Show Less
Restricted access

The Private Sector and the Marginalized Poor

An Assessment of the Potential Role of Business in Reducing Poverty and Marginality in Rural Ethiopia


Christine Husmann

The book examines the role that the private sector can play in reducing poverty and marginality in Ethiopia by providing improved agricultural inputs to marginalized poor farmers. By creating a marginality map the author analyzes who and where the marginalized poor are. Data from a household survey about purchasing behavior, demand and needs indicates that this group can be a promising market segment for the private sector if adequate business models are applied. Yet, an analysis of the institutions governing agricultural input markets shows that investments by the private sector are discouraged by de facto monopolies of the government on crucial elements of the different supply chains, including seed breeding, fertilizer imports and finance.
Show Summary Details
Restricted access

III. The demand side of BoP markets: the marginalized poor as consumers and producers


III-1 Introduction: the people at the bottom of the economic pyramid

The Bottom of the Pyramid (BoP) is often praised as a huge untapped market. A lot has been written about strategies for companies to explore and capitalize on this market (see e.g. Prahalad, 2010; Karamchandani et al., 2011; Elaydi and Harrison, 2010 to name just a few). Despite some criticism on these approaches (Karnani, 2009b; Simanis, 2010; see also Section I-2), the debate is not anymore about whether the private sector should engage the poor but about how to do so best (Reficco and Márquez, 2012).

The basic idea of recognizing poor people as market opportunities was introduced by some influential business thinkers, first and foremost by Muhammed Yunus and C.K. Prahalad (see e.g. Hamel and Prahalad, 1996; Prahalad and Hart, 2002; Prahalad, 2010; Yunus, 2007) who were then followed by many others (see also Section I-2). The main arguments for bringing the private sector and the poor together can be divided into two lines of argumentation: one is the societal necessity for getting the private sector on board of poverty reduction efforts since traditional development cooperation has a role to play but has not redressed the problem of poverty (Polak and Warwick, 2013; Prahalad, 2010). An important argument in this context, besides the big amount of knowledge and money that is expected to be made available to the benefit of the poor, is scale. Whether initiatives started by single entrepreneurs or...

You are not authenticated to view the full text of this chapter or article.

This site requires a subscription or purchase to access the full text of books or journals.

Do you have any questions? Contact us.

Or login to access all content.