Alleviating poverty – while making money

Christian Seelos writes in "Ethical Corporation" about how Telenor of Norway teemed up with Grameen Bank of Bangladesh to set up a super efficient telecom setup, made money and at the same time created thousands of jobs for the poor.

For example, Bangladesh has become one of the most profitable growth markets for Norwegian telecommunications company Telenor, which has cornered 60% of the Bangladeshi market through its collaboration with Grameen Bank (the micro-credit network – "bank of the villages" in Bangla – founded by Muhammad Yunus). Three other companies that entered the market without such partnerships share the remaining 40% between them.

Traditional corporate structures are perhaps not best suited to delivering multiple social and economic objectives at the bottom of the pyramid.

Telenor and Grameen set up two separate structures. One, run by Telenor managers, aimed to create financial returns, but the other, GrameenTelecom, run by Grameen managers, had a very different objective: maximise job creation while being financially viable.

The symbiosis turned out to be incredibly efficient: GrameenTelecom created more than 100,000 jobs in one of the world’s poorest countries, while Telenor created fewer than 1,000 jobs but achieved impressive economic returns and contributes significant tax revenues in Bangladesh.