Cornelia Stauffer: Why do you put the emphasis on the bottom of the pyramid of wealth?
C. K. Prahalad: A few years ago, multinationals were interested primarily in billion people who occupy the top of the economic pyramid. The remaining 80% were ignored. Through my work, I would like to draw attention to the four to five billion people who form the base of the pyramid, most of whom live on less than two dollars a day. Because they have a purchasing power, and thus offer to large companies an opportunity to engage profitably in a market hidden.

Credit Suisse has invested since 2003 in the microfinance sector. What do you think of micro-credit, this financing technique designed for customers with low incomes?
Poverty has three causes: firstly, the poor do not have the same access to information on markets and prices that people rich. Lack of quality products is a second factor. Finally, poor people can not rely on budgetary support. These three problems, we must combat them, and microfinance plays a decisive role. And micro-credits can enable families to ensure their livelihood.


What do you think of micro-credit to small and medium enterprises (SMEs) in emerging countries and at the bottom of the pyramid?
That's what you call invest in the future. In every country in the world, rich or poor, there is a high number of SMEs. But do they have access to financial benefits of quality? Often, the answer is no. It is therefore important to act, knowing that it is difficult to obtain figures on these companies - family businesses most of the time - and obtain securities. Banks must therefore develop in the field of microfinance new methods that will enable them to evaluate as to the morality of their clients and to impose appropriate conditions. In this context, the "pressure group" is likely to have better results than traditional securities. In India, for example, the credits are paid to help groups, which then distribute money among their members.

Concretely, that could make a big bank to enhance access to a financial infrastructure at the bottom of the pyramid? Because of its cost structure, it can not operate directly at the local level. By contrast, the major banks can work with local banks and distribute their micro-credits with the help of these partners. In all cases, it is important not to engage in a humanitarian, but to think in terms of economic and see in this an opportunity not to be missed. It is estimated that immigrants from developing countries transferred annually from 250 to 300 billion dollars to their countries of origin: it is more than the total amount of development aid in the world. This flow of money, which goes immigrants working in industrialized countries to the poor in their countries of origin, had so far not been taken into account by large international banks.

Is there not a big risk in investing in developing countries?
Not at all. At the Grameen Bank, microfinance institute of Bangladesh, from the customers who does not honour its commitments represents less than 0.5% of the total. The poor feel very indebted to banks against because the only alternative is for them to turn to private donors, who charge exorbitant rates. Young users of credit cards in the developed world represent a credit risk much greater. I think that poor people are a much lesser risk.

In which regions microfinance she was already well established?
Among Bangladesh, where Muhammad Yunus, founder of Grameen Bank, was awarded the Nobel Prize for his pioneering work. The India as a fast developing high-quality, in which different groups, local banks and large banks as well as several NGOs.

Which countries could cause difficulties for banks?
Offering banking services requires a legislative framework. A country that does not have clear laws and that does not anyway to enforce them should therefore be regarded with suspicion. It is also essential to be able to count on a well-developed civil society. Without it, access to poor people in rural areas will be complicated.

In your book entitled "The wealth of the Third World" ( "The Fortune at the Bottom of the Pyramid"), you are talking about a win-win situation that benefits both companies as poor.
In this economic model, those at the bottom of the pyramid have access to micro-credit and banking services quality. Their incomes are improving since they are no longer forced to endure the usurious rates of private lenders. And we should not overlook the technical advice which they can benefit. For their part, banks, faced with a new category of customers, must be innovative and develop solutions modern techniques and cheap. For example, in India, before the banks can offer benefits to a largely illiterate rural population, it was necessary to develop biometric devices for customer identification.

Do you think there might be the starting point of innovations in industrialized countries?
Absolutely. And to convince you, I will take another example: In most developed countries, it is not possible at present to conduct a financial transaction via SMS. Yet it is a system that already exists in the Philippines and is now tested in India. The "mobile banking" was developed by banks in collaboration with telecommunications companies and is targeted at people who have only a low income. Today, this innovation could call other, so that the term mobile phone to become a true wallet industrialized countries.