What Happens When the Bottom of the Pyramid Meets Social Assistance?

This blog post is based on an article published in the Journal of International and Comparative Social Policy by Marion Ouma and Jimi Adesina.

How does the Bottom of the Pyramid (BoP) model change or reorient social assistance in the context of cash transfers? We explore this question in our recent article by examining the case of Kenya’s Inua Jamii programme. In recent years, governments in Africa have adopted social assistance programmes largely in the form of cash transfers to address poverty and vulnerability, and as a response to humanitarian crises like drought, famine and even the COVID-19 pandemic. In most cases, the cash transfer schemes are implemented as disparate interventions with weak linkages to other public policy programmes, often falling short of enhancing the well-being of beneficiaries. In light of this, some have argued that cash transfers are more effective when implemented with measures of financial inclusion like payments through bank accounts or digital financial systems.

Bottom of the Pyramid Meets Social Policy

Bottom of the Pyramid (BoP) models refer to enterprises which operate on the premise that there is profit to be made by doing business with the poor while helping to alleviate poverty. Leading proponents of the model, including Coimbatore Krishnarao Prahalad, claim that development models of poverty reduction including aid have failed in their aim and that BoP models’ ability to integrate the poor into market structures offers better prospects for enhancing well-being. As such, Kenya and other countries implementing cash transfers have integrated commercial banks, financial inclusion models and digital tech structures as part of social assistance programmes. Often these systems are integrated following backing from advocates, including the Consultative Group to Assist the Poor (CGAP) and Financial Sector Deepening (FSD), outfits associated with the World Bank and the UK International Development (DFID), respectively.

From Inclusion to Financialisation

Despite claims by advocates of financial inclusion and BoP models, evidence from our research shows little improvement in the well-being of beneficiaries of Inua Jamii as a result of the integration of these models. Instead, we argue that the incorporation of business models leads to the financialisation of social assistance. Financialisation refers to the increasing role, dominance and transformation of everyday life by financial actors, financial tools and financial motives. We argue that BoP and financial inclusion models support structures which enable financial architectures and business enterprises to push for the financialisation of social policy. We further argue that the models not only enable the financialisation of social policy but also embody it. 

With the expansion of cash transfer programmes as the dominant form of social assistance in Africa and other countries with large poverty levels, BoP models have a new lease of life. Following declining profits in richer countries, the provision of cash transfer to the poor creates a new class of consumers. Increasingly, BoP models claim that they can unlock the entrepreneurial side of the poor. Rather than meeting their needs, these models, besides co-opting the poor into varieties of capitalism, can harm those who already bear social and economic burden due to the retreat of the state from social provisioning. BoP models and financial inclusion drive the poor towards the same markets that have contributed to their vulnerability.

Markets, Digitalisation, and Unintended Consequences

In Kenya, commercial banks contracted by government to pay cash transfers to beneficiaries have used this avenue to make profits through their agreements with the government. This business opportunity, the payment mechanism of Inua Jamii is now contracted to Safaricom, the mobile phone powerhouse, who now pays beneficiaries through M-Pesa. The continued digitalisation in social welfare, often promoted to increase efficiency and reduce leakages of resources, can act as a mechanism for managing and policing the poor. Moreover, the cost of such technologies, as in the case of the Social Health Insurance Fund, can be huge drawing resources that could be directly invested in social services or used to strengthen governments’ capabilities in service delivery.

Other studies indicate how financialisation of social assistance, enabled through government integration of market logics into social assistance has led to predation of the poor, fueling indebtedness. Our study finds similar evidence of increased debt by recipients of Inua Jamii. At the individual and household level, indebtedness increased through collateralisation of the cash benefit for items like cheap solar lamps, radios, and TVs. Some beneficiaries even use the cash benefits as collateral for basic goods like food.

At a higher level, the inclusion of market players in social assistance reconfigures social protection towards markets and changes the role of the state in social policy provisioning – with the state acting as an enabler. The state becomes a facilitator in enabling markets to operate as public and social goods become commodified and out of reach of most citizens. Financialisation of social assistance through various forms, such as BoP models, microfinance, and sometimes even cash transfers, leads to the accumulation of profits for market players, sometimes to the disadvantage of the poor. The models reconfigure the poor to fit and participate in financialised markets, shaping markets as providers of public goods, as the role of the state in public provisioning is diminished.

Rethinking Markets and Poverty Reduction

Contrary to assertions by BoP and financial inclusion advocates, poverty is not a failure of market integration but one of structural barriers and institutions that create and sustain poverty. Therefore, the state – rather than markets – has a critical role and responsibility in addressing poverty instead of market-oriented models, which can increase poverty and inequality. In light of social assistance and social protection programmes, BoP and financial inclusion models ought to be understood as part of the extension of global capitalism.

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Reference

Ouma, Marion, and Jimi O. Adesina. 2025. “Bottom-of-the-Pyramid Business Model Meets Social Assistance: Repurposing Social Protection in the Africa Context.” Journal of International and Comparative Social Policy 41(2): 79–92. doi: 10.1017/ics.2025.10077.

About the Authors

Marion Ouma is a Research Associate at the South Africa Research Chair Initiative (SARChl) on Social Policy at the University of South Africa.

Jimi Adesina is Professor and the DST/NRF SARChI Chair in Social Policy at the College of Graduate Studies, University of South Africa.