In this chapter, students will be able to understand: Understanding clients, the market, and the opportunities; size of the microfinance industry; why is microfinance growing? what are the risks of microfinance? | Summary of Last lecture Size of the Microfinance Industry Why is Microfinance Growing? What Are the Risks of Microfinance? UNDERSTANDING CLIENTS, THE MARKET, AND THE OPPORTUNITIES The $5 Trillion Invisible Market The World Resources Institute’s project, “The Next 4 Billion,” has taken on the challenge of quantifying the opportunities at the base of the pyramid. The $5 Trillion Invisible Market Its target, the estimated 4 billion people in the world who get by on incomes of less than $3,000 per person per year, are, in fact, a majority of the world’s population. The $5 Trillion Invisible Market The project declared that this population segment constitutes a global consumer market worth an estimated $5 trillion, broken down as follows: The $5 Trillion Invisible Market The Asian BOP market contains 70 percent of the total spending power ($ trillion). Latin America, Africa, and Eastern Europe each account for roughly 10 percent of the total. In Africa, despite recent growth in the . | Summary of Last lecture Size of the Microfinance Industry Why is Microfinance Growing? What Are the Risks of Microfinance? UNDERSTANDING CLIENTS, THE MARKET, AND THE OPPORTUNITIES The $5 Trillion Invisible Market The World Resources Institute’s project, “The Next 4 Billion,” has taken on the challenge of quantifying the opportunities at the base of the pyramid. The $5 Trillion Invisible Market Its target, the estimated 4 billion people in the world who get by on incomes of less than $3,000 per person per year, are, in fact, a majority of the world’s population. The $5 Trillion Invisible Market The project declared that this population segment constitutes a global consumer market worth an estimated $5 trillion, broken down as follows: The $5 Trillion Invisible Market The Asian BOP market contains 70 percent of the total spending power ($ trillion). Latin America, Africa, and Eastern Europe each account for roughly 10 percent of the total. In Africa, despite recent growth in the middle class, the BOP market is still the market. It involves 95 percent of the population and 71 percent of purchasing power. The $5 Trillion Invisible Market Even in Latin America, the BOP market constitutes 70 percent of the population and 28 percent of total spending power. The Eastern Europe/Central Asia BOP market is worth close to $500 billion annually. The $5 Trillion Invisible Market While the overall market includes many people living somewhat above their national poverty lines, an important subset is the 1 billion people who live on less than a dollar a day, the poorest segment of humanity. The $5 Trillion Invisible Market This group requires special attention if it is not to remain excluded while the high end of the BOP market receives more services. Much of the BOP market is rural, especially the lower-income portions, and this too poses special challenges. Profiles of the Working Poor Global facts and figures show the market potential in the broadest terms. We now shift to a
