Spreading Technology

“I'd put my money on sun and solar energy...
I hope we don't have to wait until oil and coal run out
before we tackle that.” Thomas Edison, 1931

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Sharing Knowledge at
Record Speed

Important numbers in tech
and finance to keep an eye on

  • 90%

    of growth in mobile broadband

    subscriptions between 2015 - 2030 will be outside of Europe and the US
  • 40%

    Increase in 3g coverage

    for the population of Nigeria in 2019
  • 64%

    Increase in download speeds

    in 2019 across 20 lower middle-income countries surveyed

One of the most striking changes of the last decade has been the colossal increase in connectivity. The advantages of this have been clearly seen during the coronavirus outbreak, with millions able to work, study, socialize and exercise from home. Yet this phenomenon is unevenly spread – large swathes of the developing world have little access to the internet, especially in rural areas. This will change in the next decade, with hundreds of millions of workers, consumers and content creators coming online as infrastructure improves and mobile broadband reaches all corners. This dramatic increase in the number of people online provides an extraordinary opportunity for businesses to scale up their impact.

Financial Inclusion

The internet has already revolutionized the way we access financial products in Europe. Mobile banking allows microfinance institutions (MFIs) in the developing world to extend their reach, providing savings and loans to remote villages while reducing costs. Meanwhile new fintech companies will disrupt markets with new products adapted to the local context.

Sustainable Food

Access to weather data helps farmers to plan planting and harvest cycles better. Up-to-date crop prices give more transparency to smallholders. Better connectivity enables more traceability, fulfilling consumer demand for food with less environmental damage and more social impact.

Climate Finance

Smart air conditioning will reduce energy costs, lessen the load on electric grids and reduce emissions. Connected technologies enable business models such as pre-financed solar home systems, or solar-powered irrigation systems.

Important topics in tech
and finance to keep an eye on

  • fintech

    fintech

    FinTech boomed during Covid-19, advancing more quickly as access to finance from home became an essential service.
  • agritech

    agritech

    From drone-based analysis to intelligent software for soil management, the sustainable food industry needs investments in technology for efficient production.
  • green buildings

    green buildings

    As buildings cause 40% of global GHG emissions, green buildings represent one of the most significant investment opportunities to help mitigate climate change.
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Our impact

The positive impact of ­connectivity on smallholders

  • increased revenue

    Weather and crop price data will increase farmer revenues.

  • sustainable production

    Connected solar irrigation systems minimise water use and improve yields.

  • access to finance

    Mobile banking allows Microfinance Institutions to reach more rural communities, benefiting smallholders.

responsAbility has supported microfinance and SME finance for nearly twenty years. By providing long-term debt financing and equity investments, we have provided the financial platform for MFIs and SME banks to move into mobile banking, already benefitting thousands of low-income households and small businesses. Our ongoing support will enable the revolution in financial sector development to continue as connectivity improves in many of our markets. Furthermore, we have increased investment activities in fintech-only companies, taking equity shares and providing strategic direction to ground-breaking business models. Meanwhile, our sustainable food and climate finance investments introduce and scale up a wide variety of technologies that are new or at a very early stage in many developing countries.

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Technology: making the difference

1. FinTech in India

“Lending simplified, growth amplified” is the motto of NeoGrowth, one of responsAbility’s portfolio companies leading the way in FinTech. The demand for finance in India is massive, as 50% of India’s creditworthy SMEs could not previously receive loans because of outdated underwriting methods.

The core of NeoGrowth’s business model started with using the digital track record of its MSME customers to underwrite and provide loans to this unserved segment. Currently NeoGrowth uses technology to parse one year of digital bank statement data and gain insights into daily card based and other digital sales for the last year. Proprietary algorithms are developed to build predictive models into the future sustainability and growth of the client's business. This helps to determine the eligibility for loans and creates a bespoke offering in terms of loan amount, tenure and pricing.

Flexible repayment is a hallmark of the NeoGrowth business, offering customers small daily auto-repayment facility from card-based sales. This is only possible because of digital interfaces with the banks and a proprietary Loan Origination System (LOS) and Loan Management System (LMS) which was custom built for NeoGrowth’s unique loan product. The next step will be further investment into analytics and machine learning, which will facilitate the disbursement of loans within 48 hours from first application.

Best of all, they are determined to create a positive social impact by lending to first generation entrepreneurs, supporting job creation, and also proactively working to increase the number of business loans to female entrepreneurs.

2. Technology in Agriculture

From precision farming to smart warehousing to satellite-based crop monitoring, Samunnati, one of responsAbility’s equity investments, actively promotes such activities and aims at facilitating the use of technology with farmer collectives around India, indirectly impacting more than 2 million farmers.

Samunnati is also proactive in FinTech, having developed a QR based virtual card that allows farmers to directly pay for inputs or other resources from their loan account. Linked to a specific list of registered merchants, it ensures that the loan is being used for its original purpose.

Next, they will be launching a mobile application that connects buyers and sellers directly. In addition, they are piloting integrations with transportation, quality assessment, and insurance on the same interface. For instance, if there are suppliers and buyers from two different regions who want to make a transaction, they would be able to review the transportation charges from various vendors and select the lowest price.

On Covid-19 and agriculture: “Amid these extraordinary times, we have taken an approach to finding solutions, aligned to our mission to make markets work for smallholder farmers. While we continue to focus on lending to our FPOs and AEs customers to build their business, we have embarked on a technology transformation route to ensure we fast pace the introduction of innovative solutions at the ecosystem level. This, we believe, would create transparency among the ecosystem players and improve value chain efficiency, ultimately benefitting the livelihoods of smallholder farmers.” - Anil Kumar SG, Founder and CEO, Samunnati.

3. Watch: FinTech in Action


Important numbers in tech
and finance to keep an eye on

  • 90%

    of growth in mobile broadband

    subscriptions between 2015 - 2030 will be outside of Europe and the US
  • 40%

    Increase in 3g coverage

    for the population of Nigeria in 2019
  • 64%

    Increase in download speeds

    in 2019 across 20 lower middle-income countries surveyed

4. Going Digital in Nicaragua

The highest quality coffee beans in Nicaragua are known to be produced in Matagalpa and Jinotega, where our portfolio company Aldea Global operates. They play a critical role in the region, as coffee production is the economic backbone for thousands of rural communities, providing the equivalent of 280,000 permanent agricultural jobs.

Vulnerable to climate change due to its geographic positioning, catastrophes such as hurricane Mitch in 1998 are inevitable and can exacerbate social tensions that continue to weigh on a country impoverished by twenty years of civil war. And as more than 50% of rural incomes in Nicaragua are generated through traditional rainfed agriculture, and are heavily dependent on natural resources, these communities needed support to become resilient.

Aldea Global initiated a project, therefore, to equip farmers with digital technology that will provide insights into their crops during the agricultural cycle to mitigate climate risks and increase productivity for their specialty coffee. With the support of our Technical Assistance Team, a mobile application was developed that provides timely information, including weather forecasts, to help farmers plan for planting, fertilization and spraying, as well as practical guidance, e.g. on soil conservation practices. The overall goal is to put farmers in a position to be more resilient and to enable them to increase their yields and incomes. Long-term, it is expected that the app could be upgraded for other crops and benefit a larger number of farmers.

Increasing the use of digital technologies is expected to be key not only to address pain points, improve productivity and transparency along the value chain, but also to ensure social distancing and protect those who represent the most vulnerable populations in developing countries, mainly women, rural, aging and migrant workers.

Continue reading: Creating Opportunity