Inclusive business models provide benefits to underserved populations.
Arrive in Papua New Guinea’s lush tropical hinterland and you’ll find trading posts, market vendors, and handicraft stalls. But you’ll be hard-pressed to spot a bank branch anywhere in the villages dotting the landscape.
Just 10 percent of Papua New Guineans have access to banking services. In all of the Pacific island nations, more than three-quarters of the population never sees a teller or has the opportunity to keep money in a bank account.
With investment and advice, IFC looks to support inclusive businesses—firms that offer goods and services to the poor and help raise their economic standing. Enabling people to save money, transfer funds, take out loans, and grow their businesses by investing is a good way to do just that.
A recent surge in gold, copper, and gas development has fueled a boom in Papua New Guinea. But to realize opportunities for many, IFC is helping the country’s transformation by supporting firms that target customers and suppliers at the base of the economic pyramid.
To that end, IFC and Bank South Pacific Rural agreed to provide banking services to individuals and tiny businesses in Papua New Guinea’s highlands by helping set up electronic terminals in local shops. The terminals enable people to deposit and transfer funds in even the remotest corners of the country.
IFC investments are supporting this emerging business at the base of the pyramid. About 150 IFC clients are currently using inclusive business models to provide direct benefits to the underserved population at the base of the pyramid, creating high development impact in financially sustainable and scalable ways.
IFC launched a dedicated Inclusive Business Group to create the tools, resources, and events that will help investment and advisory staff develop new ways to support IFC clients entering the base of the pyramid.
Ecom Agroindustrial Corporation Ltd., one of the world’s biggest coffee traders, is one. We’re working with Ecom to create benefits for the firm and its suppliers.
The collaboration led to the launch of Vietnam’s first training center for coffee farmers. Over three years, it will build the skills of 4,000 small-scale farmers in sustainable agriculture, helping them meet international certification standards, improve the sustainability and productivity of their crops, and increase their earnings, as they will be able to charge more for the certified coffee beans.