The Ethics of the Bottom of the Pyramid

Hat Tip: World Bank

It looks like Ethical Corporation has caught on to the ethics of serving the bottom of the pyramid. An article in their most recent newsletter discusses opportunities in the vast bottom of the pyramid market in Latin America. About 360 million people in Latin America fit into this category. So far, local companies have left multinationals in the dust:

A third noteworthy trend is the leadership of national companies over their international peers. Micro-insurance firm Paralife in Mexico, Peruvian financial intermediary Cajasur and many of the other high performers in the index are local firms. With the bulk of their local market being low-income consumers, such firms have learned to search out opportunities among the “majority” by default.

Multinational companies, by contrast, often lack the experience, the local relationships, the market understanding and often the vision to trouble themselves with poor customers. Yahoo, Microsoft and PepsiCo feature among the big-brand laggards in the index.

What's it going to take for the multinationals to catch on?

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International Remittance Market Sparking Interest from Big Banks

The international remittance market has become so lucrative and beneficial that large international banks are taking an interest in "taking back" a market that has gone to money transfer companies.

Big banks (especially those based in the United States) faces some challenges in the international remittance market because of the many post-911 restrictions imposed upon them by the U.S. government. Despite these challenges the banking industry is exploring opportunities because the remittance market is expected to "grow 10.1% through 2008."

As can be seen in this article on CNN Money.com, the barriers both real and perceived faced by immigrants to use money transfer technology are being broken down by younger generations acceptance of being "plugged into tech."

We at IPM are poised to guide banks, money transfer companies, merchants and end users through this dynamic time in the international remittance market.

World Bank Estimates 2006 Remittances to Reach $199 Billion

The World Bank's Development Prospects Group, Migration and Remittances Team put together an interesting brief that is useful to us on the IPM team and everyone involved in the world remittance market.

An interesting observation from the brief is the following quote:

"Recorded remittances sent home by migrants from developing countries are expected to reach $199 billion in 2006, up from $188 billion in 2005, and more than double the level in 2001."

The gigantic sums involved in world remittances are of interest to developing countries who, with the correct systems in place, can harness the power of remittance transactions to fund development at all levels of the economy and empower the "Base of the Pyramid" (BOP) to self fund and rise into a viable and productive class bringing prosperity to the entire country.