Business and Poverty: Opening Markets to the Poor

Business Fights Poverty


How can the private sector help transform the lives of the poor?

Can poor producers and consumers in turn transform business models and shape new opportunities for companies?

These are two of the key questions addressed in the forthcoming issue of the World Bank’s flagship publication Development Outreach, which examines the realities of private sector operations at the base of the pyramid and the potential risks and benefits for local development.

This special issue of Development Outreach will include an editorial on business and poverty and full articles from the list of abstracts below.

Subscribe to receive a copy of the magazine.

For more information, contact Michael Jarvis, a member of Business Fights Poverty.

Come and hear more about the publication, and meet Djordjija Petkoski, Program Leader, World Bank Institute, World Bank Group at an event in London on June 18.

The Next 4 Billion: Characterizing BOP Markets

Allen Hammond, Vice President for Innovation and Special Projects, World Resources Institute; William J. Kramer, Robert S. Katz, Julia Tran, and Courtland Walker

Four billion low-income consumers, a majority of the world’s population, constitute the base of the economic pyramid. New empirical measures of their aggregate purchasing power and behavior as consumers suggest significant opportunities for market-based approaches to better meet their needs, increase their productivity and incomes, and empower their entry into the formal economy. This article is based on The Next 4 Billion report which utilizes income data from 110 countries and standardized expenditure data from 36 countries across the globe and offers a new and compelling perspective on low-income communities worldwide. The report was an International Finance Corporation/World Resources Institute joint publication.

Nestle’s Milk District Model

Niels Christiansen, Director of Public Affairs, Nestle S.A.

Investing in the base of the pyramid is not only about providing products and services to the poor, but also involving them in the process of wealth creation. Nestle’s successful milk district model achieves a balance between meeting the needs of the poor, fostering local economic growth, and expanding Nestle’s own business model. By engaging local partners as suppliers and providing them with more than just steady cash flow, the milk district model shows that an inclusive business approach can have a host of positive impacts. Through safety and regulatory training, education and the creation of long-term employment opportunities with reliable wages, Nestle has gone beyond providing a quality product. This article discusses the deeper implications of the initiative as well as its scalability to other sectors.

The Shakti Revolution—How the world’s largest home-to-home operation is changing lives and stimulating economic activity in rural India

Gavin Neath, Senior Vice-President, Corporate Responsibility, Unilever
Vijay Sharma, Head, Shakti, Hindustan Unilever

Project Shakti, a micro-enterprise initiative in which Unilever built a network of women entrepreneurs to run a direct-to-consumer retail operation selling affordable products door-to-door, has been both a catalyst for rural wealth creation and a successful business operation. Working creatively within rural India’s existing institutional framework, Project Shakti has overcome such challenges as poor transportation links and lack of distribution networks to reach low-income consumers in around three million homes. Unilever’s experience highlights what can be done by a multinational firm in meeting both business and social objectives. Their challenge now is to co-create a multi-sectoral partnership that leverages the Shakti network to provide more social benefits and meet other consumer needs.

Social Issue-Oriented BOP Business and Japanese Companies

Mari Kogiso, Tokyo Representative, MIGA, World Bank Group, Mia Matsuo and Tokutaro Hiramoto, Social Innovation Foresight Team, Nomura Research Institute Ltd. Tokyo

In a new venture producing chemically treated mosquito nets for Africa, Sumimoto found that by engaging local companies in the manufacturing process they could capitalize on a business opportunity while providing essential malaria prevention to a larger market. Creating local jobs and reinvesting profits into local production bases increased local production capacity and employment, and increased distribution of nets.

Lighting Africa with modern off-grid lighting

Katia Theriault, Communications Specialist and Lindsay Madeira, Project Officer, International Finance Corporation

The World Bank Group’s Lighting Africa program was launched September 7, 2007, to mobilize support from the global lighting industry to reach over 250 million Sub-Saharan Africans with affordable, modern, off-grid lighting services by 2030. While the private sector can play an important role in providing African consumers with viable lighting options, a number of barriers prevent potential investors from entering this emergent market. By acting as a facilitator between public, private, and civil organizations, the World Bank Group is supporting industry efforts to transform and accelerate the off-grid lighting market, and extend benefits to those living in poverty. This article describes the program’s innovative initiatives to engage the private sector in the Sub-Saharan Africa off-grid lighting market by building a consortium of local and global businesses and mobilizing the international community.

Developing the Local Supply Chain for the Contract of the Century!

Ibrahim Ismayilov and Samir Taghiyev, BP, Olga Godunova and Farzin Mirmotahari, International Finance Corporation

This article summarizes an excellent example of an MNC, BP, leveraging the role of an international financial institution, IFC, in a successful partnership to build capacity and engage local businesses. By providing access to finance, technical advice, and resource centers, BP and IFC have helped develop linkages between Azerbaijani SMEs and the global oil and gas and industry, allowing them to better compete in the global marketplace and ensuring that small businesses can participate and benefit from the growth of the industry in Azerbaijan.

Patrimonio Hoy: Low-income Housing that Improves Quality of Life

Israel Moreno Barcelo, Founder and General Manager of Patrimonio Hoy for CEMEX in Mexico

With Patrimonio Hoy, CEMEX’s progressive housing program for low income communities, the company took a proactive approach to doing business with the poor. To address the need for improved access to affordable quality housing materials and construction, Patrimonio Hoy provides a range of specialized services to low income communities, such as free technical advice, micro-financing and guaranteed prices for basic materials, and the possibility to buy materials for construction over time. By obtaining knowledge and gaining a better understanding of how the low income segment functions, CEMEX found ways to offer products and services to fit the specific needs of the poor, thus contributing to a better quality of life.

ZMQ Enabling Bottom-up Development

Subhi Quraishi, CEO, ZMQ Software Systems

ZMQ Software Systems has shown that even a small to medium sized local company can make great contributions to social development, by combining philanthropic efforts with their core competencies to tackle the digital divide. The innovative software solution provider has dedicated 12% of its profits for developing socially relevant technology solutions in the form of information and communication technology (ICT) learning, training, and edutainment solutions to address issues and needs re education, health, skill development, micro-finance and the environment. ZMQ is building on the lessons from its projects in South Asia as it expands its operations targeting social benefits to Africa.

Business and Malnutrition – Opportunities and Challenges for the Food Industry to Address the Poor

Marc Van Ameringen, Executive Director, Global Alliance for Improved Nutrition (GAIN), Berangère Magarinos, Senior Manager, GAIN and Michael Jarvis, Private Sector Development Specialist, World Bank Institute

Malnutrition remains a scourge impacting millions worldwide and yet there are cost effective solutions available and an emerging business case for corporate action. Food dominates expenditures among those living in poverty. GAIN, a foundation committed to eliminating malnutrition, is working with industry and partners such as the World Bank Institute to explore the space between philanthropy and strategic private sector interests. New business models are being tested by both multinational and local firms that help to make foods, fortified with necessary vitamins and minerals, available and affordable to the poor.

Bridging Gaps in Reproductive Health Care in Egypt through Private Sector Involvement

Andy Cole, Reporting and Documentation Specialist, Mohamed Afifi, Monitoring, Evaluation and Reporting Team Leader and Reem Salah, Corporate Social Responsibility Specialist, Takamol Project

Takamol is a five year USAID-funded reproductive health project in Egypt that employs an integrated and comprehensive approach to increase the availability and quality of reproductive health services and empower community members to build healthier societies. It emphasizes technical assistance to host country institutions, community mobilization, improved quality of care and sustainability, paying significant attention to developing strong, sustainable win-win partnerships with private entities willing to adopt and support health initiatives, produce long lasting social benefits, and leverage resources to achieve sustainable positive impact.

Improving Health Improves Economic Well-Being—One Company’s Experience

Christy L. Wistar, Vice President, Abbott Fund, Tanzania

This article explores the positive impacts and unexpected challenges of Abbott’s investment in a public private partnership to modernize Tanzania’s health system through its Abbott Fund. In this venture Abbott utilized a uniquely blended approach, investing not only in physical assets such as health facilities, but also in advanced Information Technology and considerable training, thus enhancing staff morale and productivity. Abbott examines both the social and economic benefits of the Tanzanian initiative, and emphasizes the need to better capture and measure the general economic impacts of investing in health systems, and the complexity of this undertaking.

Access to Markets as a Strategy to Address Poverty

Nachiket Mor, President, ICICI Foundation, India and Bindu Ananth, President IFMR Trust, India

This article emphasizes the value of access to financial services for the very poor as the means to leverage economic opportunities, and suggests that such access is best provided through creative partnerships between banks and a network of local financial institutions. Since it is fundamentally rooted in a commercial proposition both for the participating client as well as for the service providers, the promise of scalability in this approach is higher than in traditional grant-led development programs.

Bringing Bangladesh into the Digital Age

DEFTA Partners Group, The Alliance Forum Foundation, and George Hara, Chairman and CEO, DEFTA Partners

In an initiative to reduce poverty in Bangladesh, San Francisco-based DEFTA Partners has led a multi-stakeholder partnership to improve access to information and communication technology (ICT). The partnership represents an innovative business model for economic development, which deploys wireless infrastructure technology and enables low cost broadband communication to extend access for businesses, and enhance health and education services in Bangladesh.

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