Microcredit has been successful in lifting millions of people out of poverty, especially women and their families. However, microcredit alone will not suffice. Most of its beneficiaries reside not at the very bottom of the economic pyramid, which is populated with the homeless, often beggar population, but rather those with a home (no matter how modest) who populate the next layer up.
However, these microcredit beneficiaries usually do not build businesses that can grow into family businesses passed on generationally or that can be expanded to additional locations. That economic stratum resides just above the typical microcredit beneficiary and likewise microcredit rarely provides them with the resources they need. Yet that same community is also off the radar screen of traditional funding sources like banks, finding itself just below the lowest layer normally served by traditional financial institutions.
We see this unsatisfied gap being filled by two mechanisms. The first is a BoP variant of our CEED Program and its unique funding model. That is, a program that can provide both funding and a support structure for new small businesses that would sit just above microcredit candidates. These businesses would typically employ a number of workers (whether from the owner's family or not) and be capable of expansion both in size and location. And like the CEED Program model, this would best be done with proven, replicable businesses models.
The corporate cooperative concept likewise has a place at the base of the pyramid. Like smaller companies in the developed world, similar companies in less developed countries can benefit by banding together, especially as that might afford them access to the public capital markets and other benefits of public companies. This BoP variant of corporate cooperatives, in combination with the BoP variant of the CEED Program, microfranchising and the CEED funding model, all taking advantage of the public benefit stock exchange, can yield dramatic improvements in BoP economic development.
Legislative changes needed
Finally, we citizens can do many things for ourselves to change the economic paradigm, but some can only be done by our elected representatives at the state and federal levels.
We are working to introduce new -- and modify existing -- statutes to establish an environment that nurtures and supports our other efforts in creating a more socially and environmentally responsible business community. The key effort at the state level concerns state laws governing the creation of corporations and similar business entities, and in particular, the rules under which they must operate.
We have also identified certain state statutes and federal tax and securities laws that currently work against our goal of helping businesses large and small grow in socially responsible ways, and are working to secure modifications to these regulations.
Measuring corporations
There is one other area where corporations can be influenced to change their behavior. That has to do with the way the investment community evaluates companies. Recently there has been a substantial movement to incorporate additional key performance indicators in those evaluations along social, environmental and governance (ESG) dimensions.
These ESG metrics can be used by stock exchanges and the investment community to push corporations into directions that will prove more beneficial for the company, its owners, employees, customers and suppliers, as well as society and the planet. See this section of our website for more information on both these legislative and metrics efforts.
(Note: You can view every article as one long page if you sign up as an Advocate Member, or higher).
1
1
1
