Just came across the following pair of posts on the blog of E+Co, a fund that invests in small-scale rural energy enterprises.
First, Harish Hande of Indian solar company Selco points out:
I am shocked, to say the least, that people are looking at the BOP in a very unidirectional way – how to SELL to the BOP, making BOP an ‘marketable area’, high returns from the BOP etc. Sometimes I feel it crosses the line of vulgarity and the word ‘exploitation’ becomes a soft word. People famously quote the example of 1 Re sachets of Shampoo bought by the poor in rural parts of India – termed as a brilliant marketing strategy. High returns, but very unsustainable for the society. But this is what the corporate and the venture capitalists like.
Selling to the BOP is a becoming completely unilateral in a way that we are not helping the BOP to come out of BOP but making them consumers while they still remain in BOP. Investors would rather invest in organizations selling to BOP (high returns) than invest in organizations trying to create services that will help people come out of BOP (small returns).
Phil LaRocco of E+Co agrees:
We need to shift the emphasis from the ROI BOP buzz. Creating portfolios of sustainable businesses analyzed and valued for their financial, social and environmental returns is a long term race endangered by any inane talk that there are financial killings to be made. The buzz I would like to hear is more to the effect: “Invest in providing services and capital to men and women so that they can provide life changing services and products to their neighbors”.