NextBillion - A WDI Publication

Strengthen the ’bottom of the pyramid’

By Anand Kumar Jaiswal The bottom of the pyramid (BOP) has become one of the dominant ideas of discussion among practising managers, academicians and policymakers. Prof. C. K. Prahalad and other proponents of BOP argue that, instead of disregarding low-income consumers as inaccessible and unprofitable, multinational corporations (MNCs) should view them as an unexploited business opportunity. Moreover, through this, MNCs can help improve the living conditions of the world?s po...

Source

The Hindu Business Line (link opens in a new window)

The fatal cost of illness in Africa

When friends carried Jennifer Uduma, bleeding from a gunshot wound to the head, to a government hospital in Lagos, staff turned her away because she could not afford to pay. She ended up at the private R-Jolad clinic in the gritty Gbagada neighbourhood, where doctors removed the bullet without asking for cash up front. Two years later, she returned to give birth to a baby girl. R-Jolad saved my life, says Ms Uduma, a 24-year-old student, nursing her day-old d...

Source

Financial Times (link opens in a new window)

Region

Sub-Saharan Africa

Excavating Prahalad?s pyramid

Profitable Business Models and Market Creation in the Context of Deep Poverty: A Strategic View, by Christian Seelos and Johanna Mair, IESE, published in Academy of Management Perspectives, November 2007. It?s vast, it?s untapped and it could just be what fuels 21st century market growth. But it will require a radical rethink of exi...

Source

Ethical Corporation (link opens in a new window)

Fortuitous pairing has been life-transforming

The concept of microfinance - small loans to the entrepreneurial poor - is not a new one on US business school campuses. Indeed, as they expand their globally minded curricula, many business schools have devoted more time and money, and sometimes even entire courses, to the subject. Other schools have gone a step further: the UCLA Anderson School of Management in California helps young female entrepreneurs in Kenya transform their poverty-stricken lives by starting homegrown busine...

Source

Financial Times (link opens in a new window)

Region

Sub-Saharan Africa

Online Extra: Microlending: It’s No Cure-all

The initial public offering in April that earned $467 million for the owners of a Mexican lender to the poor, Banco Compartamos (BMOSF), provoked a passionate protest from nonprofit traditionalists around the world. Veteran development experts have argued for years that commercialized microlending inevitably means favoring investors ahead of vulnerable borrowers. They’re money lenders. They’re not microcredit, says Muh...

Source

BusinessWeek (link opens in a new window)

Online Extra: Yunus Blasts Compartamos

Muhammad Yunus , who won the Nobel Peace Prize in 2006 for his pioneering work in extending credit to the working poor in Bangladesh, is aghast at the business strategies employed by a onetime charitable microlender that has become Mexico’s most profitable bank, Banco Compartamos (BMOSF). They’re absolutely on the wrong track, says Yunu...

Source

BusinessWeek (link opens in a new window)

Compartamos: From Nonprofit to Profit

Banco Compartamos portrays itself as the gentler lender to Mexico’s poor. Compartamos means let’s share, reflecting the philosophy of its founder, Jos? Ignacio Avalos Hern?ndez. The scion of a cosmetics business family, Avalos, 48, is a devout Catholic who in 1990 converted a nonprofit donating food and clothing to the deprived into one that made loans guaranteed by borrowers’ neighbors. Clients, mostly women, gather weekly in groups of 12 or more. They can bor...

Source

BusinessWeek (link opens in a new window)

Wal-Mart Banks on the ’Unbanked’

Every day 2.5 million people walk through the doors of a Wal-Mart (WMT) store in Mexico, generating nearly $20 billion in sales last year. Now they are potential customers of Banco Wal-Mart, the chain’s new lending operation. So are the company’s 12,000 Mexican suppliers, as well as its 155,000 employees. We want to leverage this traffic we have in our stores, says Julio B. G?mez, Banco Wal-Mart’s chief executive. As in the U.S., Wal-Mart is Mexico’s larges...

Source

BusinessWeek (link opens in a new window)