Fortune at the bottom of the Pyramid

2. CONTENT Concept of BOP Market at BOP Products and Services for BOP Global Opportunity Ecosystem for Wealth Creation Reducing Corruption Developing Social Transformation

3. CONCEPT OF BOPBOP:

Bottom of Pyramid Concern for BOP Big Questions:• Why can’t we do something for BOP?• Why can’t we mobilize the investment capacity of large firms with the knowledge and commitment of NGO’s and the communities that need help?• Why can’t we co-create unique solutions for BOP? Bigger Question:• What is the solution for all these questions?

4. MARKET AT THE BOP

•Poor are not victim or burden •There is a large market opportunity at BOP •How? •MNCs biggest mistake •New growth opportunity for MNC •MNC must become an integral part of the work at BOP •Dominant Logic

5. MARKET DEVELOPMENT IMPERITIVES

 Create the capacity to consume  3 Basic Principles:  Affordability  Access  Availablility Need for new goods and services Dignity and choice Trust

6. BENEFIT TO MNCS

 4 to 5 billion underserved population 13 trillion PPP Large potential BUT… Need for innovation

7. NATURE OF BOP

There is money at BOP BOP accepts advanced technology ( ITC e-Chaupal) BOP Market is connected (Grameen phones, Bangladesh) Access to BOP (HLL, Shakti)

8. PRODUCTS AND SERVICES FOR BOP

 Philosophy of developing Products and Services for BOP Twelve Principles of product innovation:1. Price-Performance (Reliance Monsoon Hungama)2. Innovation: Hybrid (HLL Iodized Salt3. Scale of Operation (Serving 1.5 billion across the border)4. Identifying functionality (Jaipur Foot)5. Sustainable Development (Resource Utilization)6. Process Innovation (Arvind Eye Care)7. Deskilling of work (Peru, Cemex)8. Education of customers (HLL, Handwash)9. Designing of hostile infrastucture (ITC e-Chaupal)10. Interface (Creative interface Design)11. Distribution (ICICI e-banking, ATM, Rural Banking)12. Change in conventional wisdom in delivery of goods and services

9. BOP: GLOBAL OPPORTUNITY

 Engaging BOP Local Growth Opportunities (S curve & I curve) Local Innovation and Global opportunity BOP Solutions for developed markets Lessons for MNCs from BOP Markets:  Capital Intensity  Sustainable Development  Innovation Costs of Managing Learning to Live in a Network of Relationships

10. ECOSYSTEM FOR WEALTH CREATION

 Market Oriented Ecosystem:  Micro Enterprises  Small and Medium Enterprises  Cooperatives  Large Local MNC firms  NGO Ecosystem for Developing Countries (HLL) Learning the Sanctity of Contracts ((HLL, Shakti Amma) Reducing Inequalities in Contracts (ITC e-Chaupal) Building Governance Capacity Among the poor (Bank of Madura, ICICI)

11. REDUCING CORRUPTION

 Concept of TGC Building TGC ( Andhra Pradesh e-Governance Story, e- Seva)

12. DEVELOPING SOCIAL TRANSFORMATION

 Social transformation Breaking down communication barriers BOP consumers upgrade Gaining access to knowledge Identity for the individuals Women are critical for development Evolving checks and balances

13. CONCLUSION

 The real test: From the Pyramid to the Diamond

 
Developing the Understanding Framework on Social Development and Microfinance Program
in Bangladesh

NGOs’ broad activities:

Social development Services and Microfinance programs such activities include healthcare services, children education, water & sanitation, social awareness, etc.  

Objective of Microfinance (MF) Program:

Poverty alleviation/poverty reduction

Originator/pioneer of (MF/microcredit) in Bangladesh:

Grameen Bank established in 1983, regulated by Bangladesh Bank (BB). It can take deposits from the poor and the general public. But the public do not get loans.

MF NGOs cannot take deposits from the general public  other than  the poor who are their members.

What is Microcredit Regulatory authority (MRA)?

It gives license to NGOs to carry out microfinance programs

Monitors and supervises the licensed MFIs

Fixes rate on interest rates and other deposit provisions

There are more than 700 licensed MFIs

Number of NGOs ( without microfinance) is huge.

What is NGO Affairs Bureau?

It’s government agency

Gives permission for receiving foreign grants.

Commercial organizations cannot receive foreign grants.

Only not-profit organizations can receive grants for social development.

Expander of Microfinance in the NGO sector: PKSF (Palli Karma Sahayak Foundation)

PKSF: was established in 1992 by the Government of Bangladesh.

It is owned by government organization.  

The government gives guarantee to the Fund Providers of PKSF like the World Bank, ADB, et

The government also gives Fund to PKSF

PKSF has so far funded about 273 MF NGOs of which about 203 are active members

It provides MFIs low cost fund (@5%, 6%,7.5% interest rates) and technical assistance to develop operational capacity.

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