On this question, Kenya Commercial Bank are lending out finances to individuals and small business at a lower interest rate
I agree with Jane about the collaboration needed. I cannot stress enough how important it is to have representation from society - the people. Trust that business and govt will effect real change post the immediate response is rock bottom. Fear and anxiety is sky high.
A2: First, large companies which have been supporting MSMEs in their value chains to weather the short-term effects of COVID-19 need to continue to build supportive commercial relationships with value chain partners. They should continue to identify ways to improve the commercial relationship, for example continuing to pay suppliers promptly to improve their cash flow. If companies work indirectly with MSMEs they should encourage your local network of suppliers and business partners to do the same. If possible, they should continue to provide direct financial support by extending credit or making affordable loans. And they need to accelerate efforts to recalibrate the companyâs business models to ensure the economic value created is more equitably shared with MSME partners across the value chain. This means committing to paying fair prices. And re-doubling efforts to ensure decent work and protect human rights.
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One important action is to make as loud a noise as possible and apply political pressure through organized business groups to governments to support the most vulnerable. ICC has just published an open letter to Finance Ministers on support for MSMEs and SMEs https://iccwbo.org/content/uploads/sites/3/2020/05/open-letter-to-finance-ministers.pdf
USCIB recently appealed to Secretary of State Pompeo to help ensure that COVID-19 funds being mobilized by multilateral development banks should be directed to developing countries for needed social protection systems and programs to provide critical liquidity to maintain the financial viability of SMEs and sustain employmentâto prevent closures, to provide bridging support until operations can resume, and to provide technical assistance in restarting.
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A2 - Weâre seeing a lot of action around supporting and engaging with Indigenous communities, both in terms of minimising risks of spreading virus and in supporting Indigenous businesses. E.g. developing recovery or restart funds to ensure that Indigenous suppliers are able to recover and ramp up. Our members Mining Association of Canada and Minerals Council of Australia both doing a lot in this space, lots of great examples of practical action on their websites.
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Building on Richardâs earlier comments about the importance of digitising wages, and thinking through the roles of mobile money - there would seem to be scope to really scale up new payment models and social safety nets for women in low income countries e.g. rapidly digitize wages to ensure payment for workers that can no longer receive cash payments in person. BSRâs HerProject is doing this in Cambodia, Egypt and Bangladesh. Mobile money providers should scale up womenâs access to state or donor cash payments, insurance, or other benefits. Collaboration is KEY to ensure workers are financially supported during the pandemic â e.g. in the garment sector, governmentâs and employer associations in a number of countries are working to provide financial support to workers, but it is unlikely the schemes will meet the level of need. Brands can consider creating funds to ensure that workers are financially supported and can access the health and other services they need.
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A question from the Business Fights Poverty community:
Bozo;Keny asks: Businesses have not been considerate in the welfare of the workers, they have thought of profit maximization and send workers on unpaid leave without thinking of how they will survive. Can ILO come up with universal policies that will caution workers in terms of crisis such as Covid19 without hurting the worker economically and socially?
The root problem that I see, beyond the general ills of capitalism, is that we arenât respecting peopleâs personal risk tolerance. People being asked to work when they donât feel safe to do so.
Implicit in this question is the need to start turning our attention to rebuilding better - itâs right that our attention has been focused on immediate responses, but actions we take now will lay the foundations for a more inclusive and resilient future. And in very large part this will need system-level partnerships. We highlight a few examples in the Rebuild Better Framework. Here are a few:
Partner with governments and civil society to strengthen health systems, food systems, infrastructure and access for the most vulnerable.
Partner with governments and civil society to accelerate action on climate change.
Advocate for governments to support better workersâ protection, small businesses and social safety nets as part of economic support packages.
Work in partnership with other companies, governments, donors and civil society to build a supportive ecosystem for small businesses and workers to help them better withstand future shocks.
Work with governments and other partners on supporting digital inclusion.
Partner with governments and universities to strengthen future skills and wider preparedness for the future of work.
Hi Christina - yes, and this came up in our conversations with NGOs and companies about their partnership in the crisis context. Several felt that companies and NGOs are considering new approaches now, which they would not previously have been open to. Many organisations are also moving more quickly than their culture usually allows. NGOs and companies agreed they wanted to make the most of these openings to put in place innovations that may have lasting value beyond the crisis - within their partnerships, and in terms of the activities they are undertaking to create more resilient economic and social support systems.
In response to questions on the role of the finance community: We are seeing a âmixed bagâ here. Many of the banks with stronger balance sheets are doing a fantastic job in supporting their retail and small business customers in areas such as delaying mortgage and loan repayment, serving as a conduit for government relief funds (where these exist) and also supporting the Microfinance or Community Development Finance Institutions that they work. Obviously mobile money platforms are playing a essential role in many countries. There are also initiatives such the Vienna Initiative, where banks are collectively agreeing to work with developing country governments on national debt repayment programs. At this stage, with the need to get as much liquidity into national and local economies as possible, weâre seeing less about the âbuild back betterâ and loner term resilience discussion, but the Development Finance Institutions are starting to talk about that. âŚand then there is a role for Impact Investors - especially funding and supporting essential community organizations such as food banks, small enterprise programs, energy platforms, shelters etc. - a mix of commercial, public, philanthropic and impact investing will be essential i.e. âBlended Financeâ - see the work of the OECD on this as well as IFC and CDC.
A2: The global crisis has also helped to expose the deeply entrenched, complex and interconnected challenges already facing MSMEs, and has brought into sharper focus the need for fundamental system level change to address them effectively in the longer-term. And it has also helped to remind us of an often-overlooked fact - that many different sectors share the same goal of helping MSMEs to grow.
So there has never been a more important time for all sectors with a stake in the success of MSMEs to move out of their siloes and take a more coordinated and strategic approach to tackling the barriers to growth by strengthening the underlying market system they operate in. By putting greater collaboration at the heart of their approach, all actors can help to lay the foundations for a more sustainable recovery and greater MSME resilience in the years ahead. We will soon be sharing a new guide we have developed with a group of companies and foundations on the opportunities to strengthen the underlying operating environment for MSMEs through greater collaboration between sectors.
âA2:
a) Rethink new ways of e-business and tapping into the technological innovations to expand their business. This way businesses will be able to collaborate with one another for a more efficient end product/ services and also create more jobs.
b) Developing a Risk policy strategy for their business. This will help invest more on ways to mitigate future pandemics and will build resilient business and economies
c) Business collaborating with the government sectors strengthens their capacity output and builds their resilience even after post-COVID. However there is need to review the policies around business operation to factor in the health as a vital pillar for sustainable development.
d) Every sector of the government and individuals need to work together in solving climate change problems which is the core factor in building a stronger resilient economy and a healthier nation.
UK supermarket Morrisons has just launched a hardship fund for employees facing difficulties as a result of the virus.
Multi-stakeholder business models mean that vulnerable stakeholders include customers, suppliers, newly unemployed individuals and employees:
Employeesâ health and wellbeing:
-Furloughed employees kept informed about changing situation of the company and its plans re taking them back, on different terms and/or not.
- Making the office spaces safe as possible for employees, when they return to work (social distancing, PPE, hand sanitizers etc)
- Allowing employees to WFH, where there are co-morbidities or other reasons for feeling unsafe, like living with an elderly person. Staggered rota of work could help here.
Individual response: writing recommendations and referrals
- On LinkedIn, Dominique Delport of International VICE Media Group, Global Chief Revenue Officer: If youâve recently been laid off & weâve worked together in the past, please get in touch and let me know how I can help you. Can I put you in touch with a contact at an agency, publisher or company? Can I write a recommendation for you? Do you want me to help you with your job search materials or send someone an email to put in a good word? Please let me know if thereâs anything I can do. Meanwhile stay safe and take care. Dom
Social/economic support systems for the Most vulnerable:
- Provide surplus groceries/food (supermarkets like Tesco, Waitrose, Aldi etc). This means there is no or less waste in the food system.
- Access to skills training and housing, post pandemic
- Discounts for key workers (e.g. NHS staff)
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In the health system, financial solutions are missing for most people in low-income countries. While micro-health insurance has been growing, access levels are still very low. Here, partnerships between government and the private sector can help to make access affordable and efficient. India has made some progress here in recent years. In order to reach the most vulnerable with health services, public-private collaboration is critical and inclusive businesses such as Community Health Workers must be part of the picture (see this blog by my colleague Aline Menden).
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A2 - Many ICMM members have been present in communities for several years (if not decades) and have well established connections with those who are hardest to reach, developed through structured assessment and engagement processes. This allows them to work with local NGOs and governments to quickly identify vulnerable individuals and deliver vital resources and care packages to those who need it most. Members are drawing on these community networks to share knowledge and deliver solutions to a range of critical issues arising from COVID-19.
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Business Fights Poverty community question:
Ndirangu Ngunjiri asked: We are going to experience a post-COVID recession if not depression, how can the businesses overcome this?
We welcome all your replies but would also recommend taking a look at the Response and Rebuild Framework here: https://snipbfp.org/C19_ResponseCentre
To this comment from Jane, I couldnât agree more. Even if not official, we have seen communities of engaged practitioners from a range of stakeholder groups including business in the UN setting, those working together on continuing collective efforts such as the NDCs and VNRs, so this is a model that could also work for the COVID19 response and recovery. What would help alot would be the recognition of such groupings and the mainstreaming of their work in different UN agencies now engaged on COVID19.
In response to Q2 - two other areas we need to focus on to increase resilience going forward:
Change certain business models and supply chains â in many cases the massive focus on efficiency at all costs has been at the expense of resilience and flexibility and/or at the expense of workersâ rights â this needs to be addressed. This is a particularly important issue in the apparel sector and many food and medical value chains.
Continue to invest in business-led policy dialogue platforms â initiatives such as USCIB, ICC, B20, OECDâs Business Advisory Group and their counterparts at national levels and industry sector levels are essential in shaping the policy dialogues, rules and regulations for a more inclusive, sustainable and resilient agenda going forward.
All the immediate corporate responses are great, frameworks for change are greatâŚbut, with all due respect, we have seen this before. I appreciate that covid is of a different magnitudeâŚbut how are societyâs needs practically being listened to and addressed? Do you believe that corporate and govt behaviours are going to change so they start taking a long term view for their entire supply chain and the people the serve?