MPESO: Democratizing Finance in Nicaragua

by: Rodrigo Cuestas, Julian Chernyk

Publication Date: April 3, 2015
Length: 20 pages
Product ID#: 1-429-424

Core Disciplines: Base of the Pyramid, Entrepreneurship & Innovation, Social Impact, Sustainability

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Teaching Note

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First-place winner of the 2015 Next Billion competition. Haroldo Montealegre, CEO of MPESO, a mobile money social enterprise based in Managua, Nicaragua, founded his company as a means of extending financial services to the unbanked and underbanked citizens of the country. He is wondering if he should expand MPESO’s array of financial services for Nicaraguans or to scale his bus fare card (which replaces Managua’s cash-only system for most buses) to other countries. The bus fare product has enabled MPESO to cover its high fixed and variable costs in Nicaragua and scaling the bus fare model to other countries will allow the company to grow its profits. He has to decide if the benefits of scaling operations to new countries are worth delaying or compromising his mission at home.

Teaching Objectives

After reading and discussing the material, students should:

  • Discuss the difficulties and impediments of doing business in developing country climates.
  • Explore the challenges of upsetting the status quo.
  • Understand how mobile money works.
  • Analyze how to balance the need for financial sustainability with the social mission of MPESO, and identify if MPESO deserves to be called a social enterprise.
  • Recognize the mission drift that financial returns and sustainability can cause.