Markets in Human Hope (MHH) arose out
of our desire to develop solutions for some curious puzzles that
separate business from social issues in emerging economies as well as
advance economies. For example:
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Why is
it that we invest in for-profit ventures, but donate to nonprofits,
often in the same industry such as health insurance or education?
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Why
can’t we buy shares in Transparency International and sell it in open
markets when we need our money back?
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Why is
it profitable to invest in cures for diseases but not in cures for
poverty or illiteracy?
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For
most ventures, is profit the objective or a constraint? Which should it
be?
Markets in Human Hope seeks to build on innovations that use
business and markets as viable tools in transforming societies.
THIS IS A YEAR-LONG GROUP INCUBATOR
COURSE.
IN 2013-2014, WE WILL MEET IN Q1 EARLY
WEEK 4:30-5:55pm. IN Q2 AND Q3 WE WILL MEET ON AN AD HOC
ONE-ON-ONE BASIS
(roughly every other week, at mutually convenient times). IN Q4 THE PROFESSORS ARE AVAILABLE FOR
CONSULTATION, BUT THERE ARE NO FORMAL CLASS MEETINGS.
In the year-long MHH 'Group Incubator'
course ( the old 2012-13 syllabus), co-led by
Saras
Sarasvathy,
Veronica
Cacdac Warnock and Frank Warnock, students
seek to build audacious innovations that use business and markets as
viable tools in promoting human development and transforming societies.
The challenge that we take on is to create products, services, business
methods, organizational forms, financial instruments or market-based
mechanisms that address some of the pressing issues in economic
development and social well-being, especially those that demand
structural changes.
Potential projects include
investigating the feasibility of constructing financial markets for
firms in the social sector; employing best practices such as credit
scoring systems that facilitate and expand lending in the microfinance
sector; designing and developing new metrics, new financial instruments,
new industry standards and new organizational forms; and studying how to
leverage, scale up and grow entrepreneurial drivers of new markets in
the social sector.
The MHH RESEARCH agenda is aimed at
creating or enabling MHH projects. For example, one goal is to create financial markets where they currently do
not exist. Related to that goal, MHH research can be on products and
institutional infrastructure that enable markets such as mortgage and
other types of debt and equity markets in developing countries, stock
exchanges in the social sector, futures markets in economic development,
innovative funding instruments for disaster relief and human rights
issues, and angel and venture capital markets in the citizen sector. The
markets will in a financially sustainable way fund entrepreneurial initiatives in a
variety of industries and sectors that will
redefine the business landscape.
MHH Research Projects
Video on MHH
See Batten Bulletin
article
on Saras' work. And
www.effectuation.org.
Mobile Banking
for the Underbanked in Pakistan and Bangladesh
This project with
ShoreBank International, Gates
Foundation, bKash, and
UBL Omni seeks to expand
mobile banking services to the underserved. See also
http://bankingbeyondbranches.com/.
Scoring the Unscored: Credit Scoring for Housing Micro Lenders
While
Markets and Housing Finance
concentrated on mortgage markets (that is, collateralized home loans), a
large portion of the world's population cannot access such a loan.
Instead, they are served by housing micro lenders (HMLs) who specialize
in smaller, non-collateralized home loans. Can HMLs be profitable and
sustainable? In this current project
Veronica Cacdac Warnock and Frank Warnock are
partnering with
Development Innovations Group,
FinMark Trust, and many
lenders and government entities in South Africa to explore whether a
non-standard credit scoring system can improve the risk assessment (and,
by extension, profitability) of housing micro lenders.
Short Description
of Project:
Why Credit Scoring for Housing Micro Lenders? in
Access Housing
2007 No. 7 pgs. 6-7 (FinMark
Trust).
The State of Financial Development
Around the World
Warnock, V., and F. Warnock, 2008.
Markets and Housing Finance.
Journal of Housing Economics 17: 239-251. This study of mortgage markets in 62 countries highlights the important
role of (among other things) deep credit information systems in the
development of housing finance systems. An update is our 2012
Developing Housing Finance
Systems, written for the Reserve Bank of Australia and Bank for
International Settlements.
Burger, J., and F.
Warnock, 2006.
Local Currency
Bond Markets.
IMF Staff Papers
53: 115-132. Featured in the
IFC Sustainable
Investor and
Interest Bearing Notes. This study of bond markets in over 40 countries show that there is no
quick way to develop a deep bond market. It takes a commitment to stable
macroeconomic policies and an adherence to the rule of law (and laws
that protect creditors, in particular). An update is Burger, J., F.
Warnock, and V. Warnock, 2012.
Emerging local currency
bond markets. Financial Analysts Journal 68(4): 73-93.
Enabling the Development of
Housing Finance Systems in Latin America:
Housing Finance in Latin America and the Caribbean: What is holding
it back?
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