The 2015 Annual Conference of the Microfinance Council of the Philippines, Inc. carried the theme Microfinance and Inclusive Growth. This gathering presented a venue for microfinance stakeholders to discuss inclusive growth and the essential role that microfinance plays in achieving inclusive development in the country. The conference was held at theCentury Park Hotel, Manila on July 23–24, 2015.
During the Ugnayan Session, Angelo Valenton, Founder of POWER4ALL, shared that "technologies exist today that are inexpensive, flexible, small, sustainable, does not require massive infrastructure, and very easy to access. Some refer to them off-grid technologies, I prefer to call them decentralized technologies." He further said "Inclusive growth is not just going the extra mile to impact the poor sector, but it is an upward cycle of progress for all. Poor sectors progress, providers to these sectors progress, it becomes a collective, sustainable and long term roadmap for national development." - The full text of his speech below.
The Microfinance Council of the Philippines, Inc. (MCPI) is the national network of microfinance institutions working towards sustainable, innovative and client-responsive solutions to poverty in the country. MCPI is currently comprised of 57 institutions, including 47 practitioners and 10 support institutions. Its regular members include 26 non-government organizations, 13 banks, 6 cooperatives, and 2 regional networks. The key programs of MCPI include Advocacy, Capacity building for microfinance institutions, Social Performance Management, Performance Monitoring and Benchmarking, the establishment of a Knowledge and Resource Center, and Network Strengthening.
Speech of Angelo Valenton:
What drives growth?
There are a number of fundamental drivers to growth but let me focus on one such transformative enabler… Power.
Power is fundamental to human and economic development: the greater a country’s electricity consumption, the greater the well being of its people.
When correlating per capita electricity consumption with the human development index (HDI)—a measure of well being that includes life expectancy, literacy, education, and standard of living—even a small amount of energy can transform lives, and nations. A little electricity goes a long way; when annual energy consumption rises from zero to just a few thousand kilowatt-hours (kWh) per capita, countries see a jump in HDI scores. Just as individual lives and whole villages have changed with access to energy, the impacts are very real in driving economic growth for entire countries.
Increases in energy consumption are strongly correlated with dramatic increases in economic output and productivity. Access to energy is one of the most important factors in raising people in developing nations out of poverty. Energy can transform the trajectory of individuals, families, and entire nations.
Sadly, despite the advances in power generation, big business and larger-than-life technologies, over 2 billion people do not have reliable access to energy. This means that nearly one-third of the people on earth are prevented from accessing the productivity, health, and opportunity that come from reliable energy access. With 85 percent of the energy impoverished living in rural areas, lack of supply forces people in remote locations to self-destructive extremes to get power. These extremes include walking hours to “centralized” battery charging centers, exposing children to fire hazards with candles in order to study at night, and putting entire families at risk with toxic kerosene fumes.
Further to this, over a billion people lack access to clean water.
Close to 8 million people die annually from disasters and water –related diseases,
Therefore, it will not come as a surprise that over 1 billion people live in extreme poverty. In the Philippines, the statistics point to over 80% of the population categorized as poor.
The default approaches to satisfy energy demand particularly in rural areas in developing countries are a failure.
Centralized solutions are massive, very costly, extremely slow to deploy, inaccessible to all and bear disastrous human and environmental costs.
The good news is that technologies exist today that are inexpensive, flexible, small, sustainable, does not require massive infrastructure, and very easy to access. Some refer to them off-grid technologies, I prefer to call them decentralized technologies.
You may be familiar with some of these like portable solar lamps for instance, but it goes further to innovations such as pay-go systems, hybrid generators and compact water treatment plants.
Let me show you a very interesting video on this mobile water factories… https://www.youtube.com/watch?v=09eVpEdjW4c
How far can decentralized technologies take us? These solar lamps, for instance, might appear “small time” to many, but believe me when I tell you that these solutions have the potential to leap frog and overtake slow, inefficient and expensive centralized systems.
Let’s take a cue from one of the biggest game changers of all time – mobile phones.
Until the 80’s or the 90’s we depend on wired telephone systems to communicate across distances. A privilege only to a minority of the country’s population because of the limitation of lines and the high cost of investments, acquisitions and usage.
Now, we have more active mobile phones than the entire population. The telecom companies state an aggregate of over 103 million lines compared to a hundred million people.
Mobile phones have changed how we communicate, socialize, create, organize, record, purchase, learn, do business, and steer our lives. We have become so dependent on the tiny decentralized device that we would panic if our phones' batteries go dead.
The energy access has the potential to copy the penetration rate of mobile phones. Imagine if these handheld devices transformed our lives the way it did, what can access to power do for our sectors that do not have them?
Here is a call to action. We need to create access to these decentralized technologies.
Creating access requires these critical components:
Quality, quality, quality.
Like any other consumer good or service, technologies for the developing world must meet high quality standards as the market, most especially the poor sector, defines those standards. The market has indicated a strong preference for durable products that continue to perform as promised in the extremely challenging living and working environment that represents daily life for these customers.
Unfortunately, the market will always be flooded with cheap and unreliable knock-offs and copycats.
Listen to me - bad products kill the effort to grow.
We will need to rethink how to deliver these technologies to the market. And organizations such as micro finance institutions have the underestimated capability to deliver these technologies to the masses and touch their lives in the process.
Technology will always find ways to make itself better and cheaper, but MFI’s accelerate the affordability by creating financing and capital opportunities not only to the end users but each point of the supply chain to include retailers, distributors and even technology developers.
This to me is inclusive growth. It is not just going the extra mile to impact the poor sector, but it is an upward cycle of progress for all. Poor sectors progress, providers to these sectors progress, it becomes a collective, sustainable and long-term roadmap for national development.
Inclusive growth happens when we create access to power for all.