Professional Documents
Culture Documents
Merten Sievers
Enterprise Development Programme
International Training Centre of the ILO, Turin
www.itcilo.org
International
Da Lat, Vietnam, February 2007 Training
Centre
This morning…
1. From BDS to MMW4P to Value Chains to
Business Environment
2. Systemic Market Development
3. Some examples:
► BDS and Finance
► Enabling Environment
► Agricultural Value Chains
► Media and BDS
► And more during the week: GCF, GTZ, ILO
4. Conclusions
1. From BDS to Business
Environment
¾ BDS paradigm born in late 90ies (after the
success of microfinance)
¾ Large scale voucher programs followed
that did not always work the way it was
expected
¾ “Disenchantment” led to some advocating
for more concrete (Value Chains) or more
general (Business Environment)
interventions
¾ Others applied BDS principles to a wider
set of “markets” including infrastructure,
health and educational markets (MMW4P)
¾ Massive outreach and impact still only in a
few cases
Why the Business Environment?
But BDS and finance might not be enough….
Direct, subsidised
provision: quick
impacts but less
sustainability
Time
Example 1. : linking finance
and BDS commercially
¾ Banco de Crédito Perú is the largest Peruvian
bank (>30% of financial market in savings and
loans, 50.000+ MSE clients). In 2005 BCP
bought the microenterprise bank Financiera
Solución
¾ New clients and growth, client retention
Products:
¾ management training for best clients
¾ MSE fair with “business exchange”
¾ “Formalization” service in alliance with NGO
and Labour Ministry
Financial sustainability:
¾ Cost of Implementation of SIYB training:
75.000 US$ .
¾ Additional profit through new credits: 50.000
US$
Example 2. Enabling Environment and
Market access
► Municipal purchasing in El Alto:
► On the Public sector side
¾ The “Compro Boliviano” (= buy Bolivian)
¾ Government decree that pushes local, regional and the national governments
to buy more inputs from local MSEs
¾ Improves contracting conditions for bolivian enterprises (guarantees,
experience, formalization etc.)
¾ For the private sector side
The “tarjeta empresarial” (=
entrepreneurial card)
¾ “formalizes” individual entreprenuers to
gain access to public purchasing
¾ Establishes legal liability for contracts up
to 1.000.000 Bolivianos (123.760 US$)
¾ Promotion through TV and radio...
Example 2.: Public purchasing in Bolivia
Municipal Purchasing in El Alto:
Implementation:
¾ The “Feria a la Inversa” (= inverse fair) is an
instrument to implement the “Compro Boliviano”
and the “tarjeta empresarial”:
► “Inverse” because it is a buyers fair:
The municipal government presents
everything it wants to buy to local MSEs:
infrastructure, services, up to a certain
amount
Increases transparency of the purchasing
procedure
Creates market access to MSEs and creates
local employment and economic development
Contracts closed during the fair
Additional support for training and financial
guarantees still necessary (but: overall cost
presumably still lower than without the fair..)
Eaxmple 3. Business
Association in Ghana
Pineapple Exporter Association in Ghana
¾ Low production size of individual producers creates
bottelneck in accessing large volume export markets
¾ Assocation set up to provide:
¾ quality control services
¾ market access through new export markets
¾ storage and handling facilities
¾ Export increase from 1995: 2,700 ton. to 2002:
32,000 ton.
¾ Provision of export promotion services was extended
to non members and gradually to more products in
the fruit sector assuring financial sustainability
¾ Now: developing a brandname for Ghana Pineapple
Example 4. Bamboo in Vietnam
High 300 Current bamboo
1,500 market size
Bamboo 400
Activated Shoots 1,700
Estimated bamboo
Carbon
20 market size 7- 10 yrs
170 Blinds (mid scenario)
1,200
Profitability
Low
Low Ease of market access High
Bamboo Impact Potential: Jobs,
Financial Impact by Product
1.2 Premium processing
Full time equivalent
eg flooring, laminate furniture
jobs (FTE) created
1.0
Flooring
on VN factories
farms,
Jobs etcboard
throughout the
Mat VN
per ha 0.8
supply
Woven chain from
mat VN
(Farmers
Workers Medium value the bamboo
Chopsticks VN
0.6
FTE) processing sustainably
chopsticks, panels Paper + pulp VN
produced from 1 ha
0.4 Charcoal, briquets, China
Low Value Processing Charcoal, briquets, Laos
0.2 Bulk processing paper, charcoal Raw culms VN
Raw culms for construction
0
0 500 1,000 1,500 2,000 2,500 3,000
Micro level:
enterprises and
their relations
7. Conclusions
► Mayor fields of support and current thinking:
► No “one size fits all”
► Market Development needs to be systemic:
how do we fit in
► So framework conditions and the enabling
environment need to be taken into account:
role of the government critical
► What are other actors doing in market
development?
► Exit strategies still crucial
► Big challenges remain... in outreach and scale
Thank You