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Emerging Markets, Emerging Models Market-Based Solutions to the Challenges of Global Poverty

THIS REPORT INVESTIGATES "MARKET-BASED SOLUTIONS" as a means to help those residing at the base of the global income pyramid. An alternative and complement to traditional government expenditures, aid, and philanthropy, market-based solutions give low-income people better access to socially beneficial products and services that genuinely and directly improve the quality of their lives and livelihoods. In India, for example, such solutions provide or enable:

• Clean drinking water at one-fourth the cost of the least expensive alternative.
• As much as a 125 percent increase in incomes for small farmers.
• Private education in urban slums that significantly outperforms the best government schools for about $3 per month.
• Safe, doctor-attended births for a total cost of $40—less than one-fourth the cost in traditional private hospitals.

Market-based solutions have recently attracted strong interest in the campaign against global poverty, in part due to the remarkable success of microfinance. They are relatively new, with an uneven performance record, and there is much yet to learn about what causes them to succeed or fail. The most successful pass two tests: they are self-funding, and they operate at sufficient scale to make a difference to masses of poor people. They also have one salient feature in common: a business model tailored to the special circumstances of markets at the base of the income pyramid.