NextBillion - An Initiative of the William Davidson Institute at the University of Michigan

Thursday, September 6, 2012

A little-noticed outcome of the microfinance movement has been the proliferation of rural sales networks in developing countries, where poor women earn an income by selling products door-to-door. Usually billed as entrepreneurship, these systems are typically assembled by outside parties such as banks offering microloans or social entrepreneurs selling products deemed prosocial, such as solar lanterns.

Lately, however, large global corporations such as Coca-Cola have stepped into the arena, loudly assuming the task of empowering women, while at the same time quietly extending their own reach into untouched markets. (Yes, there are still places in the world where you can’t get a Coke.)

The involvement of multinationals in rural sales networks has elicited a familiar barrage of criticisms. Consider some from a recent Oxford debate: multinationals exploit poverty as a business opportunity, marketing wasteful goods to people who can’t afford them. Or, rural sales networks are a smokescreen providing companies with an army of cheap labour. Or, global business is like Pac Man, gobbling up local vendors across rural Asia and Africa through door-to-door sales. We could go on. But the basic argument is this: corporations are evil and their products corrupt the poor; NGOs and governments are the right actors to fight poverty.