Both things that emergent markets lack - the extension of credit and access to finance - are the two fundamental factors considered as key drivers of economic growth. Yet, for banks, the lack of access to financial services and money transfer facilities in these markets represents a tremendous business opportunity, particularly among low-income segments and little and medium-sized enterprises (SMEs). This article analyzes three upscaling existing local non-bank institutions become banks; downscaling the infrastructure of conventional banks is adapted to serve new sections; and greenfield banking, which entails creating totally new microfinance associations. All demand a willingness to adapt to quite a distinct kind of customer, in addition to taking an advanced, proactive approach to the challenges of efficiency and risk assessment.
For firms in other sectors looking to expand into emerging markets, these three business models can function as a guide. Using lessons derived from the banking sector, the authors encourage all companies to see the profitability of emerging markets through new eyes: use new technology to make up for structural shortcomings and inefficiencies; and study their social diversity in depth; forge local alliances.
Seeing Profitability Through a Banking Lens case study solution
PUBLICATION DATE: September 15, 2011 PRODUCT #: IIR057-HCB-ENG
This is just an excerpt. This case is about FINANCE & ACCOUNTING
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