Managerial Beliefs Regarding Banking Activity at the Bottom of the Pyramid in an Emerging Economy

A decade has passed since C.K. Prahalad and his colleagues first introduced the notion of the “bottom of the pyramid” (BoP) into the managerial lexicon (Hammond and Prahalad, 2004; Prahalad, 2004; Prahalad and Hammond, 2002; Prahalad and Hart, 2002). Briefly, the BoP thesis states that the world’s poor are an increasingly attractive market, especially for multinational corporations. While the top of the pyramid is characterized by relative wealth, its long-term attractiveness is limited owing to high levels of current market penetration, bordering on saturation. By contrast, while the bottom of the pyramid is relatively poor, its long-term prospects are very attractive because of low levels of current market penetration offering the potential for rapid growth in the future. However, to fully leverage this potential, converting the very poor into active consumers will require considerable innovation in terms of products, business models, distribution networks, and especially price-performance relationships for products and services. To date, most companies have failed to generate the necessary innovation, preferring instead to simply transplant offerings developed for their traditional markets (Dawar and Chattopadhyay, 2002).