FAQs

General Inquiries

Eligibility Criteria

The Application Process

About Inclusive Business

Glossary

Technical issues

General Inquiries

What is the purpose of the G20 Challenge on Inclusive Business Innovation?

Businesses around the world are finding innovative ways to work with low-income people living at the base of the pyramid (BOP), working with them as suppliers, distributors, retailers, or customers. These firms are called inclusive businesses. Developing an inclusive business model that addresses the particular needs of people living at the base of the pyramid is an accomplishment. Scaling that model and replicating it in new markets is a challenge.
By recognizing businesses that have already succeeded in developing innovative, scalable, and commercially viable inclusive business models, the G20 Challenge provides a global platform for all businesses to learn from successful leaders in the growing field of inclusive business, and enables these leaders to come together and develop linkages with other inclusive businesses. When fellow innovators have the opportunity to exchange ideas and experiences, who knows what new business opportunities may become possible?
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Who are the organizers of this Challenge?

The Group of 20 together with IFC launched the Challenge at the G20 Summit in Cannes (November 3-4, 2011). Dalberg Global Development Advisors implemented the Challenge on behalf of IFC.
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What is the G20?

The Group of 20 is the premier forum for international economic development that promotes open and constructive discussion between industrial and emerging-market countries on key issues related to global economic stability. Its goals are to bring stability to financial markets and to promote economic cooperation. Membership consists of advanced and emerging economies from all regions of the globe. G20 leaders gather to stabilize the financial system, coordinate national economic policies to steer the world towards recovery, ensure that the international financial institutions are provided with the right underpinnings and adequate resources, and take new steps to increase access to food, fuel, and finance among the world’s poorest. For more information and for the list of G20 countries, see www.g20.org
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What is IFC?

The International Finance Corporation, a member of the World Bank Group, is the largest global development institution focused exclusively on the private sector. It helps developing countries achieve sustainable growth by financing investment, providing advisory services to businesses and governments, and mobilizing capital in the international financial markets. In fiscal year 2011, amid economic uncertainty across the globe, IFC helped its clients create jobs, strengthen environmental performance, and contribute to their local communities—all while driving its investments to an all-time high of nearly $19 billion. For more information, see www.ifc.org
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What is Dalberg?

Dalberg Global Development Advisors is a strategy and policy advisory firm focused on developing countries and emerging markets. Its mission is to mobilize effective responses to the world’s most pressing issues, in particular those which affect people in developing countries. During the last 10 years, Dalberg has successfully completed over 550 engagements for more than 200 leading multilateral institutions, international agencies, foundations, NGOs, governments, and global corporations operating or investing in frontier and emerging markets, including extensive work with organizations and companies focused on the base of the pyramid. For more information, see www.dalberg.com
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Eligibility Criteria

Who can apply? What are the Challenge’s eligibility criteria?

The G20 Challenge on Inclusive Business Innovation was open to eligible businesses and subsidiaries that meet the following eligibility criteria:

  • Headquartered or having a substantial part of its operations in a low- or middle-income country[1]
  • For-profit entity[2]
  • Demonstrating financial sustainability: already commercially viable or have evidence of commercial financing (equity or debt) and of being current on commercial debt[3]
  • Using an innovative business model that includes individuals living at the BOP as suppliers, distributors, retailers, or customers or includes value chain financing to the BOP[4]
  • Are not a microfinance institution, private equity fund, or a deposit taking institution
  • Founded and working with the BOP before June 30, 2009, for a minimum of three years of working with the BOP by the announcement of the winners in June 2012
  • Operating outside the extractive sector (oil, gas, mining)
  • Not involved in the production or trade of alcohol, tobacco, gambling, or weapons.

[1] The World Bank defines ‘low income’ countries as economies with GNI/capita<$1,005 and ‘middle income’ countries as lower-middle and upper-middle income economies with GNI/capita between $1,005 – $12,275.

[2] Any business regardless of its type of legal entity can be eligible to apply if it uses a commercial business model and generates commercial revenues.

[3] Commercial debt is defined as loans, given on commercial terms, by financial institutions or IFIs (International Finance Institutions). This excludes grant funding and loans on non-commercial terms.

[4] Applicant must have been using an inclusive business model that engages individuals living at the BOP since at least June 30, 2009.

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Are there size limits in the eligibility criteria? Can a business be too large to apply?

No, there were no size limits in the eligibility criteria. Any business that met the eligibility criteria could apply, no matter how large the business was.
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What is a domestic business and why are you focused on them?

A domestic business is a firm that is based in the country where it operates. For an inclusive business to operate as a domestic firm, it must be headquartered or have a substantial part of its operations in a low- or middle-income country. The Challenge aims to accelerate South-South growth by recognizing business models that have originated and had success in low- and middle-income countries and have the potential to expand on that innovation in other emerging markets.
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What do you mean by “headquartered or have a substantial part of its operations in”?

A business that has its headquarters in a high-income country could only be eligible for the Challenge if a substantial part of its operations are in a low- or middle-income country. For example, a business headquartered in Switzerland that does most of its business in Haiti would have been eligible for the Challenge whereas a business headquartered in Madrid that does only 20% of its business in low- or middle-income countries would not have been eligible.
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What is a high-income country?

The Challenge uses the World Bank definition of “high-income economy”, which is defined as a 2010 GNI per capita of $12,276 or more. The World Bank lists the following countries as high-income economies:

  • Andorra
  • Aruba
  • Australia
  • Austria
  • Bahamas, The
  • Bahrain
  • Barbados
  • Belgium
  • Bermuda
  • Brunei Darussalam
  • Canada
  • Cayman Islands
  • Channel Islands
  • Croatia
  • Curaçao
  • Cyprus
  • Czech Republic
  • Denmark
  • Estonia
  • Equatorial Guinea
  • Faeroe Islands
  • Finland
  • France
  • French Polynesia
  • Germany
  • Gibraltar
  • Greece
  • Greenland
  • Guam
  • Hong Kong SAR, China
  • Hungary
  • Iceland
  • Ireland
  • Isle of Man
  • Israel
  • Japan
  • Korea, Rep.
  • Kuwait
  • Liechtenstein
  • Luxembourg
  • Macao SAR, China
  • Malta
  • Monaco
  • Netherlands
  • New Caledonia
  • New Zealand
  • Northern Mariana Islands
  • Norway
  • Oman
  • Poland
  • Portugal
  • Puerto Rico
  • Qatar
  • San Marino
  • Saudi Arabia
  • Singapore
  • Sint Maarten
  • Slovak Republic
  • Slovenia
  • Spain
  • St. Martin
  • Sweden
  • Switzerland
  • Trinidad and Tobago
  • Turks and Caicos Islands
  • United Arab Emirates
  • United Kingdom
  • United States
  • Virgin Islands (U.S.)

Firms that are headquartered in one of these countries or cannot show that they have a substantial part of their operations in a low- or middle-income country were not eligible for the Challenge.
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Can I apply if my organization is a non-profit, partnership, or cooperative?

The Challenge focused primarily on for-profit organizations because financial sustainability is a key eligibility criterion. Any legal corporate entity (including a non-profit, partnership, or cooperative) could apply if it used a viable commercial business model and generated commercial revenues.
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What is a commercial business model and what is a commercially viable business model?

A commercial business model is one that generates enough revenue to cover costs. A commercially viable business model consistently generates more than enough revenue to cover its costs. Grants or donations, even those provided on a recurring basis, do not qualify as commercial revenue.
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Can inclusive business subsidiaries of larger businesses apply?

Yes, they could apply as long as they fulfilled the Challenge’s eligibility criteria.
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What does it mean to be “financially sustainable”?

Financial sustainability is demonstrated by obtaining commercial financing (equity or debt) and being current on all repayments. Back to Top

What if most of the people associated with my business are not low-income?

Buseinesses were able apply to the Challenge as long as the business integrated low-income people into its business model in an innovative way. Not everyone or even most people associated with the business needed to be low-income. Consideration of how businesses engaged with BOP individuals and how many they reached were evaluated through the ‘development results’ section of the application.
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Is my business eligible to apply if it is a financial institution?

The Challenge was not open to applications from micro-finance institutions (MFIs), private equity funds, or deposit taking institutions. However, businesses that include access to financial services as part of a broader business model (value chain finance) were considered. Examples include facilitating payment for basic goods through mobile money applications or offering insurance together with agribusiness products to smallholder farmers.
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Is my business eligible to apply if it is a provider of microinsurance?

Providers of microinsurance were eligible if they met all of the eligibility criteria. The Challenge was open to applications from microinsurance providers.
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Can I apply if my business is involved in the production or trade of alcohol, tobacco, gambling, or weapons? What if my subsidiary is not, but one of its fellow subsidiaries is?

Businesses were not able to apply if they were involved in the production or trade of alcohol, tobacco, gambling, or weapons.
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What are extractives?

Extractive businesses extract nonrenewable natural resources from the earth and refine them for commercial and industrial use. The extractive sector includes oil and gas extraction and all mining industries.
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Can a business submit more than one application?

Businesses could not submit more than one application. However, multiple subsidiaries of the same business could apply separately if they fit the eligibility criteria and each employs a unique innovative business model.
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The Application Process

Why should I apply?

Winners of the Challenge were recognized on a global level when they were announced at the G20 Leaders Summit in Mexico held June 18 – 19, 2012. At the Summit, the business’s successes were showcased in front of world leaders, fellow innovation leaders, and the global public.

Winners attended a high-profile event on June 18, 2012 at the G20 Leaders Summit to honor Challenge winners. Winners could also expect to receive announcement of their recognition in local media and were recognized in an official press release issued by the G20 Challenge.

Following the Summit, winners will have the opportunity to attend G20 regional workshops, where they will strengthen their inclusive business relationships and work together to accelerate the growth of inclusive business in developing countries. The regional workshops will focus on the challenges that businesses face when replicating their business model in other countries, e.g., adaptation to new markets, standardization of their business model, legal questions, and selection of the right business partners. Investors will be invited to attend the workshops so that the winners of the Challenge will be given a unique business-to-business forum. The workshops will be organized with generous additional support from the United Arab Emirates and in cooperation with the Siemens Stiftung (Foundation).

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How do I apply?

The application period for the G20 Challenge has closed.
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What are the key dates for the Challenge?

  • Opens November 4, 2011 : If you are interested in applying to the Challenge, you may fill out a quick pre-application form. After your eligibility is verified you will receive access to the applicant section of the website, which will allow you to submit a full application before February 29, 2012.
  • Until February 29, 2012 : Click on “Apply” to fill out the quick pre-application form, available online. After your eligibility is verified you will receive access to the applicant section of the website, which will allow you to submit a full application.
  • February 29, 2012 at 11:59PM (EST): This is the deadline for submitting your final application. Any entries submitted after this time cannot be considered.
  • May 2012: Finalists are notified privately.
  • June 18, 2012: Winners are announced at the G20 Summit in Mexico.

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In what language can I submit an application?

Applications may only be submitted in English. You may, however, submit financial statements in a language other than English.
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Can I submit supporting documents?

Applicants were not encouraged to submit documents beyond those requested in the application, i.e. other than their financial statements for the last three years of operation.
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Will my application be available to the public?

Absolutely not. Data entered as part of the full application form are confidential and will only be used in scoring your application. Please note that there are two questions on the pre-application form that could serve as a description of your business’ profile for the Challenge website (Question 13: “Please briefly describe your business” and Question 14: “Briefly describe how your business is inclusive by integrating BOP individuals as suppliers, distributors, retailers, or customers and what is innovative about how your business reaches the BOP”).
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Who will be judging the applications? How many winners will be selected?

A screening team conducted initial screening and identified a group of finalists. Fifteen Challenge winners were selected by an independent judging panel comprised of representatives from the G20, the private sector, academia, foundations, and International Finance Institutions.
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What are the winner selection criteria?

The  winner selection criteria are as follows:

  • Innovation
  • Development results
  • Potential for growth, including replication of the business model to other markets
  • Financial sustainability
  • Environmental and social sustainability

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Are you able to provide me with feedback regarding my application?

Due to the large volume of applications expected, we are unable to provide individual applicants with feedback regarding their application.
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About Inclusive Business

What is inclusive business?

Inclusive business is a private sector approach to providing goods, services, and livelihoods on a commercially viable basis, either at scale or scalable, to people at the base of the pyramid by making them part of the value chain of companies’ core business as suppliers, distributors, retailers, or customers.

Inclusive businesses provide opportunities for individuals living at the base of the pyramid to step into new roles: as suppliers, as distributors, as retailers, or as customers. If a firm’s customers are low-income individuals, or if it sources from people living at the base of the pyramid, or if low-income people distribute its products through their communities or sell them in local stores, that firm is an inclusive business.

Inclusive business models are helping businesses turn underserved populations into dynamic consumer markets or diverse new sources of supply. At the same time, inclusive business expands access to goods, services, and livelihood opportunities for those living at the base of the pyramid in commercially viable, scalable ways.

An inclusive business customizes its business model to take full advantage of the benefits of working with this underserved segment. The benefits are not just to individuals living at the BOP, who can realize greater access to the basic goods, services, and means of livelihood that they need, but also to the businesses themselves.

In the process, businesses are developing product, service, and business model innovations with the potential to tip the scales of competitive advantage in more established markets. And they are providing clean water, electrical power, modern communications, health care, education, financial services, and income-generating opportunities to millions of people at levels of quality and affordability they have never experienced—if they ever had access—before.
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What does BOP stand for?

BOP stands for “base of the pyramid.”
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What is the base of the pyramid?

As defined by IFC, the base of the pyramid (BOP) are those that live on less than $8 per day in purchasing power parity (PPP) or lack access to basic goods, services, and income generation opportunities.

The BOP concept has become popular shorthand for describing individuals living below a given income or spending threshold. But many people debate where these income or spending lines are best drawn, and consequently the size of this population and its purchasing power. Using a threshold of $8 per day (PPP), there are an estimated 4 billion people living at the base of the pyramid.

But income is just one parameter for poverty. Too often, poor people cannot get key products at the prices and quality on which others rely. Whether they are informal settlers, urban dwellers, small-scale farmers, villagers, or others, they are often denied clean water, electrical power, good roads, modern communications, health care, education, financial services, and—perhaps most important—steady sources of income.

An estimate of the number of people living without access to basic goods, services, and income generation opportunities would likely be much higher than the 4 billion people identified by the income threshold alone.
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Who is considered to be low-income?

For the purpose of the Challenge, a person is low income if she or he is considered to be part of the base of the pyramid (BOP). The BOP is defined as those living on less than $8 per day in purchasing power parity (PPP), or lacking access to basic goods, services, and income generation opportunities.
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What is a business model?

A business model describes how the business will make money to survive and grow. It answers the questions: Who is your customer, what does the customer value, and how do you deliver that value at a cost that allows you to make a profit? A description of the business model should detail the full value chain, which includes everything from procurement (how raw inputs are sourced), to development of the product or service, to distribution, to sales and marketing, and finally to customer service.
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What is the connection between inclusive business models and the value chain?

Inclusive business models integrate BOP individuals into some part(s) of the value chain, as suppliers, distributors, retailers, or customers. Successful inclusive business models also take into account BOP needs during product and service development.
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Glossary

Base of the pyramid

As defined by IFC, the base of the pyramid (BOP) is the portion of the global population that lives on less than $8 per day in purchasing power parity (PPP) or lacks access to basic goods, services, and income generation opportunities.
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BOP

BOP stands for “base of the pyramid.”
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Business model

A business model describes how the business will make money to survive and grow. It answers the questions: Who is your customer, what does the customer value, and how do you deliver that value at a cost that allows you to make a profit? A description of the business model should detail the full value chain, which includes everything from procurement (how raw inputs are sourced), to development of the product or service, to distribution, to sales and marketing, and finally to customer service.
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Extractive sector

Extractive businesses extract nonrenewable natural resources from the earth and refine them for commercial and industrial use. The extractive sector includes oil and gas extraction and all mining industries.
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Low-income

For the purpose of the Challenge, a person has a low income if he or she is part of the base of the pyramid (BOP). People at the BOP live on less than $8 per day in purchasing power parity (PPP), or they could be considered part of the base of the pyramid due to a lack of access to basic goods, services, and income generation opportunities.
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Inclusive business

Inclusive business models expand access to goods, services, and livelihood opportunities for those at the base of the pyramid in commercially viable, scalable ways. These businesses integrate people living at the base of the pyramid into new roles, as suppliers, distributors, retailers, or customers.
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Value chain

The way in which a business delivers value involves the value chain, which includes the following processes: procurement, product/service development, distribution, sales and marketing, and customer service.
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Net profit

Net profit is obtained by subtracting a company’s total expenses — direct and indirect costs, interest expense, taxes — from its total revenue over a given period of time (usually, one year).
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Commercial revenue

Commercial revenue refers to money made by a company through the sale of goods and services. It excludes grants, loans, and other cash inflows that do not result from sales (e.g., interest, owner’s contribution, etc.).
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Debt

For the purposes of the full application form, debt refers to primarily long-term obligations (e.g., loans), defined as lasting over one year.
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Contact Information

For any questions or concerns regarding the closed application process or the winners publication, please contact:
Dalberg Global Development Advisors (www.dalberg.com)
g20challenge@dalberg.com
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