Submitted by Group Q : Geet Panwar Marina Panggeng Nishant Ray Prabhat Saxena Raghav Bhatnagar Raunak Mantri Shivam Pallival Yashwardhan Kabra
Q1. M-PESA is a product aimed at poor and marginalized
consumers. a. Is it a good example of a company identifying commercial opportunities at the bottom of the pyramid? b. Is it a financially viable business model ? c.What impacts has it had on poor consumers ? Ans: a. Yes,it is a good example of a company identifying commercial opportunities at the bottom of the pyramid .The tapping of the potential at the bottom of the pyramid and its huge success is supported by the following points : Since its inception,M-PESA has seen multifold increase in its user base The project has been able to give a fillip to the vastly underdeveloped physical and economic infrastructure in Kenya Economic migrants who comprise a major chunk of mobile phone users have access to easy and fast payment options unavailable earlier A developing country like Kenya and its poor population cannot afford to spend a lot to speed up infrastructural requirements.Hence,interventions utililizing technology like the M-PESA are useful b.The 50% part funding by the British governments Department for International Development (DFID) and the support of Kenyan microfinance institution ,Faulu has been instrumental in making it financially viable.In addition,the spectacular success of the project and its branching into newer territories as a result of new services is ground for healthy financial performance. c. Poor consumers have been serviced in the following manner : Access to formal financial system Ability to transfer money in a safe and secure manner
Money transfers without falling prey to
robbers and hence reducing crime in the society Purchase airtime Payment of bills 2. There are strong arguments as to why poverty should be treated as a sustainability challenge. a.How does M-PESA help poor people enjoy more sustainable livelihoods ? b. How can poor people have a negative impact on other aspects of sustainability ? Do you agree poverty alleviation is a sustainability challenge ? Ans : a) Money transfers without physical transportation helps in saving energy and costs ,thus helping poor people enjoy more sustainable livelihoods.Economic benefits arising out of using technology like mobile telephony and virtual money transfers has a positive impact on their economic lives ,which is a major component of sustainable living.In a broader perspective,using technology and reducing the burden of physical infrastructure and its resultant low carbon emissions is a contribution to sustainable living as a healthier environment is beneficial to everybody.In the particular case of Africa,it can mean less draughts and availability of resources like water and agricultural produce. b) Poor people need to be given resources for sustenance.A major thrust in reducing poverty in any country is economic development.Economic development would require investments in infrastructure and other projects which may not be low carbon in nature .The creation of an eco system to boost economic development could also imply increase in activities that may not positively impact other aspects of sustainability like deforestation, rehabilitation and resettlement of populations ,burning of fossil fuels for power etc.Thus ,poverty alleviation needs to be taken up in a more sustainable manner.On the other hand,it has to be noted that the per capita energy consumption and
resultant carbon emission is very less for poor
countries as compared to rich countries. c) Poverty alleviation is a sustainability challenge because of the following reasons : Poverty can be alleviated through economic development which would involve uses of natural resources .The balancing of achieving economic development with sustainability goals is thus a huge challenge. Creation of consensus amongst countries in terms of adherence to environment and sustainibilty goals outlined in various international initiatives like the Kyoto Protocol is a huge challenge as developing countries have development goals to achieve and consider blanket emission criteria at par with developed countries to be unfair . 3.M-PESAs funding model allowed it to compete for internal resources. a. Do you think the services success will have a significant impact on either Vodafone or Safaricom in the future ? b. How might their behavior change ? c.How might Safaricom build on this success as it attempts to expand its services in East Africa ? Ans : a. In the long term ,the servicess success will have a significant positive impact on both Vodafone and Safaricom due to various reasons : the strong ties built with the customers and other stakeholders would reap positive dividends for a long time a positive brand image created across the globe due to the success of the M-PESA programme and its CSR implications is a valuable intangible asset an incentive to invest in more sustainable projects with huge economic returns b. Success begets success.More socially responsible behavior is expected from Vodafone and Safaricom
c. It can use the knowledge and experience gained out
of the M-PESA programme to implement better strategies in achieving its corporate goals without compromising with sustaianility.For instance,it could develop products to leverage the Kenyan tourism success story and support eco-tourism.