Opportunity International

Relentless Innovation

 

Overview —

CATEGORY

Entrepreneur

TYPE

Veteran Trailblazer

EST.

1971

LOCATION

Chicago, IL

Lessons for the Field —

ONE

Relentless innovation requires steadfast devotion to a single-minded purpose.

TWO

Sometimes the most influential innovation is not a new solution, but operationalizing and massively scaling an existing solution.

THREE

Innovation thrives when an organization’s culture affirms risk, latitude, and freedom to fail.

 
 
 
 

Visit Atul Tandon’s office, and you’ll spot a red toy truck on his desk. Tandon, CEO of Opportunity International, explains that it’s a reminder of one of the organization’s greatest lessons.

Some 80 percent of people in extreme poverty live in remote rural villages. About 20 years ago, staff at Opportunity—a global trailblazer in microfinance—were considering how to increase access to banking services for these communities. “Someone had the idea of putting ATM machines on the backs of these red trucks and driving them around to villages,” Tandon recalls.

It worked—but driving from community to community was expensive and labor-intensive.

Another staff member suggested putting the machines permanently in the villages. “So we put a bunch of ATMs in villages.”

It was a great idea but had its own set of challenges. Without sufficient training, no one knew how to use these new machines.

 
 
 
 

“We could laugh all day long,” Tandon says, “thinking about all we’ve learned from past projects.”

After two more iterations, Opportunity landed on the idea of mobile banking, since many people living in poverty used cell phones. However, these were not smartphones. Many clients began conducting transactions using text messages, and then team members realized the potential of adding call centers to our mobile services.

“Poor, illiterate women could call and speak with a banker,” Tandon explains, “getting fast access to their savings.”

Today, over 14 million savers use mobile services through Opportunity’s local partners—with average deposit balances of about $156.

Opportunity heartily celebrated the success of mobile banking and the call center ideas, Tandon says. “But we also celebrate the people who brought the first two solutions. They were what we needed for a season.

“I keep that red truck in front of me,” he adds. “It’s a message to me and to our entire staff: We try new things. We learn. We keep moving forward.”

 

“

A culture of continuous innovation [starts with] single-minded devotion to a single purpose.

Atul Tandon
Chief Executive Officer | Opportunity International

 
 
 

Serial Innovators

Banking call centers, agent bankers, and mobile access are just a few of the many creative solutions Opportunity has implemented over the past 50 years as the first faith-based organization to engage in microenterprise. Founder Al Whittaker was “a businessman who recognized that the solutions to poverty were businesses,” Tandon explains.

“What poor people needed were financial resources, training, and support to run small businesses, build an income and escape poverty.”

In its first two decades, the organization helped thousands of people access small loans to fund their microenterprises.

Then in 1991, a group of women supportive of Opportunity invented a new way of thinking about microlending that would allow even more people to access capital: the Trust Group.

The idea was to bring together small groups of peers—usually women—to ensure one another’s loans. Members used the financing to expand the operations of their tiny home and street businesses, and they kept each other accountable for repayment.

Opportunity began implementing Trust Groups in the Philippines the following year, enabling both increased income and household savings. The loan repayment rate of Trust Groups affiliated with Opportunity and its local partners now surpasses 98 percent. “Without that innovation,” Tandon says, “we would have stayed in the thousands served, not the millions now served.”

 
 
 

Opportunity’s Agriculture Finance arose as another initiative when staff members recognized that traditional microbanking services were not adequately meeting the unique needs of farmers.

“Farmers needed financing that wasn’t due back until harvest,” Tandon explains. “They needed access to buyers and suppliers; they needed insight into how to increase their yields with modern farming practices.”

So Opportunity introduced “production loans”—where repayments don’t start until after the harvest—and technical assistance for farmers. To date, over half a million farmers in sub-Saharan Africa have benefited.

Another breakthrough innovation unfolded in 2008 with the launch of MicroEnsure, the world’s first microinsurance intermediary. As a group, those at the Base of the Pyramid represent a huge market opportunity, yet they also present greater risk than typical insurance customers—and they can only afford minuscule premium payments. The big innovation of MicroEnsure was to bundle insurance with products that those living in poverty already use, such as microloans and mobile phone airtime.

In sub-Saharan Africa, for example, people can acquire basic life insurance coverage (enough to pay for a funeral) at no direct cost. The benefit is linked to the amount of mobile airtime they purchase each month or the amount of money they hold in a savings account at a bank or microfinance institution. As individuals experience the value of this insurance product, they become more open to purchasing additional types of coverage, such as health or crop insurance.

The Bill & Melinda Gates Foundation showed its enthusiasm for the concept with a $24.2 million grant to Opportunity. Today, MicroEnsure is its own company and serves over 65 million people.

 
 
 
 

Frontier of Practice —

WHO

One of the oldest and largest faith-based international humanitarian nonprofit organizations focused on microfinance, livelihood enhancement, and access to education for those living in poverty worldwide.

WHAT

Creating a culture of relentless innovation that has multiplied effective solutions, reaching millions of the world’s poorest people.

WHY

Innovation is not only about solving problems but also about dramatically multiplying existing solutions so that they reach more people.

HOW

Opportunity International identifies ideas and activities that are working in the lives of those living in poverty and builds on and extends the reach of those solutions through local partners.

 
 
 

Building on Success

Notably, for Tandon, innovation is not only about solving problems. It’s also about building on existing successes. “My MBA taught me to solve problems,” he says. “My education in the streets and slums of the world has taught me to capitalize on solutions, to do more of what works.”

Don’t ask the people you serve what their problems are, he explains. Instead, “identify those solutions that are working for them and then pour gas on those fires. Outsiders trying to serve materially poor people must focus on their successes, assets, and giftedness, not merely their needs.

“It’s about tapping into their strengths and then adding what is missing.”

Innovation Spurred by Neighbor Love

Opportunity’s passion for innovation springs from its commitment to building better systems that work for the poor. Tandon says that the Good Samaritan story has been foundational for the organization’s DNA: “We believe we are called to very practically demonstrate love of neighbor.”

The Good Samaritan parable, he continues, has compelled Opportunity toward a dual purpose: getting the wounded traveler back on his feet and repairing the road itself.