IB company examples
The landscape study has an appendix describing the 19 IB business lines. 6 companies were designed to create income for the BoP through agrobusiness and handicrafts, and the remaining 13 companies create affordable and relevant services in energy, finance, insurance, technical training, water and housing. The companies’ business models are briefly summarized here in an alphabetical order.
ACE is a solar energy company, producing and selling cookstoves equipped with a solar powerbank driven fan that increases firewood and other organic fuel efficiency and substantially reduces smoke emissions of cooking stoves.
Agribuddy is an input and market provider which uses an innovative platform to connect farmers to bank, agri-inputs manufacturers and crop buyers/processors. Its revenues come from commissions generated through its facilitation of those institutions.
Amru Rice is the biggest organic rice exporter of the country with a market share of 90%. In its IB business line, the company works directly with about 25,000 farmers, up from 10,000 in 2016, and projects to involve 50,000 by 2023. Farmers working with Amru Rice can earn up to $10 a day, and the company can pay 20-30% more than the market rate. The company also guarantees bank and microfinance loans to its farers, resulting in lower interest rates and no collateral. The company’s business model is well regarded among other rice producers and the management is encouraging other forms to follow the Amru Rice model.
Artisan Angkor (AA) works with about 1,200 artisans and sells them to upmarket consumers and in exports. The company pays wages and supply chain income way above the market rate and provides very good social services to its staff.
BanhJi is a FinTech company providing accounting support to 2.500 micro-enterprises and mam and pap shops, improving the financial viability and sales capacity of such firms and linking them to banks. Its revenue model comes mainly from the banks as commission for micro-enterprises working through the BanhJi platform.
FED Rice is a rice milling company, exporting about 70% of its produce, especially organic rice. The company sources directly from 3000 farm households.
Forte is a large insurance company with many business lines mostly targeting the middle calss and better-off people. For IB only the crop and social health insurances are revenant; these are targeted to about 0.3 million poor and low-income households. However, the health insurance is structured in a way that it may not be sufficient to cover catastrophic health costs like surgeries and more expensive treatment costs, and the crop insurance is targeting larger farmers. These two business lines of the company are therefore only rated as potential IB.
Khmer Green Charcoal developed a high-quality char-briquette made from organic waste such as coconut shells. This product is appropriate and relevant for the cooking needs of the poor. However, the sales are still small, although the price of the product is much lower than that of competitors. Given the highly relevant product of the company for the poor, and the strong IB intend, and despite of the still small commercial returns, the company is rated as an IB initiative.
Khmer Water Supply Holding Co., Ltd. (KWSH) provides clean water to semi-urban and rural communities in Kratie, Siem Reap and Takeo provinces. What many other companies perceive as risk, namely expanding the pipeline to remote areas in existing water concessions, KWSH sees as an opportunity and makes the reduction of social poverty (and not pure area connectivity) as the core of its business model. Unlike many other of the 300 water companies in Cambodia, KWSH’s business model is focusing on inclusion of the non-connected rural households in its concession areas, and providing them with high quality of water. KWSH is a very good example for an Inclusive Business model, that should be replicated many times in Cambodia given the market. So far, the company is still an outlier best practice, but IB accreditation, branding, and priority procurement would substantially help scaling social benefits on reliable and high standard water access to the poor in the society.
LES sells solar home lighting systems to the rural poor, and – since 2018 as a second business line – also chicken incubators, solar driers, and solar pumps to the smallholder farmers. The Inclusive Business rating for this company resulted in an overall score below the IB threshold; the commercial and innovation IB ratings were low. However, the company has a reasonable strategic intend to become an IB, and its product is relevant for the poor, LES was therefore classified as a potential IB.
Lyly Foods is a medium sized agrobusiness with two business lines, one buying products from traders to process into agrobased food. This would not qualify as IB because the suppliers do not earn substantially above the market rate. In the other business line, the company is directly sourcing from about 1.500 suppliers and paying about 10% above the market rate. The company wishes to increase the income opportunities of its suppliers and is now exploring new markets for the processed vegetable products.
My Dream Home sells environmentally better, easier to build, stronger bricks with less material input, at lower prices than the traditional red clay brick (Lego style). In addition, the company is engaging in the house developing market where it builds house with construction prices 15-20% cheaper than those of other low cost housing providers. The company was rated as an inclusive business model, with strong strategic IB intend, currently medium commercial returns, and social impact (especially social depth, business innovation, and transformative systemic change impact). Its reach is medium for a building company. Going forward the company would need further business coaching and risk reduction support for its customer. Innovative investors sharing risks of the poor could find in this company a good case for investment. Furthermore, the government could consider priority procurement in housing support (including purchase of bricks) for this company.
Okra Solar connects rural households with solar home systems to a grid, thereby allowing to increase usage of solar home systems by more households and by providing more and more reliable energy supply. The key innovation is a devise installed to distribute access energy to those with lower usage. The company has still a small social reach. On the other side, Okra’s novel grid architecture costs about one-third of the cost of traditional microgrids and by connecting systems together, machine learning enabled software automatically diverts power in the most efficient manner, meaning less solar panels and batteries are required to ensure grid stability. The company provides an innovative business model to address energy needs of the poor by sharing electricity supply and was rated as potential IB initiative.
Phare Performing Social Enterprise (PPSE) generates income opportunities for those involved in the company through Phare Creative Studio ((illustration, painting, video, graphic design, and animation), handicraft boutique, and coffee shop. It also provides training to poor people and later employs them in its business. The company has a low profit margin and low social reach. Given its strong CSR emphasis, PPSE can perhaps be seen as a scaling social enterprise or a potential IB-initiative.
Prevoir is the second biggest social health insurance provider in the country, offering health insurance (80% of contracts), accident insurance (15% of contracts) and life insurance (5% of contracts) to individuals and group insurance to companies. The company partners with microinsurance firms and offers contracts with very affordable annual premium while ensuring excellent health coverage. Its payment record in case of claims is excellent, offering immediate cash payments through electronic payment systems with their partner institutions. Giving the high relevance of the product, the large scale and deep quality of social impact, the companies various business innovations, and its leadership role in quality social insurance for the poor, the company is rated as a good Inclusive Business model.
Signatures of Asia operates a rice milling facility buying from about 2000 poorer farmers practicing organic farming. The farmers earn a little higher than the market rate. The company is classifying as a potential IB model.
Sun EEE is a rural electrification distributor with a business philosophy to connect 95% of households in a village through a more efficient solar grid system, rather than individual solar home systems. Sun EE is a good example of an IB model. While the company is still at the medium to small end, its business approach is commercially very viable, its social impact is good (because of targeted in-depth systemic transformation), and the business innovation is highly relevant for the poor.
The Worldbridge Group is one of the biggest conglomerates in the country, being mainly engaged in comprehensive solutions for transport & logistics and property developments. In 2017, in response to a call from the Royal Government to address the housing backlog in the country of 1.5 million, the company started a new business line on low-cost housing. The company has also developed a special financing scheme which reduces the challenges faced by low-income families with normally having to pay high financing costs to the banks they borrow from. The company is interested to scale up and broaden its housing business more strategically based on the large need for social and affordable housing and the strong position of Worldbridge Group in the Cambodian business community.