Market Development Latest Da Lat Feb 07 - Day 2

8/8/2019 Market Development Latest Da Lat Feb 07 - Day 2

http://slidepdf.com/reader/full/market-development-latest-da-lat-feb-07-day-2 1/18

Market Development: WhatMarket Development: What’’s new?s new?

Implementing Market-driven Strategies for BDS

Merten Sievers

Enterprise Development Programme

International Training Centre of the ILO, Turinwww.itcilo.org

Da Lat, Vietnam, February 2007InternationalTrainingCentre



This morningThis morning……1.1. FromFrom BDS BDS toto MMW4P MMW4P toto Value Chains Value Chains toto

Business Environment Business Environment

2.2. Systemic Market DevelopmentSystemic Market Development3.3. Some examples:Some examples:

►► BDS and FinanceBDS and Finance

►► Enabling EnvironmentEnabling Environment►► Agricultural Value Chains Agricultural Value Chains

►► Media and BDSMedia and BDS

►► And more during the week: GCF, GTZ, ILO And more during the week: GCF, GTZ, ILO

4.4. ConclusionsConclusions



1. From BDS to Business1. From BDS to BusinessEnvironmentEnvironment

BDS paradigm born in late 90ies (after the

success of microfinance) Large scale voucher programs followed

that did not always work the way it wasexpected

“Disenchantment” led to some advocatingfor more concrete (Value Chains) or moregeneral (Business Environment)interventions

Others applied BDS principles to a w iderset of “markets” including infrastructure,health and educational markets (MMW4P)

Massive outreach and impact still only in afew cases



Why the Business Environment?Why the Business Environment?

Financial and Business Services

The Enterprise Environment

But BDS and finance might not be enough… .



Systemic Market DevelopmentSystemic Market Development

Systemic (pro-poor) Market Development triesto achieve markets w ith the follow ing 5characteristics:

1. Expanding (sales, competitivenes, numberof firms, linkages to other markets)

2. Resilient and responsive (increasingdiversity, long term relationships,

innovation and learning)

3. Channeling benefits to the poor (relevantfor the poor, channeling income,sustainable enterprises)

4. Conducive business environments(Government policies and regulations, PPD,transparency)

5. Change drivers (institutions and orenterprises)



giving a different pattern of impact,giving a different pattern of impact,

relative to subsidised delivery.relative to subsidised delivery.

Outreach

Time

End of public

funding

Direct, subsidisedprovision: quick

impacts but less

sustainability

BDS, VCD: needtime to build local

ownership and

sustainability



Example 1. : link ing financeExample 1. : link ing finance

and BDS commerciallyand BDS commercially Banco de Crédito Perú is the largest Peruvian

bank (>30% of financial market in savings and

loans, 50.000+ MSE clients). In 2005 BCPbought the microenterprise bank FinancieraSolución

New clients and growth, client retention

Products:

management training for best clients

MSE fair with “business exchange”

“Formalization” service in alliance with NGO

and Labour MinistryFinancial sustainability:

Cost of Implementation of SIYB training:75.000 US$ .

Additional profit through new credits: 50.000US$



Example 2. Enabling Environment andExample 2. Enabling Environment and

Market accessMarket access►► MunicipalMunicipal purchasingpurchasing in El Alto:in El Alto:

►► OnOn thethe PublicPublic sectorsector sideside

TheThe “ “Compro BolivianoCompro Boliviano” ” (= buy Bolivian)(= buy Bolivian) GovernmentGovernment decreedecree thatthat pushespushes local, regionallocal, regional andand thethe nationalnational governmentsgovernments

toto buybuy moremore inputsinputs fromfrom local MSEslocal MSEs

ImprovesImproves contractingcontracting conditionsconditions forfor bolivianbolivian enterprisesenterprises ((guaranteesguarantees,,

experienceexperience,, formalizationformalization etc.)etc.) ForFor thethe privateprivate sectorsector sideside

TheThe “ “tarjeta empresarialtarjeta empresarial” ” (=(=

entrepreneurial card)entrepreneurial card)

“ “formalizesformalizes” ” individual entreprenuers toindividual entreprenuers togain access to public purchasinggain access to public purchasing

EstablishesEstablishes legallegal liabilityliability forfor contractscontracts upup

toto 1.000.000 Bolivianos (123.7601.000.000 Bolivianos (123.760 US$US$))

PromotionPromotion throughthrough TVTV andand radio...radio...



Municipal Purchasing in El Alto:Municipal Purchasing in El Alto:

Implementation:Implementation:

TheThe “ “FeriaFeria a laa la InversaInversa” ” (= inverse fair) is an(= inverse fair) is an

instrument to implement theinstrument to implement the “ “ComproCompro BolivianoBoliviano” ” and theand the “ “tarjetatarjeta empresarialempresarial” ” ::

►► “ “InverseInverse” ” because it is a buyers fair:because it is a buyers fair:

The municipal government presentsThe municipal government presentseverything it wants to buy to local MSEs:everything it wants to buy to local MSEs:

infrastructure, services, up to a certaininfrastructure, services, up to a certainamountamount

Increases transparency of the purchasingIncreases transparency of the purchasingprocedureprocedure

Creates market access to MSEs and createsCreates market access to MSEs and createslocal employment and economic developmentlocal employment and economic development

Contracts closed during the fairContracts closed during the fair

Additional support for training and financial Additional support for training and financialguarantees still necessary (but: overall costguarantees still necessary (but: overall costpresumably still lower than without the fair..)presumably still lower than without the fair..)

Example 2.: Public purchasing in BoliviaExample 2.: Public purchasing in Bolivia



Eaxmple 3. BusinessEaxmple 3. Business

Associat ion in Ghana Associat ion in GhanaPineapple Exporter Association in Ghana

Low production size of individual producers creates

bottelneck in accessing large volume export markets Assocation set up to provide:

quality control services

market access through new export markets storage and handling facilities

Export increase from 1995: 2,700 ton. to 2002:32,000 ton.

Provision of export promotion services was extendedto non members and gradually to more products inthe fruit sector assuring financial sustainability

Now: developing a brandname for Ghana Pineapple



Example 4. Bamboo in VietnamExample 4. Bamboo in Vietnam

P r o f i t a b i l i t y

High

Low

300

Area of bubble= market size

Values in

USD million

Current bamboomarket size

400

Furniture

PanelsBJC

Bamboo

Shoots

Ease of market accessLow High

Handicrafts

3,000

1,500

20030

2,2005,600

4,200

Chopsticks

300400

1,700ActivatedCarbon

170

20Blinds

1,200500

Charcoal

130

60

5 1,100Flooring

1,200

100

Estimated bamboomarket size 7- 10 yrs(mid scenario)



Full time equivalent

jobs (FTE) createdon farms, factoriesetc throughout thesupply chain from

the bamboo

sustainablyproduced from 1 ha

Bamboo Impact Potential: Jobs,Bamboo Impact Potential: Jobs,

Financial Impact by ProductFinancial Impact by Product

Premium processingeg flooring, laminate furniture

Medium value

processingchopsticks, panels

Bulk processing paper, charcoal

0

0.2

0.4

0.6

0.8

1.0

1.2

0 500 1,000 1,500 2,000 2,500 3,000

Local pro-poor financial impact per ha

(USD )

Jobsper ha(FarmersWorkers

FTE)

Flooring VN

Mat board VN

Woven mat VN

Chopsticks VN

Paper + pulp VN

Charcoal, briquets, China

Charcoal, briquets, Laos

Raw culms VNRaw culms for construction

Low Value Processing



Example 5. Media and BDSExample 5. Media and BDS►► Market linkages projects: businessMarket linkages projects: business

advertising new spapers and fair tradeadvertising new spapers and fair trade

organisationorganisation►► Comercially viable but relatively lowComercially viable but relatively low

outreachoutreach

►► Business porposition to comercial radioBusiness porposition to comercial radio

stations: creating a programme for MSEs:stations: creating a programme for MSEs:

large unmet demandlarge unmet demand

►► It took some time to convince radioIt took some time to convince radio

stations to subscibe to the programmestations to subscibe to the programmew ithout being paidw ithout being paid

►► And it took some time for ILO staff to And it took some time for ILO staff to

understand how MSEs becomeunderstand how MSEs become

newsworthynewsworthy



China: TV broadcast to reachChina: TV broadcast to reachmigrantsmigrants

►► Trial for new product lineTrial for new product line►► Challenge: reaching mobileChallenge: reaching mobile

migrant populationmigrant population

►► Basis: research on migrantBasis: research on migrantworker freeworker free--time habitstime habits

►► Objectives: encourageObjectives: encouragemigrants to considermigrants to considerbusiness startbusiness start--up, buildingup, buildinglinks to local SIYB providerslinks to local SIYB providers

►► Genre: drama, comedyGenre: drama, comedy►► Basic format: closed end,Basic format: closed end,

miniseriesminiseries

►► Problem: copyrightProblem: copyright



Sources of information onSources of information on

market development projects:market development projects:►► The 2006 reader (2003 BDS Primer)The 2006 reader (2003 BDS Primer)

►► www.bdsknowledge.orgwww.bdsknowledge.org: organized around the: organized around the

stages of BDS projects: market assessment tostages of BDS projects: market assessment toimpact evaluationimpact evaluation

►► www.microlinks.orgwww.microlinks.org:: USAIDsUSAIDs mainmain

microenterprisemicroenterprise KnoweldgeKnoweldge sharing website:sharing website:

Value Chains and how to reach the poorest Value Chains and how to reach the poorestentreprenuersentreprenuers

►► www.seepnetwork.orgwww.seepnetwork.org: SEEP is a Network of US: SEEP is a Network of US

consultancy firms and NGOsconsultancy firms and NGOs

►► www.valuewww.value--chains.orgchains.org:inter:inter--agencyagency database withdatabase withexperiences of analysis, implementationexperiences of analysis, implementation

►► www.enterprisewww.enterprise--development.orgdevelopment.org: Donor Committee on: Donor Committee on

Enterprise DevelopmentEnterprise Development

►► www.sdcwww.sdc--valuechains.chvaluechains.ch: Community of Practice on: Community of Practice on



Where to start working?Where to start working?

Spatial levels of enterprise supportSpatial levels of enterprise support

Macro: national policiesand institutions and

stakeholders

Meso level: sectoral policies,

local and regional institutions

and stakeholders

Micro level:

enterprises and

their relations

Enterprise

Development atdifferent levels



7. Conclusions7. Conclusions►► Mayor fields of support and current thinking:Mayor fields of support and current thinking:

►► NoNo “ “one size fits allone size fits all” ”

►► Market Development needs to be systemic:Market Development needs to be systemic:how do we fit inhow do we fit in

►► So framework conditions and the enablingSo framework conditions and the enablingenvironment need to be taken into account:environment need to be taken into account:

role of the government criticalrole of the government critical►► What are other actors doing in marketWhat are other actors doing in market

development?development?

►► Exit strategies still crucialExit strategies still crucial

►► Big challenges remain... in outreach and scaleBig challenges remain... in outreach and scale



Thank YouThank You

Market Development Latest Da Lat Feb 07 - Day 2

Documents

Transcript of Market Development Latest Da Lat Feb 07 - Day 2