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The ProblemWhat is the problem that the MicroConsignment Model (MCM) seeks to address?
What are the symptoms of the problem?
Why is there an access problem?
In what ways is this access problem being addressed at present?
What is the problem that the MicroConsignment Model (MCM) seeks to address?
Villagers in developing countries continue to live in sustained poverty. This is in large part due to the problem that there is a profound and sustained lack of access to basic products and services that address real, perceived, and desired needs to solve problems such as pulmonary illnesses, gastrointestinal illnesses, visual problems, malnutrition, water scarcity, energy deficiencies, educational resource gaps and more.
What are the symptoms of the problem?
This lack of access affects not only health but also has a staggeringly negative economic impact on families and rural communities. Due to inefficient practices, the local environment oftentimes deteriorates as well. Health and family income and savings are also intertwined and so this lack of access feeds the cycle of poverty. For example, because most villagers in Guatemala continue to cook “campfire” style on the floor with no chimney pulmonary illness and visual problems are prevalent, children get burned and spend time that could be dedicated to education collecting wood, and women spend an inordinate amount of time cooking, meaning that they cannot engage in income earning opportunities productively. In addition, families spend their precious earnings on fuel. The symptoms are pervasive not because of a problem of product development, as there are numerous effective stove models. It is simply a question of access. Villagers either do not know that there are products that can solve their problems or they do know but because of price and distribution constraints there is for all intents and purposes no access. These pervasive symptoms are not limited to a lack of access to only stoves. In developing countries throughout the world, individuals suffering from presbyopia either lose productivity at the time of their lives when they have become experts (weavers, tailors etc) or can no longer continue with their trade at all because they do not have access to low cost exams accompanied by economically priced near vision glasses. Many people believe they are slowly going blind because they are unaware that a simple pair of glasses with magnification can solve this problem. In addition, because families do not have access to water filtration solutions, they drink contaminated water and/or spend unnecessary amounts of money either purchasing purified water or boiling. Children are chronically sick, causing missed school time and oftentimes malnutrition. This results in a further financial burden on already poor families. This problem of access causes an unlimited number of negative symptoms for rural families and communities.Why is there an access problem?
An insight into the access problem is fundamental to gaining an understanding of the need for the MicroConsignment Model. Metaphorically speaking, when one considers rural access to products, services, and information, it is critical to look at population density and view countries in the developing world as if they consisted of groups of islands. In any given region in a country there is a main island, a city or town, and moving out in concentric circles from population centers are dozens to oftentimes hundreds of continuously smaller and smaller islands. Villagers, the inhabitants of the small islands, decrease in number and have access to fewer products and services the further they live from the central island. In other words, the greater the distance one lives from the main island, obstacles such as economic limitations, poor means of communication, sporadic transportation, illiteracy, and a frequently pervasive sense of fear, uncertainty, and doubt become more profound. Thus, the more remote the island the less likely inhabitants of that island are to travel to other islands. There is also little reason or incentive for individuals to travel from the bigger islands to the smaller islands.
Adding further complexity to the access problems is the fact that lack of access does not necessarily increase in a linear fashion as the concentric circles around the main island become bigger. There is a vast difference between “real” access and “perceived” access. Knowledge of a real lack of access can be ascertained quickly and is essential for development professionals. However, a successful strategy and tactic hinges on a deep understanding of the perceived access situation. Although they might live directly adjacent to a population center with myriad shops and health and professionals services, in the minds of many beneficiaries, there is, for all intents and purposes, a wall that separates the two. Although distance should not be necessarily be confused with access, it is most certainly true that the further one lives from the main island, the choppier the waters and more impenetrable the reefs become, such that extreme isolation pervades. Given this context, it is easy to see how the facilitation of rural access to essential products and services has been and remains to be one of the most daunting challenges confronting health and economic development professionals.
In what ways is this access problem being addressed at present?
There are many great organizations working within microfinance to solve the access equation from a distribution perspective. And there is no one “magic bullet” solution for all environments. As previously stated, the MCM is not the way but a way. Organizations such as Grameen, PSI, BRAC in Bangladesh, Living Goods in Uganda, Healthstores in Kenya, and Freedom from Hunger in Ghana are all working diligently to deliver a variety of products and services to villagers with their own methodologies. There also certainly exist fantastic local companies and corporations such as Unilever and Proctor and Gamble who are trying to put the access puzzle together. Micro credit is a proven method to provide financing to entrepreneurs, however, access to credit is not necessarily optimal for the creation of access to products and services (save commodity type goods).
For the most part, however, relief work (donations) and government programs (donations/subsidies) continue to be the primary means for people to access the solutions that they need. In our view these methodologies are more often than not sporadic and unsustainable. To be sure, donations and subsidies do have their important place in the mix and well-intentioned, intelligent people/organizations/institutions can disagree on what should or should not be relief work and who is and is not in a relief phase. That being said, a reliance on donations in perpetuity is neither possible nor optimal (the micro finance revolution drives us to that assumption), and so a market-based model is the only other distribution solution for a vast array of products and services that have positive health, economic and environmental impacts. Looking at it another way, if it can and is being sold in the “first world” effectively and efficiently, shouldn’t we work towards similar solutions in the developing world?
Seemingly innumerable organizations and individuals are continually devising new products to serve developing country beneficiaries. This is essential. But an invention/innovation without a low-cost vetting and distribution mechanism runs the risk of remaining a “potential solution.” If “necessity is the mother of invention,” the new offerings being developed require an efficient means to test and ensure that real needs are perceived by local constituents and that the invention/innovation fits within the required local criteria to be both marketable and desired by the targeted beneficiaries.
In spite of the success of microfinance and the promotion of “Base of the Pyramid” concepts, there continues to be a need for an efficient and effective model that leverages all stakeholders’ competencies and mitigates limitations to address this lack of access in a sustainable, profitable, and scalable manner. There are products that exist. There are no lack of appropriate technology stoves, water filters, reading glasses, seeds and more. There is both local and foreign latent human capital looking for solutions. There are financial resources and organizations inspired to serve these people in need. And there exist local transportation networks to reach vulnerable communities. The real problem is that a variable cost-based, holistic, product vetting, entrepreneur identifying, financing, training, and logistical model is needed. A powerful distribution model that empowers local individuals to solve local problems on an ongoing basis is crucial. Access can only be created if the product, place, price, promotion, and people are working in concert to serve the rural poor in an appropriate manner that takes into account local cultural, societal and geographic conditions. At its root, the problem is that a model that integrates all stakeholders competencies and leverages infrastructures and resources has not been implemented on a broad scale and, as such, won the acceptance necessary to create real access.
