Bottom of the pyramid theory of financial inclusion: understanding how financial inclusion reduces economic inequality Free

Financial inclusion theories are expanding in response to growing demand for research that is relevant to policymakers and practitioners (Ozili, 2020). This trend in theory development signals a shift away from positivist empirical evidence gathering in financial inclusion research to a stronger emphasis on observing financial inclusion practice and assessing the implication of financial inclusion efforts on society (Allen et al., 2016).

The purpose of this article is to develop a framework for understanding how the actions of people in the BOP enable financial inclusion in the BOP segment of the economic pyramid. It also highlights the conditions that enable financial inclusion to take place at the BOP segment. By definition, the people at the bottom of the pyramid (BOP) are those in the lowest socio-economic strata in any society (Gupta and Kanungo, 2022). Rapid financial development in the financial system often leaves many people behind in society, and it pushes more people to the bottom of the economic pyramid (Nikoloski, 2013). Developed financial systems have mechanisms that influence the degree to which people can access financial services, such as a loan, to start a small business, pay for education and realize their economic aspirations (Demirgüç-Kunt and Levine, 2009). People with higher socio-economic status tend to access more, and better, financial services than those with low socio-economic status, while those who cannot access financial services will likely fall to the bottom of the economic pyramid over time. Therefore, increasing access to appropriate financial services can help to ameliorate this effect by improving the livelihoods of people at the BOP. Despite this, the notion of people at the BOP has not been theorized in the financial inclusion literature, even though it is used frequently in organization and management studies.

This study formulates a BOP theory of financial inclusion, which draws attention to the factors enabling financial inclusion for people at the bottom of the economic pyramid. The intent for formulating the BOP theory of financial inclusion is to enable scholars, practitioners and policymakers to gain insight into the actions of people at the BOP and how their actions affect financial access and how financial access affects them. The BOP theory of financial inclusion also aims to offer a good understanding of how people at the BOP benefit from financial inclusion and through what processes they are able to do so.

Regarding methodology, the method used to develop the BOP theory of financial inclusion is the conceptual discourse analysis method (CDAM), which involves studying how the BOP concept is used within specific financial, business and historical contexts in order to focus on the underlying patterns and assumptions embedded in the use of the BOP concept and using these insights to develop a coherent linkage between the actions of people at the BOP segment and their usage of financial services. The CDAM is also used as the basis for selecting the literature used to support the assertions and predictions of the theory.

This study contributes to the existing literature in several ways. First, the proposed theory development contributes to the theoretical literature by providing an alternative framework for explaining observed financial inclusion phenomena in BOP communities where social networks play a significant role in the lives of people living in BOP communities. The theory development in this study describes what is observable from financial inclusion practice in BOP communities. It also identifies both the explanatory variable and dependent variable from observed financial inclusion phenomena in BOP communities and establishes connections between them in a way that testable hypotheses can emerge. Second, the study contributes to the existing theoretical literature that formulates financial inclusion theories, which are aimed at explaining observed phenomena in financial inclusion practice. The present study complements this effort by offering useful insights into how people at the BOP interact with financial services and its effect on them. Three, the study contributes to the BOP literature by examining the application of the BOP concept in ongoing financial inclusion discourse.

The remainder of the study is organized as follows. Section 2 presents a discussion of the related literature. Thereafter, the development of the BOP theory of financial inclusion is presented and discussed in Section 3. Section 4 explores the social mechanisms used to demand appropriate financial services at the BOP segment. Section 5 explores the effect of lack of access to financial services in BOP segments. Section 6 suggests the type of financial services that are appropriate for people at the BOP. Section 7 discusses the role of digital finance and institutional structures in operationalizing the theory. Section 8 presents the conclusion of the study.

Prahalad and Hart (2002) popularized the term “BOP” in their article titled “The fortune at the bottom of the pyramid”. In the article, they discussed the idea of a world economic pyramid and proposed that large companies should serve markets that are at the bottom of the world economic pyramid. They argued that these markets are made up of aspiring poor people who are not victims but are entrepreneurs. They argued that selling goods and services to the poor will help improve their lives while also making profit for large firms (Prahalad and Hart, 2002).

Not everyone agrees with Prahalad and Hart's (2002) view of poor people at the BOP. Karnani (2005) contests the idea that poor people at the BOP are an attractive market segment and selling to the poor is simultaneously profitable for companies and can help to eradicate poverty. Karnani (2005) argues that the idea is an illusion and is dangerous. He argues that no fortune can be made from selling anything to the poor and that the only way to eradicate poverty is to increase the real income of the poor. Landrum (2007) also challenges Prahalad and Hart's (2002) idea of poor people at the BOP. Landrum (2007) argues that it is impossible to eradicate poverty at the BOP by selling goods and services to the poor, and the only benefit that may come from serving the BOP segment is that it can pressure companies to be innovative and creative in developing products that serve poor people. However, simply selling products to poor people will not eradicate poverty.

Walsh et al. (2005), in a book review of Prahalad's BOP concept in Prahalad (2008), argue that Prahalad committed the fallacy of only focusing on the success stories of investment in BOP markets. Prahalad did not describe the mechanisms through which BOP investments may lead to poverty reduction. For example, if a multinational company invests US$5m in a BOP market or community in India, how exactly will this investment lead to poverty eradication? Prahalad and Hart (2002) and Prahalad (2008) were both silent about this in their BOP conceptualization. Another criticism raised by Walsh et al. (2005) is that Prahalad and Hart's (2002) proposed BOP concept was designed from the perspective of business managers and not from the perspective of impoverished poor people. They further argue that even if large companies consider poor BOP markets to be a profitable segment and a good market for investment, the reality is that BOP markets can be hostile to large companies. Residents in BOP markets may protest and want large companies kicked out of their communities if those companies sell products to them at high prices or if they pollute the environment.

The BOP theory, popularized by Prahalad in Prahalad (2008), proposes that the world's poorest populations are not only recipients of aid, but they are also a potential untapped consumer market, which presents a unique opportunity for large multinational organizations to offer innovative, low-cost, high-quality products and services to poor people in order to create shared value and alleviate their poverty while making profit (Prahalad, 2008). The BOP theory presents a market-based model of economic development, which aims to simultaneously alleviate poverty while providing profits for multinational corporations (Simanis and Duke, 2014). The BOP theory aims to unlock the economic potential of difficult-to-access markets in poor communities, bring poor people into the global economy and solve the problem of global poverty while simultaneously generating profit for multinational corporations (Simanis and Duke, 2014).

With regard to financial inclusion, there are three theories of financial inclusion, which are indirectly related to BOP issues or the BOP theory. They are the vulnerable group theory of financial inclusion, the community echelon theory of financial inclusion and the public good theory of financial inclusion. The vulnerable group theory of financial inclusion proposes that financial inclusion efforts should be targeted at vulnerable people who are often excluded and neglected in society (Ozili, 2020). The vulnerable group theory of financial inclusion is linked to the BOP theory because it considers poor people to be a vulnerable group who are often neglected and excluded in society, which leaves them at the BOP in society. The second theory is the community echelon theory of financial inclusion, which states that financial services should be delivered to unbanked populations through their communal leaders because community leaders are influential, and they can use their influence to encourage and persuade community members to join the formal financial sector and use available financial services to improve their well-being (Ozili, 2020). The community echelon theory of financial inclusion is linked to the BOP theory because it recognizes that excluded communities are disadvantaged and have BOP characteristics and their community leaders can be influenced and persuaded to encourage their community members to use formal financial services towards financial inclusion. The third theory is the public good theory of financial inclusion, which argues that the provision of formal financial services should be treated as a public good and should be provided to everyone for the benefit of all without any price and non-price restrictions (Ozili, 2020). The public good theory of financial inclusion is linked to the BOP theory because it advocates that everyone, including people in BOP segments, should have access to basic and appropriate financial services regardless of their income or socio-economic status.

Several studies in the literature such as Allen et al. (2016) and Wei et al. (2025) define financial inclusion as access and use of financial services. The financial inclusion literature places strong emphasis on “access” and “use” of financial services, arguing that public sector and private sector efforts to bring people into the formal financial system should not stop at granting access to financial services. It should go beyond granting financial access and consider whether people are actually using available financial services to meet their needs and whether financial services are delivered to them in ethical and responsible way (Allen et al., 2016). This suggests that financial inclusion cannot take place if people do not simultaneously access and use existing financial services.

Other studies in the literature investigate the beneficial effects of financial inclusion (e.g. Bukari et al., 2024; Wei et al., 2025; Ozili, 2025a; Al-Shami et al., 2024; Swamy, 2019; Verma and Giri, 2024; Abokyi and Bettin, 2025). These studies find that financial inclusion has the potential to alleviate poverty (Bukari et al., 2024), increase entrepreneurial activity (Wei et al., 2025), increase investment in small businesses by small business owners (Wei et al., 2025), contribute positively to economic growth (Ozili, 2025a), promote digital and financial literacy (Al-Shami et al., 2024), increase the financial resilience of people experiencing consumption shocks and environmental disasters (Swamy, 2019), reduce income inequality in developing countries (Verma and Giri, 2024) and increase household consumption (Abokyi and Bettin, 2025). Collectively, these studies show that financial inclusion is beneficial for households and businesses.

However, existing studies show that financial inclusion can also have adverse consequences such as greater indebtedness (Altaytas, 2025), encouraging spending during times when people ought to be conservative and cautious about spending, especially during crises (Ozili, 2024), increasing consumer vulnerability to fraud, scams and predatory lending in the financial sector (Mudiri, 2013) and greater exposure to financial risks in the financial system (Ozili, 2024). Despite these risks, financial inclusion is still considered by many scholars to be an effective way to spur economic growth and development in developing countries, especially in countries that have a large segment of the population operating in the informal sector (Al-Shami et al., 2024; Swamy, 2019; Verma and Giri, 2024; Abokyi and Bettin, 2025).

Another dominant theme in the financial inclusion literature, other than the beneficial effects of financial inclusion, is the determinants of financial inclusion or the factors promoting financial inclusion. The most notable financial inclusion determinants documented in the literature are a young, vibrant population (Friedline and Rauktis, 2014), access to the Internet (Akpa et al., 2025), age (Friedline and Rauktis, 2014), receiving government transfers (Niankara, 2022), access to mobile phones and mobile money expansion (Ouma et al., 2017), being employed (Sanderson et al., 2018), being educated (Atkinson and Messy, 2013), being technologically savvy (Chu, 2018), etc. Other studies examine the measurement of financial inclusion. Demirguc-Kunt and Klapper (2013) develop measurements for financial inclusion and show that financial inclusion can be measured using the percentage of adults who own an account, the percentage of adults who use accounts to save and the percentage of adults who use their accounts more frequently. These measures of financial inclusion are well documented in the Global Findex database and in Demirguc-Kunt and Klapper (2013).

Existing BOP studies acknowledge that the BOP segment has many economic problems, and some of the problems can be addressed through adequate access to formal financial institutions and use of digital financial services. For instance, Martınez and Krauss (2015) show that microfinance institutions play an important role in increasing access to finance for poor people, and they are also more responsive to the needs of people at the BOP. Pal and Gupta (2023) examine the determinants of access to credit for women at the BOP. They use logistic regression to analyse the effect of four factors affecting women's access to credit, particularly individual household level, social attributes, economic attributes and ownership of documents. They find a significant relationship between access to credit and the four determinants.

Regarding digital financial services, Gupta and Kanungo (2022) argue that the BOP is a largely untapped segment of the market and that BOP segments cannot be served using the traditional financial market channels. Their analysis showed that a higher degree of financial inclusion for the BOP segment is likely to be achieved through digital financial services or the digitalization of formal financial intermediaries. In a related study, Ashoer et al. (2024) examine the determinants of digital financial inclusion in the BOP segment in Indonesia and find that men experience a higher level of digital financial inclusion through greater use of mobile fintech than women in the BOP segment. Similarly, David-West et al. (2019) show that mobile money is an important innovation that addresses affordability constraints and resource constraints at the BOP.

Other studies focus on the BOP segment's behavioural intention to adopt and use digital financial services. For instance, Shankar (2024) examines the factors influencing BOP consumers' intention to adopt and use mobile payment to increase financial inclusion. They obtain responses from BOP customers using semi-structured in-depth interviews and find that awareness, social influence and self-efficacy influence the adoption of mobile payments towards financial inclusion, while privacy, security risks and vulnerability concerns inhibit the adoption and usage of mobile payments. In a related study, Makholwa et al. (2020) examine the factors contributing to the BOP segments' behavioural intention to adopt mobile financial services in South Africa. They find that habit, performance expectancy and uncertainty avoidance are predictors of behavioural intention to adopt mobile financial services. Wentzel et al. (2016), in a study of the factors hindering financial inclusion at the BOP in South Africa, show that the most important factors hindering financial inclusion at the BOP in South Africa are educational level, income, age, home language and the number of dependants.

Finally, although the prior studies reviewed above have explored financial inclusion in BOP segments, the gap in the literature is the lack of theories that connect the actions of people in BOP segments to financial inclusion outcomes. Prior studies have not developed theories that enable scholars, practitioners and policymakers to gain insight into the actions of people at the BOP and how their actions affect financial access and how financial access affects them. This theoretical study fills this gap in the BOP-finance literature by (1) providing a theoretical framework for explaining observed financial inclusion phenomena in BOP communities where social networks play a significant role in the lives of people living in BOP communities and (2) identifying both the explanatory variable and dependent variable from observed financial inclusion phenomena in BOP communities and establishing connections between them in a way that testable hypotheses can emerge.

In this section, I formulate the BOP theory of financial inclusion. I begin by providing an expanded view of the BOP concept. Thereafter, I explain the BOP theory of financial inclusion, present the predictions of the theory and develop a functional economic model from the theory.

Prahalad and Hart (2002) used the term “BOP” to describe the poorest or the aspiring poor in society. They define “BOP” based on level of income. They suggest that the poorest, i.e. people with little, irregular or no income, are the people found at the bottom of the economic pyramid in any society. This view of the people at the “BOP” is too narrow.

For the purpose of theory development and to take into account other socio-economic stratifications other than income, I expand the term “people at the BOP” to include unbanked adults who find themselves in the BOP according to any socio-economic stratification that is used to define people at the BOP at any point in time, whether by income, age, religion, gender, location, etc. For example, just as a large group of poor people will intuitively belong to the BOP according to income stratification, a large group of uneducated people will also intuitively belong to the BOP according to education stratification. Also, a large group of prolonged unemployed people will intuitively belong to the BOP according to labour force stratification.

An illustration of the economic pyramid is shown below in Figure 1. The top of the pyramid are the elites who own large corporations and control a large share of economic resources in society. The next level below the top pyramid consists of people who have access to life-changing financial services that uplift them far away from the BOP. These include middle-income adults, rich adults, highly educated adults, medium-scale business owners, long-term employed people, investors and government officials. The next level below the economic pyramid consists of people who have access to appropriate basic financial services. These include small business owners, low-income people, moderately educated people, short-term employed people, etc. The lowest level in the economic pyramid consists of people without access to formal financial services. These include the poorest adults, uneducated adults, prolonged unemployed adults, etc.

For the purpose of theory development, the BOP refers to people in the lowest socio-economic group in any society. They often constitute a large segment of the population in many societies, and their large size makes them an indispensable segment of society (Gupta and Kanungo, 2022). They are visible to the rich, wealthy, political elite and the government. They are a major source of labour in many societies, and industries depend on them to produce goods and offer services to markets (Khan and Surisetti, 2023). They are mostly consumers, while only a few of them are entrepreneurs.

The distinguishing feature of people at the BOP is that they have many unmet basic needs (Gupta and Kanungo, 2022). For example, they need quality education, healthcare, employment, a decent income, housing, healthy food and clothing, among others (Wentzel et al., 2016). Yet, they have insufficient money, income or savings to meet these needs. They even find it difficult to raise emergency funds within 7 or 30 days to meet their most pressing needs and their emergency needs.

Many of them want to transition from the BOP to a higher level in the economic pyramid, but they face financial constraints that prevent them from doing so. They do not have sufficient money, income or access to economic opportunities that can move them from the BOP to a higher level in the pyramid (Wentzel et al., 2016). When these people cannot access financial services that would enable them to transition from the BOP to a higher level in the economic pyramid, they will feel held down at the BOP against their will. When they are further “pushed to the wall” due to economic hardship, rising cost of living, high inflation, macroeconomic instability or societal neglect, they will have incentives to engage in anti-social actions that are potentially destabilizing to industries, markets and society (Quentin, 2017).

Therefore, to avoid this situation, there is a need to direct financial inclusion efforts to people at the BOP and ensure they have affordable access to financial services, such as bank accounts, mobile money, fintech services and other digital financial services, that meet their most pressing needs and increase their ability to cope with any economic hardship they may experience while at the BOP (Ashoer et al., 2024; David-West et al., 2019).

Furthermore, if people at the BOP can access and use affordable financial services, such as loans, to meet their basic consumption, investment and social needs, they will be able to contribute to social and economic development (Ashoer et al., 2024; David-West et al., 2019), and their incentive to engage in anti-social actions that destabilize industries, markets and society will be greatly diminished or reduced. They will be able to raise capital or obtain a loan to start a small business, earn income, acquire assets and build profitable social connections that can uplift them from the bottom of the economic pyramid to a higher level in the economic pyramid (Allen et al., 2016; David-West et al., 2019).

In summary, the BOP theory of financial inclusion states that the provision of appropriate financial services to people at the bottom of the economic pyramid can help to meet their needs, improve their well-being and reduce their incentive to engage in anti-social actions that destabilize industries, markets and society, and it can provide them with an opportunity to exit the bottom of the economic pyramid for a higher level in the economic pyramid.

The method used to make the predictions of the BOP theory of financial inclusion is the CDAM, which involves reviewing the literature; studying how the BOP concept is used within specific financial, business and historical contexts in order to focus on the underlying patterns and assumptions embedded in the use of the BOP concept and using these insights to develop a coherent linkage between the actions of people at the BOP segment and their usage of financial services.

The World Bank reports that 1.3 billion adults worldwide are unbanked in 2024, and they do not have access to basic financial services that they can use to meet all their basic needs (World Bank Global Findex, 2025). This supports the prediction that there are many unbanked people with unmet basic needs. Lack of access to financial services will keep them in the bottom of the economic pyramid (Realini and Mehta, 2015). See Prediction 1 in Figure 2.

Unbanked adults will leverage their formal and informal social networks to communicate their financial needs and express their desire to have banks and non-bank financial institutions operate in their location (Okten and Osili, 2004). They will communicate with influential people in their social networks, such as their elected representatives, government institutions, policymakers and financial system regulators, who can urge banks and non-bank financial institutions to bring traditional financial services and digital financial services to locations where unbanked adults in BOP communities reside. See Prediction 2a and B in Figure 2. This prediction is supported by Chai et al. (2019) and Okello Candiya Bongomin et al. (2018), who show that social networks significantly increase financial inclusion by increasing the probability of households participating in the financial system.

If unbanked adults remain unserved or underserved after prolonged periods of waiting either because financial service providers refuse to serve them or for other reasons, unbanked adults will have incentives to use anti-social methods to ensure that their demands are met, especially if their demands have been previously communicated to their elected representatives, policymakers and financial service providers but were ignored (Archibong et al., 2022). See Predictions 3a, b and c in Figure 2. This prediction is supported by Garcia and Ortega (2024), who show evidence that small business owners engage in anti-social behaviour, such as protests, due to lack of access to small and medium-sized enterprise credit due to racial inequities.

To avoid anti-social actions, policymakers will develop strategies to ensure adequate access to financial services for people in BOP communities (Shankar, 2024). Policymakers will collaborate with financial service providers and telecommunication firms that offer banking, fintech, digital payment and mobile money services to ensure that these financial services reach people at the bottom of the economic pyramid (Realini and Mehta, 2015). See Predictions 4a and b in Figure 2. This prediction is supported by Arun and Kamath (2015), who show evidence that collaborative efforts between governments and financial service providers lead to better financial inclusion outcomes.

Once policymakers and financial service providers have provided appropriate financial services to unbanked people at the BOP segment, they will use the available financial services to meet their needs and improve their livelihoods right there at the BOP (Realini and Mehta, 2015) and have fewer incentives to undertake anti-social actions that destabilize markets, industries and society. See Prediction 5 in Figure 2. This prediction is supported by Kelikume (2021) who examine the relationship between financial inclusion and poverty reduction in 42 African countries from 1995 to 2017 and find that higher levels of financial inclusion are associated with poverty reduction.

Over time, as banked adults continue to use available financial services, such as investment, savings, deposit and mortgage products, they will become financially empowered to exit the bottom of the economic pyramid and transition to a higher level in the economic pyramid (Shankar, 2024; Realini and Mehta, 2015). See prediction 6 in Figure 2. This prediction is supported by Verma and Giri (2024) who find that higher levels of financial inclusion through more bank branches, deposit accounts, outstanding loans and greater domestic credit to the private sector decrease income inequality.

What banked adults do with available financial services and the quality of their financial decisions will determine whether they will move out of the BOP to a higher level in the pyramid or whether they will return to the BOP from a higher level in the pyramid (Gandy et al., 2016). Suboptimal or bad financial decisions have the potential to drive people into poverty, worsen their well-being and keep them in the BOP for a prolonged period of time (Gandy et al., 2016). See Predictions 7a and b in Figure 2. This prediction is supported by Lusardi and Messy (2023) who find that higher levels of financial literacy improve the quality of financial decision-making of households and individuals.

The BOP theory of financial inclusion offers seven predictions or hypotheses. The first five predictions focus on how financial inclusion is achieved at the BOP segment. They emphasize the efforts made by unbanked adults and their social networks to influence financial service providers to serve BOP segments. For example, the third prediction emphasizes that unbanked adults rely on their social networks by communicating their need for financial services to influential people, elected representatives, policymakers and government institutions who can influence financial service providers to serve BOP communities. More interestingly, the sixth and seventh predictions show that the ultimate objective of promoting financial inclusion in the BOP segment of the economic pyramid is to enable people to exit the bottom of the economic pyramid and move up to a higher level of the economic pyramid. The sixth and seventh predictions clearly demonstrate that it is not enough to be financially included. Rather, financially included individuals who use financial services should aim to consistently make sound financial decisions that increase their income and wealth and empower them to exit the bottom of the economic pyramid and move up to a higher level of the economic pyramid.

The above predictions can be summed up in a simple economic model. The model predicts that the propensity for an individual (e.g. an unbanked adult) to remain in the BOP or exit the BOP is a function of whether the individual is financially included, whether the individual uses financial services frequently, whether the individual has formal or informal social networks and whether the individual makes quality financial decisions that lead to income and wealth generation to uplift them out of the BOP to a higher level in the economic pyramid. The functional form of the economic model is specified below in Equations (1) and (2).

People at the BOP who need access to financial services as a gateway to access economic opportunities in society will use social mechanisms, such as interaction with people, elected officials, regulatory institutions and local authorities, to communicate their need for basic and appropriate financial services.

People at the BOP may inform their elected representatives about the lack of basic financial services in their community. They expect their elected representatives to communicate their concern to the relevant authorities and financial service providers and influence them to provide appropriate financial services to BOP communities (Ozili, 2020). In response, financial service providers will consider the business case of serving BOP communities and reach a decision on whether they want to serve BOP markets (Ozili, 2020).

People at the BOP can also communicate with the individuals and groups they respect and hold in high esteem who are also role models and a source of inspiration to them (Singer, 2017). They will inform these groups or leaders about the lack of basic financial services and the need for them to assist in influencing financial service providers to provide basic financial services to the affected BOP community. The reference groups and leaders may be successful or unsuccessful in influencing financial service providers to provide basic financial services to the affected BOP community (Ozili, 2020).

People at the BOP will interact with financial system regulators and bank supervisors to inform them that they lack access to basic financial services or that the financial services that are offered to them are not appropriate to meet their needs. They will have greater incentives to communicate their financial needs to financial regulators and bank supervisors if they believe that the loans, insurance and banking products being offered to them are exorbitant and are not tailored to meet the needs of people in the BOP segment. They expect financial regulators and bank supervisors to listen to their concern and influence financial service providers to provide appropriate financial services to the BOP community.

People at the BOP can also inform the local authorities about the lack of appropriate financial services and the need for them to assist in influencing financial service providers to provide appropriate financial services to the affected BOP community. They expect the local authorities to pass on their concern to financial service providers who can provide appropriate financial services or deploy digital financial services in BOP communities (Ozili, 2020).

People at the BOP will also inform their family, friends and business partners about the lack of appropriate financial services so that they can develop strategies to cope with the absence of appropriate financial services. Since family, friends and business partners may not have the power to influence or lobby financial service providers to provide appropriate financial services in their communities, their only option might be to develop coping mechanisms that enable them to survive and carry out their business (Fungáčová and Weill, 2015).

Prolonged lack of access to financial services, experienced by people at the BOP, can motivate them to mobilize in large numbers to engage in anti-social actions that destabilize industries, markets and society. Members of BOP communities who have nothing to lose will be more willing to engage in anti-social actions even if those actions alone will not bring financial services to their BOP communities.

When unbanked adults at the BOP cannot obtain a loan or other financial services from a financial institution or from family and friends, they may use self-isolation or social isolation as a coping mechanism (Yawe and Prabhu, 2015). They can make a deliberate decision to limit or stop interacting with people and not seek help from family or friends. They may choose to rely solely on their own limited resources, no matter how little. Such isolation is harmful to society because it can prevent them from meeting people who can point them to where they can access affordable loans and other financial services. Self-isolation also affects the economy because employers will not be able to use the labour services of people who isolate themselves from economic activities, thereby leading to fewer labour supply and low economic output (Gallie et al., 2003).

When unbanked adults at the BOP cannot obtain affordable financial services from financial institutions or from family and friends, they may have incentives to defraud others by developing schemes to obtain money from others by false pretence or deception. They may defraud their friends, neighbours and community members, which will adversely affect trust and social cohesion in BOP communities (Button et al., 2014). They can also defraud their employers and other small business owners, which could lead to loss of revenue and business failure, thereby increasing unemployment and decreasing economic output and economic growth.

Prolonged lack of access to financial services can create incentives for various groups at the BOP to engage in economic sabotage to express their dissatisfaction about their inability or difficulty to access appropriate financial services (Thomassen, 1990). They may engage in economic sabotage by damaging critical infrastructure, disrupting activities in physical markets, vandalizing gas pipelines, using blockages to disrupt road traffic, disrupting the movement of finished products to markets to create artificial scarcity, vandalizing warehouses and disrupting ongoing public works (Thomassen, 1990).

When unbanked adults at the BOP cannot access basic financial services, such as a loan, to meet their most pressing economic need, they may undertake violent demonstrations and protests to express their frustration and send a clear message to the authorities about the economic difficulty and hardship they are facing, which are linked to lack of access to finance (Thomassen, 1990). Such violent demonstrations and protests may lead to the destruction of valuable assets or properties. Business assets may be destroyed in the process, leading to loss of revenue and jobs, which can adversely affect economic output and economic growth.

When unbanked adults at the BOP cannot access basic financial services to meet their most pressing economic need, some groups at the BOP may kidnap or abduct employers, corporate executives and influential people for ransom as a means to obtain money illegally, which they can use to meet their own needs (Parsons, 2013). The victims and their relatives will lose their savings to ransom payments, which may lead to loss of financial independence for the victims. Kidnapping and abduction also breed mistrust and fear in society, which affect society's trust and cohesion (Parsons, 2013).

When unbanked adults at the BOP do not have enough money to meet their needs and cannot access affordable loans and other financial services to meet their needs, they may harbour hateful resentment against the rich, politicians and successful members of society. This anti-social behaviour mostly arises when people at the BOP believe that the rich and elite members of society control all the money and economic resources in the country and have refused to allow the poor to access affordable financial services in the financial system. This resentment encourages anti-social behaviour towards the rich and the political class, and it can motivate people to launch physical attacks on the properties and assets owned by the rich and politicians in society (Bennett and Kottasz, 2012).

To reduce the incentive for people at the BOP to engage in anti-social actions that destabilize industries, markets and society, they need to have access to appropriate financial services, which they can use to contribute to societal and economic development.

Access to low-cost financial services is essential for people at the BOP. Some people fall into the BOP because they cannot afford the high cost of financial services (Rasheed et al., 2019). Reducing the high cost of financial services can make a positive difference for them and reduce their incentive to engage in anti-social behaviour that destabilize markets, industries and society.

Another appropriate financial service for people at the BOP is access to microfinance products and services such as small loans. Some people may fall into the BOP because they cannot access a small loan from a financial institution. Ensuring equitable access to microfinance products and services, such as micro-credit, can make a positive difference for them (Rasheed et al., 2019) and reduce their incentive to engage in anti-social actions that destabilize markets, industries and society.

The third type of appropriate financial services that should be provided to people at the BOP is access to income-based financial services. Some people may fall into the BOP due to low income. Ensuring equitable access to income-based financial products and services can make a positive difference for them (Sheets and Crawford, 2014) and reduce their incentive to engage in anti-social actions that destabilize markets, industries and society. In the case of a loan, for example, low-income earners should be able to access a small amount of loan. If they earn irregular income, they should be allowed to access a loan amount that is equivalent to the average of the last three irregular incomes they have received in the past. Income-based loans provide people with (1) the ability to access limited credit if they have low income, (2) the opportunity to access more loans as their income increases and (3) the opportunity to use loans to acquire assets, earn income and move from the bottom of the economic pyramid to a higher level in the economic pyramid.

The fourth type of appropriate financial services that should be provided to people at the BOP is gender-based financial services. Some women may fall into the BOP due to lack of gender-appropriate financial services. Ensuring adequate provision of gender-based loans at favourable interest rates can make a positive difference for them (Tripathi and Rajeev, 2023). Also, if women own a small business, gender-based loans can give them favourable access to more loans since they can repay from the income generated by their small business. The same logic applies to gender-based insurance and savings products.

The fifth type of appropriate financial services that should be provided to people at the BOP is age-appropriate financial services. Some people fall into the BOP due to their age such as retired senior citizens without a pension or young adults who are dependent on social security benefits (Harker and Hinn, 2023; Storm et al., 2010). Providing tailored age-appropriate financial services that cater for the needs of old people in their vulnerable years and for young people can make a positive difference for them (Yin and Wang, 2025).

The sixth type of appropriate financial service that should be provided to people at the BOP is access to easy-to-understand and easy-to-use financial services. Some people fall into the BOP due to lack of financial education. Lack of primary education combined with financial illiteracy and lack of financial education can prevent uneducated people from accessing and using banking services, while digital illiteracy can prevent them from using digital technologies to access available financial services via mobile phones (Wentzel et al., 2016). Providing easy-to-understand and easy-to-use financial services, or digital financial services, for people at the BOP can bridge the education barrier and make a positive difference for them (Shankar, 2024; Makholwa et al., 2020).

The seventh type of appropriate financial services that should be provided to people at the BOP is religion-compliant financial services. Some religious people fall into the BOP because their religious beliefs discourage them from using mainstream financial services to meet their needs and improve their well-being (Ozili, 2025b; Sukmana and Trianto, 2025). For example, Islamic sharia principles do not permit Muslims to take interest-bearing loans. This group of religious people should not be abandoned or neglected. Providing religion-compliant financial services for them can provide an opportunity for them to use religion-compliant financial services to improve their well-being and transition from the BOP to a higher level in the economic pyramid (Alfian and Abd Majid, 2025).

Another appropriate financial service that should be provided to people at the BOP is rural-focused financial services. Some people fall into the BOP because they reside in rural and remote communities where financial institutions are either non-existent or are in limited supply and financial services are insufficient to meet their needs. Establishing more financial institutions in rural areas and extending digital financial services to more people in rural areas can make a positive difference for them. It can meet their needs, improve their well-being and provide an opportunity for them to transition from the BOP to a higher level in the pyramid (Bansal, 2014; Ozili, 2018).

The fourth prediction of the BOP theory of financial inclusion states that collaborative efforts will be made to provide appropriate financial services to people at the BOP. In this regard, financial service providers may prefer to offer digital finance solutions or digital financial services, such as mobile money, fintech apps, online banking, Internet banking, digital lending apps and digital payment services, to people in the BOP segment due to the low-cost and high-penetration advantages of digital finance. Policymakers, on the other hand, can intervene by providing an enabling policy environment that is conducive to the growth and development of digital financial services in the BOP segment. This makes digital finance very important in operationalizing the BOP theory of financial inclusion.

Digital finance or digital financial services in BOP segments will uplift people at the BOP by increasing access to affordable, convenient, fast and secure financial services that were previously unavailable through traditional banking channels (David-West et al., 2019). This access enables greater financial inclusion, improved financial resilience, business growth, greater entrepreneurship and women empowerment, which contributes to poverty reduction and economic empowerment of people in BOP segments (David-West et al., 2019). However, there needs to be improved digital literacy, financial literacy, reliable digital infrastructure and strong consumer protection regulations to maximize the benefits of digital finance while mitigating known risks such as fraud, predatory lending and data privacy breaches. Institutional structures also play a crucial role in operationalizing the BOP theory of financial inclusion (Ozili, 2018). Quality institutions can support the provision of basic financial services, protect BOP populations and establish a policy environment that is conducive to economic participation by formalizing the BOP economy, enabling the poor to invest in income-generating activities, enforcing contracts and the rule of law and empowering BOP segments through information sharing using financial education, vocational training, entrepreneurial skills development and information on business opportunities (Tebaldi and Mohan, 2010; Chambers and Munemo, 2019).

This article has argued that the people at the BOP are the lowest socio-economic group in society. They have many unmet needs, and they can demand financial services that meet their basic needs to improve their livelihoods. The theory proposed that access to appropriate financial services is one of many mechanisms by which people at the BOP can improve their livelihoods right there at the BOP. Access to appropriate financial services will also enable them to contribute to social and economic development, exit the BOP and uplift themselves to a higher level in the economic pyramid. The theory also explored the type of actions that people at the BOP may take when faced with prolonged lack of access to financial services. These include self-isolation, defrauding others, economic sabotage, violent demonstrations, protests, kidnapping, abductions and resentment against the rich and political class. Such actions can be avoided or mitigated if policymakers and financial service providers respond quickly and ensure timely provision of appropriate financial services to people at the BOP. The theory demonstrates that people at the BOP are a type of power group, i.e. they have some form of power, and they can demand appropriate financial services if they believe that access to appropriate financial services will significantly improve their livelihoods and provide them with an opportunity to transition from the BOP to a higher level in the economic pyramid.

The BOP theory of financial inclusion is a useful tool in the hands of policymakers because it can guide them in understanding the actions of people in BOP segments, the strategies used by people at the BOP to bring financial service providers to their location to serve them and the need to accelerate the provision of basic financial services for people at the BOP segment to meet their pressing needs.

Despite the theory being a useful tool to policymakers, implementing the ideals of the theory in developing economies may not be very easy or straightforward due to the heterogeneous characteristics of different BOP segments, their changing financial needs, the difficulty in accessing and maintaining social networks, the unwillingness of financial service providers to serve unprofitable BOP segments, the lack of enabling banking and digital payments infrastructure in BOP segments, low financial literacy and awareness, the lack of trust in financial institutions and the provision of inappropriate financial services.

The limitation of the BOP theory of financial inclusion is that it does not take into account the role of strategic business decisions in the provision of financial services to the BOP segment. Rather, it prioritizes the financial needs of people in the BOP segment while paying little attention to the profit motives of financial service providers. If banks and non-bank financial institutions consider the BOP segment to be an unprofitable customer segment, they will not serve the BOP segment. The theory also did not consider other factors that hinder the provision of life-changing financial services to the BOP segment such as a high crime rate in BOP communities, lack of regular income, lack of roads, electricity and Internet infrastructure and lack of government support to financial service providers that want to serve the BOP segment.

Finally, the theory development in this study opens new areas for further research. For instance, future research studies can use real-world survey data or empirical data to test the predictions of the BOP theory of financial inclusion. Another area for future research is to investigate whether the profit motives of financial service providers and the perceived low profitability of the BOP segment are major factors preventing financial service providers from serving BOP segments. Another interesting research topic would be to test the predictions of the BOP theory of financial inclusion in both developing countries and developed countries to determine whether the level of development plays an important role in the financial inclusion of the BOP segment.