So, this past weekend I asked a few people about this, specifically, I asked: shouldn’t the goal be to get the (poorer) people to earn more i.e. they move into the middle class instead of sucking more money out of them?
The premise of this question was based on the logic that if you are going to sell poor people products and services that keep them in the vicious cycle of poverty (e.g. mobile money loans that make them even more dependent on the loans given the fees they charge) then it is not a sustainable business practice nor something that can grow a country’s economy in the long term as they will eventually (most likely, at some point) not be able to afford such products. More than that, is it not better and beneficial to everyone (i.e. government, startups, corporates, etc.) that we collectively try to find ways to lift as many people out of poverty as possible, creating a middle class, that benefits everyone?
One answer to my question that resonated is this one:
Yip - the poor must end up more skilled, productive and earn more … that should be the development focus … flogging more products and services to the poor is a dead end game - Max Pichulik, Partner at Impact Amplifier
Let’s take another example. Boda Bodas (in East Africa) or Okadas (West Africa) are being hailed by many as a great solution to Africa’s transportation problems especially in congested, badly maintained, and badly managed cities. So much so that there are now several new Boda Boda and Okada startups in Africa that have created Uber-like apps for requesting them. However, using myself as an anecdote when I travel across the continent, I only use motorcycle taxis when I need to get somewhere quickly and urgently. I admit I am a terrible example of a typical Boda rider (by the way, boda is South African township slang for death/dying, and having been on bodas many a time, I think I’ve come close to meeting my maker several times). The typical Boda / Okada rider is mostly students or low-income earners who most times cannot afford an Uber (or similar) or a cab. Add salt to the wound, public transportation (the type that is supposed to be offered by governments) is almost non-existent or badly managed.
Also, once a regular Boda / Okada rider gets a job (or a better paying job), they will either get a car or have enough disposable income to afford better transportation which allows them to run errands (how much shopping can you carry on a Boda?).
The point I am trying to make, despite digressing slightly, is that we keep trying to innovate and hack our way around poverty instead of realizing that the best solution for all of us, is to hack poverty away.
Do you agree?