May 20 2017

At a recent digital banking conference in Africa, I was asked if fintech is sustainable. The response was simple – fintech is not singular. It is an amalgamation of multiple digital financial services trends across regions, and across payments, lending, and banking

The question is which of these are solving a real problem vs those solving a perceived problem. There are a few trends out here that I like, which are solving real issues, which will sustain, and merge with the overall financial services ecosystem:

Disintermediation of the lending value chain – Banks would traditionally source, acquire, underwrite, onboard, collect and service customers. Most would do some parts well, and a few parts not so well. This is increasingly now being solved by the entry of new ‘customer owning’ entities into the game, who will acquire, owners of data who can underwrite, and the lenders who can lend and collect. This makes partnerships key.

However, the cost of acquisition, collections and data partnerships is turning out to be quite prohibitive (upto 6-8% in some cases), especially in telco-dominated markets, for example Kenya, which is driving the fintech business models towards non-feasibility.

May 18 2017

In 2050, India will achieve reliable, economically competitive and environmentally sustainable electricity system, addressing the energy security and environmental strains.

In past few years, India has achieved an impressive growth in adding renewable energy generation. Efforts have been made to alleviate the long standing problems like power shortages, rural electrifications, poor distribution companies (Discom) financial health and non performing energy assets through various policy interventions. However the current penetration of renewable energy is low about 15% of total energy supply. The energy supply spectrum largely entails coal (about 50%) followed by oil and gas. It is envisaged that in 2050, India will have an annual energy demand of about 14,500 TWh per year (with a moderate CAGR of 6.7% till 2050). Largely the demand will be from industry sector followed by transportation and buildings. In the absence of paradigm shift towards the low carbon alternatives, the dependence on fossil fuel will increase, causing a serious threat to nation’s energy security and GHG emissions in future.

With determined efforts by the policy makers, India can overcome barriers to enable investment in clean and sustainable energy supply options. In 2050, India will achieve reliable, economically competitive and environmentally sustainable electricity system, addressing the energy security and environmental strains. A couple of trends under current energy sector reforms are converging to create game-changing disruptions like electrification of large energy intensive sectors coupled with accelerated renewable energy capacity addition, parallel efforts to strengthen electricity supply to underserved and un-served through integration of grid and distributed renewable energy, adoption of emerging storage technologies to increase the grid appetite to accommodate intermittent sources and enabling cost optimization through the best use of automation and communication analytics.

Electrification of large energy intensive sectors coupled with accelerated RE capacity addition

Clean energy is India’s top priority to meet the global commitment under INDC (Intended Nationally Determined Contribution) to meet the target of reducing GDP emission intensity by 35%. The reduction is to be made by 2030 considering 2005 as a base data. With an aggressive chase of INDC targets on renewable energy capacity addition, India can have more than 50% of electricity generated from renewable source, leading the global renewable energy generation in 2050. India is eyeing towards massive electrification of its energy intensive sectors, the majority of which in 2050 will be seen to be supplied from renewable sources like solar and wind. Ongoing efforts towards greening the passenger & freight transportation by railways and an ambitious plan to electrify the entire road transportation by 2030, indicates that the second most energy intensive sector- Transportation is targeted. A mammoth pipeline is to be built in coming years to reach the target of 100GW by 2022.

Apr 20 2017

“Imagination is the only weapon in the war against reality.” ― Lewis Carroll, Alice in Wonderland

In 2050 we can visualize a large population enjoying an amazing quality of life with access to such services and privileges as are not accessible even to the urban middle class of today. Higher income levels, universal access to quality education, healthcare, safe drinking water and sanitation services shall characterize rural India in 2050. Women’s participation levels in India’s workforce shall be rivaling that of the men with all discrimination based on region, caste, community, ethnicity, gender, age and disabilities being minimized. The optimism for future stems not only owing to the rate at which the technology is evolving and is being adopted by the masses but also owing to the changing attitudes of the new generation towards “holistic development for all”.

Demographically a large proportion of population may migrate to urban India by 2050; however about 850 million people will continue to reside in rural India.

Despite a view that India is rapidly urbanizing, it will have just half of its population in cities even in 2050. By 2050, India will still be one of the least urbanized countries in the world. It’s likely that the simplicity of life, improvement of income levels and availability of basic services may significantly improve the quality of rural life in India.

Farm and non-farm rural households are likely to improve their incomes and reduce their vulnerabilities significantly by 2050.

The per capita income for urban India in 2011-12 was INR 1, 01,313, whereas for rural India it was only INR 40,772.

However in 2050 rural India is likely to have significantly higher incomes. This will largely be driven by a quantum leap in the cropping intensity, riding on almost all the arable land coming under irrigation. For instance, the gross irrigated area is expected to increase from 76 million hectare in 2000 to 117 million hectares by 2050. Besides, the vulnerabilities arising out of climate change will have become a non-issue with universalization of crop insurance across rural India. The core value chains will have completely integrated vertically, performing at the highest level of efficiency, aided by world class infrastructure, resulting in smooth access to markets. Non-farming rural households too shall be experiencing buoyancy in their incomes aided by a burgeoning demand for services and non-farm goods. The rural population shall have access to social security owing to the entire workforce being a part of the formal sector and high level of financial inclusion among the rural population leading to access to life insurance, health insurance, insurance cover against accidents, pension services and credit for both consumption and production purposes. The expected increase in per capita income for India to over INR 26 lakhs (USD 40,000) will also reflect in rural incomes.

Apr 19 2017

Woman entrepreneur no longer elicits surprise or curiosity in India. Many women entrepreneurs are driven by a desire to do good work, realise their dreams and prove their detractors wrong, rather than just make money.

The glass ceilings are shattered and women are found indulged in every line of business. The entry of women into business in India is traced out as an extension of their kitchen activities, mainly 3P‘s, Pickle, Powder and Pappad. But with the spread of education and passage of time women started shifting from 3P‘s to modern 3E‘s i.e., Energy, Electronics and Engineering.

One of the biggest hurdle facing the social and moral fabric of women entrepreneurs in India is Lack of awareness about the financial assistance in the form of incentives, loans, schemes etc. by the institutions in the financial sector. So the sincere efforts taken towards women entrepreneurs may not reach the entrepreneurs in rural and backward areas.

Well one of the possible solution to overcome this big problem is by provision of micro credit system and enterprise credit system to the women entrepreneurs at local level. One of the key players moving up the charts on this front is CashSuvidha – An SME firm providing hassle free loans to people in a super quick time and at competitive rates of interest.

CashSuvidha helps women entrepreneur to raise un-secured business loans of up to Rs 3 Lakhs and then secured loans upto 10 lakhs. In both the Rural & Urban areas, they are providing loans of upto Rs 50,000 for small businesses or any type of income generation activities. They have also joined hands with Intellecap Advisory Service Pvt. Ltd to support access to finance for Women Entrepreneurship as a part of the Creditree project.

This will be a growth- propelling step towards developing financially stability in the unorganised sector of Women Entrepreneurship, and will encourage more and more women to step out and make the best possible use of this space with all the resources.

Mar 30 2017

India is transforming from a rural to an urban country. To prepare our cities for the future – we need to reimagine concepts of shelter, utilities, culture, health, and economy. Unless we plan today, we will build cities that codify inequity and unsustainability.

In the next three decades India will transform from a rural to an urban country

Approximately 1,800 Indians move from rural areas to a city every hour. The pace at which Indian demographics are shifting from rural to urban is unprecedented. Major cities such as Mumbai and Delhi are no longer “cities” as traditionally defined but megalopolises – a collection of urban conglomerates whose borders have merged to become the Mumbai Metropolitan Region and Delhi NCR respectively.

Consider this: by 2050 60% of Indians will live in cities. Delhi, Mumbai, and Kolkata will be amongst the world’s largest cities and cumulatively become home to nearly 100 million people. How will these cities that are already bursting at the seams ensure basic quality of life for all these new citizens?

The answer is in reimagining the construct of cities. We need to shift away from thinking of cities purely in terms of fixed locations and physical infrastructure such as roads and buildings, and towards cities as dynamic living systems. We have an opportunity ahead of us to overhaul our existing cities and carefully plan new ones as we prepare for the future. Resilience to natural resource scarcity, extreme weather conditions and human-made disasters, as well as inclusive growth will need to be the bedrock of the future of Indian cities. At Intellecap Innovation Lab, we use five lenses of enquiry to think about these future-ready cities:

Mar 22 2017

Global water crises – from drought in the world’s most productive farmlands to the millions of people without access to safe drinking water – are the biggest threat facing the planet over the next decade. With increasing demand, due to the growing population and unsustainable lifestyle, many countries are facing severe water crises. In the absence of suitable corrective measures, many developing countries including India will have to face crisis of water scarcity.

The Indian Context

India is not water poor country, availability of rain water, surface and ground water are not an imperative problem, but inequity due to population growth, rapid urbanization and inefficient resource management, water is becoming a scarce commodity. This crisis is an emergency and calls for attention by all the stakeholders to make sustainable and intelligent use of the available

With ~25% (estimated) Increase in population the demand rises by ~360 billion m3 and the supply drops by ~1065 billion m3 and this being only for domestic consumption. By 2050, the amount of ground and surface water available for supply is estimate to have dropped by more than 40%. While there is increased emphasis on equitable access, affordability, quality water availability, recycle / reuse and several conservation initiatives, efficient utilization of existing water across dimensions of usage becomes an impetus to meet the future water demand.

Efficiency is the key

A concerted effort is required to bring in a paradigm shift in approach to achieve higher standards of efficiency in water use across sectors involving all stakeholders central and state government, municipalities, industries etc. While rebuilding and modernizing a massive water systems offer an opportunity to chart a sustainable, prosperous course for the nation. These are not the only solution to resolve water scarcity and stress. Investments in form of capital, advanced technology, process and good governance in water can futureproof a nation like India against water crisis. While there are different approaches (mainly top down) of standards, regulations guiding industrial consumption of water for increased efficiency bearing reuse and recycle of water, there are several other sectors which are still not under the purview for good water management practices. Applying good governance and particularly the principles of equity, transparency and accountability in water management across industrial, agriculture and domestic use can ease the intensity of the problem. With a mere 1% improved utilization of groundwater, 150 litres per day per capita for 500000 individuals can be created.

Feb 24 2017

Executive Summary

Africa has registered impressive economic growth over the past decade and a half, displaying
remarkable resilience in the midst of volatility and turmoil in global markets. Time is now ripe
for the continent to turn the chapter and embark on a journey towards a major economic
transformation. For this, Africa needs a new economic growth model powered by the strength
of the real economy, entrepreneurship and innovation. This report aims to explore the critical
role emerging technologies can play in helping Africa address its age-old development challenges
and achieve exponential growth over the next decade. Our research and interviews with
a range of emerging technology specialists from around the world and experts with deep
experience on the social entrepreneurship and impact space in Africa helped us develop a
framework for analyzing the potential of emerging technologies to amplify impact creation in
the African context.

The report highlights our vision of how emerging technologies can trigger a set of big shifts to
help Africa leapfrog and combat its development challenges. Our research indicates that
although early evidence of these shifts is already visible signaling the beginning of Africa’s
innovation journey, significant whitespaces currently exist. The report identifies these key
innovation whitespaces based on scanning of 100 technology use cases in Africa. It
concludes by identifying a set of opportunities these whitespaces present for key stakeholders
to help nurture a vibrant and high impact technology innovation ecosystem and in the process,
become a part of Africa’s journey towards economic transformation. The following visuals
help stitch together and narrate the key findings, insights and takeaways from the report.

Africa contends with age-old development challenges
which need a fresh look

While achieving food and nutrition security is widely recognized as arguably the greatest
development challenge for Africa, securing water security and low carbon energy security are
other mega challenges that are intertwined with the food security crisis. In addition, Africa
needs to build holistic healthcare ecosystems, create a future ready workforce and financially
include majority of its population.

Feb 23 2017

Digitization and exponential technologies like the Internet of things, big data, blockchain, artificial intelligence, 3D printing, machine learning, and robotics not only disrupt the ways we design, produce, manage and maintain products and services at a fast pace, but also the way we will work in the future. IBM’s Watson technology is already complementing human decision-making in fields such as cancer diagnostics through artificial intelligence. So will Watson and Co replace human labor in 2050? Global thought leaders like Stephen Hawking are warning already that the very technology that has been an enabler for mankind in the past, has the potential to destroy the world, as increasing automation is going to decimate middle class jobs, worsening inequality and risking significant political upheaval.

While emerging technologies bring higher productivity and efficiencies, estimates already suggest that up to 45% of tasks people are paid to do every day could be automated in the future—with big impacts on emerging markets. China is acquiring 160.000 robots this year and a recent report by Citi and the Oxford Martin School shows that the Chinese market has already replaced the US as the largest market for industrial automation. In India, textile giant Raymond is planning to cut about 10,000 jobs in its manufacturing centers in the next three years, replacing them with robots. IT-Giant Infosys has already announced reducing jobs through automation. The future will see business without people, like the fast-food chain Eatsa that requires zero human interaction.

The ‘future of work’ is not only shaped by automation, but also by changing aspirations: Enabled by technology and driven by increasing entrepreneurialism, the idea of ‘employment’ is already changing: The current generation of millennials is increasingly looking for purpose and personal development. The rise of the ‘on demand’ economy gives more power to the individual: Estimates suggest that by 2020, 1 in 2 people in the US and UK will work in a freelance capacity. While routine tasks are expected to be increasingly completed by intelligent machines and technology, creativity, analytical skills and problem solving will be requirements of the job of the future.

Is the picture so gloom? Human history has shown that technology has not only improved working conditions and living standards, increased value creation and raised incomes, it also created life-changing innovations such as the steam engine, the conveyer belt, airplanes or the internet – and yet we fail to predict its implications. “The global demand for cars will not exceed 1 million, one reason being the shortage of drivers,” estimated Gottlieb Daimler in 1901. In the same year, Wilbur Wright, a pioneer in aviation, estimated: “It will not be possible for humankind in the next fifty years to take-off in a metal plane.” The rest is history. We are certain that the future of work is changing, but the effects will not only be negative. These shifts will play out differently in India – and we need to join forces to prepare and make it inclusive.

Feb 16 2017

It’s well known that the African continent has made rapid strides in economic growth and continues to demonstrate promising avenues for investors. The continent was ranked as the world’s second-most attractive investment destination in 2013, garnering a number of traditional, angel and impact investors. East Africa has consistently been named the fastest-growing region. This growth, however, has not transformed into inclusive development and the region still sees high economic inequality in terms of income and opportunities. For instance, the average Human Development Index score of Sub-Saharan Africa is less than 0.5, signifying that the region fares poorly in terms of quality of life and specifically health, education and purchasing power.

Factors such as shifting demographics toward economic development and government initiatives to improve infrastructure are on the rise, while strong foreign investment has helped establish the region as an entrepreneurial hub. Nevertheless, geographical, infrastructural and socio-economic barriers in the region render many traditional business models unviable. Consequently, most mainstream enterprises avoid targeting low-income customers and focus on markets that are easy to reach and have the capacity to pay. Result: a large proportion of the region’s low-income population remains underserved.

The existence of both underserved markets and an enabling environment for entrepreneurship has led to a rapid growth of impact enterprises in the region. Many of these enterprises have designed game-changing innovations across sectors, enabling them to serve low-income and underserved markets while ensuring sustainable returns to investors. The impact enterprise landscape in the region is currently blooming and more than 155 impact investors operate here. More than US $9.3 billion has been disbursed by development finance institutions (DFIs) and other impact investors in the region. Moreover, the base of the pyramid-focused innovations from the region continue to draw considerable interest from development practitioners across the global south.

In 2016, Intellecap undertook a study to better understand how East African impact entrepreneurs manage to design viable business models despite the various market challenges. The insights from the study can inform inclusive development in the region and across the global south. The study classified impact enterprises across three levers based on their interaction with the BoP: access, ability and knowledge.

Feb 10 2017

By 2050, India’s population is expected to reach 1.7 billion people, creating the most populated country in the world. Growth of the Indian population and transition of its demography will need for leapfrogging in healthcare delivery including transformation of public healthcare system. Major shifts await healthcare industry in India.
What lies ahead?

India’s demographic and epidemiology profile will witness a change by 2050 which will demand healthcare sector needs to evolve. India’s population is projected to be 1.7 billion in 2050 with maximum number of people in the working age group of 15 to 64 years and average life expectancy at 80+ years. The old age population is expected to grow to 14% (from 4% at present) with geriatric health care specialized services such as dementia, nutritional services and home care services expected to have a larger role. The shift in demographic patterns and lifestyle trends will necessitate preventive healthcare to reduce cost of healthcare spend. Moreover nearly 51% of India’s population is expected to live in cities by 2050 (up from 30% in 2015). Increased urbanization may offer some advantages to the health care practitioners such as a larger set of population will be accessible for availing healthcare services at relative lower costs.

Trends shaping future health

India is leapfrogging the use of technology innovations such as mobile health devices, technology integration with healthcare data and telemedicine strategies which could reduce the burden from health system while still trying to boost healthier lives, reducing disabilities and increasing life expectancy. This trend will continue to evolve as there will be a shift in population profiles, disease burden and care protocols by 2050 and a future will emerge where chronic diseases are things of the past, patient dependency on public healthcare systems is minimal and more preventive care is sought for, life threatening diseases such as TB, Cancer or AIDS are cured and people lead healthy lives post treatment.