The Asian Development Bank (ADB) and development partners will use a new $3.6 million grant to support around 20 private sector businesses in Asia targeting poor and low-income communities.
“Economic growth has been high in Asia but that hasn’t trickled down to improve living standards of the poorest in most countries,” said Armin Bauer, Principal Economist in ADB’s Regional and Sustainable Development Department. “Private companies are only now slowly recognizing that poor and low income groups are a huge market for goods and services and a good source of employees and talent.”
The grant will help companies develop new business models relevant to the poor and those on low incomes, and assess the social impact of such activities. It will focus on “inclusive businesses,” or enterprises and projects that make both profits and provide goods, services, and jobs for those living on less than $3 a day. Around 60% of Asia’s population is estimated to live on this small sum.
Among the potential projects to receive support this year are a cacao project and seafarers scholarships in the Philippines, spice production in Cambodia and India, and a water project in the People’s Republic of China.
The grant will also finance work with governments and business associations to make inclusive business much easier. In the Philippines, for example, ADB is helping the Department of Trade and Industries’ Board of Investments set up inclusive business accreditation. ADB is also planning a major loan for generating jobs for the rural poor through private sector initiatives.
Apart from ADB, the Government of Sweden and Credit Suisse, an international financial services company, also financed the grant. Further support comes from the World Business Council for Sustainable Development as well as the French, the German, and the inter-American development banks.
“Inclusive business is a new development area for many donors. We want to be instrumental in helping ADB move into this important field,” said Maja Forslind, program manager for private sector cooperation in Asia at the Embassy of Sweden in Bangkok.
In addition to its financial contribution, Credit Suisse will deploy up to six staff every year for the next three years as part of its Global Citizens Program to provide specialized business expertise to companies targeting low income communities.
“One of the greatest contributions that business can make to society is to expand access to goods, services and economic opportunities to make growth in the world more inclusive. In addition to our philanthropic giving and allowing our clients to get involved via impact investing products, we believe that there is also a great opportunity to harness our core business competencies by providing the expertise of our staff to tackle development challenges and build inclusive business models,” said Manuel Rybach, Global Head of Corporate Citizenship and Foundations at Credit Suisse.