Village savings and loan schemes help the poor save in remote communities like this one in Malawi. Photo: Erik Mandell for MercyCorps

The world's poorest have long struggled to borrow. Now, an alternative microfinance model is also making it easier for poor people to save.

Microfinance institutions have provided lending services to millions of the world’s poor people for several decades. But loans must be paid back, and even traditional microlenders are hesitant to lend money to the poorest of the poor—including those living in some of the most remote and unpopulated communities. That’s where the model of village savings and loans associations (VSLAs) comes in, according to a recent Economist article.

The idea is simple: savings, rather than just borrowed money, is key to helping poor people become more stable and less vulnerable. Differing from the better-known Grameen Bank model of microfinance, which provides individual or group loans and operates on credit, a village savings and loan scheme allows a group of community members to pool their savings, lend within the group, and save the interest earned from the loans to disperse to members individually or use for community projects.

This model enables both borrowing capabilities and longer-term savings accumulation for both the group and its members.

CARE International, a humanitarian aid organization focused on fighting poverty, engineered the VSLA model in Niger in 1991. Today, CARE oversees village savings and loan associations in Ghana, Malawi and Uganda. Numerous other non-governmental organizations have promoted village savings groups that serve more than 4.6 million members in 54 countries.

While nonprofits promote the model, the groups themselves are internally managed. Unlike solely credit-based models, group members do not owe repayment to an external bank, but rather to their own pool. Group constitutions are established by members, outlining rules, interest rates, and how savings and interest will be shared. Sometimes transactions, debts and credits are written in basic ledgers, but some groups with no literate members rely on memorization, familiar to those with a culture of oral history, according to Hugh Allen, founder of VSL Associates.

Amid criticism of the effectiveness of traditional microfinance models, as we reported a few months ago, VSLA schemes offer a different path to poverty alleviation.

And for some of the world’s poorest, savings—not a loan— is the golden ticket needed for a better life.

Erik Mandell is a graduate of Middlebury College in Vermont. He is currently pursuing a master's degree in public administration and global leadership at Portland State. Read his other contributions to Global Envision.

Medic Mobile works with the simplest of cell phones to help provide health care to those far away from their nearest hospital. Photo: Fabiola Coupet/Mercy Corps.

In rural communities around the world, the virtual doctor is in.

The distance between far-flung communities and their nearest hospitals can be fatal. Medic Mobile bridges the gap using a common household item: the cell phone. It’s not the same as a living, breathing doctor, but Medic Mobile comes pretty close, and it does so using a list of platforms that is strikingly similar to what you might find on a smart phone. These seemingly-sophisticated technologies can work on even the most basic of cell phones and computers, just like those found all over the developing world.

Medic Mobile’s Sim Apps, in addition to open-source platforms like FrontlineSMS, OpenMRS, Ushahidi, Google Apps, and HealthMap, allow hospital staff sitting at a computer to communicate with multiple health workers in rural areas. The health workers’ phones are basic, but Medic Mobile uses a tiny parallel SIM card that fits between any GSM phone and a carrier’s cell phone to allow these phones to run the necessary apps. The Medic Mobile website provides a more in-depth description of the many technologies it employs. In a 2009 interview with GOOD magazine, co-founder Lucky Gunasekara described Medic Mobile’s importance:

We can communicate need in real time. Say I am a community health worker in rural Malawi and one of my patients gets really sick. Before this system came along, for a lot of clinics, the patient would die, because even though I have some basic health training as a community health worker, there is nothing I can really do. They're still just as disconnected as the communities they live in. Now with our system clinicians see things in real time and they communicate back.

In addition to saving lives, the program saves time: its website says that in six months, the pilot program in Malawi “saved hospital staff 1200 hours of follow-up time and over $3,000 in motorbike fuel” and cut 900 hours of travel time for antiretroviral therapy monitors by eliminating their need to hand-deliver reports to the hospital.

Since its inception in 2009, Medic Mobile has expanded to Honduras, Haiti, Uganda, Mali, Kenya, South Africa, Cameroon, India and Bangladesh. The platform is adaptable to different situations: it was used in Haiti following the 2010 earthquake to link first responders and locals in need of help. As a result of its successes, Medic Mobile was recently named one of the Top 11 in 2011 mobile health innovators of the year by mHealth Alliance.

The proliferation of cell phones is sparking a revolution in developing-world health care. Innovators from all reaches of the globe have used the near-ubiquitous technology to increase health care affordability and access. By adapting sophisticated platforms to basic devices, they’re turning $15 cell phones into invaluable lifelines.

Editor’s note: For more information on the connection, check out A Medical Lab in the Palm of Your Hand, A Dose of Cell Phone Surveillance Helps Aid Workers Save Lives, and Paging Dr. Smartphone, to name a few.

Women farmers in Africa produce over 60 percent of all food crops. CIMMYT (flickr)

Women comprise 43 percent of the world’s farmers. In Africa, it’s 80 percent. Women plant, harvest, process and sell their crops, but men continue to dominate agricultural science and research. This may be about to change.

African Women in Agricultural Research and Development (AWARD) is trying to close the R&D gender gap. Their program fast-tracks female science careers in agriculture, empowering them to contribute more effectively to hunger and poverty alleviation in their own communities - a model that could be replicated internationally.

Although African women produce 60 to 80 percent of food crops, they receive significantly less (5% as of 2008) of the agricultural training and tools available to men, says the United Nations. A 2010-2011 research report by the United Nations Food and Agriculture Organization shows that women could produce 20-30 percent more if they had equal access. This creates a subsequent increase in household income, health, and community food supply. The East Africa Report emphasizes that research is also pivotal in fostering innovation. Without a seat at the table, women cannot influence practices. Who better to innovate than the farmers themselves?

Much needed food aid being distributed in Sukkur, Pakistan. Photo: Rob Holden, UK Department for International Development (Flickr)

Malnutrition, which prevents children from reaching their physical and intellectual potential, is falling. The most significant cause? It's becoming a politically important issue in its own right.

Today, 925 million people do not have enough to eat. About 98 percent of those people live in developing countries and 60 percent are women. In sub-Saharan Africa, one third of all child deaths are caused by hunger.

But these rates are lower than they have been in the past. In Brazil and Peru, malnourishment in some regions has been nearly eradicated. A likely cause for these improvements is economic development: as economies grow, people should have more money for food.

But a recent study found no such correlation in many parts of the world. In Peru, a mining boom occurred that boosted the incomes of certain regions. But these regions were not those that saw the most dramatic drop in malnutrition rates. In Southeast Asia, where economies have been growing rapidly, hunger rates have not seen a corresponding drop. As the World Bank’s chief economist for South Asia describes it, "For a region that's clocked something like 6 percent growth on average over the past decade, the statistics on malnutrition are just truly astonishing and unacceptable.”

Growth hasn’t exactly led to glut for much of the developing world. But many regions have seen a sharp decline in hunger rates.

Children in Haiti waiting for food and school supplies to be distributed. Photo: UN Photo/Marco Dormino (flickr)

What caused the plummet? Proactive politicians. Increasingly, politicians are seeing tackling malnutrition as a means of getting elected. The humanitarian news and analysis service IRIN reports that malnutrition has been a neglected issue in the politics of many developing countries. One researcher from the Institute for Development Studies recalls being told by Indian journalists that hunger was a difficult issue to get past editors “because it’s not an election issue.” Looking at the figures for global poverty, it is easy to note that the world’s poorest tend to be the most politically neglected. This may be changing.

The study attributes this attitude shift to civil society networks that are getting better at lobbying governments, and to governments that are themselves becoming more responsive amid democratization of the developing world. According to the World Health Organization, “disparities in health outcomes between the poor and the rich are increasingly attracting attention from researchers and policy-makers, thereby fostering a substantial growth in the literature on health equity.” More attention has led to more action in many parts of the world.

Former Peruvian president Alan Garcia was elected on his “5x5x5” campaign, which pledged to reduce malnutrition for children under age 5 by 5 percent in 5 years. After his election proved it to be a popular issue, he raised the figure to 9 percent.

Some leaders learn the hard way that hunger is something to be taken seriously. In Niger, former president Mamadou Tandja all but banned the subject of hunger from the press. A growing hunger crisis led to his ouster in a military coup. Knowing that its power rested on a promise to provide food, the interim government acted quickly to coordinate relief efforts.

For most countries that have reduced malnutrition, success came after national governments began coordinating and implementing broad anti-poverty campaigns. In Malawi, the federal government began coordinating its own programs with those of non-profits operating in the country to increase efficiency and monitor what worked and what didn’t. Cash transfer programs that were established to incentivize behavior in the community best pulled people out of poverty. While international groups have been doing good work in Malawi for quite some time, it was the government’s engagement of the issue that proved crucial to increasing efficiency and providing real results. “The government’s remarkable engagement and leadership on fighting hunger and undernutrition cannot be overstated,” according to reports from Tripode Proyectos, the research group that conducted the study.

So malnutrition is being elevated in importance around the world. But it is still a huge problem. In Asia, Latin America, and Africa, despite recent improvements, malnutrition remains a leading cause of death for children. As many developing countries head for economic growth, this study should remind us that bigger GDP does not always mean healthier people. But prosperity should mean more money and resources to fight hunger, and politicians are learning that healthy voters are more likely to be happy voters.

According to one Peruvian governor, “In the past, politicians didn’t care about issues like nutrition, because children don’t vote. But now they have realized that their mothers do.”

Ben Osborn is a 2011 graduate of Lewis & Clark College in Portland, Oregon. Read his other contributions to Global Envision.

While corn is not native to Malawi, it has become the country's staple crop. Photo: Nathan Laurell (flickr)

Teach a man to fish and you feed him for life; if you give a family seeds, do you feed them forever?

For decades, the people of Malawi have lived with chronic food shortages, prompting massive food aid interventions. But these unending handouts of foreign-grown food are unsustainable, so how can one of the poorest countries in the world enable its population to produce the food they require? One answer is to give the Malawian people the tools to grow it themselves.

A scorching drought ruined the 2005 Malawi growing season. Compounded with an economy that didn’t allow many to plant in the first place, this left the people hungry, reported the New York Times. Five million Malawians, almost 40 percent of the population, required emergency food aid -- the proverbial fish handout. At the time, World Bank policy was to promote cash crops and exports. This incentivized farmers to grow crops for use outside of the country, that would in turn allow they to buy food. But after more than a decade of implementation the strategy had yet to pay off, the Times notes.

After the food crisis in 2005, something changed. Newly elected President Bingu wa Mutharika defied the decades-old advice from the World Bank. Instead of encouraging cash crops, the government started subsidizing fertilizer and maize seeds for the poorest of the poor. At the time, the national poverty rate was at 53 percent, so this was a huge undertaking. This move defied the conventional wisdom of the West and the World Bank and carried a sizable risk of alienation and failure, reports the Times.

Despite these challenges, the government of Malawi distributed millions of coupons for two 50-kilogram bags of fertilizer -- enough to treat an acre -- and seeds to fill half that space. These coupons allowed the holders to purchase fertilizer and seed at a fraction of the retail cost. With such small allowances the program was targeting subsistence or small-scale farmer, who likely only owned a few acres, this giving the common people of Malawi the tools to support themselves.

The crops and fertilizer, when combined with the abundant rainfall of 2006, completely transformed the barren landscape. Maize production more than doubled that year, from 1.2 million metric tons to 2.7. By 2007, production was up to 3.4 million and instead of importing food aid, Malawi became the largest exporter of corn in Southern Africa to the World Food Program.

However this success has come at a cost. Between 2008 and 2009, the government of Malawi dedicated a full 16 percent of the national budget for seed and fertilizer subsidies. This strain prevented other projects, such as irrigation systems, from getting off the ground. And some question the sustainability of the subsidies. Elizabeth Sibale, a consultant at the UN Food and Agriculture Organization in Malawi, commented that “[Malawi is] forgetting all the other problems that affect farmers and putting a Band-Aid on them."

It has been a full six years since the initiation of the subsidy program and it's harvest time again in Malawi. But even as the corn is harvested and processed, the Malawian government is debating the future of the subsidies. The program officially ends in June and while the program has been successful at raising corn production and lowering poverty levels, the true cost of the subsidies has been steep.

So the question remains: Are fertilizer subsidies teaching families to fish, or are they just handouts wrapped in a new package? The answer seems to be somewhere in between. Ensuring access to seeds and fertilizer is an important step in reducing poverty, but it is only one step. In 2004, about 60 percent of Malawi's population was impoverished. Today the poverty rate has fallen to 40 percent. These numbers seem to suggest that the idea is working, but the remaining poverty level demonstrates that it’s not enough.

How many times have you seen a picture of a rural African farmer dressed in his Sunday best? Probably not very many.

In an ongoing project called Perspectives of Poverty, Canadian Duncan McNicholl is taking photos of people he meets while working on water and sanitation projects in Malawi to illustrate how photographs can be manipulated to convey different messages.

His latest model is a young girl named Gertrude, who's maybe five or six years old . The mood of the first photo is dreary. Gertrude is looking up at the camera with big, sad eyes and a despondent expression. Her yellow dress is slipping off her small shoulders. Little bits of cereal are stuck to her hand and lips, and she seems to be caught in the act of eating.

In contrast, the second photo is sunny and well lit. Gertrude is hamming it up for the camera with a big grin and mischievous eyes. She’s wearing the same yellow dress, but this time it doesn’t look shabby. A thatched hut in the background is the only clue that this girl lives in poverty. You certainly wouldn’t be able to tell from her smile.

McNicholl started the project because he didn't think the "poverty" photos used by some charities accurately reflected the lives of the friends he had made in Malawi, he explains in his blog.

I thought that these images were robbing people of their dignity, and I felt that the rest of the story should be told as well … I want to bring to light some of the different assumptions we make about a person, especially when we see an image of “poverty” from rural Africa.

Malawi's economy has deep roots in the small family farms that pepper its landscape. But farmers often can't earn enough from cash crops like tobacco, sugarcane, peanuts and tea.

The Clinton Hunter Development Initiative (CHDI) hoped to change this when they started working with rural Malawian farmers in 2006. As they explain on their website, they encouraged the farmers to grow soy instead of peanuts, which is more nutritious, gets better yields, and is easier to grow.

In one particularly impoverished district, CHDI also worked with a group of local farmers to build a large commercial soy farm. Collectively, the farmers could get a better deal by buying in bulk, which drove down the price of seeds, fertilizer and irrigation tools. CHDI also used the farm as an informal classroom, showing locals how the different cultivation techniques were used.

After only two full years in the country, CHDI reports that for many farmers, harvests have more than doubled under the new system, with income not far behind. One of these farmers shares her story in the video below.

In a country as poor as Malawi, where an estimated 53 percent of the population lives on less than $1.25 a day, that extra income provides farmers with many opportunities that had previously been out of reach.

A photo of what is believed to be William Kamkwamba's first windmill. Photo: whiteafrican (flickr)

When I was fourteen, I was busy going to drama rehearsals, shopping at the mall and fighting with my brother. But when William Kamkwamba was fourteen, he built a windmill to bring electricity to his rural village in Malawi by studying pictures in a library text book and using whatever materials he could find.

Watch this video, from Yes! Magazine, for his truly inspiring story:

You can follow William's current projects on his blog and and support his work in Malawi by donating here.

Plumpy’nut is frequently used by humanitarian agencies in emergency malnutrition situations. Photo: Thatcher Cook for Mercy Corps

Humanitarian agencies have long been using protein and energy bars filled with nutrients and vitamins when responding to food emergencies. Though these "ready-to-use foods" are seen everywhere on grocery shelves in the West, they're often viewed as lifesavers when food crises strike the developing world.

BBC News recently highlighted the efforts of two British doctors, Steve Collins and Alistair Hallam, who saw the great results these easily accessible foods can have on malnourished populations. The doctors have taken the idea of ready-to-use foods even further with their company, Valid Nutrition, which manufactures foods supplemented with important nutrients found in meat and vegetables — foods most Africans can’t afford. While majority of emergency food packets contain high sugar concentrations and supplements that help in emergency relief areas, Valid Nutrition's products contain nutrients that are important in a person's daily diet and are sold at an affordable price. The company has opened manufacturing factories in various African countries, creating jobs for locals and helping the economy by using local crops.

Instead of only using these foods during emergency relief situations, the doctors want to help treat severe acute malnutrition, where a person's weight for height measurement is 70 percent below the median range due to food shortage and/or illness, according to the World Health Organization.

"The idea is to target people suffering from a less acute, but more widespread form of malnutrition that affects a staggering two billion people worldwide," reports BBC News.

Fortification of food for the developing world is not a new idea. Other companies such as Global Alliance for Improved Nutrition, a Swiss nonprofit, has programs in various developing countries providing food for the poor. In fact, Gain is trying to put more market pressure on firms to “develop new, affordable nutritious foods by convincing business it is missing a vast untapped market.”

A ventor illegally sells bags of charcoal on the side of the road. Photo: Scott Gregory Photography (flickr)

Charcoal is Malawi's cheapest energy source, but local dependency on charcoal fuel is stripping the country's forests. The charcoal trade is illegal in Malawi, and now government and environmental groups are scrambling to find affordable forms of alternative energy for heating and cooking.

A shift away from charcoal seems implausible for many residents of the tiny southeast African country, where electricity and other energy options are much more expensive. Voice of America reports that Malawians, who earn an average of $19 a month, would have to fork out $30 for a new electric hot plate, where a locally made charcoal stove costs only $2.

Environmentalists say the charcoal trade is responsible for the loss of 50,000 hectares of native forests — the highest deforestation rate in Southeastern Africa.

Police roadblocks have failed to significantly impede charcoal trafficking. Malawi charcoal producer John Manda told VOA why he continues to ignore the charcoal ban:

I have been burning charcoal for 20 years. This is where my bread and butter come from; this is where I get money to pay school fees for my children. Although I know that it is not legal, there is no way I can stop without government giving me an alternative business.

Charcoal is one of the few industries in Malawi that benefits the poor, economist Patrick Kambewa told IRIN. In 2007, Kambewa published a report on charcoal consumption, trade and production which estimated that around 93,000 people depend on the charcoal industry for employment. (Malawi has a population of over 10 million.) Kambewa suggests that industry regulation — not criminalization — is a wiser way to address charcoal consumption.

"[Criminalizing the charcoal trade] has not helped matters, and all government ought to do is look into issues of taxation and rehabilitation of forests," said Kambewa. "People should be trained on how to manage forests at community level. They should be told about the importance of reforestation and the need to manage such resources.

Malawi is trying to wean itself off charcoal. The locally-based Wildlife and Environmental Society is training people in other profitable vocations like beekeeping and fruit juice production. Meanwhile, the government, with assistance from the European Union, has launched a six-year program that promotes sustainable forest management. The program will also push for expanding use of wind and solar energy. But VOA says people are skeptical that these efforts will fail to reduce the temptation of the lucrative charcoal trade.

In refugee camps in Sudan and the Congo, Mercy Corps trained locals to build and use fuel-efficient stoves, reducing the demand for firewood and ultimately cutting consumption by 50 percent.

"If you've ever smoked a major-brand cigarette, the chances are you've smoked Malawian tobacco," says the BBC. "Virtually every western cigarette uses a bit of the produce from this small southern African nation in its blend."

The battle between cigarette companies and anti-tobacco campaigns poses a challenge for Malawi, one of the poorest nations in the world. In Malawi, tobacco production contributes to 10 percent of GDP and is the second-largest employer in the country.

Proponents of tobacco production argue that tobacco is a crop of choice for farmers because it is easy to grow on marginal soils that yield little else, and earns about seven times more than maize and 22 times more than cotton. In Malawi, revenues from tobacco production are generated from a mere 2 percent of the country’s arable land.

Critics of tobacco production argue that the wealth generated by this resource is not spread evenly across the country. With the price of tobacco constantly fluctuating, those hardest hit are small farmers who are often forced to sell their produce at a loss when tobacco prices fall below market value. According to The Malawi Tobacco Control Commission (TCC), a local government watchdog, it takes US$1 for farm workers to produce a kilogram of tobacco, but that kilo is sold for only US$0.70. As a result, farmers on the big tobacco estates become bonded laborers, forcing whole families to work and repay the landlord. One study found Malawi's tobacco industry employs 78,000 children.

What's not in dispute is that Malawi's tobacco industry is struggling. The government is starting to push alternatives. One is farming mushrooms, where there is already a"brisk local market" — and a potential to meet unmet global demand.

On the tobacco auction floor. Photo: joellaflickr (flickr)

Today allAfrica revealed how increased funding to the UN's Rural Livelihoods and Economic Enhancement Program will teach Malawi's farmers how to benefit from increased market competition in the agricultural sector.

The program seeks to encourage production based on market needs rather than traditional small scale subsistence needs.