Microfinance models for microenterprises at the base of the pyramid

Abstract

The purpose of the research was to investigate the proposition that current Microfinance solutions are not adequate for Microenterprises operating at the Base of the Pyramid. The research proposes Microfinance solutions for Microenterprises should provide all-inclusive solutions; encompassing both financial and business development services. While the government can lead the debate and deliver on some of the enabling requirements, the limited government resources cannot deliver fully on development requirements at the Base of the Pyramid. There is an increasing need for the private sector to participate in sustainable development initiatives. A key limiting factor is a lack of in-depth understanding of the needs of Microenterprises operating at the Base of the Pyramid. Quantitative research was conducted, using a survey-based method. The results show there is appetite amongst Microenterprise owners at the BOP for holistic Microfinance solutions that can deliver financial and business development services. The study also found business development services, focusing on developing business knowledge and business management skills, were rated the highest. BOP markets for Microenterprises are complex and require dedicated initiatives to understand them and deliver solutions tailored to their needs accordingly.