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The move from the company more usually associated with expensive footwear and celebrity sponsorship was inspired by Bangladesh's Nobel prize winner, Muhammad Yunus, the pioneer of micro-loans which help the poor start their own businesses. He told the company, which has been criticised for exploitation in the developing world, that Bangladesh needed "social businesses" which would create jobs in the country.

The company has now agreed it will produce shoes in Bangladesh on a non-profit basis, although a spokesman stressed the final price may be higher than the €1 (89p) target.

The move marks a change of heart for the company, which has been associated with big money sponsorship deals and luxury brand prices. Adidas pays former England football captain David Beckham £3 million per year as a brand ambassador and to use his name to promote their Predator football boots, which sell for £130 a pair. It spent a reported £50 million to sponsor the Beijing Olympics last year and has pledged a further £100 million for the London Olympics in 2012.

Last year the company was widely criticised for the amount it allegedly pays workers at its Chinese factories.

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Riyada Ventures, which was set up in the Jordanian capital of Amman in 2005, will be integrated by Abraaj into its newly launched regional SME and entrepreneurship initiative. Khaldoon Tabaza will continue as the CEO of the new business line of Abraaj.

Tabaza has worked in the MENA venture capital industry since 2000, prior to which he set up several entrepreneurial ventures.

Abraaj has previously invested in the SME space, having backed Maktoob.com, an Arab language portal recently acquired by Yahoo!. It also invested in Arabtec, Aramex and Amwal at the early stages of their growth stories.

The MENA-focused private equity firm will allocate a portion of the funds it raises for SME investments for philanthropic uses by partnering with sustainable development funds.

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IFIF will invest in MFI, low-cost housing and companies that provide financial services to the poor.

India Financial Inclusion Fund (IFIF), one of the largest funds focussed on investing in companies playing in the bottom-of-the-pyramid market, has achieved a final close of $90 million. Advised by Hyderabad-based Caspian Advisors, IFIF has raised commitments from the likes of UK's CDC Group, Global Microfinance Equity Fund and Switzerland's Social Investment Services. 

IFIF started fund-raising last year before the crisis and has managed to close it in a period of 15 months. The interest in the MFI sector has been consistent throughout the period, said Mona Kachhwaha, Director of Investments at Caspian.

"Though some limited partners (LPs) did have some short-term cash flow pressure but it did not translate into a shift in the way they viewed microfinance," she said.

The fund, apart from microfinance institutions, also invests in "firms that enable the provision of financial services to the poor". These include companies in areas like housing finance, business correspondents to banks and technology companies in this sector.

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Kampala - The seventh mobile operator in Uganda, Smiles Communication, starts operations today, using the 02 code.

Irene Charnley, Smiles' chief executive officer, yesterday said the firm targets the un-served, bottom of the pyramid consumers in Africa and the Middle East.

"For the first time, individuals are offered free electronic identities and voice message boxes without needing to own a phone," said Charnley.

Using their telephone number, or Smile ID, together with a secure PIN code, customers can login to any Smile phone, she said.

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BANGALORE -- Hair tucked into a surgical cap, eyes hidden behind thick-framed magnifying glasses, Devi Shetty leans over the sawed open chest of an 11-year-old boy, using bright blue thread to sew an artificial aorta onto his stopped heart.

As Dr. Shetty pulls the thread tight with scissors, an assistant reads aloud a proposed agreement for him to build a new hospital in the Cayman Islands that would primarily serve Americans in search of lower-cost medical care. The agreement is inked a few days later, pending approval of the Cayman parliament.

Dr. Shetty, who entered the limelight in the early 1990s as Mother Teresa's cardiac surgeon, offers cutting-edge medical care in India at a fraction of what it costs elsewhere in the world. His flagship heart hospital charges $2,000, on average, for open-heart surgery, compared with hospitals in the U.S. that are paid between $20,000 and $100,000, depending on the complexity of the surgery.

The approach has transformed health care in India through a simple premise that works in other industries: economies of scale. By driving huge volumes, even of procedures as sophisticated, delicate and dangerous as heart surgery, Dr. Shetty has managed to drive down the cost of health care in his nation of one billion.

His model offers insights for countries worldwide that are struggling with soaring medical costs, including the U.S. as it debates major health-care overhaul.

"Japanese companies reinvented the process of making cars. That's what we're doing in health care," Dr. Shetty says. "What health care needs is process innovation, not product innovation."

At his flagship, 1,000-bed Narayana Hrudayalaya Hospital, surgeons operate at a capacity virtually unheard of in the U.S., where the average hospital has 160 beds, according to the American Hospital Association.

Narayana's 42 cardiac surgeons performed 3,174 cardiac bypass surgeries in 2008, more than double the 1,367 the Cleveland Clinic, a U.S. leader, did in the same year. His surgeons operated on 2,777 pediatric patients, more than double the 1,026 surgeries performed at Children's Hospital Boston.

Next door to Narayana, Dr. Shetty built a 1,400-bed cancer hospital and a 300-bed eye hospital, which share the same laboratories and blood bank as the heart institute. His family-owned business group, Narayana Hrudayalaya Private Ltd., reports a 7.7% profit after taxes, or slightly above the 6.9% average for a U.S. hospital, according to American Hospital Association data.

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Kolkata: If you are in Gurdaspur, make sure you take a stroll down the Western Union Chowk. For nowhere else in the world would you find a street named after the world's largest cross-border remittances company.

This only proves how great is the brand recall for Western Union in this smalltown in Punjab. This also shows how big corporates have moved beyond the archetypal rural marketing tools like small unit sachets, mom-and-pop stores or partnership with NGOs for tapping at the bottom of the pyramid.

More and more companies are beginning to think of the next best way to tap 720 million customers spread across the country's hinterland.

According to Pradeep Kashyap, CEO of MART, a leading rural consultancy firm, organisations need to adopt the "reverse innovation" strategy and also work on new price paradigms.

A reverse innovation simply means any innovation that's likely to be adopted first in the developing areas. Increasingly, we see companies developing products in smaller towns and villages and then distribute nationally.

Kashyap, who is known as the father of rural marketing in India, is also the brain behind a large number of rural marketing initiatives by leading corporates.He said there is a lot to be done by corporates who have been slow on capturing the rural heartland. "Except for commendable programmes like ITC's e-choupal and HUL's Project Shakti, most rural marketing initiatives have been an extension to what has been offered in the urban areas," he added.

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Mumbai: The private sector lending arm of the World Bank group is sharpening its focus on the bottom of the pyramid.

The International Finance Corporation (IFC) will increase lending to enterprises in seven north Indian states that lag the rest of the country in average incomes and has set up a separate unit that works in these poorer states, the lender’s top manager said on Monday. “We have shifted focus to areas where we can contribute,” said Lars Thunell, executive vice-president and chief executive of IFC.

India is currently the biggest recipient of IFC funding, overtaking Russia, and accounts for around one-tenth of its global portfolio, but Thunell said “the Indian countryside is still under-represented” in its India portfolio. IFC will continue to fund large projects, but its new drive to invest in companies serving the needs of the poorest will lower the size of its median financing deal. The new strategy entails some changes in the way the lender is structured.

IFC has set up offices in Mumbai, Chennai and Kolkata in addition to its main India office in New Delhi, a process that Thunell describes as “massive decentralization”.

He added that employees will no longer be evaluated, incentivized and promoted only on the basis of “big fancy transactions”.

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In the countryside of Shanxi Province in north-central China, farmer Xie Xin has struggled for years with water shortages. The 47-year-old, who grows tomatoes and cucumbers, had to pay dearly to use the local well, since the region receives an average of only 16.5 inches of rainfall annually. But this year, Xie started participating in an experiment in which farmers use new irrigation equipment to conserve water. The equipment, similar to a garden hose with small holes every foot or so, is expected to cut his water use by more than half. Through a translator, Xie says he'll save money and boost production by reducing water-related diseases.

The gear Xie uses comes from a startup in Palo Alto, Calif., called Driptech. Although similar kinds of irrigation systems have been used for decades, Driptech is winning business in places such as rural China because its technology is designed specifically for small farms and costs much less than traditional systems. The company's equipment runs $300 for a one-acre farm, instead of the usual thousands, and as little as $5 for smaller family plots. "There are literally hundreds of millions of small-plot farmers suffering from seasonal water scarcity," says Peter Frykman, Driptech's 26-year-old founder. "We're focused on reaching our first million farms as fast as possible."

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Hyderabad: Philips Electronics India Ltd is resorting to innovative pricing and customer engagement models in India to gain market share and acceptance by 'bottom-of-the-pyramid' segments and enterprise customers. Clean energy is the common pitch that Philips is making to log in higher customer numbers through such innovations.

For instance, in one such initiative, the company has collaborated with Washington-based C Quest Capital (CQC) to supply 2.6 million compact fluorescent lamps (CFLs) to official residences of employees of the Indian Railways. These CFLs have a life of 10,000 hours and will be supplied free of cost to the Railways under the scheme and available on exchange with energy-inefficient incandescent bulbs. However, the condition is all the legal and beneficial rights to any emission reduction generated by the bulbs and all corresponding benefits and all certified emission reductions (CERs) will accrue to CQC, which is funding the project.

While the project kicked off on a quite note earlier this year, Philips is now talking to several state governments for establishing similar lighting ventures, Philips Electronics India MD & CEO Murali Sivaraman told DNA Money.

The Indian subsidiary of the €26 billion Royal Philips group, which is present in India across various verticals like healthcare, consumer and professional lighting, domestic appliances and personal care, is currently talking to at least five states for similar projects.
Rajeev Chopra, head of lighting, Philips India, said, "We are open to such innovative engagements for financing options through carbon credits or otherwise including service contracts even with commercial establishments."

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BAGEPALLI, India — Under harsh fluorescent lights, dozens of heads bend over keyboards, the clattering unison of earnest typing filling the room. Monitors flicker with insurance forms, time sheets and customer service e-mail messages, tasks from far away, sent to this corner of India to be processed on the cheap.

But these workers are young people from villages clustered around this small town deep in rural Karnataka State in India’s southwest. They are part of an experiment by a handful of entrepreneurs to bring the jobs outsourcing has created to distant corners of India that have been largely cut off from its extraordinary economic rise.

Only about a million workers are employed in the buzzing call centers and pristine tech company campuses that have come to symbolize India’s boom — a drop in the bucket, given the country’s more than 1 billion people.

Almost all of those jobs are in cities. But 70 percent of Indians live in rural areas. India largely skipped — or never arrived at — the industrial phase of development that might have pulled the rural masses to cities. Over the decades a Gandhian fondness for — some say idealization of — rural life has also kept people in villages, where the bonds of caste and custom remain strong.

India has struggled unsuccessfully with the question of how to lift this vast underclass out of poverty. Some economists argue that India still needs rapid urbanization if it is ever to become a major economic power and provide jobs to its vast legions of unemployed. But the founders of Rural Shores, a company that is setting up outsourcing offices in rural areas, say it makes more sense to take the jobs where the people are.

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