Bottom Of Pyramid

Creating wonders at the Bottom of the Pyramid

2010-04-01T21:52:00.000-07:00

The expression “bottom of the pyramid” was coined by C.K. Prahalad and Stuart Hall and refers to the potential market of four billion people in the developing countries living on less than $1,500 per year. They state it as follows:

“The real source of market promise is not the wealthy few in the developing world, or even the emerging middle-income consumers: It is the billions of aspiring poor who are joining the market economy for the first time.”

I found the topic quite interesting and welcomed the opportunity to contribute to a whitepaper on the subject. So after some weeks of discussion and sharing of examples on the platform I was wondering how I could best contribute to the topic. I decided that it could be interesting to look at the shared examples through the business model lens, which I explained in an earlier post (what is a business model). In this blog (which I am writing from Yaoundé, Cameroon) I will simply share an interesting business case for each of the nine business model blocks I usually use to describe a business model. What I learned was that doing business at the bottom of the pyramid is really nothing else than real

There are examples of business model innovations in each building block. The most obvious is innovating in the value proposition. When mobile phones appeared in the market they offered a completely different value proposition than fixed line phones. In developing countries where fixed telecom infrastructure is weak and waiting lists for phone lines unbelievably long, mobile services were destined to thrive. In Nigeria MTN, a South African Telco set up a successful venture to tap into the 130 million person market.

Regarding target customer segments and distribution channels, Arvind Mills Ruf n Tuf Jeans (www.arvindmills.com) is a particularly interesting case. The entrepreneur Arvind Mills saw a niche market in stylish jeans at an affordable price that was not being filled by any company. Target customers are Indians who cannot afford conventional jeans but still wish to purchase them. So Ruf n Tuf offers a jeans kit at $6/pair to local tailors who function as a distribution channel to reach the final local customers. Due to the large scale Arvind Mills manages to make a profit on the low margins per jeans.

Anand Milk Union Limited (www.amul.com) is an interesting case of how a business innovation can change the fortunes of the poor in a developing country like India by integrating local skills and local activities into its business model. India was a country with milk shortfall and imported milk every year in form of milk powder. Then AMUL built up a huge milk industry from scratch together with local farmers. Today India is the world’s largest milk producer and it even exports milk. AMUL products are found on the shelves of Walmart in the USA and many other retail giants in the world.

A nice example of how partnerships can lead to BOP success is the case of GrameenPhone (www.grameenphone.com) in Bangladesh. Its founder, Iqbal Quadir, realized that if a woman could be given a micro-credit to buy a cow and sell milk then the same could be done for phone services. GrameenPhone was born. Supported by the multinational company Telenor he bought a mobile network license and set up a mobile phone network. Then he partnered with Grameen Bank, an established micro-credit institution in Bangladesh who brought in the knowledge on credits and a database of potential customers. The bank started offering women in villages a credit to buy mobile phones, which they used to sell phone calls to the villagers, repay their debts and make a daily living. Grameen Bank expanded its lending and GrameenPhone harvested a network of women reselling phone calls through their network.

Hindustan Lever Limited (www.hll.com) has been able to create new revenue streams by being proactively engaged in rural development in India for nearly 30 years. It set up Project Shakti (www.hllshakti.com) in 2001 with the objective of creating income-generating capabilities for underprivileged rural women, by providing a sustainable micro enterprise opportunity, and improving rural living standards through health and hygiene awareness. With working capital provided by HLL, Shakti women entrepreneurs sell HLL products to their local village. This gives HLL access to large markets that would not otherwise be easily accessible. 70% of the Indian population lives in villages, of which there are around 627,000.

Regarding the cost structures of BOP business models there is often a huge pressure to produce extremely efficiently, because products usually have to be cheap enough for Tier 4 customers. In general BOP cost structures are kept low by selling very large volumes and thus profiting from economies of scale. In addition many of the BOP business models described above make use of affiliation and entrepreneurship to shift parts of the costs to other partners in the business model. GrameenPhone, Arvind Mills and Project Shakti are just three examples of how tapping into local entrepreneurship by promoting micro business ownership can give access to powerful free distribution networks of incredible reach. This could have never been achieved by the companies themselves

Teach India-Right to Education is Light to Education!

2010-04-01T21:26:00.000-07:00

Accelerating progress towards education for all is one of the defining development challenges of the early twenty-first century. In recent context of India, approval of Right to Education Bill is a very important step towards the dream of the developed Nation. Prospects for achieving equal opportunity and accessibility to basic education will definitely influenced by this bill. Like any human right, this right should also be protected and extended as an end in itself.

In other aspects of education, prospectus for reducing poverty, narrowing extreme inequalities and improving public health are also heavily influenced by what happens in education. Accessibility to basic information and knowledge through basic education is one of the most important conditions for overcoming social injustice and reducing social disparities in any country. It is also a condition for strengthening economic growth and efficiency: no country can afford the inefficiencies that arise when people are denied opportunities for education because they are poor, female or members of a particular social group. Some benefits of education are less tangible and harder to quantify than others.

People denied an opportunity for achieving literacy and wider education skills are less equipped to participate in societies and influence decisions that affect their lives. That is why broad-based education is one of the foundations for democracy and government accountability, and why it is such a vital input for informed public debate in areas such as environmental sustainability and climate change that will have a bearing on the well-being of future generations.

The impact of education is strongly conditioned by other factors, from macroeconomic and labour market conditions to the state of public health provision and levels of inequality based on wealth, gender and other factors. The benefits of education are likely to be greatest in contexts marked by broad-based economic growth, a strong political commitment to poverty reduction, high levels of equity in access to basic services, and a commitment to democratic and accountable governance.

Opportunities can strengthen economic growth by raising productivity, supporting innovation and facilitating the adoption of new technology. And broad-based access to good quality basic education is one of the foundations for broad-based growth, since it enables poor households to increase their productivity and secure a greater stake in national prosperity.

The ultimate goal of education is to equip children with the knowledge, skills and opportunities they need to realize their potential and to participate in social and political life.

Photovoltaics-Solar Enery Generation

2008-10-03T11:32:00.000-07:00

Photovoltaic (PV) systems convert the sun’s energy into direct current (DC) electricity and then alternate current (AC), which is used to run your home’s appliances. PV technology is both innovative and sustainable with its use of the sun’s abundant source of energy

Environmental Impact

PV and solar thermal devices are essentially specialized formations of glass, steel, aluminum, and plastics; their manufacture is comparable to that involved in making household windows, water heaters, or mirrors. The energy payback of a PV system (the point where it produces as much energy as it took to be produced) is about 3 years.

PV devices are essentially "electric glass" - their (usually) silicon substrate is a close relative of window glass, and the processes used to render it electrically reactive are the same as are used in the microchip manufacturing industry. Some hazardous materials are used to produce PV. PV systems also contain certain toxic materials such as cadmium and selenium. However, these toxic materials are minimal compared with conventional energy sources. Research is being done to determine the best way to recycle PV systems at the end of their lifetime. Over its life, a typical residential system will avoid 124,300 lbs. of coal or 8,800 gallons of oil or 13.5 illion cubic feet of natural gas used in power production, and reduce NOx emissions by more than 1.5 pounds for each megwatt-hour produced.

FAQs (Frequently Asked Questions)

Would a PV system work at my house?
How do PVs function in inclement weather?
How do I size my PV system?
How much energy do PV produce and how long do they last?
Do I need special permitting?
What maintenance is required?
What financial incentives are available?
How do I sell excess energy back to the utility grid?

Would a PV system work at my house?
PV easily fit on unobstructed roofs of most homes, depending on the size of your system. Arrays are also mounted on the ground, if your roof can’t accommodate them. Your roof must be in good condition and unshaded. Panels are mounted at optimum angle and facing south (or north if you live south of the equator) to capture the greatest amount of sunlight, with variations up to 45 degrees. If you live in an area with a great deal of insolation (sunshine) the PV will perform better. The map below shows the greatest areas of sunlight exposure in the U.S. (the red area of the map below receives the greatest amount of insolation). If you live in a less exposed area, ask a local PV supplier for a solar site analysis to see if a system would meet your energy needs.

Remember, solar cells operate on sunlight, not heat. Photovoltaics are even used in antarctica quickly melting any fallen snow on the glass.

How do Photovoltaics function in inclement weather?
Even during cloudy days, PV produce up to 80% of their maximum energy. On an extremely overcast day, a system produces up to 25% of its potential energy. Manufacturers test solar cells for year round weather conditions including high wind, hail, freezing, and thawing. Some PV produce enough excess power during the summer to supply energy needs in the winter. Sleet and hail rarely harm the panels and the panel efficiency may actually improve in cooler weather. See Success Stories below.

How do I size my Photovoltaic system?
The size of your systems depends on several factors. Talk to a system designer or contractor to determine size factors such as:

How much electricity, heat, and hot water you use
The amount of sunshine in your climate
How much you want to invest

First consider what percent of your home’s energy you’d like the PV to supply. For systems not connected to the utility grid (stand-alone systems), determine an accurate amount of energy output. You may also add more modules in the future but must size the inverter and other equipment (such as storage batteries if off grid) for the expansion.

How much energy do Photovoltaics produce and how long do they last?
Electricity production depends on sunlight exposure, and how well PV can convert the sun’s energy. At average exposure and efficiency, a PV system produces 1,800 kWh a year per an optimum output of 1 kW. Typical PV residential systems are between 5 and 10 kW. Compare this to the average energy use of an American home: 1,000 kWh per month.

PV systems should last over 20 years. Most manufacturers guarantee their products for up to 25 years, with silicon based PV loosing efficiency at less than 1% per year.

Do I need special permitting?
Regulations on the who, what, and how of installation vary with location. Installing PV usually requires an electrical license, and there may be codes or limits on the following:

Type of system
Installer’s level of certification
Electrical installation
Building codes
Connection to a utility grid
Eligibility for rebates and tax credits

Standards are set by the following groups:

Home owners’ association
Local government building department
Utility company

Talk to officials of your local government or state energy office for details on regulations in your area.

What maintenance is required?
The expected life of the PV modules is between 20-25 years. Maintenance costs are fairly low since you can check the system periodically on your own. Your PV system may only need check-ups on the condition of solar cells, battery, and electrical connections. The biggest expected maintenance expense is for the inverter, which has an expected life of about 8-10 years. The inverter is the gizmo that converts the DC power of the cells to the AC power your home and utility uses. The cost for replacement can be as high as $8,000 though those costs are also coming down. You should hire a professional to do any major repairs.

What financial incentives are available?
Depending on where you live, these incentives may be available:

Property tax exemptions
Sales tax exemptions
Tax credits and deductions
Renewable Energy Certificates (credits paid to the energy producer)
Rebates
Grants
Loans
Bonds
Mortgages

These incentives may be offered through the following providers:

Federal government
State government
Local government
Utility

Contact the energy office in your state or province, or your local utility for more information.

How do I sell excess energy back to the utility?
If your PV system is connected to a utility grid (grid-tied system), and produces more energy than your home uses, utility companies buy backthe excess power. This buy back is called Net Metering or a Feed-In-Tariff. During times of excess energy, such as a sunny, summer day, the inverter converts electricity to the utility’s standards, allowing the company to purchase the energy as it flows backwards through your meter. Currently, only 39 states allow connection of PV to the grid, and only 36 states require net metering for utility companies. Ask your utility company about local polices. A customer may use power from the utility during the night or on a cloudy day. At the end of the month or year, the electricity bill shows whether the PV system produced more or less energy than the customer used.

Installing a Photovoltaic System
Self Installation
The U.S. Department of Energy advises hiring a contractor instead of installing a PV system yourself. Professional installment ensures a functional system, a guaranteed warranty, safety, and protection of your home appliances. Search for photovoltaic distributors on this web site.

Finding Contractors
For design, installation, and maintenance, search for a supplier on this web site. Solar vendors and installers range from large corporations, small businesses, discount warehouses, or mail order companies.

Choosing a Contractor
When you talk to a professional, ask about their experience, licensing, recent training, and level of certification in PV systems. Find an installer whose professional relationship with the local inspector is reputable. Consider liability insurance with your contractor and ask about repair and maintenance.
Ask about products the contractor uses: Do they meet industry standards? Are warranties available? Talk to the installer’s business references and former clients about their experience, and the current condition of their PV system.

Success Stories
This Massachusetts home has used 40 square meters of PV since 1980. Mounted on the south roof, this system generates more electricity than the house uses during the summer. The excess electricity sold back to the grid during the summer covers almost the entire cost of energy during the winter.

Also in Massachusetts, a 26 unit condominium is opening in Brockton that features a PV system for each unit. Residents will have their own 18 panel PV system and save $600 per year. Designers expect each system to generate 4,212 kWh per year, over 60% of the electricity needed for each town home. This six million dollar project also includes rainwater collection tanks, and energy star ® and LEED® certification. A $458,300 grant from the Renewable Energy Trust helped finance the cost of panels and installation.

OLD WINE IN NEW BOTTLES

2008-10-03T10:43:00.000-07:00

As Prahalad articulates how the private sector can exploit profitable opportunities by tapping BOP markets, he gives the impression that this is a revolutionary idea. But companies have been selling to the BOP in one form or another for several decades.

Similarly, as he describes how microfinance is useful for tapping the BOP market, it seems to be a new model for serving the poor. But microfinance has long been recognized as an efficient way to eradicate poverty. The Grameen Bank, Muhammad Yunus’s landmark innovation, attracted worldwide attention many years before the BOP concept came to light. Less famous but larger is Bank Rakyat Indonesia, which has the world’s largest sustainable micro-banking system and has held a dominant position in commercial microfinance in Indonesia for more than 20 years (Robinson, 2002, 2004). Furthermore, organizations such as Amul, the State Bank of India, and Nirma have long realized the importance of serving BOP customers. The State Bank of India (SBI), a public sector bank, has been providing banking services for two centuries, and has more than 8000 branches all over the country. It has been serving rural poor customers by providing bank loans for agriculture and other purposes and offering personal banking products. The sheer size of its network of branches helped it reach out to rural customers. In addition to SBI, other national banks and rural cooperative banks have been serving rural and BOP customers, with services designed specifically for them. At some banks, a villager can open an account with as little as Rs 500 ($12.50), whereas MNC banks may require a minimum balance of Rs 5000 ($125) or more, well beyond the capacity of most BOP customers.

Many other organizations such as the National Bank for Agriculture and Rural Development (NABARD), other nationalized banks, and Nirma have been serving BOP customers for decades. These facts make it difficult to accept Prahalad’s contention that few initiatives have focused on developing BOP markets.

Is Sachet(small packing) Marketing Revolutionary?

2008-10-03T10:30:00.000-07:00

BOP proponents mention sachets (small packets) as an innovation that has delivered many products to BOP customers. Prahalad suggests that if BOP customers “don't have lump sums to buy 20 ounces of shampoo at one time,” a company should “do what Unilever did in India: Sell single servings of shampoo so the cost structure matches what they can afford” (Fast Company, 2005, p.25). In fact, sachets were introduced in 1976, not by HUL but by CavinKare, a local South-India based company, with its ‘Velvet’ brand (Ranganathan, 2003).

In 1999, CavinKare came up with another pricing innovation: it launched a 4-ml sachet of Chik shampoo priced at 50 paise (1.25 cents). The launch was a great success: Chik’s market share jumped from 5.61 percent in 1999 to over 23 percent in 2003. It became the largest selling brand in rural markets. As Chik’s volume and market share grew rapidly, HUL saw the potential of the market it had always ignored—as well as its own vulnerability. It responded by launching 50-paise and one-rupee sachets of its Lux, Clinic Plus and Sunsilk brands. HUL had always viewed rural consumers as a low-margin, inaccessible segment. It entered the BOP market for shampoo primarily because of its potential vulnerability, not as part of a planned strategy to serve poor customers. Considering all these cases, then, it is simply incorrect to give HUL the status of a pioneer in tapping BOP markets, as the literature on BOP does.

Small Isn’t Always Beautiful

BOP proponents view sachets and other small packages as an ideal way to tap low-income markets. Prahalad (2005, p.16) argues that because small packages are more affordable, they encourage consumption and provide a choice for the poor. But the empirical evidence does not support his contention. An ACNielsen study on rural markets in India revealed that, for several products, the best-selling package size is the same across rural and urban areas (Dobhal and Das Munshi, 2005).4 For products including biscuits, jam, washing powder, sanitary napkins, and milk powder, the smallest available packages are not the largest contributors to the total volumes of products sold in rural areas. The two exceptions are shampoo and razor blades; for these two products the smallest packages do account for the largest share of the total volumes sold. In the cases of jam and milk powder, larger packages (e.g. 500 g) are better sellers even though smaller packages are available (e.g., 12 g in jam and 3 g in milk powder).
If Prahalad and Hart (2002, p. 10) are correct in their argument that the poor “look for single-serve packaging,” then we would expect small-size packages to be the most popular for most products in rural markets, not just for shampoo and razor blades. The smaller packages of shampoo and razor blades also perform better in urban markets as well as rural ones. For shampoo this is probably true because shampoo sachets offer better value than larger packages. With sachets, consumers pay lower prices per unit volume. For example, Sunsilk Black shampoo in sachets costs approximately 25 paise (.6 cents) per ml. On the other hand, shampoo in a bottle costs approximately 5 paise (1.25cents) per ml (a 200-ml bottle costs about Rs99, or $2.50). This is true for almost all the major shampoo brands in India (Krishnan, 2001). The artificial price differential actually contributes greatly to the popularity of shampoo sachets. Another study in India, by LG Healthcare, questions whether sachets are valuable for marketers: although they have helped increase penetration, they have also led to a decrease in overall consumption (Economic Times, 2004).

For most products, the logic of serving the poor by simply offering smaller packages may not be as workable as Prahalad argues. To make small packs more affordable, companies must keep their unit cost lower compared to larger packs. This does not make economic sense: it is by selling larger packages that companies can reduce their processing and transaction costs, not the other way around. Companies usually reward consumers who buy larger, or economy-size packages, through low-unit pricing, because of their associated cost savings. Low-price shampoo sachets are an atypical case or an unusual distortion of the market. In fact, companies are trying to persuade consumers to move up from sachets to bottles; though sales volume has risen because of sachets, the profits and revenues have dropped (Soaps, Detergents & Toiletries Review, 2003).

Fortune at the Bottom of the Pyramid-2

2008-10-03T06:42:00.000-07:00

THE FORTUNE: AT THE BOTTOM OR THE MIDDLE OF THE PYRAMID?

Before looking at the larger questions, it’s important to estimate the true size of the BOP market. Prahalad and Hart (2002, p. 2) refer to the 4 billion people in Tier 4 as the bottom of the pyramid. But certainly income inequality is widespread across the developing countries where the BOP population lives. Many developing countries, especially the least developed countries (LDCs), are characterized by extreme poverty. Many factors make it unrealistic for the private sector to participate in economic development in most LDCs. Among them are inefficient regulation, widespread corruption, lack of basic infrastructure, extreme poverty, and the underdeveloped financial and banking structure. In these countries, people’s most basic needs must be fulfilled before anyone can look at them as profitable BOP markets. The success stories of MNCs serving poor customers cited in the BOP literature are predominantly in fast-growing economies such as India, where the GDP per capita remains low, as well as in countries like Brazil and Mexico with higher per-capita income. Not surprisingly, BOP advocates fail to provide cases of MNCs serving the BOP population in LDCs.

World Bank data can be used to estimate the size of the BOP market. In 2005, 2.4 billion people lived in low-income countries (Table 1), and 751.8 million people of those lived in LDCs where the per capita gross national incomes averaged US $378.2. Realistically, these very low income earners at the extreme bottom of the pyramid are not likely to be profitable customers for MNCs. (See Table 2 for comparative figures for selected countries among the LDCs and Newly Industrializing Economies). In 2001, 1.1 billion people were living on less than $1 a day which the World Bank considers to indicate extreme poverty. If we enlarge the base, a total of 2.7 billion people live on less than $2 a day (World Bank, n.d.). The 1.1 billion people living in acute poverty, and struggling to meet even their basic needs, cannot possibly be viewed as a profitable market for large corporations. Whatever fortune does exist is only at the lower middle and middle of the pyramid, definitely not at the bottom. When Prahalad and Hart (2002, p. 2) talk about “doing business with the world’s 4 billion poorest,” they count the entire population of both developing countries and least-developed countries. Depending on the products and services and economic conditions prevailing in poor countries, a significant portion of this population will be totally out of the direct reach of MNCs. MNC involvement in LDCs can be viable and fruitful only after these countries reach a certain threshold of economic development.

Karnani (2007) provides an interesting contradiction to Prahalad’s estimate that the BOP market size is $13 trillion at purchasing power parity (PPP)2. He construes that as a gross overestimation. Using the World Bank estimate of $1.25 a day as the average consumption of the 2.7 billion poor and total poor, he calculates the BOP market size as $1.2 trillion. He also points out that MNCs would repatriate profits at actual currency exchange rates, not at PPP. Taking this factor into account, he estimates the BOP market size as less than $0.3 trillion, which is just 2.3 percent of Prahalad’s estimate of $13 trillion.

Fortune at the Bottom of the Pyramid:-1

2008-10-03T06:32:00.000-07:00

Abstract

The Bottom of the Pyramid (BOP) has emerged as one of the dominant ideas in business. Cognizant of the overwhelming attention BOP has attracted and its potential impact on the billions of the poor and on managerial practices, the author analyzes the different aspects of BOP approach on how large corporations can serve low income customers profitably. An attempt is made to provide an alternate perspective on the BOP concept. I argue for the facilitation of selective consumption by the poor by avoiding their undesirable inclusion (marketing products that are not likely to enhance their wellbeing or products that are likely to be abused by them) and exclusion (not offering products that are likely to enhances their wellbeing) in target market selection decisions by the private sector organizations. A framework is presented for assessing the appropriateness of large corporations’ participation in BOP markets. I also emphasize the need to strengthen the role of the poor as a producer for rapid poverty alleviation.

The Bottom of the Pyramid (BOP) has emerged as a dominant concept in business, propelled by C.K Prahalad’s (2005) The Fortune at the Bottom of the Pyramid. Given the enormous attention the concept has attracted, it has the potential to impact the world’s billions of poor people—as well as the managerial practices of multinational corporations. This double potential makes it important to analyze how large corporations can serve low-income customers profitably.

Prahalad and Stuart Hart argued in 2002 that multinational corporations (MNCs) have only targeted customers at the upper end of the economic pyramid and have ignored BOP customers, assuming them to be inaccessible and unprofitable. Prahalad and Hart argued further that MNCs should view BOP markets as an unexploited opportunity and be proactive in fulfilling the needs and wants of low-income consumers. To tap the vast markets at the BOP, MNCs must specially design and develop quality products and services, or they must select some to alter and make available at lower cost. Serving BOP customers is a profitable opportunity for corporations. It is also a social imperative, given that two-thirds of the human population (about four billion people) are at the bottom of the economic pyramid. By addressing the BOP, they say, MNCs can curtail poverty and improve the living conditions of the world’s poorest.

In these arguments, however, BOP proponents do not take a holistic perspective. Several weaknesses in the BOP theory often go unacknowledged. Considering the far-reaching implications of these proposals, the underlying premises demand carefulscrutiny. Several questions need to be answered: Is there really a ‘fortune’ at the bottom of the pyramid? If so, can MNCs tap it as easily as BOP proponents suggest? And—is there also a fortune for the bottom of the pyramid?

In answering these questions, I offer an alternative perspective on the BOP concept: I believe that we must help the poor to become selective consumers. That is, we must avoid both undesirable inclusion, and exclusion. Undesirable inclusion means marketing products to the BOP that are not likely to enhance their wellbeing or that they are likely to abuse. Exclusion means failing to offer them products or services that are likely to enhance their wellbeing. I also suggest a framework to assess when it is appropriate for large corporations to participate in BOP markets, and I emphasize the need to strengthen poor people’s roles as producers, rather than merely consumers

What is Bottom of the pyramid?

2008-10-03T06:06:00.000-07:00

In economics, the bottom of the pyramid is the largest, but poorest socio-economic group. In global terms, this is the four billion people who live on less than $2 per day, typically in developing countries. The phrase “bottom of the pyramid” is used in particular by people developing new models of doing business that deliberately target that demographic, often using new technology. This field is also often referred to as the "Base of the Pyramid" or just the "BoP".

The more current usage refers to the 4 billion people living on less than $2 per day, as first defined in 1998 by Professors C.K. Prahalad and Stuart L. Hart. It was subsequently expanded upon by both Prahalad in 2004 in The Fortune at the Bottom of the Pyramid and by Hart in 2005 in Capitalism at the Crossroads.
Prahalad proposes that businesses, governments, and donor agencies stop thinking of the poor as victims and instead start seeing them as resilient and creative entrepreneurs as well as value-demanding consumers. He proposes that there are tremendous benefits to multi-national companies who choose to serve these markets in ways responsive to their needs. After all the poor of today are the middle-class of tomorrow. There are also poverty reducing benefits if multi-nationals work with civil society organizations and local governments to create new local business models.

Micro-credit
As The Economist reported on August 11th, 2005, one example of “bottom of the pyramid” is the growing microcredit market in South Asia, particularly in India. With technology being steadily cheaper and more ubiquitous, it is becoming economically efficient to “lend tiny amounts of money to people with even tinier assets”. The firm discussed in the article, Sa-Dhan, argues that the availability of credit to the poor “helps the poor but allows banks to increase their business”.