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Corporate Engagement at the Base of the Pyramid: Commercial Microfinance and Entrepreneurship

40 Pages Posted: 12 Jun 2015  

Jasjit Singh

INSEAD

Pushan Dutt

INSEAD - Economics and Political Sciences

Date Written: June 10, 2015

Abstract

Microenterprise loans are commonly considered an effective way of having social impact at the base of the pyramid (BOP). We examine evidence for this in the context of a microfinance company, investigating how economic outcomes associated with loans meant for supporting microenterprises compare with those for other kinds of loans. While loans targeting income generation do in general exhibit better outcomes, these outcomes are at least as good for loans specifically funding traditional means of rural livelihood as for microenterprise loans. Within microenterprise loans, the outcomes are even worse for starting than growing microenterprises, pointing towards lack of complementary resources and skills as a bottleneck. These findings suggest a need to temper the emphasis on funding microenterprises as a preferred way of supporting BOP livelihoods.

Keywords: Base of Pyramid, Microenterprise, Microfinance, Emerging Markets, Economic Development, Corporate Social Responsibility

Suggested Citation

Singh, Jasjit and Dutt, Pushan, Corporate Engagement at the Base of the Pyramid: Commercial Microfinance and Entrepreneurship (June 10, 2015). INSEAD Working Paper No. 2015/41/STR/EPS. Available at SSRN: https://ssrn.com/abstract=2616746 or http://dx.doi.org/10.2139/ssrn.2616746

Jasjit Singh (Contact Author)

INSEAD ( email )

Boulevard de Constance
77305 Fontainebleau Cedex
France

Pushan Dutt

INSEAD - Economics and Political Sciences ( email )

1 Ayer Rajah Avenue
Singapore, 138676
Singapore
65-6799-5498 (Phone)

HOME PAGE: http://faculty.insead.edu/pushan-dutt/

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