Document: Accelerating Inclusive Business Opportunities: Business Models that Make a Difference

IFC’s mission is to create opportunity for people to escape poverty and improve their lives, and we pursue it by investing in the private sector. At a fundamental level, it is the private sector that drives economic growth — a basic ingredient in poverty alleviation. At the same time, the private sector can expand access to goods, services, and livelihood opportunities for the poor, helping to ensure that growth is inclusive. IFC is particularly interested in investments with this dual rationale — investments in what we call inclusive business models.

Inclusive business models are helping companies turn underserved populations into dynamic consumer markets and diverse new sources of supply. In the process, companies are developing product, service, and business model innovations with the potential to tip the scales of competitive advantage in more established markets as well. And they are providing clean water, electrical power, modern communications, health care, education, financial services, and income-generating opportunities to millions of people at levels of quality andaffordability they have never experienced— if they ever had access—before.

In the past five years, IFC has invested over $5 billion in more than 200 companies in nearly 80 countries around the world. We know it can take time to overcome the challenges to inclusive business success, and we aim to help companies accelerate that journey. The need for experimentation and iteration may never be eliminated entirely, but adapting proven models — learning from the experience of others — is quicker and easier than starting from scratch.

As a result, we have decided to publish this overview of a number of the inclusive business models in our portfolio, summarizing and analyzing patterns in the solutions they are using to succeed. IFC has invested in all of the models summarized here. This means that extensive fi nancial, environmental, and social due diligence was done; that the fi nancial projections showed a suffi ciently high commercial return; and that all projects have been monitored on a quarterly basis for fi nancial, environmental, and social results. Mature investments in companies with inclusive business models show returns very similar to those of IFC’s portfolio as a whole.