Editor’s Note: This post is authored by Acumen Fund Summer Associate Amy H. Lin. Amy is pursuing an MBA and International Relations MA from the Wharton School, University of Pennsylvania and the School of Advanced International Studies (SAIS), Johns Hopkins University, respectively. Her professional interests are in international development in sub-Saharan Africa. She has worked at the World Bank, with TechnoServe and with the Boston Consulting Group. Amy graduated from Yale with a BA in Political Science.
By Amy Lin
Proving that BoP services and profit can go hand in hand, Nairobi-based Meridian Medical Centre has been profitably operating three outpatient clinics with one-third of its clients earning only $4 a day. In April 2008, Meridian opened a fourth clinic in Donholm, a low-income Nairobi neighborhood, to cater to a low-income clientele interested in high quality outpatient health care at a reasonable price.
Through a new partnership with Acumen Fund and The Blue Link Mirror Fund, Meridian will open 5 more clinics over the next 3 years in higher density, lower income areas. This expansion will begin in Nairobi, but with an eye to expanding to towns on the periphery of Nairobi. As the Kenyan newspaper The Standard reported on June 17, Meridian’s partnerships will leverage both capital and management expertise—strengthening Meridian’s bottom line while meeting BoP needs.
Meridian’s push into lower-income markets is part of a larger trend of companies recognizing the market potential of the BoP. In Kenya, prominent businesses like Equity Bank and Safaricom (a mobile phone company) have enjoyed explosive growth in recent years, largely due to their success at attracting large volumes of low income clients. Investors are also recognizing the opportunity to profitably serve the BoP, as illustrated in the oversubscription of the Safaricom IPO, which drew 236 billion Kenyan shillings ($3.68 billion).
As Meridian and others launch operations targeted at lower income populations to achieve higher growth rates, in Nairobi as well as in peri-urban or rural areas, the BoP will benefit from the greater choice of products and services. Just as he predicted, Adam Smith’s “invisible hand” is using corporate self-interest to achieve a greater public good.
