Learn to Tap the Bottom of the Pyramid

New book Microfinance for Bankers and Investors, is being touted as a road map for those ready to embrace the challenge of providing financial services to emerging markets. These so-called bottom of the pyramid (BOP) consumers are the four billion people in the world who live on less than $3,000 per year.

Written by Elisabeth Rhyne, managing director of the Center for Financial Inclusion at ACCION International and one of the world’s foremost experts on microfinance, Microfinance for Bankers and Investors explores in-depth the challenges of profitably delivering credit, savings, insurance, and remittance services tailored to serve the BOP.

The Money’s in the Micro

Noting that over the last six years, the microfinance sector has grown at an average rate of 30%, this book offers sixteen in-depth case studies that explore successful solutions in product design, last-mile delivery to remote villages and urban slums, and technological innovations that reduce costs and provide liberating new means of payment and remittance to populations previously tied to a cash economy.

At the outset of the book, Ms. Rhyne asks us to “imagine a world in which a farm couple in the highlands of Nicaragua saves enough money to provide for their old age, a slum dweller in Mumbai who falls ill gets medical treatment without sacrificing her life savings, and a snack vendor in Uganda borrows money and builds a small restaurant.”

Mapping the path to such a world, the book details:

• The extraordinary social value and business sustainability of microfinance
• Changes in the market that allow for increased private investment in microfinance
• New technologies and delivery channels that reduce costs for small transactions
• Innovative products for grassroots finance, such as mobile phone banking and microinsurance
• Proven ways to overcome the unique challenges of serving customers at the bottom of the pyramid

Microfinance for Bankers and Investorssets out to educate potential microfinance investors in three ways: by reviewing authoritative research that demonstrates the investment opportunity; by analyzing success stories from around the world; and by identifying best practices. The sixteen case studies of ventures by companies including Citibank (NYSE: C), Visa (NYSE: V), and Sequoia Capital bring microfinance to life, recounting the motivations that led these companies into inclusive finance, obstacles and setbacks encountered, solutions developed in the field, and results to date.

Image Credit: amazon.com