An idea from the bottom of the pyramid that is changing lives in the USPosted: September 30, 2011
Grameen Bank from Bangladesh brought the concept of Micro Lending to an impoverished nation. The idea was so successful that its founder Mohammed Yunus bagged the Nobel Peace Prize.
Grameen America is its US version. It started operations in New York in January 2008. In a country where the word sub-prime brought the nation to it’s knees, Grameen’s Sub-Sub Prime borrowers turn in a 98% repayment rate. Since 2008, Grameen has lent about 25 Mn$ between 7300 borrowers.
Grameen has stumbled upon a big market segment in the US – the unbanked. The economist has a detailed article on the unbanked class in the United States and the opportunity to serve this group. The size of this segment – 1/4 of all households in the United States.
Here is a link to several examples that highlight the big difference Grameen is making in America.
So, is time for us in the United States to do a re-read of CK Prahlad’s classic – Fortune at the bottom of the pyramid?
His idea was that there are several untapped markets at the bottom of the economic pyramids who would represent a large enough market if companies could innovate and create offerings at low prices. With growing unemployment and poverty in the west, this seems like a good time for companies to start thinking of this market segment.
Another view point could be that it would be easier for several emerging market companies to do this and this could be a big opportunity for them to break into the western markets.
Here are two other potential bottom of the pyramid markets in the US that I could think of:
1. A 3 year college course in Engineering for 25,000$ – potential market – 1 Million high school grads who do not go onto college
2. A private sector low cost healthcare solution – Let’s say a premium of 50$ per person – potential market – 40 Million uninsured Americans