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Business Development Services for micro Enterprises (BDS4ME)
across the World
Jitesh Panda
Vrutti Livelihoods Resource Centre
22nd July 2009
References from the Document…..
BDS UPDATEFourth Annual BDS Seminar, Turin, Italy
September 2003
By: Alexandra O. Miehlbradt and Mary McVay for the
Small Enterprise Development Programme
of the
International Labour Organization (ILO)
Azerbaijan…
� Organization: Mercy Corps
� Background: International NGO
� Clients: Small scale livestock farmers
� Services: Training veterinarians with training and assistance in marketing, business planning, and Management; who in turn proving services to small scale livestock farmers
� Payment: Grant Funded by USAID
� Learning: Veterinarians could access new skills;
Beneficiary including women could access service in groups
Bangladesh….
� Organization: KATALYST
� Background: Funded by a donor consortium and implemented by Swisscontact and GTZ International Services
� Clients: SMEs through Partner Organizations
� Services: develop Cross-sector business services markets; Industry and Rural business services markets; Media services markets and Conducive Business Environment
� Payments: NA (likely to be grant project linked)
� Learning: Able to integrates crosscutting issues such as environmentally responsible business, socially responsible business and gender
Bulgaria….
� Organizations: UBDP, ILO, Ministry of Labour and Social Policy
� Background: A development project� Clients: micro Entrepreneurs� Services: Setting up Business Centres, Incubators and
Business Information Centres� Payment: 33 to 84 % cost recovered by Business Centres� Status of Service: Project completed; BDS available
through Business Centres� Learning: Building on existing local initiative, focusing
on ICT and on simplicity of model led to success of the project
Guatemala…
� Organizations: Aid to Artisans and AGEXPRONT� Background: Aid to Artisan (NGO); AGEXPRONT (An
association of Exporters)� Clients: Artisans� Services: Organizing Trade Shows, Training and Product
Development� Payment: Earlier subsidized services; Planned to provide fee
for services� Learning: Stimulating market demand may work;
Possibility of developing business plan for BDS facilitation (asdeveloped by AGEXPRONT, income coming through membership fees and proceeds from workshop/events
Egypt….
� Organization: FfIT � Background: Development project supported by CIDA and
Government of Egypt� Clients: Potential Entrepreneurs belonging to marginalized
population groups� Services: Developing innovative, new small and medium sized
Enterprises through Regional enterprise Development Centres� Payment: Focus was on self sufficiency of Regional Enterprise
Development Centres� Learning: Model could be replicated through other facilitating
NGOs;Small Enterprise Development programs can focus on women and take care of concern for environment and child labour
El Salvador…
� Organization: GTZ� Background: International Organization� Clients: NA� Services: BDS Market Assessment� Payment: NA� Learning: There is a limit to outreach of BDS - Even in well
developed market consulting services reach about 40% of small enterprises;Relative prices for BDS is higher where market penetration for BDS is lower;BDS program need to focus on awareness and appreciation of BDS and on improving service quality of BDS Providers
Ethiopia…
� Organization: ACDI/VOCA� Background: A USAID funded Horticulture Development
Project� Clients: Small Scale Farmers growing Fruits and Vegetables� Services: Strengthening ties between exporters and
cooperatives; Introducing embedded services to farmers such as training and quality control standards along the market chain
� Payment: Embedded Service (indirectly paid as part of business transaction)
� Learning: NA
Honduras…
� Organization: Fintrac� Background: USAID-funded Agribusiness Project � Clients: Small Farmers and Agri Businesses � Services: Increasing the demand for BDS;
Enhanced availability of BDS through local commercial service providers;Also facilitated Custom Clearance and Marketing Services
� Payment: Commercial Service – fee for service� Learning: BDS helped to reach out to more farmers
than was originally covered under the project
Honduras….
� Organization: FINTRAC� Background: USAID funded horticulture development
program� Clients: Small Scale Farmers� Services: Linking farmers with better input supplies and
market; Information services to farmers through input suppliers
� Payment: Free during project; Difficulty to sustain service after the project
� Learning: Able to reach more farmers at lower cost;It has become difficult to continue the research and publication service in the long run
India…
� Organization: SEWA
� Background: NGO and MFI
� Clients: Salt Workers
� Services: Organized Workers;
Social (health, childcare and water) services;
Market linkage services; and
micro Finance services
� Payment: NA
� Learning: Holistic services has supported improvement of lives of salt workers
India….
� Organization: EDA Rural Systems� Background: NGO� Clients: NA� Services: BDS Market Assessment (Leather Footwear
Cluster)� Payment: NA� Learning: Important to use Entrepreneur own language in
assessment process; Assessment process was educational for the Entrepreneurs;Entrepreneurs identified fee-for service, embedded, and informal BDS experienced by them
Kenya….
� Organization: World Bank� Background: Kenya Training and Business
Development Services Voucher Program� Clients: Small Enterprises� Services: Training Services through BDS Providers � Payment: NA� Learning: BDS had indirect benefit to economy and
Employees associated with different Enterprises
Kenya….
� Organization: DTTEM Ltd� Background: USAID funded Kenya Business Development
Services Program� Clients: Rural micro and Small Enterprises� Services: Services like product assembly and grading, quality
assurance, market information, financial brokering, research anddevelopment, appropriate technology, business skills training, and material input supply were identified through a step by step process; Related BDS was provided BDS Facilitators (both NGOs and Private Firms; International and National) identified through selection process
� Payment: Small Grant from Project� Learning: Step by Step implementation of the project facilitated
BDS
Kenya…
� Organization: ITDG� Background: INGO� Clients: Small Entrepreneurs unable to access
internet� Services: Enhance access to internet information
through Informal Business Advisers; ITDG provides sector specific business tips in Internet
� Payment: NA� Learning: Helped develop intermediary BDS Market
Kenya….
� Organization: Twendelee� Background: Women Handicraft Group based at
Nairobi; supported by EU Micro Enterprise support program
� Clients: Women associated with production of Handicrafts
� Services: Services related to use of Internet to strengthen business (like deciding color choice and design)
� Payment: Free service through Technical Service Provider; Payment for use of Internet
� Learning: Able to get idea on new designs
Kyrgyzstan…� Organization: Helvetas Swiss Association for International
Cooperation� Background: Support to Private Initiatives Project (SPIP), supported
by SDC and GTZ� Clients: Small and Medium size Agri Processors� Services: Project facilitated links between food processors, Kyrgyz
traders, and buyers in Russia by hosting workshops and buyer-seller meetings; This led to demand for BDS; Later a Private Company led Information and Technical Center sold information about markets, equipment, and finance to food processors and traders
� Payment: Initial effort through Grant Project; Later BDS Services to businesses on fee for service basis
� Learning: Voucher type BDS Intervention did not work as Processors did not experience previous consulting services
Kyrgyzstan…
� Organization: Helvetas Swiss Association for International Cooperation
� Background: INGO� Clients: Rural Food Processors� Services: Overall focus was to link Rural Food Processors to Urban
Management Consultants; Urban Management Consultants formed Association of Consulting Companies (ACC) to develop the market for consulting services, increase competence of consultants; and defend the consulting market from “market distortion” and “improper” interventions by donor agencies
� Payment: Urban Management Consultants offered services on fee basis
� Learning: Initial Meeting between Consultants with Food Processors was useful to develop BDS Market in the long run
Malawi….� Organization: GFA and GTZ� Background: Establishing Franchise for Training Products� Clients: Small Entrepreneurs� Services: Initially, GFA established BEED, a private company, as the
franchiser and license holder. BEED trained trainers who were to sell training to entrepreneurs and pay a licensing fee to BEED, which would re-invest profits in further capacity building of franchisees; Later, BEED became a broker for training contracts to trainers and the payers were government and parastatal organizations, with contributions from participants.
� Payment: Grant from Govt. and Contribution from Beneficxiaries� Learning: Initially, trainers were not able to sell training directly to
SEs, due to high costs, lack of marketing skills, and highly distorted training markets
Mali…
� Organization: Action For Enterprise (AFE)� Background: USA based International NGO focusing BDS
Market Development� Client: Exporters (indirectly benefiting Artisans)� Services: Facilitator and Action Research – linking Artisan to
international Market� Payment: Grant project of USAID Office of Micro Enterprise
Development - Implementation Grant Program for BDS� Status of Service: Grant Project already Implemented� Learning: Could built Exporters capacity to offer quality
control services to Artisans
Nepal….
� Organization: Business Service Adhar
� Background: Promoter is Entrepreneur in Business Service Market
� Clients: DTP Units serving small Enterprises
� Services: Services DTP Units to become Advertising Firms for small Enterprises
� Payment: Fee for Service
� Learning: NA
Nepal….
� Organization: GTZ� Background: International Organization� Clients: Micro and Small Enterprises� Services: Accounts Training Service through Commercial
Accounting Firm� Payment: Mainly Fees from Participants, supported by Grant
from GTZ� Learning: Demand for accounting services from micro and
small enterprises to comply with Value Added Tax;In the long run service was profitable to accounting firm;Possibility of replicating the service through Franchise was explored
Peru…
� Organization: Swisscontact� Background: INGO� Clients: Small Enterprises� Services: Information about Trainers and Training
Market through Information Magazine on the BDS Market
� Payment: Magazine is funded by advertising from BDS Suppliers
� Learning: Found to be potential “exit strategy” from the information function of a voucher program; Trainers could know trends in BDS Market
Peru….� Organization: Chemonics and ITDG; Mennonite Economic Development
Agency (MEDA) � Background: USAID-funded Project to Reduce and� Alleviate Poverty (PRA)� Clients: Farmers� Services: Advice, inputs, markets, and finance to Farmers;
Input suppliers, agro-processors, buyers, and an MFI co-finance loans to farmers and share collateral. If the crop is good and sale successful, buyers pay the MFI, which then pays all parties. In case of disaster, all parties take a loss.Agromonitor – An information gathering system support this system
� Payment: Embedded with Loan� Learning: Combination of finance and BDS shows promise for improving
the agricultural production and market chain to the benefit of all parties
Philippines…
� Organization: Strategic Development Cooperation–Asia
� Background: USAID-funded program to develop BDS markets for micro Enterprises
� Clients: Small Enterprises� Services: Brand and market space rental
services to Small Enterprises with support of local firm
� Payment: Fee for Services� Learning: NA
Philippines…� Organization: GTZ Nepal and Strategic Development Cooperation - Asia� Background: As part of Projects focusing on BDS Market Development� Clients: Small Entrepreneurs� Services: Assisting existing BDS providers to develop and commercialize
new products;Conducts regular BDS Market Assessment
� Payment: Fee for Services by BDS Providers� Learning: Incidence of “copycat” BDS providers delivering the BDS
products;More enterprises are purchasing the BDS, particularly groups such as women-owned enterprises; Target enterprises are using business servicesSystematic market monitoring helped in adjusting the interventions to changing conditions in BDS markets
South Africa…
� Organization: GTZ� Background: International Organization� Clients: Small Enterprises in Urban Areas� Services: BDS Market Assessment to identify service
markets� Payment: NA� Learning: Analysis of the Market Assessment data
using different tools helped in identifying unmet demand and pinpointing BDS service features and benefits that Small Enterprises want
South Africa….
� Organization: World Education� Background: NGO� Clients: micro Enterprises in Construction Sector� Services: Facilitated BDS services such as information, compliance,
project management, and transaction financing for both large andsmall firms through existing BDS Providers;Developed new service products;Strengthened linkage between small and large firms
� Payment: NA� Learning: With BDS services, micro Enterprises could win higher
value sub contracts; Initial BDS Market Assessment was useful in designing the program
South Africa…
� Organization: Triple Trust Organization (TTO)� Background: NGO� Clients: Spaza (Hidden) shop Owners� Services: Assessed potential for offering BDS
Services using idea of BDS Product concept like “What If “ specific BDS was made available
� Payment: NA� Learning: NA
Srilanka….
� Organization: SEEDS
� Background: NGO operating mFI and BDS Program
� Clients: mFI Clients
� Services: Training, counseling and technology access through Business Advisers
� Payment: Fee for BDS
� Learning: Instead of providing BDS, mFI will link to external BDS providers
Srilanka…
� Organization: GTZ, FINTRAC/USAID, ILO/FIT� Background: Donor supported BDS Project� Clients: Small Enterprises� Services: Supported Organizations to sell Business
Information Services i.e. General Business Information, Business Contacts, Market Opportunities, Sector Statistics, Business Mapping; through Email, Phone, Mail, Visit and Fax
� Payment: Offered on Fee for Service to Small Enterprises� Status of Services: On going; Service Providers are offering
Services� Learning: More demand for General Business Service
followed by Information on Business Contact;With this track record of effective sales, BIS suppliers are nowseeking profitability
Srilanka….
� Organization: Southern Province, Srilanka and CBTD� Background: Initiative of Southern Province Rural Economic
Advancement Project (SP-REAP) and ILO SIYB; CBTD – A Development Consulting Group
� Clients: Small Entrepreneurs� Services: Technical and managerial training relating to construction� Payments: Entrepreneurs pay 30 % of cost of training� Status of Service: On going � Learning: Implementation through BDS Organization was
successful; Role of CBTD as BDS facilitator was important; Small Entrepreneurs could participate in construction tender andoffer quality services
Tanzania….
� Organization: FAIDA Small Enterprise Program in Tanzania� Background: SNV project supporting rural micro Enterprises� Clients: Rural micro Enterprises� Services: Business training and counselling services;
FAIDA provides services through BDS Training and Consulting Firms that offer services through network of Grass root Promoters
� Payment: Fee for services to Clients� Status of Service: On going – Market led� Learning: Initially difficult for micro Enterprises to pay full
cost; Outreach and cost-effectiveness improved dramatically with market led approach
Uganda….
� Organization: Creative Business Development Group
� Background: Promoter worked in Donor funded Project
� Clients: Small Enterprises
� Services: Training Package and Consulting Services
� Payment: Fee for specific Service
� Status of Service: Planning Stage
� Learning: NA
Uganda…
� Organization: DFID/ILO� Background: Business Service Market Development
(BSMD) Project� Clients: Small Farmers� Services: Publishing information in local media on existing
businesses providing embedded BDS to Small Farmers Example – Training provided as embedded service by Exporter
� Payment: NA� Learning: It is possible to strengthen BDS as embedded
service
Ukraine….
� Organization: Intron - A Private Sector Firm� Background: USAID funded Newbiznet Project� Clients: Enterprises� Services: Replication of valuable accounting service
(Guarantee against Tax Inspection Fine) developed by Intron, through other BDS Provider
� Payment: Monthly Fee for Service at BDS Provider level
� Learning: It is desirable to replicate existing proven BDS
Vietnam….
� Organization: Training for Women Micro and Small Enterprises – Phase 2” (TWMSE2) project
� Background: A Development Project� Clients: Women Entrepreneurs� Services: Management Training courses offered through local
trainers� Payment: Grant Project� Learning: New management practices were observed in the
Enterprises; Women who received training enjoyed higher sales and personal income
Learning Points….
International BDS4ME efforts focuses on:
� Developing BDS Market � Both enhancing Demand and facilitating Supply
� Conducting BDS Market Assessment� Before taking up BDS Intervention
� Exploring option to work with existing BDS Providers � Preferably CSOs, Private Companies and Individual BDS Providers
� Facilitation of BDS (than providing BDS)� Through Franchising/Working through local Organizations
� Commercialization of BDS Services
Thank you