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Abu Dhabi

When competition forces the market to serve the poorest

Dilip Ratha's picture

Poor people are not used to receiving customized services from businesses that are usually vying to serve rich customers. Every now and then, however, one comes across an example that defies convention. The example I have in mind is the story of Esterelle, a remittance agent who goes to the migrant camps in Abu Dhabi to provide remittance services to poor migrant workers from Bangladesh and the Philippines and other countries. In a story published today - Bringing it all back home - John Gravois describes how Esterelle provides not just a standard remittance service, but actually deposit and loan services customized to the needs of the poor individuals. And she does it for profit, not charity (even though the story hints at this motive). Charity is not sustainable; profit motive is.

This example is also an exception to the notion that services for the poor must rely on state subsidies and earmarks. When small numbers add up to create large profit opportunities, market competition can pressure businesses to provide customized services for the poor at market prices. Such services are likely to be more sustainable over time than those relying on public or private subsidies.