One thing that isn’t necessarily required: a smartphone. While the narrative from U.S. tech giants like Google and Facebook implies that economic development comes from directly connecting people to the internet, billions of people can’t afford smartphones, and many might never get them. Innovators must think around that barrier. The global poor often pay more per unit for what they consume, be it energy, consumer goods or bandwidth, precisely because they can’t afford to buy these things in the volumes that wealthier people do. They also appear to be credit risks, because they’re short on assets. “When microfinance appeared a few years ago, the big innovation was to be able to offer a loan to a person who had no credit history,” says Xavier Faz, head of business model innovation at the Consultative Group to Assist the Poor, part of the World Bank. Now, there is “a very wide variety of lending models which leverage alternative information to assess risk,” he says.These services are still nascent, reaching tens of thousands of households out of a potential market of hundreds of millions. And as rich countries have discovered, connecting everyone has its downsides, as the networks that underlie communications and finance create new vulnerabilities for nations and individuals. But it’s also true that using the internet to access basic services can significantly boost the fortunes of the world’s poorest people.Weather data from satellites can be used to trigger claims instantly. “When a customer becomes eligible for a claim because a drought situation has been detected, we send them an SMS or voice message alert,” says Mr. Sheehan. “Then we transfer the funds directly to their mobile wallet, so they can immediately cash-out or use the funds for relief.” Because M-Pesa was born on feature phones, citizens of many countries in Africa can access mobile wallets without a smartphone. And those who lack even a feature phone can get payouts in cash directly from WorldCover. WorldCover raises money from institutional investors who are used to “catastrophe bond” returns of 5% to 7%. It charges farmers enough to get an additional margin on top of that. Eventually, WorldCover hopes to have its portfolio underwritten not only by institutional investors but also by retail investors. It’s a model similar to LendingClub . Because WorldCover is taking money from investors, it’s passing on the risk of a big drought hitting its entire portfolio to those investors, who in theory are happy to take on the risk as long as it’s part of a larger diversified portfolio.Rukula charges 40% interest on a six-month loan. This might sound usurious, but it’s typical for microloans, which have relatively higher service costs than loans available in rich countries. The firm doesn’t take collateral, and it caps the interest: A customer will never pay more than $140 back for a $100 loan, no matter how long that takes. On average, loans are paid back in 15 months, and 95% of the company’s loans have been paid off by the two-year mark. The company turned a profit within two years.