Ivey Publishing
Baring Private Equity Partners India Limited: Banking Services for the Poor in Bangladesh
Product Number:
9B09M052
Publication Date:
09/16/2009
Length:
23 pages (11 pages of text)
Product Type:
Case (Field)
Source:
Ivey
From the 1970s onward, after the emergence of microfinance, lending for the poor started shifting from informal sources (e.g. moneylenders) to formal sources. The Grameen Bank (Grameen) led this change, primarily due to its chief executive officer (CEO) and his innovative microcredit model. On the basis of the CEO's rich understanding of on-the-ground realities, he began to experiment and modify the business model for microfinance, which, in the past few years in Bangladesh, was largely dominated by a few big players. As a result of some very interesting and insightful experiments that had been conducted, the microfinance landscape was changing the way banking services were modeled for the poor, not only in Bangladesh but throughout the world. The case profiles a situation wherein Baring Private Equity Partners India, one of the largest private equity players in emerging markets, was looking to invest in the high-growth, profitable microfinance industry of South Asia.This case is oriented toward helping students understand the credit needs of the poor and their perspective on money management, hunger, investment and savings. Students should be made to appreciate how an innovative business model can be developed through a deeper understanding of the local context combined with conceptual thinking. The case strongly vouches for the development of sustainable solutions that require both financial viability and sensitivity to the conditions of the poor. The most important point to be highlighted about the microfinance landscape is that the entrepreneurship model is changing from being socially focused to being business focused. Earlier, most players entered the microfinance arena as a not-for-profit venture; however, many for-profit organizations have now entered this sector.
Learning Objective:
The objectives are this case are to:
  • Help students to understand how to build and nurture sustainable social entrepreneurship ventures
  • Illustrate how innovations change with their context (i.e. their site of action)
  • Help students to realize “the bottom of the pyramid” business model
  • Promote an understanding of social and business entrepreneurship in a South Asian environment
  • Increase appreciation of standardization and responsiveness in the microfinance arena
  • Introduce students to the evolution of the microfinance industry from a not-for-profit orientation to a for-profit orientation
  • Increase understanding of conceptual thinking when devising financial instruments
  • Promote the importance of the hands-on experience of working with the poor, for purposes of innovation
  • Help students to understand the linkage between corporate characteristics and financial numbers
  • Help students to understand the need to link financial analysis with qualitative content
    Issues:
    Disciplines:
    Entrepreneurship,  General Management/Strategy,  International
    Industries:
    Finance and Insurance,  Social Advocacy Organizations
    Setting:
    Bangladesh/India, 2008
    Intended Audience:
    MBA/Postgraduate
    Price:
    $4.25 CAD / $4.25 USD Printed Copy
    $3.75 CAD / $3.75 USD Permissions
    $3.75 CAD / $3.75 USD Digital Download
    Associated Materials
    Translations: Simplified Chinese (24 pages)
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