Inclusive Business is a business model that integrates low-income communities into the main operations of a company.
Different from corporate social responsibility (CSR) which usually involves donations or charitable activities, IB makes the community part of the process of production, supply, distribution or provision of services.
SME Corp. Malaysia has introduced the Inclusive Business Recognition which pays attention to businesses that create commercial value and social impact through community engagement.
Among the models highlighted is buying back products from the community as well as outsourcing work to them.
Imagine a local food company that needs a consistent supply of sambal, chips or traditional kuih.
Instead of producing all the products themselves, the company can work with a group of B40 entrepreneurs as suppliers.
Companies provide product specifications, help improve quality, coordinate packaging and market access, while entrepreneurs produce products based on agreed orders.
Companies get supplies and opportunities to expand business. Entrepreneurs gain market access that may be difficult to achieve alone.
This is the strength of IB. It is not just distributing aid, but creating economic relations that benefit both parties.
