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| Lok Capital / About Lok / Defining Inclusion and BoP |
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Defining inclusion and BoP |
| Inclusion |
“Inclusive business models include the poor on the demand side as clients and customers, and on the supply side as employees, producers and business owners at various points in the value chain. They build bridges between business and the poor for mutual benefit.”
– UNITED NATIONS DEVELOPMENT PROGRAM |
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| The Base of the Pyramid |
We define Base of Pyramid customers by applying a combination of criteria such as low levels of income, low value of assets owned, poor quality of life, lack of access to basic needs such as water, sanitation, power and exclusion from vital services such as health and education.
Lok strives to integrate the poor or BoP customers into economic value chains with financial inclusion as the foundation, to improve their livelihood / income while reducing expenses / improving productivity. This leads to market and social inclusion for the poor and will contribute to the national goal of inclusive growth.
At the same time, we do not want to promote credit dependency among the poor in India. We do not want to support consumption-based lending, with the understanding that in reality it is often difficult to separate from lending for productive purposes. Thus to mitigate against this, business models must have strong deterrents against consumption oriented lending (i.e. complimentary crop or health insurance or livelihood training) and promote access to other basic services like education and healthcare.
We believe that all future models serving the BoP market successfully will be relatively nascent, pioneering and high on product / business model innovation, and would demonstrate great focus on delivering impact. Patient capital and impact oriented outlook will lead the next wave of inclusion investing.
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