The bottom line and the bottom of the pyramid

Creating sustainable for-profit  businesses that target people at the bottom of the income pyramid is a topic of growing interest to development finance institutions, private investors, and local entrepreneurs to support poverty reduction through private sector business opportunities.

With increasing focus on this lower income segment, companies both large and small have started to recognize that there is a large market potential represented by the base of the income pyramid.

For multilateral development banks, like ADB, this is an important way to mobilize and engage the private sector to achieve poverty alleviation and reduce income inequalities in developing countries.

The good news is that the Asia and Pacific region is already demonstrating how innovative, inclusive finance can make a difference, but much more can be done. In India, for example, the government has prioritized financial inclusion and, as a result, great strides have been made in opening bank accounts for millions of the previously unbanked.

Banks and non-banking financial companies such as IFMR Holdings have developed business models that have as their core business strategy a target of financing lower income people. IFMR Capital innovatively works to mobilize capital markets funding for microfinance institutions, which traditionally have limited access to this financing base.  

Other successful examples of bottom-of-the-pyramid funding are being seen in Central Asia through the Access Microfinance Holding network and through the pioneering work of the Kashf Foundation in Pakistan.

Mountain Hazelnuts, an agribusiness firm, has been a pioneer of bottom-of-the-pyramid solutions in Bhutan. It grows and exports hazelnuts to the People’s Republic of China, where it has found a niche in capturing the increasing demand for higher-end agricultural products from the Chinese market. At the same time, it is increasing livelihoods for thousands or rural workers – mostly women.

Of course, these solutions do not happen without finance. Leading global banks such as Credit Suisse see that bottom-of-the-pyramid investments can be good business. But the market is far from saturated. With over 2 billion consumers spread across developing Asia, the opportunities are limitless for financial institutions that take the time to understand their clients and develop the kind of innovative solutions that can serve this underserved market.

Modi Govt is now trying the same idea for achieving political gain by investing in the rural india,as the interim budget on 1st Feb 2019 provision for farming & agriculture can be anything between 11 lakh crore to 15 lakh crore.
My suggestion to the govt is that it should utilize and spend money mostly of investment in nature for the rural upliftment to touch the bottom of the heart of the bottom line of the pyramid to get the ballot support from the rural masses, because other methods such as MSP,Loan waiver and other schemes may not be attractive to the masses because these all schemes are reaching  only to 20% to 30 % of the rural masses. Besides rural population has many other non farmer and non farming labours. Who will take care about their grievances? They also form a great chunk of rural population.
Regards,
DR N K ARORA