That’s great! Would love to connect on that as we are pulling together data from various sources to inform actions under the COVID Alliance for Social Entrepreneurs together with WEF and Duke Uni.
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A key question for us here is what it takes for all players, entrepreneurs, corporates and intermediaries alike, to take this longer term view. The guide is a useful tool to help practitioners - but we also need to create the space for concrete examples, as well as supporting efforts that create a dialogue around this.
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Agreed, digitalization in agriculture is key for SMEs. When agricultural businesses can take advantage of cloud-enabled, mobile technology, they simplify their data collection process. This enables more efficient and transparent sharing with upstream buyers and consumers. Just as importantly, enterprises can use the data to benchmark their performance within their industry, inform business decision making, and increase transparency for their farmers.
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Agreed. We are also experiencing something similar in Pakistani market. Digitization will also help in documenting the economy which will add to other macro economic objectives
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*Incentives are not just needed across the stakeholders but also at several stages of the development of the sector. Incentives must be reciprocal and measure from another perspective.
The conditions can not just be economical or business related. We need to have a purpose perspective and a long-term vision where we define the MSE segment not just for the sales or revenue potential but also for new solution development, test new tools, pricing models, go-to-market strategies, communication channels and other business factors that translate into societal impact
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@Lino: I think at least for us investors/funders, this time is an opportunity to increase trust by standing by their portfolios and constituents through providing immediate relief. Do you see that as well?
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This is a fascinating prospect!
A1:
RAMP-UP OUR ECONOMY
Help rebound the core socio-economic systems - recover activity levels in an innovative and safe manner
ACCELERATE THE RECOVERY
Mitigate the impact of this crisis in the short term focusing on the most affected
STRENGTHEN OUR RESILIENCE
Develop resilient societies, cities and living systems, to better face future challenges
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Hi Katie - this is my first time participating, thanks for the forum! Quick question - are your questions pre-set, or can we throw in questions for the panelists, and what is the procedure? Thanks!
Agree-- but the question is who pays, who controls/owns the data, and who gets the returns from the efficiency. Even in the US market, these initiatives falter because the smaller farmers do not see the value
Hi @Lino! This makes a lot of sense. Surely there is an opportunity in here to collaborate already around the analysis of the issues, so that responses are coordinated from the beginning. Are you collaborating around these analyses already? And if so, how do you approach it?
Question number two:
Q2. How can sectors collaborate more effectively to rebuild a better operating environment for MSMEs post the crisis? What are some good current examples?
1/4 It is definitely a complex problem that cannot be solved by any sector alone, let alone individual players. But the work of pioneers will go a long way in supporting MSMEs. Recognizing that it does take policy changes as well, we at YSB are focused on enabling companies to work with MSMEs in a more systematic way. At the moment, many MSMEs and in our case social businesses are – almost by definition – lacking the scale and quality levels to be procuring to MNEs.
Technical assistance to MSMEs is critical to make them ready for sourcing to MNEs and thereby participate in global supply chains. And as ANDE is highlighting, many of the TA providers are facing bankruptcy due to COVID themselves.
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I believe that immediate relief might be critical. It is however important to ensure the long-term component… the resilience…
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The guide presents the concept of “Market Building Collaboration”. Essentially, this is about complementary players joining forces to fix constraints in the MSME ecosystem. The guide aims to enable more of these types of collaborations in the future. Some of the example we highlight:
• Unilever joined forces with Mastercard and Kenya Commercial Bank (KCB) to improve access to finance for small retailers in Kenya. The initiative “Jaza Duka” grants these merchants credit based on inventory information provided by Unilever and analysed by Mastercard. With each successfully repaid loan, merchants can increase their lending, and thus their stock purchasing. Of the 18.000 stores that have signed up, 62% were able to access credit for the first time. Participants increased their sales by 20-30% in the first six months.
• In a similar initiative, AB InBev in Latin America supports micro-retailers to get licensed and access credit. Through its initiative “Caminos al Progreso” it also provides training, which is delivered by specialised consultancy FUNDES and partly funded by the Inter-American Development Bank (IDB). The ambition is to reach 190.000 “Tenderos” by 2020.
• CocoaAction is an industry-wide initiative in Côte d’Ivoire and Ghana to help 300.000 cocoa farmers adopt productivity practices and empower 1.200 communities with development interventions. Nine partner companies work together to enhance productivity and livelihoods of cocoa farmers.
• Tokafala is a joint initiative by mining companies DeBeers, Anglo American and Debswana as well as the Government of Botswana with the aim of supporting local SME growth. The initiative has reached more than 1.000 SMEs, creating over 1.000 jobs and contributing to an average growth of 260% among micro enterprises.
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As previously stated, key to ensuring more effective collaboration between sectors is investing the time to analyse and understand the underlying operating environment that MSMEs operate in, what their barriers to growth are and which other players in the ecosystem have an impact on their success. Based on these insights, it is easier to identify where to focus and which partners to engage.
For example, AB Sugar, as it looked to step up its support for smallholder farmers, it spent time understanding their barriers and identified a lack of land rights as a key underlying barrier to success, which strongly linked to other barriers like difficulty in accessing finance and gender inequality. Based on this insight, it was able to engage and partner with NGOs with the right experience and international government donors with an interest in addressing these issues.
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Any examples of such incentives we could encourage more of?
2/4 But it always takes two to tango. Many MNEs are not yet ready to procure from social businesses or MSMEs themselves – many reasons starting from rigid policies to lack of ecos of scale to incentive structures that do not value local/social sourcing for procurement officers.
The crisis presents an opportunity. According to Oceans Insights, almost half of all corporations surveyed wanted to change their supply chain strategies post-COVID. For MSMEs and especially impact ventures, this may just be the foot in the door to adjust procurement policies to be more flexible and adequate to their structures.
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More effective collaboration between sectors also requires a significant shift in mindset within organisations, from a piecemeal, short-term approach to a longer-term growth perspective with the aim of strengthening the market environment for all over the long-term. Also being open to working with non-traditional partners can change the way organisations conceptualise challenges and design solutions. For large companies, for example partnerships can open up new ways to reach unfamiliar market segments, test new products and service offerings, save costs and reduce risks.
For example, Visa and iZettle’s partnership to bring 50,000 micro-retailer into the digital economy in Mexico has enabled Visa to better understand the needs of micro and small business owners and test innovative ways to serve an unfamiliar customer segment. The initiative also contributes to Visa’s social impact mission of advancing financial inclusion and economic growth to enable small business owners to grow and thrive. For iZettle, the partnership has enabled the company to explore new distribution channels and better understand how to engage micro retailers and other segments with their value proposition.
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The only way we can accomplish what we need to do at the scale it needs to happen is through collaboration and partnerships.
We all have our unique capabilities and strengths. It is also a time where we can have impact if we move towards a common goal without really caring who gets the credit.
One example for us in Bayer has been how our Better Life Farming Centers in India, which are normally places where farmers go to get inputs or advice, have capitalized on their role as a community connector to help farmers find buyers for their crops or access financing. This has provided real value to local famers.
The model was proven successful for the farmers and MSMEs and for the partners in several countries. We will be opening Better Life Farming Centers in Indonesia in the upcoming months and additional pilots are expected in other regions as well.
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