As fresh graduates of the Massachusetts Institute of Technology’s Sloan School of Management in Cambridge, Mass., R. Blaize Wallace and Mustafa Khalifeh could have taken highly lucrative positions in the business world.
Instead, they are launching a start-up from a few spare desks at Jordan’s Oasis500 accelerator. Their idea, which won the $50,000 grand prize in social enterprise at Harvard Business School’s New Ventures competition this spring, aims to help low-income citizens save up for large purchases – such as a washing machine, which could free up women’s time and thus advance opportunities for women in the developing world.
So why Jordan? Well, it is Mr. Khalifeh’s home country, where he helped found three companies before going to Sloan, but he also made a convincing sales pitch to Mr. Wallace and their two other partners, Hoda Eydgahi and Manoah Koletty. Living expenses are relatively cheap, there’s a high concentration of talent and a burgeoning entrepreneurial community, and Jordan is small enough to test new ideas; the mobile giant Zain also launches its pilot projects here.
“The entrepreneurial environment here was a huge part of why we came,” says Wallace, a lanky Californian who previously worked in venture capital in Brazil and for a start-up in San Francisco. “We could have started in a dozen countries.”
In 2011, the Middle East had less access to financial services than sub-Saharan Africa, he says, making it a ripe market for their company, called Bluelight.
For the most part, banks in Jordan have minimum balance requirements that are beyond the means of low-income people. Credit-card penetration is around 2 to 3 percent, and while informal savings initiatives exist, there are perpetual problems with someone running off with the collective pot of money, while fees for more official savings programs can be as high as 30 percent. Those who manage to stuff a bit of cash under their mattresses the old-fashioned way often get asked by friends or family to help out and feel badly saying no.
The “save-to-buy” service, which will enter a second pilot phase later this month, enables clients to create an online account via microfinance institutions, and then add as little or as much to the account at a time via a wide network of locations in Jordan that accept cash deposits. They also have the option of signing up for an account for a specific vendor, giving them access to bonus savings from their favorite appliance or electronics store, for example.
In addition to winning big prizes at both Harvard and MIT, the idea has also captured the attention of potential users. One woman from a low-income neighborhood in east Amman who participated in a focus group said it sounded too good to be true. Then the moderator told her that in fact there is an actual company getting ready to launch.
Khalifeh says there is a specific focus on women, both to help them better manage household finances and free up their time – and opportunities.
“It’s a universal fact by now that they’re the responsible ones in the household,” he says. “We also see this as a women empowerment tool.”