may be the hardest part. If we were to pursue this idea, getting the apps and other services to scale is the necessary pre-requisite to building a business on the back-end data aggregation and analysis for both individual MFIs and (with the right privacy protections) for meso- and macro-level stakeholders. A methodology like the Customer Development Process that starts with a strong product vision but then uses a rigorous approach to testing hypotheses and building a viable business model before trying to get to scale would be key to making this work.

As part of my current exploration of opportunities for Mifos in Africa, I’m building out two different business plans. The first, detailed here, would create an Institute for Open Source and Software Entrepreneurship (IOSSE – just a working name) based in Accra, Ghana. The second, which I’ll outline in a future post, would create an investment organization and R&D lab (loosely modeled on MPOWER Labs) based in Nairobi, with an initial focus on building a Mifos company that delivers a mobile-centric experience.

For the IOSSE in Accra, the primary goals will be:

  • Work as part of the global Mifos community to foster further software development and innovation in Mifos and to work closely with Mifos specialists and MFIs in sub-Saharan Africa to maximize the positive impact of Mifos for the poor
  • Work as part of the local software community to develop and nurture software entrepreneurs in Africa
  • Support the development and impact of open source software in Africa

The core idea is to build a small organization that is actively working with real customers, initially focused on Mifos but later expanding to other open source projects, and that partners with local organizations (such as Ashesi University and MEST) to provide opportunities for local software entrepreneurs to gain real-world experience, learn from more experienced software developers and entrepreneurs, and contribute to open source projects that have an impact in Africa.

Continue reading »

As part of the exploration of new opportunities to use Mifos in Africa, I’ve been looking into and thinking about new models for the delivery of services – financial and beyond – to the poor in Africa through the microfinance channel.

Consider a network – connected, social, and mobile – that delivers services to empower the poor in Africa. The services could range from traditional microfinance services (credit, savings, insurance) to health and ag information to pure P2P lending services built on a mobile payments platform.

poor centric app network.png

The underlying premises of such a network would be:

  • Find hard problems that the poor face every day and deliver access to apps that solve those problems
  • Make assumptions about a future state – $25 Android phones and ubiquitous data access, for example – but build in an inclusive way that leverages today’s prevalence of feature phones (using SMS/USSD)
  • Engage the broader community across Africa – app providers, MFIs, etc. – in the creation of a connected marketplace for the poor

In doing this, can we remove friction and costs from the flow of both information and capital to and from the poor?

I’ve talked to a couple of MFIs (and MFI-like) organizations here who are starting to go in this direction. Musoni (a Dutch-based MFI with operations in Kenya) is providing traditional microfinance services but are 100% built on the M-Pesa platform. By leveraging the mobile platform 100%, they have the opportunity to build additional value-added services to deliver to their clients over time. Nuru International, based in the US with operations in Kenya, is a development organization with multiple areas of focus ranging from economic development to agriculture to water & sanitation. They’re using Mifos today for their microfinance programs, but could really use a platform that enables them to see what’s happening across all of their programs and to push both information and capital (and proxies for capital, like seed and fertilizer) to their clients.

If so, what are the technology requirements to make something like this work? At it’s core, this is about creation of a platform that has these attributes:

  • Flexible and extensible: supports many models for the delivery of microfinance services, and includes the interface points to plug in new apps at a low time/energy/financial cost
  • Aggregates information across apps: see what’s happening in the ecosystem and provide information to both users and service providers
  • General purpose: can be leveraged for any kind of information or capital transaction

Rather than focusing future Mifos development on incremental features for traditional microfinance services, maybe the real play is to leapfrog to a network of apps – including those that support traditional microfinance – to empower MFIs to grow both in scale and breadth of services, leveraging the explosion of mobile access and mobile apps across Africa.

This is clearly a very high-level, abstract, and early-stage idea but I think that there’s a lot of potential in this and invite others to help refine and improve the idea.

Key learning

  • Senior technical and business talent is extremely scarce in all regions (Ghana, Kenya, Uganda)
  • East Africa buzzing with mobile activity and some investors
  • No ecosystem to promote the development of talent or growth of entrepreneurs
  • Few companies thinking about the backend – where all the mobile data/transactions go
  • Where the puck is going: sub $50 android phones, data connectivity growing fast
  • Makerere University Kampala: lots of students, some bureaucracy to contend with
  • Opportunity for microfinance technology still strong, especially on lower end
  • Building talent idea: pair technical/business experience with local product design and slowly build the deep technical/business leadership
  • Greatest relative impact likely in West Africa (due to the white space and lack of vibrant ecosystem and software companies)
  • Greatest absolute impact likely in East Africa (due to the emerging ecosystem of companies, more mature mobile space, greater access to talent, etc.)

More after the jump… Continue reading »

I spent the first week of this trip in Accra starting the exploration into what we can do with Mifos in Africa. Initial takeaways and ideas on opportunities follow.

Ghana first glimpse
Key takeaways & learning

  • Ghana has a very nascent software industry; there are a handful of local software companies but all struggle with
    • lack of talent
    • lack of opportunities to work with the large commercial buyers (who all spend their money outside Ghana)
  • Implication is that there is significant need to develop software leadership – both business and technical – in Ghana
  • There are several players working on this problem already – may be able to leverage/convene/augment some or all of them if we work in Ghana. These include Meltwater, Google, the WWW Foundation, some private sector companies, and the Kofi Annan Centre for ICT Innovation.
  • Market for Mifos in West Africa is mixed
    • Lots of small MFIs who need systems
    • Few good providers (the big vendors don’t seem very present here)
    • very limited ability to pay, and limited tech skills
  • Talent is going to be a huge constraining factor (this appears to be the case in Nairobi to an extent as well)
    • Senior software talent is virtually unheard of
    • development methodologies, how to ship, etc., are also very hard to find skills in
    • Competition for more junior talent is strong
    • May need to import some expat talent (people I talked with think need to import talent for 2-5 years)
  • It appears relatively easy to do business in Ghana, including setting up organizations and bringing in capital and talent


  • There’s a clear need for a massive uptick in software entrepreneurial and development talent in Ghana
  • There’s also a clear need for a strong technology platform for microfinance in West Africa
  • Additional business opportunities today are limited (as opposed to East Africa); however, as the market develops it’s likely that other opportunities will begin to appear; everyone wants to play in mobile now but the telcos are v hard to work with
  • With a university, brainstormed about creating an “Applications” course where
    • Mifos exists as a full-fledged social business/project (basically: it’s working with customers)
    • Bring a mix of students into the org for a semester (include business, MIS, and CS) to learn specific things as part of a course
    • This would be less intensive than an internship
    • But more of a studio course – not just using Mifos as a textbook but pairing up with professionals to learn directly and apply to coursework

What’s really clear to me already is that there is absolutely an opportunity to create a running, real-world software business that works at the enterprise level (eg Mifos) and use that as a means of incubating talent. The opportunities elsewhere in Africa are likely to be very different – more commercially oriented – and the challenge/constraints in Ghana are going to be a) talent and b) potential impact (due to the nascent market).

Assumptions & Hypotheses

  • Hypothesis: Faculty at universities can fulfill the architect needs of Mifos; this is proving to be false, and instead will need to bring in external talent. The faculty will be able to engage and help but not drive full-time, and they don’t appear to have serious enterprise architecture talent in place.
  • Assumption: I have a few working assumptions about Mifos itself
    • Need to have a real, working organization that is actively engaged with MFI customers; this is the only way to keep the code alive and evolving and to keep the project from becoming purely academic
    • Need to have a separate organization from whoever we partner with (such as Ashesi); can have multiple tight affiliations, and could even structure as “The West African Center for Open Source and Software Entrepreneurship” or something and have Mifos be a core business within that
    • However, Mifos is too big and complex to try to embed into another organization. The best ways to develop skills will be
      • Build directly by hiring and mentoring/growing junior talent
      • Build via partnerships by bringing students/trainees/etc into the organization for periods of time and exposing to (for example) QA, scalability, marketing, customer support, integration with mobile, etc.

So this week I’ve been hanging out with some people in the software community in Accra, Ghana. At this stage of the exploration around Mifos in Africa, I’m mainly interested in getting a sense of what’s possible, where the challenges are, etc., while exploring a few more specific initial scenarios. I had a great discussion with Patrick, Nathan, and Aelef at Ashesi University and then met up with Derrydean Dadzie, the CEO of DreamOval and winner for greatest name ever.

Some initial thoughts & learning:

  • Senior software talent – architect level – is exceptionally hard to come by in Ghana, and expensive when you find it. Kojo (who worked with us on Mifos at Grameen Foundation) confirmed this at dinner the other night.
  • That said, there are a fair number of younger, smart and energetic developers around; and a lot of demand for them as well
  • The software industry in Ghana is still very nascent – lots of smaller software development shops have sprung up, and seem to be doing OK but not great. All indications are that they have a really hard time competing with international firms from the US and India, even when prices for local work are lower; the big customers (banks, oil companies, etc.) are in “I won’t get fired if I buy IBM, even if it’s more expensive” mode
  • For Mifos to be used as a platform to grow talent is going to require both a) a real core organization to drive Mifos software and services and b) some level of simplification that gets around the long ramp-up period on the code and domain

One idea that I’m exploring with Ashesi is creating a sort of software incubator / institute / center that would be affiliated with them in some way. The center would do a lot of work on Mifos – and would have to have the full time talent to really drive the core Mifos business and participate in the Mifos open source community – but could then be a place for students and faculty to drop into the stream of an ongoing enterprise software business. They could work on specific projects, use some components of Mifos as class projects or for teaching, probably lots of other things. It’s intriguing and I think it has legs, but will be challenging to get it right without a total loss of momentum. The cool thing about this is that it could be a petri dish for all the talents needed for software entrepreneurs, from engineering to product management to the business/marketing side.

During the next few months, I will be exploring options for creating a new, independent Mifos organization based in sub-Saharan Africa. The goal of this organization will be to create long-term positive impact in Africa using the Mifos platform to do the following:

  • Continue to empower microfinance institutions to reach more of the poor with great financial services
  • Contribute to the creation and evolution of a vibrant software industry in Africa

The organization might take any of a number of forms, ranging from an incubator that uses Mifos as the basis to build software engineering and entrepreneurial talent to a business that provides Mifos cloud services and builds and delivers other applications that leverage the platform. I’ll be exploring both academic and private sector partnerships to find existing organizations who can both contribute to and benefit from the Mifos platform and the Mifos community.

At the end of this three month exploratory phase, I hope to have multiple options identified which leverage different strengths and opportunities in different geographies. For example, one option might be a software entrepreneurism institute based in Ghana, connected to a leading university, which acts both as a teaching and mentoring facility for emerging software talent and as an incubator for new software business ideas. Another option might be a for-profit company based in Kenya that leads the Mifos open source community while pursuing new business opportunities in the mobile space, using Mifos as a back-end transaction platform to connect the data flowing among all the exciting new mobile applications starting to appear in East Africa.

The global Mifos open source community – software developers, IT companies, microfinance institutions, and others – are critical to the ongoing success and viability of the Mifos platform. I believe that the community can thrive, perhaps in a different form than it has worked in the past, but that the community will need new leaders to emerge to provide the direction and support needed to ensure that Mifos continues to evolve and provide great support to its users.

I’m in Accra this week, speaking with leaders at places like Ashesi University, DreamOval, RanCard Solutions, the Ghana-India Kofi Annan Centre of Excellence in ICT (AITI-KACE), local microfinance organizations, and others. Starting next week, I’ll be based in Nairobi for the rest of June exploring opportunities and ideas in East Africa. In this early stage of the exploration, my goal is to collect as much information and generate as many ideas as possible, seeding the analysis and refinement needed to come to some viable alternatives.

Here on my blog I’ll keep a running commentary going on the meetings, discussions, and ideas that this exploration generate. I’m planning to do as much of this as possible in the open, enabling anyone and everyone to see and contribute to the process. I’ll also be dipping my toe into the Twitter world as @GeorgeConard.

If you’re a member of the Mifos community, an African MFI or software entrepreneur, or just have ideas about how Mifos might have the greatest long-term impact… I’d love to hear from you. You can comment here, post to the Mifos mailing lists, email me directly, find me on Twitter, etc…

I’m excited about this – it’s great to be back in Africa for an extended period of time, and I think that the Mifos software and Mifos community can create empowerment and opportunity for both software entrepreneurs and for the poor across Africa.

Grameen Foundation has formally announced that they are exiting the Mifos business:

We are announcing that Grameen Foundation USA will be exiting its activities related to Mifos®. Over the coming months we will make a concerted effort to transition the initiative to leaders in the Mifos community.

During the next few months, I’ll be looking at ways to continue the work of Mifos from a base in Africa. Watch this space for more details and evolution…

Earlier this week I wrote a guest blog post for the CGAP Technology blog… reposting here.

Today, a lot of attention is being paid to front-end technologies for microfinance, but it’s important to remember that back-end systems – the technologies that process the billions of small financial transactions – are still at the heart of the delivery of financial services to the poor. Core management information systems (MIS), while not the headline grabber, are the engine for innovation and scale in microfinance.

If we want to add significant numbers of poor people to the ranks of microfinance (and we must do so), MFIs must have a robust core technology infrastructure that enables them to grow quickly and efficiently. While many MFIs today do have MIS systems in place, a significant proportion of those systems are not supporting the growth and increased impact of the institutions running them.

Without significant transformation in back-end technology throughout the microfinance community, the reach and effectiveness of microfinance will continue to be hindered.

Here are four reasons why back-end technologies are still important:
1.    Operations and insight: providing financial services for the poor is an information-intensive business. Strong core MIS systems enable MFIs to process large numbers of relatively small transactions efficiently, and can provide insight into an MFI’s business that enables MFI leadership to tune their products and operations to more effectively serve more poor clients.

2.    Measurement and results: while achieving greater numbers – reaching more of the poor with financial services – is important, equally important is measuring the results. A core MIS system can provide MFIs and their stakeholders with the tools to more effectively measure both financial and social performance and, in turn, enable the MFIs to tap new sources of capital and tune their business for greater impact.

3.    Scalable innovation: microfinance is a fertile ground for innovation in both business process and technology. Innovations – mobile banking, ATM integration, new products and business models, etc. – need to be tied together in order to achieve network effects and scale. Those innovations must plug into and be supported by strong back-end technology to transform the innovations into a new baseline of operations for MFIs.

4.    The problem isn’t solved yet: while many MFIs are using technology today, industry surveys (CGAP, Banana Skins) indicate that MFIs still see core back-end technology as a major constraint. The systems MFIs use are often inflexible, expensive, hard to support, and incapable of enabling innovation in microfinance practice.

This is, to be sure, a complex domain. Many of the ideas in this entry – and many more not touched on here – deserve a deeper treatment, and I’ll be writing a series of posts in the coming months to address some of the key issues we all face. I encourage everyone to use the comments to suggest topics or issues that need to be addressed; no guarantees I’ll get to them all, but the more we can make this a discussion, the more likely we’ll be to find breakthrough, transformative solutions.

Unlocking the next wave of potential for microfinance will require a lot of technologies – back-end, front-end, shared platforms, integration to global financial systems, CRM, and more – and the back-end is the engine that powers innovation and scale to unlock that wave. Without stronger, more effective back-end systems, our work with other technologies and models will never achieve the impact that it could have.

Adam Monsen (an engineer on the Mifos team) and I were interviewed for an open source podcast called FLOSS Weekly… have a listen if you’re interested, or having trouble with insomnia.

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