Make the BoP Credit-worthy
What is the BoP? (Bottom-of-the-Economic Pyramid)
The more current
usage refers to the billions of people living on less than $2 per day (The
definition proposed in 1998 by C.K. Prahalad and Stuart L Hart)
There are other
definitions of BoP – but in the overall scheme of things, pinning down a
precise definition is less important than finding a starting point to solve it.
The word was first
used by U.S. president Franklin Roosevelt, in his 1932 radio address, The
Forgotten Man, in which he talked about the –“the forgotten, the unorganized
but the indispensable units of economic power . .”
The “forgotten man” as a definition for BoP should serve the
purpose just as good….
The BoP Debate
There is “Fortune at
the Bottom of the pyramid” said C K Prahalad. Don’t see them as poor victims.
They can be value-demanding consumers. They are the middle-class of tomorrow.
So choose to serve them as a growing consumer market.
There is “no fortune”
at the bottom of the pyramid” said Karnani. They are poor. Don’t see them as
consumers. See them as producers. That is the only way they can become the
middle-class of tomorrow.
Why slot them as
“with fortune” or “no fortune”. Why slot them as “producers” or “consumers” –
say recent approaches. Just enroll them as potential producers or consumers and
engage them in an entrepreneurial process that co-creates businesses and
markets.
With the size of the
world BOP being 4 billion consumers, with almost a billion being in India
alone, its good to find a synthesis to the debate – so at least it lets you
make a start.
Because what is worse
than getting the definition and size wrong, is to not do anything at all ….
How does “Earn while you
cook” help solve the Economic Challenge?
Monetise and createentrepreneurshiparound cookstove residue – Charcoal.
To make them credit
worthy – so they have access to make economic choices. Whether it is to be a
producer or a consumer or a collaborator or all of it.
This is a
transformational innovation in business model – that morphs the cookstove into
a “livelihood” engine
- At the very least it allows them access to loans on the strength of the “charcoal collateral”.
•
At
the very best, charcoal residue-production clusters - can be a powerful
self-sustaining growth in the BoP.
The “Earn While you
Cook” program seeks to do its bit towards the economic challenge
– by building “charcoal co-operatives” around cookstove residue.
If not anything else,
it is in line with what the wise man Roosevelt said about the forgotten man –
“These unhappy times call for the building of plans …. that build from the bottom
up and not from the top down, that put their faith once more in the forgotten
man at the bottom of the economic pyramid”
They say “It takes a village to raise a child”….The poor are the “babies” of the economy… It will take an entire eco system to nurture improvements for them…
They say “It takes a village to raise a child”….The poor are the “babies” of the economy… It will take an entire eco system to nurture improvements for them…
