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This post is Part 5 of a 5 part series.

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How much credit should banks extend to the BOP? Are insurance policies appropriate financial instruments for low-income communities? For the last few weeks, the editorial page of South Africa’s Business Day has taken up the debate. On the one hand, the paper reports on expanded access to credit in poor townships. A few days later, the editors urged “credit caution.”

Yesterday, the debate moved from credit to insurance. According to the paper:

The industry is proposing affordable short-term householders' and cellphone owners' policies that would provide basic risk cover. The target is to raise those in the lowest income brackets with short-term insurance from 0,2% to 6% over the next three years. There are also proposals for affordable death and disability products that would extend such cover to 1.7-million more low-income earners in the next decade.

While praising the proposal, the editors urge caution – how much insurance do low-income South Africans really need? I think the editors make some valid points, and I’m interested to see how this debate plays out in the paper in the coming weeks.

This post is part 4 of a 5 part series.

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I’m typically skeptical of development agencies’ efforts to stimulate business solutions to poverty. When it comes to the Growing Sustainable Business (GSB) initiative of the UN Development Program, however, perhaps my skepticism is mislaid. According to their web site,

The Growing Sustainable Business initiative facilitates business-led enterprise solutions to poverty in advancement of the Millennium Development Goals (MDGs). These enterprise solutions accelerate and sustain access to needed goods/services and livelihoods opportunities.

Typical development wonk-speak? The web site’s full of it, but careful reading reveals that the GSB has been able to facilitate tens of millions of dollars in private investment for sectors ranging from rural electrification to food franchising to telecom.

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A month ago, I posted some information about housing technologies for the BOP. This week, a colleague of mine emailed me to tell me about some of her research in the area.

One thing her team has discovered is that the choice of technology may not be as important as the choice of business model. This applies to materials and also applies to a certain extent to design. Quality (safety, durability) are issues but even more important is desirability. Nobody wants to live in a house that looks different, that brands him or her as a poor person; they may also be averse to taking the risk of investing in an unfamiliar material or design that they, or their buddy they hire to do the work for them, may not be able to fix or build onto later.

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This post is part 3 in a 5 part series.

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In his broad analysis of business and the BOP, The Fortune at the Bottom of the Pyramid, C.K Prahalad points out that being poor is expensive. With a lack of products and services tailored to fit their needs and incomes, they languish in exploitative informal markets that often prevent them from escaping the cycle of poverty.

According to an article in Progress magazine, poor people in developed countries have the same problem:

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We're pleased to announce that a new Calendar feature was launched today on Nextbillion.net. The Calendar will highlight upcoming BOP-related events, such as WRI's two regional conferences on private sector-led development, to be held in Brazil and Mexico later this month.

As much as possible, we will post feedback from each of the events listed. We welcome contributions from Nextbillion.net readers who attend these events, and would like to highlight their experiences.

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Small and Medium-Size enterprises (SMEs) create most of the jobs in any economy, and they also play a critical role in providing goods and services to low-income communities. But there are very few sources of financing to help SMEs scale. Interest in SME funds is growing, however, so finding successful models is critical. Shell Foundation has piloted and is now scaling just such a successful model. In this and succeeding posts, we ask Shell Foundation’s Kurt Hoffman to explain the model, its impacts, and the potential for scaling. We’d welcome comments from others about the Shell Foundation model, their experience with other models, and other suggestions about catalyzing SME development in BOP markets.

A.H.: The Uganda Energy Fund was the Shell Foundation’s first attempt at providing investment financing for local SMEs. How did this Fund start?

K.H.: The Uganda Energy Fund was started through a partnership with DFCU, a local commercial bank that had started out as a development bank. We were interested in growing a portfolio in the local SME energy sector, which is where we saw the greatest unmet need. Microfinance was there, large loans were there, but there really was nothing in the middle--$10,000 to $500,000--for SMEs looking to scale, despite the fact that these businesses are the largest source of local job creation.

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