Can the private sector help transform the lives of the poor? Can poor producers and consumers in turn transform business models and shape new opportunities for companies?
For a growing number of innovative entrepreneurs, the most effective way to end poverty is to focus on the potential of the poor as the world’s largest and fastest-growing market of producers, workers, and consumers.
The current issue of Development Outreach magazine showcases how forward-looking companies are reaching out to the four billion or so people who make do with incomes of less than $5 a day.
The magazine captures the experiences of companies engaging with the poor, presenting a dozen case studies, including Unilever's Project Shakti network of women entrepreneurs, CEMEX's Patrimonio Hoy initiative, which provides housing to low-income communities in Mexico, and Nestlé’s Milk District model.
Businesses Spurring Economic Transformation
For example, Hindustan Unilever, part of the giant international consumer goods company Unilever, is reaching into 550,000 Indian villages of fewer than 2,000 people where 87 percent of the population lives. To do so, it created a network of 46,000 entrepreneurs, most of them disadvantaged women, who sell low-priced products, often in single-use packages, to their neighbors. Their new incomes not only help the entrepreneurs climb out of poverty, but become role models for other villagers.
In Mexico, CEMEX, a global building materials company, has helped poor rural people streamline what was often the difficult and expensive challenge of building or expanding their homes. Through a combination of technical advice, microfinancing, and improved materials storage and delivery, Patrimonio Hoy has helped 185,000 Mexican families build the equivalent of 95,000 10-square-meter rooms. The program has been extended to Colombia, Venezuela, Nicaragua, and Costa Rica.
“These case studies are stories of private sector pioneers on a new development frontier,” said Rakesh Nangia, acting vice president of the World Bank Institute (WBI). “They are more than inspiring; they are instructive. They give us models to follow, along with the tools to make replication possible.”
“These examples are evidence of a new role for business in development, which is a step beyond corporate social responsibility,” said Nangia. “These businesses are moving from being responsible corporate citizens to being agents of transformation.”