Social Impact Investing

Impact Investments:
An emerging asset class
Global Research
29 November 2010
target BoP population that lives in urban areas is 37%. Across our measured
countries, it is 58%. Since we have the percent of urban population by income
bracket and by country, we incorporate this data on a granular basis.
At this stage, we have determined the parameters of the population we will target
with our housing product: the Annual Household Income (line 1 in Table 7: Income
brackets A – E in Table 8 and Table 9), and only the urban population. Next, we
broaden our focus globally and count the number of people or households that fall
within those parameters.
5. Using the WRI data, identify population or number of households in each income
bracket
The WRI data provides the number of people per income bracket. Since housing
is a product sold to a household rather than an individual, we count the number of
households that would fall within our target income bracket. For the 36 countries
represented in the WRI data set, the populations given in each income bracket
count the people earning the relative incomes but exclude non-earning members
of the household. In order to determine the number of households, we first take
the size of the earning population (the WRI number), and divide by the Economic
Activity Rate to find the total population size (earning and non-earning). Then for
each country we divide by the average number of people per household to obtain
the total number of households 53 .
6. Factor in population growth
From the WRI database EarthTrends, we find the growth rates for urban
populations in each country measured from 2005–2010. Since the population data
we have is from 2005, we apply these growth rates – 1.06% on average – to each
country’s number of households. Similarly, we apply the rural population growth
rates when relevant. We do not consider urbanization rates, which could be
expected to change over time.
7. Extrapolate to the rest of the region
Finally, we extrapolate from the 36 countries to the broader regions, just as WRI
has done in The Next 4 Billion. We calculate the ratio of measured to extrapolated
population and apply the same ratio to the number of households in our target
income bracket. Table 11 shows the countries included in the measured work, and
the regions to which we then extrapolate.
Table 11: Countries included in WRI data
Africa Asia Eastern Europe Latin America and Caribbean
Burkina Faso Bangladesh Belarus Bolivia
Burundi Cambodia Kazakhstan Brazil
Cameroon India Macedonia, FYR Colombia
Cote D'Ivoire Indonesia Russian Federation Guatemala
Djibouti Nepal Ukraine Honduras
Gabon Pakistan Uzbekistan Jamaica
Malawi Tajikistan Mexico
Nigeria Sri Lanka Paraguay
Rwanda Thailand Peru
Sierra Leone
Uganda
South Africa
Source: World Resources Institute
53 Also based on WRI data.
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