Report On The Base Scan Survey On Inclusive Business in Bangladesh

BASE SCAN SURVEY
ON
INCLUSIVE BUSINESS MODELS

IN BANGLADESH
Base Scan Survey on Inclusive Business Models in Bangladesh
CSR CENTRE ǀ MAY 2010
BASE SCAN SURVEY

ON
INCLUSIVE BUSINESS
MODELS
IN BANGLADESH
CSR CENTRE
16 May, 2010
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Inclusive Business is fairly a new concept for the private sector of Bangladesh.
To identify the current level of understanding of the private sector
organizations of the country, CSR Centre was entrusted by IBLF and UKAID to
conduct a Base Scan Survey within a smaller group of companies. The Report
has some significant findings in this regard.
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E XECUTIVE S UMMARY
Bangladesh is a flourishing economy and holds key markets growing at
rapid rates in almost all the fields and sectors of operation. Merrill
Lynch has identified the country as one of eleven nations with the
potential to emulate the recent growth patterns of the so-called ‘BRIC’
countries (Brazil, Russia, India and China). This fast growing-low cost and
profitable key markets have attracted both the local and many major
foreign investors to initiate operations in Bangladesh in a variety of
fields such as Ready-made Garments (RMG), FMCG, pharmaceuticals,
foods and beverages, banking, construction, etc. With the rapid growth
rate, the business sector observed a tremendous expansion over the
last two decades.
Businesses worldwide are profit oriented, seeking opportunities to

maximize their return on investment. While the prime motive of
business is totally focused on maximizing profit, it tends to be involved
in some social/contributory works aiming at poverty alleviation,
employment, and sustainable livelihood to aligning their vision with the
agenda of the Millennium Development Goals thus adding value to their
existence.
While value addition can be done through responsible behavior,

another elegant approach is to integrate the supply chain through
inclusivity. Companies worldwide are implementing innovative changes
in their supply chain to be benefited from flexibility and steadiness,
reduced costs and at the same time offering ample of opportunities to
the low income communities. Usually they are done through
establishing new relationships with smaller suppliers, marginalized
producers, or through improving the existing chains by fetching
inclusiveness of the tail end.
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The UKAID (UK Department for International Development - DfID) has

launched a “Partnering with Business” initiative, which is programmed
as a series of events in Africa, Asia and the UK meeting DfID's
commitment to build stronger partnerships with business. The UKAID
has partnered the International Business Leaders Forum (IBLF) for
conducting the programs in different countries in Asia, Africa and the
United Kingdom.
In Bangladesh, to explore the present understanding of Inclusive

Business Models among the Business Houses, IBLF has partnered with
the Corporate Social Responsibility Centre (CSR Centre) to conduct this
Base Scan Survey among a number of Private Sector organizations. The
sample size was determined to be 20.
CSR Centre selected 20 organizations from different sectors; those who

are large, likely to have a story on how they became big with
inclusiveness, and/or those who are concerned about corporate social
responsibility, a buzz word in recent times, that encourages them to be
involved in some social and/or community development projects aiming
at reducing poverty or creating sustainable livelihood.
Inclusive Business is comparatively a new term in Bangladesh although

during the Base Scan we found that most of the organizations, some
way or the other, are replicating the model in their business aspects.
An Inclusive Business Model is a sustainable business framework that

benefits low-income communities. While large corporations
traditionally target consumers in the middle and high-income segments
of society, and established suppliers and service providers from the
formal economy, inclusive business finds profitable ways to engage the
low-income segments into their business operations in a way that
benefits both the business and the low-income communities and
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creates sustainable livelihoods for them and foster a win-win situation

for both concerned.
The data collection method of this study includes semi-structured

interviews and discussions with different stakeholders. The interviews
were conducted with the top level management of the sample
organizations and potential businesses and financial institutions.
Some recommendations are made based in the findings in the later part
of this report.
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F OREWORD
International Business Leaders Forum (IBLF) and UKAID (DfID
Bangladesh) had requested the CSR Centre Bangladesh to conduct a
short but significant Base Scan Survey on Inclusive Business Models in
Bangladesh in the period April 2010. The objective of the survey was to
scope the business environment in Bangladesh to realize whether the
private sector had some understanding on inclusive business and to
what extent inclusive businesses models exist and what are its various
forms.
The CSR Centre had conducted a Base Scan Survey of 20 larger sized
organizations and companies who not only have large annual capital
turnover but those who are well reputed in their specific sectors at the
national level.
It was a challenge in selecting the proposed twenty organizations /

companies within the short duration of the timeframe for the Survey
itself. The other challenge was to gain the interest of the respondents as
the survey team met or conversed with the senior managers or CEOs
and heads of these organizations that would need to have a clear
understanding of the needs and objectives of the survey in order to feed
into the survey instrument effectively. It was rather difficult to get
immediate feedback as companies needed time to think through the
concept of inclusive business and then delegating the right person for
filling in the survey instrument within the very short span of allocated
time. Yet, nevertheless the Survey did give some idea on the status of
“Inclusive Business” models and its challenges in incorporating this into
the Bangladeshi private sector.
I would like to take this opportunity to thank all those twenty

companies and organizations who gave the survey team their time and
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shared their business experience to make this Base Scan Survey of

Inclusive Business in Bangladesh possible.
Thanks also go to IBLF and UKAID in addressing such a crucial issue of

“Inclusive Business” in Bangladesh. I hope that this will be the first of
many such studies for Bangladesh’s private sector in implementing good
practices of Inclusive Business models.
Lastly I would like to thank my team at the CSR Centre who worked
diligently through weekends to make this Base Scan Survey a success
given the time constraint.
As Bangladesh is still coping with high population growth rates and

minimum livelihood options, large portion of the population being
unskilled and illiterate the Government of Bangladesh hopes to reach
the Millennium Development Goals (MDGs) and to create substantial
space for investment, the scope for inclusive business can support a
public-private partnership approach to sustainable development.
I am hopeful that through the recommendations made in this Survey

Report there will be a greater shared understanding of “Inclusive
Business” models. Those companies possessing best practices can share
their struggles and benefits of doing inclusive business strategies to
uplift the socio-economic condition of the bottom pyramid of the
population.
_______________________
Shahamin S. Zaman
CEO, CSR Centre, Dhaka, Bangladesh
May 14th 2010
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Contents
Executive Summary.............................................................................................4
Foreword .............................................................................................................7
Introduction.......................................................................................................10
Methodology .....................................................................................................16
Overview of Inclusive Businesses in Bangladesh ............................................19
Survey Findings .................................................................................................23
Recommendations ............................................................................................31
Conclusion .........................................................................................................33
ANNEXURE 1: Questionnaire of the Base Scan Survey................................34
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I NTRODUCTION
Inclusive businesses may engage low-income communities through,
among other things, directly employing low-income people; targeting
development of suppliers and service providers from low-income
communities; or providing affordable goods and services targeted at
low-income communities.
Inclusive business is not a form of corporate philanthropy, which has

intrinsic limitations of scope and implementation. Rather, it is the
search for a sustainable business model that "does well by doing good
and being good" and have the potential to become a part of the
mainstream business model within the companies concerned - the key
to business having development impact at scale.
As employees and suppliers, through an Inclusive Business Model, the

low-income segments gain access to the formal economy; including
provision of training, access to finance and livelihood. As consumers,
low income customers can be benefitted from products and services
that meet their needs in an affordable way. If business does both, it
opens up the virtuous cycle of business in development.
An Inclusive Business Model involves doing business with the base of

the Bottom of Pyramid (BoP) across companies' value chains,
incorporating them in the supply chain, production stream, distribution
means and marketing channel of goods and services. This generates
new employment, income, technical skills and local capacity. Given that
most economic activity now occurs in developing countries, and given
that over 90% of population growth will happen there, those companies
that master Inclusive Business Models could be those who realize
greater success in the coming decades.
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Inclusive Business investments need to generate a return. It is a matter

of combating poverty through business solutions – not philanthropy. It
is not just about selling cheaper products to the poor, but rather about
looking holistically at opportunities to productively engage in a long
term relationship with the private sector.
Large companies have the potential to make a contribution to poverty

alleviation through the following four areas of business action:
 Core business operations and value chains

 Corporate social investment and strategic philanthropy
 Hybrid models that combine social and commercial capital and/or
public and private resources
 Public advocacy, policy dialogue and institution building
Support from political leaders and the establishment of optimum

framework conditions are crucial to succeed on Inclusive Business.
Doing business with the BoP require bold innovative strategies from the
state and a close collaboration with small and medium-sized enterprises
(SMEs), large firms, and civil society organizations (CSOs), in order to
prioritize key areas that, if addressed, could maximize the impact of
development efforts while also reducing investment inflows.
In 2006, the World Business Council for Sustainable Development

“WBCSD” and the Netherlands Development Organization “SNV” joined
forces to form the Alliance for Inclusive Business in Latin America. The
Alliance has reached out to 300 companies in these countries, and has
generated 80 Inclusive Business ventures, now being implemented in
areas such as agriculture, affordable housing, micro-insurance, mobile
banking, forestry and biofuel, improving the lives of up to 400,000
people in the BoP by 2010. The WBCSD and SNV have begun expanding
the uptake of inclusive business by starting activities in Asia and Africa.
Projects have begun in Zimbabwe, Mozambique and Vietnam.
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THE BOTTOM OF THE PYRAMID – BOP: AN OPPORTUNITY FOR

ENTERPRISES TO FACE THE ECONOMIC CRISIS
TH E BO P CON CEP T
1. In recent years, use of the terms “base of the pyramid” and “bottom
of the pyramid” have proliferated. Technically, BoP is a socio-
economic designation for the four billion people who live on less than
USD 1,500 (according to the purchasing power parity exchange rate)
per capita income.
The so-called Base of the Pyramid (BoP) Strategy involves the private
sector in helping reduce poverty by serving these people in ways
responsive to their needs, such as providing them with access to
knowledge and technology.
2. The BoP concept does not merely relegate the poor to the area of
charity, philanthropy or social responsibility (CSR) initiatives. It
involves change in the functioning of companies as much as it changes
the functioning of developing countries.
Annual per capita Income1 Tiers Population in MM The World Economic Pyramid Note: 1 Based on purchasing power parity in USD
Source: UN World Development Reports; ‘Bottom of the Pyramid’-C.K. Prahalad; The Fortune at the Bottom of the Pyramid, C.K. Prahalad and Stuart L. Hart
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PURPOSE OF THE SURVEY:
The UKAID (UK Department for International Development - DfID) has

launched an initiative “Partnering with Business”, which is programmed
as a series of events in Africa, Asia and the United Kingdom to meet up
with DfID's commitment to build stronger partnerships with business.
The International Business Leaders Forum (IBLF) has been partnered by
the UKAID in this process for conducting the programs in different
regions of Asia, Africa and the United Kingdom.
In Bangladesh to explore the present understanding of Inclusive

Business Models among the Business Houses, IBLF has partnered with
the Corporate Social Responsibility Centre (CSR Centre) to conduct this
Base Scan Survey among some of the Private Sector organizations.
TH E OBJ EC TIVE O F THE SU RVEY IS:
 To look at how businesses in Bangladesh perceive the notion of

Inclusive Business
 To identify the cases of inclusiveness and tales of partnerships that

have been developed due to their social development projects
 To explore the challenges/barriers, if any, of doing Inclusive Business

in the context of Bangladesh
The findings of the Base Scan Survey will be presented in a day-long

Conference on May 17, 2010 in Bangladesh where the program will
focus on raising the awareness on Inclusive Business Models and how
the private sector can contribute to human development as well as to
the MDGs through such models and demonstrate the business sense for
adopting Inclusive Business Models.
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INTERNATIONAL BUSINESS LEADERS FORUM: www.iblf.org
The International Business Leaders Forum (IBLF) is an independent, not-

for-profit global organization working with business leaders to deliver
innovative solutions to sustainable development challenges.
IBLF is supported by a network of over 60 global and national

companies from Europe, America, Asia and the Middle East. These
businesses are leaders in their sectors, and often in the fields of social
and environmental accountability, community investment, stakeholder
consultation and partnerships.
Over the past two decades, IBLF has worked with businesses,
governments, and civil society organizations in over 90 countries - both
in developing countries and emerging markets, as well as the major
financial hubs where companies are based.
IBLF also works with a range of partners, including government bodies

and inter-governmental organizations such as the UN (United Nations)
and the World Bank, NGOs and the public sector to create an ‘enabling
environment’ in which business can have a positive impact on society.
An additional asset to this work is IBLF’s long-term relationship with

regional affiliates and networks across the world in key markets such as
Latin America, Asia Pacific, Europe, Russia and the Commonwealth of
Independent States (CIS).
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CORPORATE SOCIAL RESPONSIBILITY CENTRE: www.csrcentre-bd.org
Established with private sector start-up funding to raise CSR awareness,

the CSR Centre’s goal is to promote sustainable development through
responsible business practices. Registered as a Trust, the autonomous
CSR Centre was set up as a non-profit organization in August 2007 and
launched publicly in September 2007 under the direction of a Board of
Trustees comprised of leading private sector companies (BRAC Bank
Limited, Rahimafrooz Bangladesh Limited, TATA International, and
Youngone Corporation) and Civil Society Organizations (Bangladesh
Centre for Advanced Studies, Bangladesh Enterprise Institute, Centre for
Policy Dialogue, and Development Research Network).
The Centre’s mission is “to establish corporate social responsibility as a

key strategy for corporate excellence in Bangladesh to maximize
stakeholder benefits”. The primary objective of the Centre is to become
the prime source of information, resources, and advisory services on
CSR in Bangladesh, and the operational principal is to contribute to
achieving the human development targets set in the Millennium
Development Goals (MDGs) in Bangladesh through private sector led
growth.
CSR Centre is the joint focal point for UN Global Compact in Bangladesh
along with the Bangladesh Enterprise Institute (BEI). With BEI, the CSR
Centre comprises the principal promoters of the UNGC and its principles
in the country.
CSR Centre also holds the Secretariat of South Asian Forum on

Responsible Business (SAFoRB) in Bangladesh. The Centre has wider
access to business sectors and a strong local and international network
to promote responsible business.
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Besides its mission to create awareness on CSR amongst the

Bangladeshi Business community, CSR Centre has conducted several
studies on behalf of foreign investors regarding the present CSR
positioning and sustainability issues in different business sectors in
Bangladesh. The Centre is also capable of providing services for CSR
policy development, capacity building programs, CSR trainings and
workshops, conformities with international standards (i.e. GRI, SA8000,
BSCI, WRAP, GOTS, etc), corporate governance, stakeholder
engagement and dialogue, sustainable appraisal, and so on.
M ETHODOLOGY
ST UD Y TE AM
The following members of the CSR Centre have conducted the study
and prepared the report:
 Ms. Shahamin S. Zaman (Chief Executive Officer)

 Dr. Feroz Kabir Khan (CSR Operations Manager)
 Mr. Shafiq R. Bhuiyan (Officer, CSR Resource Mobilization)
SA MP LE
IBLF and CSR Centre agreed upon conducting the Survey of a sample
size of 20 large organizations in Bangladesh who are likely to have some
Inclusive Business Models prevailing in their activities.
CSR Centre selected the companies so as to have various sectoral

representations.
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D A TA CO LLEC TIO N ME THOD
The data collection method of this study includes: company visits,

factory visits and semi-structured interviews and discussions with
different stakeholders.
The survey was conducted by the study team in the month of April 2010
in Dhaka city, Bangladesh.
Template for case studies provided by the IBLF was used to structure
the basic questions in the interviews focusing on their understanding on
Inclusive Business, story of projects undertaken for inclusiveness,
challenges they faced in doing so and the step forward that they plan to
implement in future. The questionnaire is enclosed in Annexure 1 of this
report.
Company websites were also visited to explore relevant information.
Based on the findings, the recommendations have been made at the

end of this report.
The major constraint of the study is the short time-period. The initial
time line for the study was 20 days, was insufficient to cover the large
organizations and explore their perception on a relatively new concept
of “Inclusive Business”. However, it was clearly identified that the
perception is not so clear among the private sector organizations that
created the impediment to finish the study in time. Many of the
respondents had to take more time than stipulated as they needed
more interaction with the team from CSR Centre to get a clearer
understanding of the issue of “Inclusive Business”. This led to a need to
revisit and assist a majority of organizations more than once in order to
get the desired interest in responding to the survey itself.
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The Base Scan took into account 20 of the larger companies /

organizations for its sample size. Yet there was an attempt to include
the various sectors which have larger companies / organizations
involved so as to get a better picture of the Bangladesh scenario.
SU RVEY R ESP O ND ENTS:
The following organizations were included in the Base Scan Survey:
1. Advanced Chemical Industries Limited (ACI Limited)

2. AK Khan and Company
3. Akij Group
4. Apex Adelchi Footwear Limited
5. Apex Leather Craft Limited
6. Bank Asia Limited
7. Concord Group
8. Elite Group of Companies
9. Hatil Complex Limited
10. Janata Jute Mills Limited
11. Kazi & Kazi Tea Estate
12. M. M. Ispahani Limited
13. Navana Group
14. Otobi Limited
15. Partex Group
16. Rahimafrooz Bangladesh Limited
17. Summit Group
18. Square Pharmaceuticals Limited
19. Unilever Bangladesh Limited
20. Viyellatex Group
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O VERVIEW OF I NCLUSIVE
B USINESSES IN B ANGLADESH
As mentioned earlier Inclusive Business is comparatively new phrase in
Bangladesh although during the Base Scan Survey it was found that
most of the organizations, some way or the other, is active with the
activity of inclusive business.
Bangladesh is a country with a population over 150 million people with

major concentration in the rural areas. But surprisingly, “Inclusive
business”, being a much unheard concept, has been one of the key
sources of earning for many in the rural areas though the model has not
been realized in most of the cases. With the growing number of
businesses and their affiliations with NGO’s, Inclusive Business models
have become more visible and have helped the economy grow
significantly with a more efficient distribution of resources and
increased cash flow.
Bangladesh has made considerable progress in its economic

development over the last two decades. At the same time, Corporate
Social Responsibility (CSR) has had a good coverage among the business
organizations encouraging them to be involved in different social and
development works. As part of their social commitment, many
companies are involved in donating money, establishing school for
educating the poor, setting up health camp, considering the potential of
small suppliers, vocational training, community investment, equal
employment practices, taking care of the vulnerable group, partnering
NGOs for development projects, and so on. Promoting initiatives like
vocational training and skill development to accelerate this growth
process will help reducing poverty.
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The main challenge for the skill development system is to overcome its
inadequate orientation to the labor market. Although recently in some
business houses, financial institutions are supporting the technical and
vocational education, and training and skill transfer thus driving the
changing in the patterns of labor demand, with proper incentives to
build those connections, which would ensure that skill development
courses are relevant and useful to potential new employees and the
employers.
Bangladesh at a Glance
General Economy Development
 Land Area: 130,170 sq km (2007)  GDP per capita: US$431.45  Human Development Index:
th
 Population: 144.5 million (Male 74.0 million, (2007) 0.547 (140 in the world) (2007-
Female 70.5 million) (2008)  Per capita income: US$599 08)
 Population Density (people per square km): (2007-08)  Official Development Assistant:
1218.19 (2007)  Labor Force: 74.25 million US$1.502 billion (2007)
 Annual Population Growth: 1.64 (2007) (Male 60.81%, Female 39.19%)  Aid consisting of Central
 Urban Population 26.66%, Rural Population (2007) Government Expenditures:
73.34% (2007)  Inflation, Consumer Prices 21.72% (2007)
 Life Expectancy at Birth: 64.07 (Male 63.16, (annual): 9.11% (2007)  Aid per capita: US$9.47 (2007)
Female 65.02) (2007)  Population living at/below
 Fertility Rate (births per woman): 2.83 (2007) US$1.25 a day: 13.08%, at/below
 Literacy Rate 53.48% (Male 58.67%, Female US$2.00 a day: 33.78%
48.05%) (2007)
Source: Bangladesh Bureau of Statistics (2009); Statistical Pocket Book of Bangladesh 2008,
Dhaka: Bangladesh Bureau of Statistics
Inclusive business models are to be designed and delivered for mutual

benefits for business – generating sales and profit growth – and for low-
income communities – creating jobs, providing access to new products
and increasing incomes. Without any pre-acquaintance with the
concept of Inclusive Business, these practices have been profoundly
been into action under many social and community development
projects. Building sustainable livelihoods requires targeted support from
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governments, private sector and civil organizations to ensure impact,

long term commitment, scale and sustainable development.
Inclusive Business Model in some cases is considered as an addition to

the Social Enterprise Model. Social Entrepreneurs are initiators who
undertake businesses for social causes while social businesses are self-
sustaining, profitable ventures that aim to alleviate poverty. But it is
important to mention that while Social Business/Enterprise Model is
completely about commencing a new entity aimed at operating in either
profit/non-profit framework with a social cause, inclusive business
model is the integration of the marginalized stakeholders in the existing
business outline that goes beyond the immediate return and ensures
the sustainability of its value offering.
One of the pioneering examples strained many times of such model is

Grameenphone Limited’s “Polly Phone” (village phone) program which
offered mobile phone for commercial purpose to the disadvantaged
population, specially women in the rural areas, on the basis of small
loans to outreach the rural areas with wider coverage at the same time
creating a means of earning for them. (Source: www.grameenphone.com)
An alike inclusive business model can be found in the case of Bata Shoe
Company (Bangladesh) Limited. Bata in partnership with Care
Bangladesh initiated a “Rural Sales Program” with an objective to
generate employment and address profitability of the private sector
through increasing sales. It aimed at promoting gender equality and
empowering women, building their capacity for sustainable enterprise
Photo of GP’s Polly Phone and development and creating a win-win business partnership. While Bata
Bata’s Rural Sales Program
provided the women with the necessary trade credit, training support
and delivery of products in time, Care provided the support of credit
guarantee, training and support services to the self-help groups. (Source:
www.socialenterpriseportal.org)
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A good example of Social Enterprise is Hathay Bunano Proshikhan

Society. Hathay Bunano p.s. is a social enterprise, aiming to create
flexible employment opportunities for women, which is fairly paid, good
quality, flexible and local, through centers in the rural areas while
generating returns comparable to a for-profit enterprise. It is a non-
profit society and as such any profits achieved are re-invested in the
communities. (Source: www.hathaybunano.com)
Inclusive Business models include the poor on the demand side as

clients and customers and on the supply side as employees, producers
and business owners at various points in the value chain. The model
builds bridges between business and the poor for mutual benefit (win-
win situation). The benefits from inclusive business models go beyond
immediate profits and higher incomes. For business they include driving
innovations, building markets and strengthening supply chains. And for
the poor they include higher productivity, sustainable earnings and
greater empowerment.
As mentioned earlier, Inclusive business is completely a new package for

higher productivity for the business organizations in Bangladesh.
However, showcasing an ideal model can create a lot more business
sense for the private sector at the same time can play a revolutionary
role in fostering the creation of extensive sustainable livelihood options
for the poor and marginalized producers of the bottom pyramid and
hence contribute to the greater objective of alleviating poverty.
Photo courtesy: Hathay Bunano p. s.
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S URVEY F INDINGS
This Base Scan Survey was conducted among a sample size of 20 large
organizations of Bangladesh. CSR Centre selected 20 organizations from
different sectors; those who are large, likely to have a story on how they
became big with inclusiveness, and/or those who are apprehensive in
social commitment / responsibility (CSR) that encourages them to be
involved in some social and/or community development projects aiming
at reducing poverty or creating sustainable livelihood.
The companies included in the Survey represented different business

sectors:
Name of the Company Representing Sector

1. ACI Limited FMCG, Pharmaceuticals, Agro
2. AK Khan and Company Jute, Textile, Trade
3. Akij Group Jute, Beverage, Tobacco, Cement
4. Apex Adelchi Footwear Limited Leather
5. Apex Leather Craft Limited Leather
6. Bank Asia Limited Bank
7. Concord Group Construction, Textile
8. Elite Group of Companies Steel, Textile, Paints
9. Hatil Complex Limited Furniture
10. Janata Jute Mills Limited Jute
11. Kazi & Kazi Tea Estate Tea
12. M. M. Ispahani Limited Tea
13. Navana Group Automobile, Battery, Construction
14. Otobi Furniture
15. Partex Group Furniture, Bank, Beverage
16. Rahimafrooz Bangladesh Limited Battery, Renewable Energy
17. Summit Group Energy
18. Square Pharmaceuticals Limited Pharmaceuticals
19. Unilever Bangladesh Limited FMCG
20. Viyellatex Group Textile, Tea
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RE SEA RCH F IND INGS
UNDERSTANDING OF INCLUSIVE BUSINESS
Majority of the respondents highlighted that they do not have a

concrete understanding regarding the model of Inclusive Business. But
they also mentioned that it should be a business model that allows
…inclusive organizations integrating its supply chain to create a wider impact on its
business starts market value or value offered. Some mentioned that inclusive business
starts very much from the suppliers, includes the banks, buyers,
very much from workforce and ends at final consumers. Some mentioned that inclusive
the suppliers, business is renovating businesses to help the poor in becoming better
by providing access to critical goods, service, jobs and incomes.
includes the
banks, buyers, One interesting statement was, “to my understanding Inclusive Business
workforce and means incorporating of individuals, institutions and service providers
from all section of the society, mainly from the low income group to
ends at final
facilitate them in ways that benefit them and the cooperation for better
consumers… livelihood of this group and the overall society”.
However, most of the respondents stated that Inclusive Business is what

the terms suggest, business inclusive of all the stakeholders. The
business model is not so clear to them is considered how to measure
the impact and how to scale success.
In the context of Bangladesh, the respondents feel that as the country is

poverty stricken and it has a huge population, businesses have a better
opportunity to engage them as human resource and workforce that will
enhance the growth and sustainability of the firms. Some think that
engaging with Inclusive Business can also create goodwill for the brand
in the market and the society.
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CASES OF INCLUSIVE BUSINESS
CASE 1: OTOBI LIMITED – Linking with Mini Suppliers
A good example can be set of Otobi Limited. As a part of Otobi’s brand

…thus rugs, reposition from being a furniture manufacturer to being a provider of
complete space solutions the company built an alliance with multiple
linens, ceramics,
mini suppliers thus rugs, linens, ceramics, vases, bamboo accessories,
vases, bamboo table lamps, candles and toys were introduced beside their world class
accessories, table furniture and home décor at Otobi. It created a substantial linkage of
lamps, candles mini suppliers with the brand name of Otobi and enabled them to earn
a handy amount of yield. By outsourcing certain elements of their
and toys were
production, Otobi creates job for a large group of workers who lost their
introduced at job during the financial crisis and reduces cost considerably which also
Otobi… made it possible to expand their consumer base to include lower
income people.
Photo courtesy: Otobi Limited
CASE 2: KAZI & KAZI TEA – Community Development
From its inception, Kazi & Kazi Tea (K&K Tea) has been eager to engage
the communities in a mutual benefit way. This is why K&K Tea initiated
a Cooperative that is open both to worker, and to neighbors in
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surrounding villages. K&K Tea’s cooperative began with innovative

method focusing on dairy. Co-op members receive milking cow, for
Co-op members
which they pay back not in cash but with milk and cow dung. Members
receive milking pay only one liter of milk per day, keeping the rest for their children and
cow, for which they the calves. They pay 10 to 20 kilograms of cow dung per day, keeping a
pay back not in measure for their own. This easy barter form of payback takes off the
pressure of cash payments, making the co-op a practical alternative
cash but with milk
even to the micro-credit operations for which Bangladesh is now
and cow dung. famous. Most members manage to pay off their cow within 2/3 years.
Best of all, they keep any calf that the cow bears.
Photo courtesy: Kazi & Kazi Tea
CASE 3: APEX ADELCHI FOOTWEAR LIMITED – Training and Education
Apex Adelchi Footwear Limited (AAFL) factory in Shafipur has areas of

300,000 square feet, using environmental complaint finished leather
from either AAFL’s own tannery or from imported leather. Since its
inception, Apex Adelchi has been facing difficulties to get skill
manpower available in the market.
With the support from PRICE (Poverty Reduction by Increasing the

Competitiveness of Enterprises), a USAID funded economic development
project with a mission is to reduce poverty by increasing the
Page | 26
…started training competitiveness in aquaculture, horticulture and Leather sector,

utilizing the factory particularly for the benefit of women, young adults and SME suppliers,
premises to train Apex Adelchi Footwear Limited started training utilizing their factory
premises to train over 200 individuals every three months time,
over 200 individuals
resulting in a total of 2400 operators trained in three years and create
every 3 months, employment opportunities in footwear and leather goods sectors.
resulting in a total of
The sector lacks sufficient skilled workers, particularly in the growing
2400 operators footwear and leather goods industry. Under the partnership, PRICE
trained in 3 years commits to work jointly with LFMEAB (Leather and Footwear
and create Manufacturers Exporters Association of Bangladesh) to address this
critical sector constraint by leveraging its members’ resources to
employment facilitate workers’ skill development and a continuous supply of new
opportunities… skilled workers to the sector.
Photo courtesy: Apex Adelchi Footwear Limited
RBL did not initiate CASE 4: RAHIMAFROOZ BANGLADESH LIMITED – Sustainable Development
inclusive business as a
project rather it got
Rahimafrooz Bangladesh Limited (RBL) did not initiate inclusive business
started from the
as a project rather it got started from the “Bottom of the Pyramid”
“Bottom of the (BOP) market opportunity and the vision of doing good business. RBL
Pyramid” (BOP) has employed over 2,000 low income people in their Storage Power,
market opportunity Energy Services, Automotive After Market, Electronic and Retail
Businesses. For their Storage Power, Energy Services and Retail Business
and the vision of doing an average of 30% of the local suppliers are from the low income
good business.
Page | 27
communities. Most importantly another 25% grew with their business

and graduated to relatively upper level. Through their renewable energy
business they have installed 100,000 Solar Home Systems (SHS) to
benefit the lives of 600,000 low income community people in different
rural areas in Bangladesh.
Photo courtesy: Rahimafrooz Bangladesh Limited
COMMUNITY IMPACT
Different social responsibility projects of the respondents somehow was

able to sustain the livelihood condition of the poor and these
marginalized people have been provided with the opportunity to dream
about a better future through means of generating income, transfer of
skills to small businesses, education and training, better means of
leading a healthy life and so on.
Through some of the branches of Bank Asia Limited in some rural and
agro-based areas, farmers now have a better access to capital, trade
and transaction. Viyellatex Group has an agreement with CRP (Centre
for Rehabilitation of the Paralyzed) to train physically challenged
women to give them with an opportunity to join the mainstream work
at their textile unit. Summit Group supports Acid Victims through
Page | 28
“Prothom Alo Shahayak Tahbil” and meritorious students for quality

higher education as needed. Partex Group and MM Ispahani Limited
have established some schools for educating the poor and
disadvantaged children while Partex Group also providing some of them
with free education with free books and stationeries. Organizations like
Apex Leather Craft and Square Pharmaceuticals have shown many
initiatives to capacity development of its workforce, who they consider
as their main asset.
All the projects of the respondents are somehow aimed at community

development for creating a better society to live in. But, most of them
have not identified the scale of measuring the impact on the
community. However, scalability ensures businesses in creating a win-
win situation for their business.
CHALLENGES
The survey revealed that one of the main challenges in Inclusive

Business is the clogged mindset of marginalized producers that obstruct
the maintenance of the standard of compliance and quality through
supply chain integration. Another challenge is to retain the skilled
workforce after their skill development. Capacity development program
itself sometimes gets difficult to execute due to lack of transparency
and accountability.
Respondents sense that Government should be more proactive in

responding to the inclusive growth of businesses. The present scenario
of power failure and lack of access to finance are also big impediments
for Inclusive Business models in Bangladesh. Private-Public Partnership
(PPP) can play a vital role in fostering the growth of Inclusive Business in
Bangladesh.
Page | 29
A vital challenge lies in identifying the risks associated with Inclusive

Business Model or integration of the supply chain. Most of the
respondents also stated that it is important to measure the impact of
inclusive business as it requires investment for community
development.
Another basic challenge is to differentiate between a Social Enterprise

and an Inclusive Business. It needs a lot of awareness raising programs
and showcases of good Inclusive Business Models to place the model
strategically to align with the business motive of maximizing profit
through sustainable value offering.
OPPORTUNITIES
GENERATE ECONOMIC SUSTAINABILITY
 Large untapped market looking for innovative products to meet

tailored needs (Bottom of the Pyramid).
 Contribute to increased economic opportunity and wealth.
DEVELOP NEW MARKETS
 Regional channels and suppliers to enrich the local value chain

and generate new supply channels.
 Disseminate products, services, and technologies as tailored

low-cost solutions.
DRIVE INNOVATION
 Appropriate and affordable products and services that meet the

needs of underserved markets.
Page | 30
 Generate a competitive advantage.
EXPAND LABOR POOL
 Build the capacity and competency of enterprises in new market

technologies.
 Access an existing and untapped labor market.
R ECOMMENDATIONS
Based on the findings of this Survey, following are some
recommendations that will foster the strategic inauguration of Inclusive
Business Models in Bangladesh:
CREATING AWARENESS ON INCLUSIVE BUSINESS MODELS:
It requires significant numbers of awareness raising programs to make

the business community familiar with the concept of Inclusive Business
Models. The programs should be comprehensive to the specific business
needs with a sectoral approach. It is also important that the program
comprehends the techniques to sensitize the business community with
the benefits of Inclusive Business at the same time showcase the scope
of its wider implementation to the existing outline.
MEASURING IMPACT:
Organizations often fail to measure the impact of their social endeavors.

It is important to identify tools and techniques to measure the positive
impact of such initiatives and identify scope for further improvements.
Page | 31
PARTNERSHIP:
It is also important to get the involvement of the Government to initiate

partnerships that will foster the growth of inclusiveness in the business
community. Private-Public Partnership (PPP) can be a useful instrument
to address the situation. With the encouragement from the
Government side, companies will be driven to integrate the
marginalized people into their business chain while creating better
livelihood options for them that will contribute to a wider scale to
reduce poverty. NGOs and Civil Society Organizations (CSOs) should also
join hand in addressing the relevant issues.
SHOWCASING BEST PRACTICES:
“Seeing is Believing” – it is perhaps more applicable and suitable in the

context of Bangladesh. Showcasing the existing local good practices and
also some from the Global perspective can be a positive driver for the
private sector to initiate more inclusive methods with their operations.
ACCESS TO INFORMATION:
Organizations motivated to incorporate Inclusive Business Models

should be given proper access to information to generate necessary
knowledge base on “how to do it” and “where to start from”. In the
donor driven economy of the country, the private sector can be a prime
force for fostering national growth through inclusive approaches and
thus the nation as a whole can address the Millennium Development
Goals (MDGs).
Page | 32
C ONCLUSION
Companies are still struggling with the challenges associated with
starting and scaling of Inclusive Business Models in Bangladesh. These
challenges range from lack of knowledge about the target market to
scarcity of financing and technical expertise suited to the task.
Companies, donors, development finance institutions, civil society
organizations, and others are increasingly interested in working
together to address these challenges and unlock the potential of
inclusive business for development.
Poverty is multidimensional. At its core is the lack of opportunity—or, in

the words of Indian economist Amartya Sen, the inability to choose a life
‘one has reason to value’. Causing this lack of opportunity are not only a
lack of money or resources, but also a lack of the ability to use
resources. Bad health, lack of knowledge and skills, social
discrimination, exclusion and limited access to infrastructure can hinder
people from converting resources into opportunities.
Improving these can bolster both access to resources and the ability to
transform resources into opportunities. Indeed, the case studies show
that doing business with poor people can make them better off beyond.
Two well-known examples of ‘cracking the code’ (Doing business with

the poor) to do business with the poor are microfinance and mobile
telephony. Both show how inclusive business models can set off a
virtuous circle, improving people’s lives and incomes and benefiting
from the growth that results. Both sectors, moreover, can still expand
greatly by reaching out more broadly within countries and more deeply
into low-income populations.
Page | 33
ANNEXURE 1: Q UES TIONNA IRE OF THE B ASE S CA N S UR VEY
SURVEY ON INCLUSIVE BUSINESS STATUS IN

BANGLADESH
An inclusive business is a sustainable business that benefits low-income

communities. Building inclusive business models requires
entrepreneurship. Entrepreneurs perceive opportunity and take
advantage of it.
Does your company have a project that

contributes to sustainable development
and the eradication of poverty by
supporting employability? And would you
let it be for inspiration to other
companies?
Then please fill in the blanks to the extent possible, and you will be contacted
by an IBLF employee who will make the case study ready for publication.
Company
Contact person
Email
Telephone
Page | 34
1) What do you understand by “Inclusive Business”?
2) What do you think of Inclusive Business in context of Bangladesh?

Background
3) Do you have inclusive business model in any of your activities?
4) How did the project begin? What inspired it and who drove it?
5) What’s the main idea behind the project and how has the project itself developed?
Project story
6) Have you thought of any further steps ahead?
7) How does the project help the low income communities?
Community impact 8) What measurable impact has it had? Is there any data?
9) How is it beneficial for your company?
Business sense
10) What are the opportunities for scale and how they can be reached?
Scalability
Page | 35
11) What partnerships have been developed – have these been beneficial and if so
how? If not, why not and how could they be improved?
Partnerships
12) What have been the main challenges and how were they overcome? What are the
main challenges ahead? Think about the context of Bangladesh as well.
Challenges
Page | 36

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BASE SCAN SURVEY

INCLUSIVE BUSINESS MODELS

BASE SCAN SURVEY

Businesses worldwide are profit oriented, seeking opportunities to

While value addition can be done through responsible behavior,

The UKAID (UK Department for International Development - DfID) has

In Bangladesh, to explore the present understanding of Inclusive

CSR Centre selected 20 organizations from different sectors; those who

Inclusive Business is comparatively a new term in Bangladesh although

An Inclusive Business Model is a sustainable business framework that

creates sustainable livelihoods for them and foster a win-win situation

The data collection method of this study includes semi-structured

It was a challenge in selecting the proposed twenty organizations /

I would like to take this opportunity to thank all those twenty

shared their business experience to make this Base Scan Survey of

Thanks also go to IBLF and UKAID in addressing such a crucial issue of

As Bangladesh is still coping with high population growth rates and

I am hopeful that through the recommendations made in this Survey

CEO, CSR Centre, Dhaka, Bangladesh

May 14th 2010

Overview of Inclusive Businesses in Bangladesh ............................................19

Survey Findings .................................................................................................23

ANNEXURE 1: Questionnaire of the Base Scan Survey................................34

Inclusive business is not a form of corporate philanthropy, which has

As employees and suppliers, through an Inclusive Business Model, the

An Inclusive Business Model involves doing business with the base of

Inclusive Business investments need to generate a return. It is a matter

Large companies have the potential to make a contribution to poverty

 Core business operations and value chains

Support from political leaders and the establishment of optimum

In 2006, the World Business Council for Sustainable Development

THE BOTTOM OF THE PYRAMID – BOP: AN OPPORTUNITY FOR

PURPOSE OF THE SURVEY:

The UKAID (UK Department for International Development - DfID) has

In Bangladesh to explore the present understanding of Inclusive

TH E OBJ EC TIVE O F THE SU RVEY IS:

 To look at how businesses in Bangladesh perceive the notion of

 To identify the cases of inclusiveness and tales of partnerships that

 To explore the challenges/barriers, if any, of doing Inclusive Business

The findings of the Base Scan Survey will be presented in a day-long

INTERNATIONAL BUSINESS LEADERS FORUM: www.iblf.org

The International Business Leaders Forum (IBLF) is an independent, not-

IBLF is supported by a network of over 60 global and national

IBLF also works with a range of partners, including government bodies

An additional asset to this work is IBLF’s long-term relationship with

CORPORATE SOCIAL RESPONSIBILITY CENTRE: www.csrcentre-bd.org

Established with private sector start-up funding to raise CSR awareness,

The Centre’s mission is “to establish corporate social responsibility as a

CSR Centre also holds the Secretariat of South Asian Forum on

Besides its mission to create awareness on CSR amongst the

 Ms. Shahamin S. Zaman (Chief Executive Officer)

CSR Centre selected the companies so as to have various sectoral

D A TA CO LLEC TIO N ME THOD

The data collection method of this study includes: company visits,

Company websites were also visited to explore relevant information.

Based on the findings, the recommendations have been made at the

The Base Scan took into account 20 of the larger companies /

SU RVEY R ESP O ND ENTS:

The following organizations were included in the Base Scan Survey:

1. Advanced Chemical Industries Limited (ACI Limited)

Bangladesh is a country with a population over 150 million people with

Bangladesh has made considerable progress in its economic