How can we best support entrepreneurship across the value chain?

At SABMiller, our business success depends on local entrepreneurs and their business success, at every step of the value chain. We have to cultivate and support them in order to grow. We have programmes focused on smallholder agricultural producers, suppliers of goods and services, distributors and retailers and entrepreneurs within the communities where we operate. Across our different programmes in Latin America, we find we are working with two distinct types of entrepreneurs: opportunity entrepreneurs and survival entrepreneurs.

- Opportunity entrepreneurs are in business by choice. They have an appetite for innovation and ambitions for growth. We tend to find these companies on the supply side of our value chain.

- Survival entrepreneurs, on the other hand, are often in business by default. In Latin America, we find hundreds of thousands of these entrepreneurs within our customer base. They are the small scale shops and kiosks that buy our products and retail them to consumers. Perhaps they inherited a store, or decided to start selling goods because they couldn't find jobs, or needed to stay at home to care for their children.

What have our panellists and the broader Business Fights Poverty community learned about the needs and expectations of these two distinct types of entrepreneurs, and how to support them? Specifically,

1) What are the most important constraints facing opportunity entrepreneurs, and what are the most important constraints facing survival entrepreneurs? What methodologies have people used to "diagnose" and prioritise their needs?

2) What can a company like SABMiller do to meet the needs of opportunity entrepreneurs and of survival entrepreneurs? Are there things a company like ours can or should do?

3) And where do we need to bring other players into the ecosystem - like banks, government agencies, NGOs, other large companies - to support each type of entrepreneur? How can we incentivise these players to participate?

Please post your comments below!

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Thanks for this discussion Cecilia. For me your 3rd question is really important, and a good starting and finishing place!

The experience of many practitioners, including my organisation Practical Action, is that system change is vital if we want to achieve scale, sustainably. We see our role, as external agents, is to facilitate change. Internal players can also faciltiate change clearly, but recognising that there are different dynamics as the company has a stake in what happens (so perhaps external facilitators are needed too?).

An initial analysis of a system, all the various actors (private-public, large-small, powerful-marginalised) and the issues (like those in the enabling environment), should try to identify some 'hooks' for different actors. What will get them engaged? Are there some potential market opportunities to be explored? Are there quality issues affecting several players?

Having got their interest then it's good to facilitate a process where the actors map out the blockages and opportunitites and together develop solutions. Often smaller interest groups around specific topics/issues are more effective in taking things forward. One key thing is to ensure you have done some work in advance to build confidence and capacity of the less powerful players to engage e.g. your entrepreneurs.

There a great community of organisations exploring this kind of topic on the SEEP on-line community MAFI.

And if you want to know more about our apporach you'll find it here

Looks like it'll be an interesting discussion so I'll try to listen to the panel on Thursday.

thanks and best

Alison Griffith

Firstly I think it is great that SAB Miller recognizes the need to work with the small entrepreneurs at the start of the value chain in order to grow their business. All too often work such as this is seen as charity, when in fact it is key to the success of the company, and is therefore a strategic business investment.

Question 3 is a broad question and all the actors that you have identified bring different benefits (and risks) to the table. So it is really a case of mapping out what the final goal is, understanding what you can achieve on your own and where you need to bring in different actors into partnership, then identifying who has collaborative advantage in the area that you would like to impact. In terms of incentivizing– again the different actors will come with different motivations according to their organisational mission and partnership objectives. I recommend attending the event that IMA International are hosting a forum on the ‘HOW’ of cross sector partnerships in NYC on May 7th where we will be discussing these types of issues. Email me ( to register for the free forum.

Great comments so far!

Access to finance is one thing both opportunity entrepreneurs and survival entrepreneurs need to participate, grow, and be valuable parts of larger corporate value chains. For companies like SABMiller, financing can be tough to provide directly - especially at scale - but could they play a stronger role in encouraging and incentivizing banks to get more involved in these segments? I could envision a coalition of companies working to build or strengthen inclusive value chains getting together - perhaps jointly with entities like IFC, IDB, etc. - to advocate, encourage and participate in experiments, offer some risk sharing perhaps, distill and disseminate the lessons. Something like CGAP perhaps but specifically for inclusive value chain financing. There are of course a number of initiatives out there (see for example the recent partnership between IFC and Coca-Cola) - but is there or could there be a platform that would render the whole greater than the sum of the parts?

This initiative is in good direction as a way forward strategy. As many people are falling into poverty line due to economic challenges, then doing business with the poor people is not a poor business. The isses to address are building the capacity of these two groups on Business management, innovative marketing, accounting and access to finance. Our Organisation Poverty and Hunger Initiative is Planning to assist small bisness owners in Nigeria on these areas.

Ola Odunayo Lagos Nigeria

Thanks for raising this debate. I agree with Linzi that it is great to know Sab Miller is interested in promoting such initiatives. There are many ways on how a company can help entrepreneurs meet their needs. In our report on the state of entrepreneurship in the Middle East, we identify areas such as promoting entrepreneurial culture, enhancing capacity building of entrepreneurs, creating business development services for implementation, enabling access to finance, specially to young entrepreneurs without credit history, enhancing their access to markets or guranteeing their access to technology transfer and innovation.

But as Beth says, there is great potential on the third question you raise, bringing players together such as coalition of companies working to build or strengthen inclusive value chains. Check the initiative IBLF, SIDA, the Netherlands and other players are launching to create business innovation facilities to promote precisely that goal. There is significant progress in countries such as Colombia, Zambia or Bangladesh, and companies like SAB Miller could contribute a lot creating such enabling environments. At the end, when promoting entrepreneurship, the sum of the parts is always bigger than each part on its own, and thus, more than thinking what each individual group (banks, government agencies, NGOs, other large companies) can do to promote an enabling ecosystem, we should be thinking how these organizations can work together to really upscale entrepreneurial impact.

I agree with you Beth that access to financial services, especially small loans, is often a constraint (and on the flip side an opportunity) facing 'survival entrepreneurs' such as smallholder farmers and others at the BoP. But what is the best way to provide such financing?

A recent Hystra Study called 'Marketing Innovative Devices for the BoP' looked at lessons learnt from 15 global pioneers involved in BoP marketing and found that financing is best done in house, whenever possible; despite the fact that many companies are wary of getting involved in the complex world of finance (dealing with risk assessment, handling default payments etc.)

Alternatively I really like the idea of a coalition of companies getting together to encourage and incentivise banks and Micro-Finance organisations (MFIs) to provide greater financial services to survival entrepreneurs.

The organisation I work for, International Development Enterprises has experience in encouraging commercially driven MFIs to target ‘survival entrepreneurs’ with financial products. We work with smallholder farmers who need small loans (less than $200) to invest in productive assets such as irrigation equipment, seeds, fertilisers etc in order to increase productivity and engage more actively in value-chains, including larger corporate value-chains.

For example in Zambia iDE worked with MFI CETZAM Plc to encourage them to adopt a new agricultural loan product suitable for smallholder farmers (extended payback, lowered interest rate of 3% per month, group lending model with groups of five to eight farmers taking individual loans for which the whole group is jointly and severally liable, and loans tied to specific items of equipment or inputs and are paid directly to local retailers from whom farmers receive their goods).

The iDE-CETZAM model is a great example of an effective approach to agricultural microfinance, with total disbursements at 8.2 billion Kwacha (over US $1,500,000), 3,000 loans disbursed in 2011 and a loan recovery rate of 97.2%.

So a number of interesting avenues to pursue!

Hi Sam!

Interesting tip on the Hystra study, thanks. I assume their finding that it is best to provide financing in-house applies primarily to consumer financing, since the study focused on marketing? Do you think it would suggest that SABMiller should finance its customers (i.e. the small-scale shops and kiosks that purchase its products to retail to consumers) in-house? Or would that be a different kind of case?



Marzena, did you do a matrix of barriers/solutions for this competition? Is that still something Changemakers does? I poked around the website but couldn't immediately find one. Many thanks!

entrepreneurs can be supported through financing and capacity building.

Thanks Alison – That’s a really helpful perspective and we fully recognise the need to understand the different needs and motivations of system actors. At the early stages of developing the 4e project in Latin America, which we have just announced, we undertook a significant amount of research to understand the lives and day to day challenges and aspirations of the “Tenderos” we are seeking to support. It is clear that we must be able to distinguish between entrepreneurs who primarily value a stable job and income and those that have aspirations to grow and build their businesses. I think your points also flag for me the important role that intermediaries can play to engage different actors and facilitate action, and I look forward to learning more about your work.

Thanks Linzi – I’ll take a look at the event information you have kindly shared and it will be interesting to learn more about the latest thinking in cross sector partnerships. One area we are starting to explore is the scope for our business to develop an ecosystem based approach to managing the performance of our many existing entrepreneurship projects, and to help our local businesses to establish new projects with the ecosystem front of mind. It’s early days but we think this approach will really help us to enhance the impact of existing and new programmes.

Thanks Beth – I agree that there are significant opportunities to find ways to scale access to finance to small businesses in value chains in partnership with financial institutions, governments and donors who share the same ambition and vision. There is clearly an opportunity for commercial lenders to provide loans with reduced collateral requirements and on more favourable terms if DFIs can help to underwrite the risk of lending. In Colombia, Peru and other parts of Latin America, we have partnered with financial institutions to provide access to credit for shopkeepers (‘Tenderos’). The success of these projects has spurred our partnership in Latin America with the Multilateral Investment Fund (MIF) and the Inter-American Development Bank (IDB) as part of our recently launched 4e project.

Thanks Sam and great to hear more about your work helping smallholder farmers to access finance. You may be interested in this report from Dalberg that was released in September of last year that identifies a range of pathways for channelling finance to smallholders: In our experience, another key role we can play is to help the many informal small businesses in our value chain to formalise. In Peru, for example we have worked with a number of small businesses in our value chain to improve financial literacy and educate on the benefits of formalising. I would be very interested in learning about other people’s experience of this area.

Thanks Fernando – I couldn’t agree more with your point about the importance of collaboration to create the enabling environment for entrepreneurs to thrive.

Do you have a link you can share with me on the initiative on business facilities you mentioned?


Thanks for these good questions. Agora, a major supermarket chain in Bangladesh, faced a lot of similar questions and we can use their experience to help answer the first question.

Agora wanted to see its SME suppliers grow their capacity as Agora grew. Often in these situations, it is one or two 'gaps' that are most evident. Perhaps lack of cold storage, or poor accounts. But usually a host of different issues emerge as soon as any kind of needs assessment or capacity gap is conducted. And so, when the Business Innovation Facility helped Agora to develop a tool for building supplier capacity, the resulting approach covered a host of issues from business planning to human resource management to equipment.

It's a really good tool (I had nothing to do with it, but I have played with it and commend it) and I'm glad to say a public version has been shared, along with a host of guidance material, templates for scoring results, tips on how to engage with suppliers, and additional resources for those who would like to adapt the tool for their own efforts to support SMEs.

See for links to all.

In terms of your distinction between survival and opportunity entrepreneurs, this tool is for the opportunity ones, already running as small businesses (one or a few staff, purchasing from farmers and traders).

Cecilia is highlighting one of the key challenges that entrepreneurship faces in Latin America and the Caribbean: the need to clearly differentiate between opportunity and survival entrepreneurs. Many times both categories are mixed when their needs and motivations are completely different and, as such, the policies and activities aimed at them should also be different. And here we should stress that there is no “bad or good” entrepreneur, is just that we need to approach them in a different way. The best way of avoiding confusion? Always asking for real examples of the entrepreneurs we are looking to support.

That is a very good idea. And when you use the ecosystem approach, please don't forget to consider cultural factors which are some of the most relevant but also most difficult to address. Measuring impact on cultural issues is really hard, among other reasons because it usually involves really long time horizons, and that makes many organizations unwilling to consider them.

Excellent points. I would definitely say that large companies can and, sometimes, are playing a stronger role in facilitating access to finance (and not just credit). Per example, SABMiller / Bavaria has a very interesting pilot with Bancolombia. New technologies are opening up many opportunities in financial inclusion and supply chain financing that represent clear win-win-win opportunities for large companies, financial intermediaries and entrepreneurs.

One of the areas I would like to see a more active involvement by large companies is in addressing the information gap that exits between survival entrepreneurs and commercial banks. Large companies tend to know quite well they suppliers and distributors, and if they could capture this information in a format appropriate for banks, these could do a much better job in assessing risk.

The Inter-American Development Bank (IDB) - through its specialized windows like the Multilateral Investment Fund (MIF), Opportunities for the Majority (OMJ) or its Structured and Corporate Finance Department (SCF) is actively involved in this topic and more than willing to collaborate with companies like SABMiller.

For those interested in learning more about the entrepreneurial ecosystem, for opportunity or dynamic entrepreneurs, in Latin America and the Caribbean, the IDB’s Multilateral Investment Fund (MIF) produced the report "Considering the Entrepreneur". You will find there (I’m afraid that just in Spanish) some valuable lessons on the interaction of a range of actors - public and private institutions, universities and business schools, incubators and accelerators, angel investor networks, centers and technology parks - all of which are essential to increasing the chances of success for new companies and business ventures.

One of the challenges identified: how to involve more large companies in creating and expanding these ecosystems. Their role is key in: generating markets, developing human capital, providing exits for investors and entrepreneurs, providing “role models”, facilitating “feed-backs” loops, etc.