Opening remarks at the 2nd Asia Inclusive Business Forum on 17 February 2016 in ADB Headquarters, Manila, Philippines.

Good morning distinguished participants, private sector executives, government officials, business association representatives, inclusive business experts. On behalf of the Asian Development Bank, it is a privilege to welcome you to the 2nd Asia Inclusive Business Forum.

It is heartening to see such a broad gathering of private sector participants here today. ADB welcomes the partnership of the private sector in our operational work, and we see great potential in the private sector’s development of inclusive business markets that can contribute to poverty reduction and inclusive growth in Asia and the Pacific.

This IB Forum has about 400 registered participants from across the region, in addition to guests from the Americas. Overall, 39% of the participants represent companies and 19% are impact investors. That is a lot of private sector people to energize this forum over the next 3 days, and it shows your strong collective interest in advancing inclusive business markets in the region.

Adam Smith in his seminal book Wealth of Nations wrote: “But what improves the circumstances of the greater part can never be regarded as an inconveniency to the whole. No society can surely be flourishing and happy, of which by far the greater part of the numbers are poor and miserable.” By advancing inclusive business markets, ADB and partners are seeking to improve the wellbeing of low- income and vulnerable populations through a market-based approach.

Inclusive business is a relatively new concept. The World Bank’s International Finance Corporation (IFC) and Inter-American Development Bank (IADB) were the first to operationalize the concept, beginning in Latin America in 2008. Today, IFC has invested about $3 billion (10% of its portfolio) in more than 600 inclusive business projects worldwide. IADB also has invested more than $420 million in 60 deals.

ADB is a newcomer to this area. We started in 2012, and so far we have 14 private sector deals worth $360 million. ADB’s approach to inclusive business is somewhat unique. While we seek to increase our number of investments in inclusive business deals, we also conduct knowledge work including market scoping, sector studies, and exchange fora, and we reach out to the public sector.

Government also can be a key in unleashing the potential of the private sector. At present, ADB is in discussions with 4 governments on possible inclusive business projects or including inclusive business as components of larger investments and policy loans. This is a new form of public-private partnership (PPP), moving beyond the traditional PPP for infrastructure financing. The purpose is to improve the enabling environment for inclusive business through measures such as inclusive business accreditation, policy alignment, patient capital investment funds, risk sharing mechanisms, and targeted support programs.

In this work, ADB also reaches out to business associations that we think can educate their members on the money to be earned at the base of the pyramid (BoP) and that this money can only be made in a sustainable way when the business models are innovative and provide solutions to the relevant problems of the poor. That is why this IB Forum also has a session on what governments can do, how business associations can promote the agenda, and what banks need to do differently.

In assessing the market for inclusive business in Asia, one question we must ask ourselves is why, if the region’s low-income market with trillions of dollars in demand across sectors is so unserved, are there so few inclusive businesses? And why is the situation so much less in Southeast Asia compared to South Asia?

A recent ADB study on the Philippines found that there was only about 100 commercially viable inclusive business models across the country. And of this 100, perhaps only 15 were investable—meaning that they have sufficient scale for growth and a large enough rate of return to counter the opportunity cost arguments of chief financial officers and bankers.

There are several common challenges for inclusive business markets globally. These include the high cost of large mile distribution, the unfamiliarity with the purchasing and living behaviors of the poor, the large informality of the market and the high perceived risk to invest, government restrictions, the difficulty of finding an affordable price point, and a lack of understanding on how to maximize social impact.

In Southeast Asia, inclusive business investments remain nascent also due to reasons such as high risk aversion, a culture where imitation is more widespread than innovation, and an environment in which caring for the poor is done actively by the private sector through philanthropy and CSR, and it is expected to be delivered by the government. While ADB will continue to make good inclusive business deals in South Asia, we want to place more emphasis on creating an enabling environment for inclusive business in Southeast Asia.

I am pleased to announce also that we will be launching a new inclusive business in Asia website, though which valuable information on inclusive business can be shared. We hope that our partners from Latin America, Asia, and Europe will join us in creating a global knowledge network through this website.

Let me stop here so that we may begin to discuss and learn of the many good things you – inclusive business practitioners – have done to provide commercially viable solutions for the poor in Asia and the Pacific. Welcome again to this 2nd Asia Inclusive Business Forum and I look forward to invigorating and fruitful discussions ahead.

Thank you.


  • Susantono, Bambang
    Susantono, Bambang
    Vice-President for Knowledge Management and Sustainable Development