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the private sector is ready to engage with thepoor, private businesses alone cannot meetthe needs of the poor. Examples such as A toZ Textiles in Tanzania show without doubtthat businesses, non-governmental organizations,donors and local governments must allbe involved.Local governments can remove manyof the constraints in the domestic marketenvironment. For example, they can reducethe amount of red tape surrounding theupgrading of basic infrastructure such astransportation, electricity, water and datatransmission. In addition governments canimprove the living conditions of their poorestpopulations and encourage local businessdevelopment by ensuring a functional andinclusive financial market, and by providingaccess to the legal system for the poor. In thisway they can unleash the power of business.But local governments cannot stand alonein fostering inclusive business models. Donorcountries can also raise awareness amongbusiness and development practitioners aboutthe opportunities and benefits of doing businesswith the poor.Moreover, donor countries are in a uniqueposition to facilitate dialogues between businessesand governments or other partners.And they can encourage development fromthe ground up by providing ‘patient capital’and other appropriate forms of financing.One such form is the challenge fund forinnovative inclusive business models that canbe used to donate to international developmentprogrammes.Challenge funds associated with the UKDepartment for International Developmentinclude the Business Linkage ChallengeFund and the Financial Deepening ChallengeFund, which offer grants for preparatoryphases and for investments including investmentsto remove constraints on poor people’smarkets.A great example of the success of suchfunding is Vodafone’s mobile transactionsservice in Kenya, a country that has fewerthan two million bank accounts serving 32million people. In partnership with Vodafone,Safaricom Kenya developed M-PESA,an electronic money transfer product to makefinancial transactions faster, cheaper andmore secure through the use of short messageservice (SMS). Now more than 6,000 peoplea day are signing up, helping Kenya and theUK meet MDG 8: developing a global partnershipfor development.UN Secretary-General Ban Ki-moonrecently issued a call to action on the MillenniumDevelopment Goals, urging anTools for the jobinternational effort to accelerate progress andto make 2008 a turning point in the fightagainst poverty. On September 25, the Secretary-Generalwill reaffirm this call at theUN General Assembly. ‘Doing well’ and‘doing good’ can be mutually reinforcingideals. Inclusive business models create moreindependence and interdependence by recognizingthe poor not only as consumers butalso as drivers of growth. Such models lead togreater wealth as well as progress in humandevelopment. In short, when markets includepoor people we all win.Bruce Jenks is Assistant Secretary General and Director, Partnership Bureau, at the UnitedNations Development Programme. Jean-Michel Severino is Managing Director of the AgenceFrançaise de Développement and a member of the blog www.ideas4development.org . CreatingValue for All and more information on GIM can be found at www.growinginclusivemarkets.orgParliamentary BriefCalling the immobileIn South Africa large portions of the country’spoor population lack access to mobiletelephony, despite a quite advanced nationalmobile phone sector. Heat maps like the oneabove show that in urban areas, 43 per cent ofhouseholds living on less than $2 a day haveaccess to a mobile phone but in rural areasonly 31 per cent do. Moreover access variesdepending on the region.Cell phone penetration is strongest in thewest and weakest in the central part of thecountry. Free State has the greatest disparities:at least 40 per cent of people earning morethan $2 have mobile phone access but fewerthan 20 per cent of those earning less than $2a day do. This visual overview can act as a firstlook at possible markets.OCTOBER 2008 15