G20 Inclusive Business Framework

A framework that defines inclusive business, sets out recommendations to enable inclusive business, and proposes a way forward for governments, the private sector, and other stakeholders.

Leaders’
Call

Leaders at the G20 Leaders Summit in Antalya, Turkey issued a call to action to public and private sector representatives, international organizations and civil society to advance the ability of businesses around the world to integrate low-income people into their value chains.

About Us

Endorsed by the G20 in 2016, the G20 Global Platform on Inclusive Business (GPIB) seeks to connect policymakers and business behind a mission that is both pro-poor and pro-business and strives to better understand the role that G20 and non-G20 governments can play in supporting inclusive companies more effectively. The GPIB stems from the G20 Leaders Call on Inclusive Business issued in 2015 and was officially launched by the Chinese Presidency in Nanjing, China in April 2016. 

How Can Inclusive Business Be Supported?

 

Information

At the market-level, information about BOP consumers’ needs, preferences, and consumption patterns is often not available to potential investors or business partners. The same is true for BOP suppliers, as information about the production capacity of smallholder farmers, or of market prices, is often lacking. Information services, including market research, are also in short supply, especially at the local level. Companies that want to pursue a BOP market opportunity often encounter difficulties finding enough data to build an inclusive business model.

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Financial Resources

Conventional finance providers are not always equipped to finance inclusive businesses, and often consider risk-adjusted returns too low to merit credit or investment. Financial products are often not adapted to the needs of inclusive business. Despite the growth of the microfinance and SME industry, access to credit and other financial resources for the BOP are still scarce and are usually limited to small sums. Equity finance is also difficult to access. For example, smallholder farmers aiming to invest in equipment or distributors with a need for working capital must often rely on their own resources.

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Rules

Innovative inclusive business solutions are often limited by existing regulation, or because legal foundations are missing; this was initially the case for microfinance and mobile money. Moreover, as BOP markets are mainly informal, companies find it difficult to establish and enforce contracts. At the company level, corporate rules and structures can limit their ability to innovate in BOP markets. Corporate business development processes, for example, often do not allow for longer-term investment or high levels of uncertainty. In addition, in many countries, non-profit organisations (NPOs) can be limited in regards to their earned income strategy.

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Capacity

Many inclusive businesses face external and internal constraints, both at the BOP market level and at the company level. Challenges differ in degree and type from those typically encountered by businesses in developing and emerging economies and may also differ depending on the company’s approach to inclusive business. Constraints at both the market and company levels have been identified along four broad dimensions: information, rules and regulations, financial resources, and capacity. Where these can be reduced, inclusive businesses can grow and achieve greater impact.

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G20 Inclusive Business Framework

A framework that defines inclusive business, sets out recommendations to enable inclusive business, and proposes a way forward for governments, the...

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