As I turned the corner, it appeared almost out of nowhere - a monument to the successes (and failures) of capitalism - the New York Stock Exchange. I had ventured downtown to attend the premiere of Carol Pineau’s new documentary, Africa Investment Horizons, which was being screened inside the Exchange. As first impressions go, you could do no better: it’s impossible not to take Africa’s investment potential seriously when you’re talking about it inside the center of the financial universe.

Even the security line was interesting: long but vibrant, an impromptu salon of Africanists, investors, expatriates and activists, all of whom share a passion for the business of Africa. Not surprisingly, I saw a number of base of the pyramid allies: Liz Wald, of EDI Imports; Emeka Okafor, of TED and Timbuktu Chronicles fame; Joy Sun, COO of Market for Change. This was going to be a good event.

Before screening the movie, we heard from Carol Pineau, its director. Pineau’s previous film, Africa: Open for Business, came out in 2006 and served to shine a spotlight on the quantity and quality of business opportunities in Africa. (Both high, by her estimation, and underexploited.) That conclusion was a natural starting point for Africa Investment Horizons: if there were high-quality, under-exploited business opportunities in Africa, wouldn’t that be a recipe for solid returns?
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This past Tuesday in New York, Acumen Fund hosted a breakfast featuring Aun Rahman, our Pakistan Country Director and longtime Acumen Fund employee. The event began with Omer Imtiazuddin – Acumen’s health portfolio manager – introducing Aun. Before joining Acumen Fund, Aun worked for five years in economic and strategy consulting at Charles River Associates in Boston, specializing in financial modeling and quantitative analysis. Aun joined Acumen in 2003 as a Fellow, working for 18 months our investee, Saiban, to structure and incubate an affordable commercial housing project in Lahore and to develop the organization’s management information systems.

In 2005, he became Acumen Fund’s Country Manager in Pakistan. Originally from Karachi, Aun came to the United States to attend the University of Chicago, where he earned a BA in Economics. At the conclusion of his introduction, Omer remarked how he and Aun actually went to school together (in grade six) but only realized their shared history upon joining Acumen Fund. It is indeed a small world.

Aun began his talk by giving a demographic overview of Pakistan. Seventy percent of Pakistanis earn less than $2/day; fifty percent of the urban population lives in slums; seventy percent of Pakistanis don’t have access to clean drinking water. Not only that, but recent commodity price increases have put a squeeze on the purchasing power of the poor, exacerbating some of these (older) figures.

After his overview, Aun began the heart of his presentation by talking about Saiban, an incremental housing model targeting the urban slum population. The poor aren’t offered housing options in the current economy – it’s too expensive, on the wrong time schedule, and scarce. To address these issues, Saiban has developed a model based on the informal housing sector. Specifically, Saiban works with people in low-income communities who build their homes over a four or five year period – not a traditional housing or real estate model.

Acumen became involved to help Saiban accelerate and scale up the incremental housing process. When we came in, Aun notes, it was already a holistic business – they weren’t just building homes, but also the infrastructure, and facilitating financing and land purchase as well. Acumen’s assistance came in the form of a $300,000 grant/loan in 2005, as well as the services of Aun (Fellow, 2004) and Jawad (Fellow, 2007) working directly with Saiban’s team.

As far as impact, Aun displayed a slide noting that there are 22,000 residents living in 2 communities built by Saiban. There are schools, mosques, stores as well as a range of utility services (water, electricity, sanitation, etc.). Finally, and perhaps most interestingly, there’s a formal mortgage financing scheme for the poor – a first in Pakistan.
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Congratulations to Acumen Fund friend and ally Martin Fisher, who today was named the winner of the Lemelson-MIT Award for Sustainability.  Fisher - who co-founded KickStart - will be awarded $100,000 for his work developing a low-cost irrigation pump and the business ecosystem to design, produce, sell and repair them in base of the pyramid communities.

Media coverage of Fisher’s award is widespread; the Boston Globe has a good article on the announcement, and PopSci makes a mention as well.

To celebrate, be sure to watch “Don’t Wait for the Rain,” a social marketing rap video produced about KickStart’s signature MoneyMaker pump.

Yesterday in New York, I had the pleasure of attending a round table organized by the Council on Foreign Relations entitled The Commercialization of Microfinance: The Good, The Bad and The Ugly. Moderated by CFR Senior Fellow Isobel Coleman, the discussion featured comments from Mary Ellen Iskenderian (of Women’s World Banking) and Roshaneh Zafar (of the Kashf Foundation.)

I arrived early, set up my laptop and grabbed a bite to eat (if you’re curious, the CFR building is beautiful and they do a good lunch spread). Before I was through my sandwich, the room had filled to capacity and CFR staffers were scrambling to set up overflow seating – there’s clearly a lot of interest in the recent controversy surrounding microfinance. It was quickly apparent that women outnumbered men in the audience by a ratio of about 2:1 – interesting, though not completely unexpected given the importance of women in microfinance and the fact that the speakers and moderator are all women.

Coleman kicked off the session with brief introductions and quickly segued into the topic at hand – the good, bad and ugly of microfinance. She stated – without dissent – that microfinance now finds itself at an inflection point. On the one hand, there have been calls for microfinance not to profit off the backs of the poor, notably in the New York Times’ coverage of Compartamos’ IPO. On the other hand, those who know microfinance realize that it can’t scale – from 100 million clients today to its potential market of 4 billion – without the capital markets, and the formality capital markets require.

I thought Coleman did a good job setting the stage here. From my perspective as a quasi-insider, there wasn’t much new – but it is important to say nonetheless. Microfinance can and will go one of two directions, and it’s pretty clear that there are strong arguments being made by advocates on either side.

Mary Ellen Iskenderian was next to speak. She is President and CEO of Women’s World Banking (WWB), the world’s largest network of microfinance institutions and banks. Iskenderian leads the WWB global team, based in New York, providing hands-on technical services and strategic support to more than 50 top-performing microfinance institutions and banks around the world. Iskenderian told us that WWB’s network MFIs have a total portfolio value of $1.4 billion and an average loan size of just $500. Those MFIs serve roughly 9 million clients and there are another 14 million clients served through WWB affiliate banks. Of WWB’s 23 million clients, approximately 70 percent are women.

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What’s big, red and innovative all over? No, it’s not Clifford’s supremely creative cousin – it’s Entrepreneurship@Cornell. A university-wide initiative, Entrepreneurship@Cornell is unique in bringing together students, faculty, alumni and outside experts across a range of sectors (hospitality, biotech, real estate, venture capital, law and more were all represented at the event I attended last week). Other universities could learn from Cornell’s approach – a truly multidisciplinary program is hard to find in academia, so kudos to the Big Red for getting this one right.

I went to Ithaca last Thursday and Friday to participate in Entrepreneurship@Cornell’s annual celebration. The 2 day event featured a gala dinner, entrepreneur expo and – of course – panel sessions. Thankfully, the panel session in which I participated was well organized and expertly moderated. (No coincidence here: the organizers – Steve Wang and Sara Standish – are Johnson School students and the moderator was Mark Milstein, a heavy hitter in the BoP space.)

I thought Sara and Steve did a particularly good job finding representatives from distinct stages of the BoP continuum. First to speak was Fernando Lima, founder of Florestas and a New Ventures entrepreneur. Fernando holds a Ph.D. in economics from the University of Barcelona and has worked for many years in finance – but his passion is personal care products. Specifically, Fernando is all about certified-organic products whose ingredients are sourced from Brazilian cooperatives. Florestas’ new line – Ikove – just attained nationwide distribution through Whole Foods, which is the holy grail for any start-up company in the organics sector.

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“Great” is often thought of as better than “good.” Not in this case. What I mean to say is that GOOD is great; GOOD Magazine, that is. We at Acumen Fund are happy to congratulate longtime ally Jonathan Greenblatt on his new job: CEO of GOOD Magazine, another Acumen Fund ally.

We’ve worked with Jonathan through WorldChanging, the Global Entrepreneurship XPrize, and Ethos Water - which he co-founded, sold to Starbucks and helped scale. (As of today, Ethos has raised over $6.2 million dollars towards clean water projects in the developing world.)  We are thrilled to know that we can continue working with him now that he’s at GOOD.

And just a reminder, when you subscribe to GOOD, your subscription fee is donated to Acumen Fund. GOOD magazine, good cause!

It is always humbling to have Acumen Fund featured in the mainstream media.  Today’s interview - published in Red Herring - is no different.  We hope that these kinds of stories will help us create momentum around building transformative businesses to solve the problems of poverty.  A big thank-you to Joel Dreyfuss, Red Herring’s Editor-in-Chief, for making the time to come and speak with us in New York.

Last night, Acumen Fund hosted the Muslim Finance Professionals Association of New York for an event entitled “NY MFPA and Acumen Fund evening.” (Suggestions for better event titles are welcome.)  More than 40 people gathered over snacks and drinks to hear Omer Imtiazuddin and Adrien Couton, Acumen’s health and water portfolio managers, describe our social investment fund business model and methodology.

Spirited Q&A followed Omer’s and Adrien’s remarks, ranging from questions on Acumen’s rate of return to how we define and measure social impact.  Particularly interesting were repeated calls for those in the room to use their extensive networks – the Indian and Pakistani diasporas, local finance professional associations and university alumni networks – to spread the word about Acumen.

Thank you to the Muslim Finance Professionals Association – and in particular Malik Sarwar and Dalia Mahmoud – for organizing last night’s event.  We are truly humbled by the sight of a room full of people – all of whom are taking time away from their hectic professional and social lives – gathered to learn more about business models serving the BoP.

(With Helen Ng and Misbah Naqvi)

Nicole Wallace’s recent article in the Chronicle of Philanthropy, Social Entrepreneurs Seek New Investments to Reach a ‘Tipping Point’, prompted some e-mail discussion here in the Acumen New York office as well as in our Karachi office.  Naturally, we were pleased to see one of our investees – Kashf Foundation’s Roshaneh Zafar – quoted.  We were also glad to see mainstream coverage of the challenges facing our sector.

In her article, Wallace focuses in on the need for social entrepreneurs to reach a tipping point, and to begin scaling up their operations and, as such, their impact.  This is something we think about nearly every day at Acumen Fund: does this company have the potential to reach 1 million BoP customers?  Money is an issue, as KickStart’s Martin Fisher points out in the article.  So too is finding the right corporate partner.  We also see talent – recruiting, training and retaining good employees – as a key bottleneck.

Will social entrepreneurship reach a tipping point?  It depends on the money, the partners and the people – among other things.  We applaud Nicole Wallace for focusing on some of the real challenges facing our sector, and hope that this article will prompt even more discussion of how we can move ahead using business strategies to address poverty.

I like late March. Here in New York - and in Washington, where I used to live - late March is when spring starts to take hold, bringing longer, warmer days. It’s also when the annual Skoll World Forum takes place, bringing a breath of fresh air to cloudy, rainy England (apologies for the weather metaphor). For a review of Forums past, check out Jacqueline’s blog post from 2006 and Kevin Jones’ guest post on NextBillion from 2007.

I sincerely hope for good weather in Oxford this week, since a number of my Acumen Fund colleagues (and numerous allies from throughout the ‘base of the pyramid’ community) will be attending the Forum. Then again, rain might be for the best - that way, no one is tempted to spend time outside, away from the excellent sessions. I am particularly impressed with this year’s lineup, and its theme: social entrepreneurship: culture, context and social change.

If I had to choose, here are some of the sessions I would mark on my planner as “must-see.” Unfortunately, some of them are being held simultaneously…so be sure to check out posted synopses online (see below for more info on blogging at the Skoll World Forum.)

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When talking with people inside the “base of the pyramid” (BoP) community, I often hear strong opinions about how BoP ventures should be set up. Some people strongly support registering these ventures as for-profit entities, while others maintain that BoP activities can start out as non-profits and transition into formal businesses later.

There is no one answer, and this is not a straightforward discussion. The legal and financial implications of a for-profit vs. non-profit organization are myriad, and I don’t claim to understand them all by any means.

Thankfully, a new article in the Stanford Social Innovation Review explores the tension between for-profit, non-profit and hybrid structures. The Funding Gap - written by Jeff Hammaoui, Eliot Jamison and Michael Chertok - explores the social enterprise capital market and how the BoP community can address recurring legal, financial and funding issues associated with it. (more…)

Today marks the 16th annual observance of World Water Day, as designated by the United Nations in the afterglow of the 1992 Rio Earth Summit. Thankfully, World Water Day is more than just a random entry in the “did you know” section of your day planner; it is well-publicized, discussed and observed around the world. Building on that, we at Acumen Fund thought it would make sense to review what’s going on this year.

For an excellent overview, check out Greg Lamb’s article in the Christian Science Monitor. Lamb mentions a number of critical statistics and reports; this is a good place to start.

In the blogosphere, Acumen Fund ally GOOD Magazine is dedicating their blog to World Water Day today. Check it out. (And – if you haven’t already – subscribe; your 20 bucks goes straight to Acumen! Besides, it’s a good read…no pun intended.)

Over on TreeHugger, correspondent Lloyd Alter focuses on World Water Day’s 2008 theme: sanitation. In a nod to archived blog posts, I wrote about the “base of the pyramid” penalty and water last year on NextBillion.net. The numbers may have changed slightly since then, but the message remains the same: low-income customers remain critically underserved and generally face incredible price premiums when it comes to water.
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