Thoughts on BoP market development

I wrote this while sitting in on a discussion on “BoP Markets and development” arranged by CDCS  I was listening to the presenters debating on whether BoP should be defined as the Bottom of the Pyramid or the Base of the Pyramid. After the coffee break several organizations (NGO’s, private sector company and Government research institute) presented their success stories on how they integrated their beneficiaries into formal markets or increased the margin of profit for the people they work with.

All the time that I was listening to these discussions, I kept thinking and writing these points down. The points turned into paragraphs covering several pages. When it was my turn to talk, I closed the notebook and tried to stick to my main points. I am sure that I didn’t cover everything in my very brief talk but then thought that this would make a rather good blog post J so bear with me while I regale you with all the things that I was thinking about while experts and people with far more experience in this Aid sector discussed their thoughts on how to integrate the BoP population into formal markets.

 

“The challenge is in treating the BoP not as beneficiaries but as customers and consumers. Farmers, small traders and middle men are also profit oriented. In fact they are probably far more profit oriented than you or me simply because they do not have the luxury of an assured salary at the end of the month.

The economies of scale and the style of management at the BoP level is different and needs recognition and subsequent adjustments to our approach. But let us not forget that for these people profit matter and they too are business and profit oriented.

At the BoP level, lack of knowledge and information is something that is often discussed. While we do agree that advancements made in research does not always reach the intended beneficiaries, what we tend to forget is that there is a vast untapped reservoir of knowledge at this level too.

People do not survive by being lazy. We are hardy, resilient people and that is testament to our own ingenuity, our thrust to survive and our entrepreneurial spirit. The economy of this country grows at a rate of 5-7% per year, this happens despite all of our issues and challenges. In a country of 160 million people, this progress affects all of us.

In the embassy’s experience, we have found that the private sector are interested in engaging with the BoP markets. The problem is usually that they are not sure on how to engage in a sustainable, profitable manner. This is an opportunity for the NGO’s who are working at the BoP level. They can be the bridge that connects the BoP with the profitable economic activities of the private sector.

In order to successfully bridge this divide there needs to be a shift in the mindset. NGO’s need to treat their funds the same way that businesses do, as capitals which once invested must have as high a ROI (return on investment) as possible. When every dollar is made to count, sustainability is possible.

Can we (the Aid agencies, NGO’s etc.) say that we love money? That we love to make money, talk money and create more wealth for all those we work with? No one grows alone, growth will affect everyone and there will be spill over effects.

In business, networking and cooperating are old accepted ways of working. This is used by businesses to create vertical and horizontal linkages. NGO’s could learn something from this – most NGO’s are interested in receiving funds and working on their own. If however, they could instead adopt the same modus operandi, they could capitalize more on each other’s strength and past experiences. Instead of just sharing knowledge, we could concentrate on instilling a sense for business and profits in an eco-friendly, sustainable way that benefits the producers, consumers and our environment.

The hardships we face for me are similar to growing pains. How long does it take for a human being to mature? This country is still young, only 42 years old. We have a relatively young population who are of the digital generation. Born at a time when tv, radio already existed and now in the technological age most people are connected, even if it is by a simple mobile.

For a country this young, this connected, it is an opportunity. Dr. Kabir spoke of the young population who are migrating to the big cities and even outside the country because they do not want to be involved in the drudgery of agricultural labor. These youngsters may be interested in going back to agricultural activities if they can make just as much money if not more and if farmers receive the recognition they deserve, because it is on their back-breaking labor that this country is standing.

The agricultural contribution percentage to the GDP may have declined but the agricultural sector is still the largest employer. The food security of this country and its future population very firmly rests on the shoulders of these farmers who toil in the field, day in and day out. We need multi-sectoral cooperation, to create economic, social, policy level impacts that will be needed for sustainable development.

To the NGO’s I say this – change your mindset, become more business oriented in order to keep pace with the changing times.

To the private sector I can only say – your business rests on these farmers too. It is their output that becomes your input. In order to compete, to become players in the global economy, you need to take care of your supply chain for your own survival and profit. “

 

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Posted on September 30, 2013, in Uncategorized and tagged , , , , , , , , , , , , , . Bookmark the permalink. Leave a comment.

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