The Future Of Doing Good In Banking, Inspired by Muhammad Yunus


This post is about the “Banks for a Better World” Innotribe incubator project. Innotribe have showcased it at the “Future of doing good” session at Innotribe@Sibos 2012 in Osaka, where we had the privilege of having Prof. Yunus on the panel. The event was exciting in itself, but what is even more exciting is that there is a traction to continue the project and concrete ideas about how to do so.

Banks for a better world represents a new trend in Innotribe topics, very much away from fin-tech. In essence, it is about:

  • Bridging traditional and social finance, a kind of “fair trade” but for financial products and services.
  • Connecting the unbanked – the people who are not part of the financial system because they don’t have any bank relationship or account. In many developing countries, the unbanked form the majority of the people.
  • Establishing a community, or movement, to influence the governments and global companies for more transparency in the way they invest.

“Bypass to social impact” (by Mariela Atanassova) – bridging systems

The project is run in partnership with Ashoka (www.ashoka.org), a global organisation supporting what they call “social entrepreneurs” – people focused on driving social change by using entrepreneurial principles.

Through our contacts with Ashoka and other inputs from the Innotribe network, it became apparent that:

  • There is a major gap between the domain of traditional finance, very well known in the developed countries by everyone, and social finance – very much unknown in developing countries with notable exceptions such as Grameen bank and their micro-credits.
  • There is a lack of adequate financial instruments to support small SMEs and social enterprise. This was equally valid, to my surprise, in developed countries as well as in developing ones.
  • There is a major issue of financial inclusion, illustrated by the situation in India where pretty much the entire population has, or has access to, a mobile phone, but only a third of the eligible population has a bank account. The so-called “unbanked” are thus isolated from traditional financial instruments, giving rise to many initiatives and instruments to serve that market with more or less good intentions.
  • Bridges between the social and traditional finance can only be established through a collaborative efforts, as any single bank wouldn’t have the power to resolve all these problems on their own.

The Banks for a Better World project, under the leadership of Martine De Weirdt in the Innotribe team, explored in the past year several angles on how to tackle these issues, and also tested the appetite of the financial community to act.

Where does it stand?

The idea is to create sustainable products, services, companies that solve problems related to “social” finance by bridging it to “traditional” finance.  I want to emphasise this – it is neither about Corporate Social Responsibility (CSR) nor charity.

The person who explains this most eloquently is Prof. Muhammad Yunus.

Prof. Yunus relaxing near the Innotribe tent at Innotribe@Sibos 2012

Martine first met Yunus at the World Economic Forum in Davos 2012, where Innotribe was hosting a private session on the Banks for a Better World subject. He was interested by the Innotribe approach of a collaborative innovation, and eventually agreed to join the Banks for a Better World session at Innotribe@Sibos 2012 and also deliver a speech for the Sibos closing plenary. He says that “charity money never comes back” – giving money doesn’t guarantee a sustainable improvement of the persons or entities receiving that money. He told me about a recent trip to Haiti, where he observed that despite massive amounts of donations and charity given since the catastrophic earthquake, the situation on the ground has improved only marginally. His solution is the “social entreprise” – an entreprise like any other, except that the dividends are re-invested into the company. So, the mission of such social entreprises are to solve problems, and not to make money. This makes a big difference, and he has more than 60 social entreprises behind him to prove the point – most notably the Grameen Bank and Grameen Danone Foods. The focus is on long term sustainability – the initial money is invested into the entreprise not as charity, but as a means to get the social entreprise off the ground and hopefully able to sustain itself.

Based on all of this, the following idea emerged at Innotribe@Sibos 2012: Banks for a Better World becomes a collaborative project whose goal is to create a number of social entreprises focused on bridging the traditional and social finance worlds. The project would be co-ordinated by Innotribe, as follows naturally from the collaborative innovation mission it has. The following ingredients are needed – funding, agenda setting, idea generation and, finally, creation of the social entreprises.

The banking community would provide the funding, based on a voluntary basis (banks willing to participate) or a community-wide mechanism. Two ideas have been mentioned for the latter, involving SWIFT –

  • Rounding the value of the payment instructions transmitted on the SWIFT network to the upper currency unit, and making the difference available to Banks for a Better World (e.g. an amount of 143,36 EUR is rounded to 144 EUR and 0,64 EUR is kept)
  • Making the SWIFT refund available for Banks for a Better World. SWIFT being a co-operative society (thus not for profit), SWIFT refunds its member banks each year with any surplus income made that year.

The agenda setting for Banks for a Better World – in other words, the focus of innovation – of course will depend on the way it is funded. However, it will be important to have Enablers, people with experience on the ground such as Prof. Yunus, to drive the agenda as well.

Next is actual idea generation – spot the social entrepreneurs or startups who have ideas relevant to the above agenda, engage and encourage them to step forward and enable them to create solutions and social entreprises. This sounds easy at first, but it is not – from Innotribe’s experience in the startup challenge, it does require an extensive network and work to produce quality ideas. In fact, inspired by the startup challenge, and in collaboration with Ashoka, the Banks for a Better World session gave five social startups the opportunity to pitch their ideas to Prof. Yunus and the other panelists.  These ideas were in the following domains:

  • Providing young people in developing countries with financial education and bank accounts – tomorrow’s future customers
  • Developing mobile banking to reach the word’s unbanked communities
  • Building partnerships between specialist community lenders and mainstream banks to improve access to finance
  • Providing working capital funding to high growth SMEs and social impact organizations
  • Issuing municipal impact bonds to finance high impact social projects

Another interesting idea came from Julius Akinyemi, a panelist in the same session. Julius is the initiator of a project called Unleashing the Wealth of Nations and a resident entrepreneur at the MIT Media Lab in Cambridge, Massachusetts. Akinyemi is proposing leveraging new technology – such as the Digital Asset Grid –  to create a local and nationwide “eRegistry” of all assets such as land, real property, farms and even cows and goats, that could be converted into a globally-understood and accepted common currency.

Finally, when the ideas are on the table, it is necessary to empower and enable the ideas owners to progress these ideas by creating a social entreprise focused on the subject. We can all draw heavily on Prof. Yunus extensive experience and advice in this domain.

I’m curious about where this goes, and very much looking forward to it. For sure the Innotribe team and I were tremendously encouraged by Prof. Yunus’ incredible faith and drive.

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Taking No Risk Is The Greatest Risk Of All


— update on 5 November 2012 —

PlayMoolah has won the grand finale of the Innotribe Startup Challenge at Innotribe@Sibos in Osaka! They were selected first among 10 startups that were pitching to a senior jury of bankers and venture capitalists.

Here are Audrey and Min with the $50,000 prize awarded by Innotribe.

Well deserved Min and Audrey, wish you luck.

— end update

— update on 1 October 2012 —

Min came back to me today with some great news, showing PlayMoolah’s progress since I wrote the original article back in June.

PlayMoolah has its first bank partnership, with OCBC.  The bank will sponsor PlayMoolah for their customers, and will provide digital and retail space in all 55 branches across Singapore.

Excellent news for Min and Audrey. I wish them a continued success and, most importantly, hitting their target to educate thousands of children in Singapore. And elsewhere!

Here is an extract of their press release:

Technology start-up, PlayMoolah, is today announcing that it is working financial institution, OCBC Bank. This tie-up will see young customers from OCBC Bank’s Mighty Savers programme gaining access to PlayMoolah’s fun online platform that educates 6-12 year olds on financial literacy matters. In order to provide financial empowerment to more young people, PlayMoolah is partnering with financial institutions around the world and OCBC Bank is the first financial institution to sign up. Through this partnership alone, PlayMoolah target to educate over 50,000 children in Singapore.

— end update —

Forbes is running a “startup month” and this week is about turning an idea into a real business.

Immediately I thought about the PlayMoolah startup and its co-founders Min Xuan Lee and Audrey Tan. Playmoolah was a winner in the Innotribe Startup Challenge in Singapore earlier this year. I was inspired with what they do – a tool to help parents educate their children about the value of money – and the energy and passion of Min, so I asked her to tell her story.

Giving the floor to Min –

It was an eye-opening experience to learn how different cultures use money. Coming from Singapore to California during the height of the financial crisis, we uncovered more and more horror stories over casual conversations about debt and over-leverage, fueled by relentless, uninformed optimism. It was evident how this generation was fast becoming the most indebted generation in modern history. This sparked one simple question – what is the root cause of financial illiteracy in our world today?

Our curiosity led us onto a path of inquiry, into the homes of American families, volunteering to teach in public schools, and speaking to anyone who had done work even remotely related to the field of financial literacy. Over one year, we spoke to hundreds of researchers, entrepreneurs, investors, teachers, and parents. The problem was clear – children lack financial education, school intervention had not proven effective, and only 32% of American parents talk to their children regularly about money.

Volunteering in schools and seeding questions about money

The solutions were staring in our face. First, the problem is not simply about literacy, but in following through with real action and cultivating good habits. It’s also about starting young and involving not just the child but their parents to encourage good role-modeling and healthy conversations about money. At the root of the problem, parents just don’t know where to begin. And if the problems start at home, they need to be solved at home. But why isn’t there a home-based solution to help children and parents work through money matters together?

On the other hand, children are exposed to an avalanche of mass media and games that encourage consumerism and peer comparisons of what they have, even in the virtual world. What are our kids exposed to?

While at Stanford University, we were influenced by the work of B.J. Fogg and his methods for designing persuasive technology –technology that influences behavioral change. We saw an opportunity to nip the problem in the bud and take what kids have come to love, to turn the incentives completely on their head and design good technology that inspires real-world behavioral action.

There is something powerful about an idea whose time has come. So many people rallied around the idea offering us so much encouragement and help, putting us in a position where taking no risk became the greatest risk of all. With gut indignation towards the problem, an agonizing discomfort of the status quo, and the collective wisdom of all that we met along the way, PlayMoolah (http://playmoolah.com) was born.

Kiara, age 9, sitting in to one of our brainstorm meetings

In the PlayMoolah headquarters, there is a little desk with little chairs for the kids, filled with sketch paper, color pencils and markers, lego bricks and all sort of toys for kids to join us in the design process. All our concepts go through prototyping and feedback from the kids before put into production.

Paper prototyping game concepts

We design and develop playtools that put kids in the driver seat of their own learning, empowering them with the curiosity, knowledge, skills and tools needed for financial capability. Separately, parents are provided with a dashboard where they can monitor and track their kids progress, get involved with their kids saving goals, or get ideas on family projects they can do at home. No other solution on the market today is tying important age-appropriate lessons about managing money to real life, real dollar and real impact.

PlayMoolah family time!

There is a famous saying in the valley – ask for money and you get advice, ask for advice and you get money. Through many of these unexpected conversations, we raised our seed round from a diverse group of angel investors across US and Singapore with an alignment in intention and a great humility towards something larger than ourselves. Our first investor wrote a tongue-in-cheek description on our cheque – “Pay to the Order of Play Moolah” for “Saving the world”, definitely one for the archives.

Getting investment to save the world!

We are approaching exciting times as we partner with more schools and financial institutions to offer PlayMoolah to a greater number of kids and parents around the world. As part of the International ChildFinance Movement headquartered in Amsterdam, we also hope to catalyze quality financial education and access to reach the goal of touching the lives of 10 Million children around the world.

Fan mail from one of our awesome moolahkids!

At the end of the day, we hope to inspire a next generation of young people to develop a healthy perspective of money, and to really rethink what money is. To see money as a wealth creation tool rather than an end in itself, money should serve our own dreams, personal growth and happiness. It’s about the enhancing the quality of our experiences, the strength of our relationships, our well-being and our health, and ultimately using money as fuel to create greater value in society. That is the true essence of startups that have served as a vehicle for wealth creation – because every single time we see our Playmoolah kids saving up for their goals, or giving their allowance to charity, we couldn’t imagine trading what we’re doing for anything else in the world.

Audrey Tan, Min Xuan Lee (co-founders) with Playmoolah kids