BEHIND YOUR BACK: Personal security, convenience and child safety as the bases for corporate fraud

When I came to London with the vision of a ‘peace network’ of people and computers protecting our planet, I could hardly foresee the battles between good and evil unfolding soo clearly before our eyes…

The Slog.

You don’t need to be a roving, khaki­-clad action correspondent these days to dig out malfeasance; you just have to wonder why things are as they are, do some internet research, and then sound innocent when calling the more naively accepting employees of multinational concerns. Yes it’s sneaky, but after a while one gets to realise that the purpose of the exercise is to put something back into the society that helped you.

That may sound terribly grand, but the truth is that for a Northern English lad comme moi, society did poo on me an awful lot early on, but on the whole I benefited far more from the free healthcare and education I got.

Plant a tree after 65, and you realise the likelihood of you ever sitting on a
circular bench around the trunk of the resultant mature walnut are close to zero. I’ve no idea whether…

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Shift Happens – Technology rather than People Drives Evolution?

International Conference for the Integration o...

International Conference for the Integration of Science and Technology in Society (Photo credit: Wikipedia)

This is rather a delightful presentation that everybody interested in either evolution or technology or both will enjoy.

And it’s about time that I bring this blog up to speed:

  1. technology tends to be presented for the sake of sales and consumption – rather than for giving HOPE
  2. my innovative software methods give AMPLE reasons for hope, as they offer a new instrument of investigation
  3. I enjoy WordPress as the blogging platform that keeps me sane in an insane world; see for a list of my sites

Everyday Digital Money

This workshop at the Anthropology Department of the University of California Irvine was a great opportunity for checking the state of the art – ranging from the technical analysis to far out creative suggestions and the gap between Western multinationals and women in Africa getting money via mobile phones…

Mobile Movement

Thanks to my dear partner Dr. Lilly Evans I have come across this remarkable project “Always with You: Experiment in Hand-Help Philanthropy”. It’s now called “Mobile Movement” and connects young African social entrepreneurs with young North American professionals.

Please click here for inspiration and admiration!

Making microfinance viable with IT

Making microfinance viable with IT

from Network World

By Kanika Goswami

Kanakapura is a township of about 50,000 on the fringes of Bangalore. It’s known more for the road that leads to it: Kanakapura Road, on which an Art of Living Center is located.

But it’s also the hometown of Razya. For three years, the 28-year-old could not find work in the small town and her husband barely made ends meet with his job in the sericulture business.

That all changed when Grameen Koota, a microfinance institution, lent her enough money to start a scrap business. In its first year, the business earned the family a profit and Razya was able to send her kids to school and purchase some furniture.

Razya is one of many. Although most others are not as fortunate. It sounds unbelievable but Bangalore, arguably the world’s IT capital, is the 13th poorest district in Karnataka. An estimated 38 percent of the district’s 1.7 million people live below the poverty line.

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Experts agree that development among this class of poor is hard. Mainly because the cost of servicing microfinance loans (under Rs 30,000 (US$700) doesn’t make business sense and commercial banks don’t trust the poor to repay their loans.

That’s a view that’s beginning to change. “Microfinance is needed for people who are left out of formal financing institutions. Their inability to pay is never a reason, they pay back better than others,” says Suresh K. Krishna, MD, Grameen Koota. According to Grameen Koota’s website, it’s repayment rate is 99.99 percent.

The high administration costs associated with small loans, however, is a harder nut to crack. Some experts estimate that servicing a microfinance loan is about six times more, proportionately, than servicing an average bank loan.

These problems kept commercial banks from seeing the poor as a potential market until Grameen Koota showed them.

Sorry, We Can’t Help

When Grameen Koota started in 1999, its aim was to help poor women in rural areas and urban slums through micro credit. Their target audience were women who earned between Rs 40 to Rs 80 a day. If they could consistently deliver need-based financial services to these women — in a cost-effective manner — they could be a financially-sustainable microfinance institution to the poor.

The Grameen Foundation, which also works with the Grameen Bank in Bangladesh (which got the Nobel peace prize for its work in micro-credit), supplied Grameen Koota with Rs 44 lakh to start work in the Bangalore district.

Today, the institution’s mission hasn’t changed — but its way of working has. When it started, it worked with a microfinance management application. Like all start-ups, it was satisfied with an application that met its basic needs: track its portfolio and accounting for microfinance.

But growth started catching up with the software. Maintenance issues cropped up, MIS reports took longer to create and expanding the institution’s operations was becoming a problem.

“For example, [the system] could not maintain transaction data,” says Krishna. It overwrote “each transaction on top of the last one, maintaining only balances.” This meant that a loan officer in a remote village could not tell when the last repayment was made — only how much more needed to be paid. Since transaction records were maintained off the system, “you had to do a lot of work to generate proper transaction data,” Krishna says.

And the system’s simplicity, once a measure of its success, began to be a drag on efficiency because it did not allow modifications to existing accounts. For example, if the term of a loan’s repayment was to be changed from 60 weeks to 48 weeks, a loan officer had to create a new account. These tedious workarounds left Grameen Koota unable to handle the volumes it needed to meet its growth targets.

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Worse, the software was unable to support new product innovations. It could handle only three products: a general loan, a consumption loan and a supplementary loan. This locked Grameen Koota out of a world of other loan and insurance possibilities and hampered its growth.

Growth, however, was exactly what the institution wanted. After its initial success, the institution, which will soon get the status of a non-banking financial institution, wanted to spread the goodness. So it set itself some difficult targets. It’s strategic goals for 2007-08, for instance, aims to increase both its client base and its portfolio by a 100 percent.

To do this, it needed to be able to open new offices quickly, be more efficient in the areas it already serviced, and create management reports much faster than it already did, so that decision makers could take calls like opening new branches.

It also needed a system that was flexible; since every branch might want to tweak its system. For example, how interest is calculated differs by region.

“The flexibility and scalability of the [new] product means that we’ll be able to simultaneously standardize common processes, accommodate regional variations, and scale for new innovations in the future,” says Krishna.

Spread the Goodness

In a bid to get a system that would meet all its current requirements and handle expansion, Krishna and his team walked through all the available products but failed to find a generic product that met their needs. They also realized that an off-the-shelf product would leave them more ‘vendor dependent’ than they were comfortable with — especially since the expansion would require local customizations.

The option of developing a system inhouse was considered, but was quickly scratched out because it would require too much specialization.

It was around this time that the Grameen Koota team figured out that an Open Source solution would fix all their problems: it was scalable, it would free them from vendor-dependency and it could be customized at the branch level. And it would be less expensive than a bought solution — an important criteria.

“Applying an Open Source model to a microfinance application is a very innovative approach to tackling the severe cost pressures in the microfinance sector. It helps MFIs (microfinance institutions) profitably extend their reach to poor communities,” says Lee E. Tenny, managing consultant, IBM Global Business Services, Financial Services-Strategy & Change.

After it jotted down its goals, Grameen Koota identified a solution: Mifos, an Open Source management information system designed specifically for the microfinance industry. Mifos, developed at the Grameen Technology center at Seattle with help from IBM, allowed individual MFIs to modify the software to their needs. It also provided the key functions required by a MFI including client management, loan and savings portfolio management, loan repayment tracking, fee and savings transactions, and reporting.

For Grameen Koota, the journey to implement Mifos has been an arduous one, partially because the institution also played an important role in developing the solution further.

The challenges were on two fronts: migration and training. Legacy data needed to be rediscovered or corrected before it could be migrated — from 44 centers spread across 13 districts — onto Mifos. In the meantime, training manuals and infrastructure had to be created.

“Transforming all the data into the new format was really challenging. We had about 1.2 lakh deviations,’ remembers Krishna. For example, there were loans in the old system that showed up as a late payment, but Grameen Koota said there were not. So, loan repayment schedules had to be regenerated. “We needed to migrate all the data, but since the transaction history [of a loan] was not part of the earlier application, we had to run an intermediate script and get all the data in place, then put it into the format required for Mifos. Though nothing was lost it, took quite a bit of time to migrate,” he says.

The migration needed to be done branch by branch. For a while, each branch used both their existing system and Mifos in parallel. Each week, data was re-migrated to Mifos on the day when no meetings were held. This was done to capture any changes made in the legacy system during the week, since Grameen Koota didn’t have enough staff to enter changes on both systems. This introduced performance issues because with tiny payments every week the database kept expanding.

In retrospect, some people associated with the project think it would have been easier if the migration could have been done with a merger tool and a separate migration tool.

Training everyone on the new software would also take away much mindspace. Training was done inhouse, but in a staggered manner, across the centers. “We took training sessions at many places, clustering some branches and training one set of people at a time. Over the five months that it took to migrate, half were trained, and then they trained the other half,” Krishna says.

The team quickly set up a help desk to aid with issues during dry runs. Its aim was to identify operational issues and rectify them. Documentation of all processes was also carried out in this phase. Since Mifos is an Open Source application, every step needed to be documented and updated on the Mifos site, so that other users could benefit from new customizations. To play safe, Krishna hasn’t yet pulled the plug on the old system. “I have not removed our legacy software even now. So far, nothing has happened and I plan to go ahead with only Mifos now,” he says.

What helped, everyone agrees, is that the ground was ripe for user acceptance and users and the IT team were enthusiastic.

Link to full article. May expire in future.

Computers should pay Taxes, too

This article is one of those finds that I got used to expect from Dr. Lilly Evans who seems to have a special sensor for gold dust on the web. It is written by software developer Dean Vantari who talks about Four Cornerstones: Cybernetic Democracy, Financial Justice, Ecological Harmony, Peace and Non-Violence.

Since “cybernetic democracy” is one of my dreams, I put his article here:

Since the advent of the microprocessor in the late 1970’s, the science of CAD/CAM has revolutionized manufacturing and lead to great advances in process automation and logistics. Inflation has abated since then because of the new economics of computer assisted manufacturing and process automation.

Using intelligent computer technology embedded in machine tools and manufacturing controls has lead to a vast reduction in labor costs, but it has done so at the cost of millions of jobs. Capitalism seeks to reduce costs in order to increase profits. Manufacturing costs are in essence wages and salaries paid to human beings. Computers and machine tools do not get paid, they are slaves of capitalist corporations, providing them with ever increasing profits for essentially nothing.

While manufacturing costs have been going down since the 1980’s, wages have remained stagnant and manufacturing work has become scarce. We have allowed the capitalist system to develop by it’s own accord, for it’s own purpose, not for the benefit of life and humanity, but for the private accumulation of profit from the exploitation of labor.

While costs have been reduced, the prices consumers pay for most items have not gone down in the same proportion. Consumers pay what they are used to paying for most products, even though the cost to produce them has gone down due to technology and outsourcing. We still pay $29.- for a toaster, even though their cost has been reduced from about $19.- to maybe $2.- per unit. The new $17.- profit that has been generated by technological innovation and outsourcing goes directly to pay for the C-class’s (CEO class) exorbitant lifestyles. The use of CAD/CAM technology has eliminated real jobs, from real people that now must find work in other occupations or who have been forced into sub-employment in the informal economy.

However, each new process that is automated saves a finite number of employee/hours. This is known in the financial world as the ROI, or return on investment. If the new process eliminates 100 jobs, all of the wages and benefits of these workers accrues to the ROI equation in evaluating the purchase of the process automation involved. These accounting figures are well known by financial analysts, they can and should be reported to the fiscal authorities in determining the social costs of automation.

If an automated process has a ROI that is derived from a laying off a known number of workers at known pay-scales, we can surely implement a social tax structure that returns the social cost of the worker’s layoffs to the social funds, i.e. to the social security fund, the universal medical insurance (Unimed / Medicare) and the unemployment insurance fund. Automation would then pay it’s fair social cost, not human beings left out in the cold.

For each worker that looses his/her job due to the introduction of process automation, their former employer must pay a fixed tax to the FICA fund, representing the loss of that job’s social contribution to the health and welfare of the People. These costs must be equal to the sum of the FICA contribution for each lost position, along with the Unimed (Medicare) deduction, both for the employee and the employer contribution, at the pay-rate that the worker was assigned at the time he/she was terminated.

By implementing a “computer tax” that computers, not humans, pay, we will be able to maintain social harmony and financial justice well into the future. We will have in effect eliminated the fiscal pressure on the social security system, by collecting FICA taxes from both human beings and machines. In the future we will be able to say that for every retiree there are at least 3 people and 6 computers contributing to the system.

Let computers pay taxes too, by all means, let them take over our tedious jobs, but let us not fall into the trap of lowering our standard of living for the sake of a global nobility that lives far above the rest of us, using technology to exploit us. This is an issue that would certainly merit discussion in an open and democratic society, but one that sadly will remain “under the radar” until such time as we are truly free from the fetters of power and it’s control over our political discourse on the mainstream media. Yes we can, if we can debate the merits of this idea in the open. Controlled democracy is an oxymoron.

Dean Vantari
Atlanta, GA
May 19, 2008

Grameen-Intel – a social business for ICT

With thanks to Brother Shafi:

Intel-Grameen deal on ICT – based business services

The Daily Star – Wednesday, May 10, 2008

Global computer technology giant Intel has signed an agreement with Grameen Trust to form a new venture dedicated to social and economic development.

Intel Corporation Chairman Craig Barrett announced this while addressing the World Congress on Information Technology (WCIT) 2008 in Malaysia on Monday.

The Grameen-Intel joint venture aims to bring about self-sustaining solutions based on information and communications technology (ICT) to help empower the world’s impoverished.

The initiative, which will be launched in Bangladesh, is based on the ‘social business’ model created by Nobel Peace Prize winner Dr Muhammad Yunus, who founded Grameen Bank in 1976 to promote microfinancing and community development.

“Technology offers the means for scaling up our efforts towards global change and progress,” said Barrett, who also chairs the United Nations Global Alliance for ICT and Development (UN GAID). “By creating new business models based on ICT, as Intel is doing today with Grameen, we can bring people the tools they need to improve their future.”

“I am very happy to collaborate with Intel in this new direction and create opportunities for poor people to rise above social and economic barriers,” said Yunus, also the author of the best-seller, Creating a World Without Poverty.

“I believe technology-based services will provide the ‘hand up’ that people need to discover their full potential. Once we show that this business model works in Bangladesh, we hope the successes we achieve there can be applied to the rest of the developing world.”

Grameen-Intel combines Intel’s technology innovation and Grameen’s extensive experience in creating economic development and income-generation opportunities at the village level. The new company will use a private sector-based approach to address social and economic problems such as poverty, healthcare and education in developing countries.

Intel and Grameen foresee a number of ICT-based services and entrepreneurship opportunities growing out of such a business model. Examples include remote villagers receiving medical attention through internet connectivity, rural communities being able to order medicine locally instead of having to walk 10 miles to a hospital, and families being notified of money received from relatives abroad.

According to Kazi I Huque, the Intel manager serving as the CEO of the joint venture, “The creative usage of technology has the potential to make a real impact on people in the developing nations who today are not part of the digital age.”

“To narrow the gap, we must address specific needs at the grass-roots level,” Huque said.

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