Integrating BDS into microfinance operations: Another pathway out of poverty

BUSINESS Development Services (BDS) is the provision of complimentary non-financial services to clients through any form or combination of marketing, product development, business advisory and training with the end in view of helping the clients grow their businesses and increase their income. As more and more clients grow their enterprises and transform them into small and medium-scale businesses, they have to deal with volume and quality standards. This means having to deal with reliable and quality suppliers, entering into contracts with risks considered and addressed.

BDS can help them build capability to address such requirements by developing or improving their negotiation skills or forging strategic partnerships to come up with win-win arrangements.

A high-impact intervention appreciated by CARD MRI clients is being undertaken by one of its institutions, Mga Likha Ni Inay (MNLI). It helps CARD members, the Nanays, to market their products in commercial channels after their products go through a series of market testing and product development until they become market-ready. In this case, MNLI is a BDS provider that becomes part of the value chain or becomes an intermediary player because it has involved itself in the process.

A BDS provider assumes the role either as a player-intermediary or as a facilitator within the value chain. MNLI is an intermediary player since it is involved from product development to marketing of community products. The intervention is a lot more complicated than that of straightforward microfinancing given that it helps the community all the way up with all the attendant problems. In reality, not all community products/sub-sectors will gain commercial scale/success. In our experience in distributing to commercial channels like SMKultura, Robinson’s, LCC, and partner-exporters like Gem Foods, perhaps out of 100 products/sub sectors in which MLNI intervenes, only five products/sub-sectors scale up. So far, in MNLI’s nearly three years of distribution experience, only dried fish, muscovado sugar, coco jam, honey and selected handicrafts find their way into the commercial market. Despite the challenges, these relatively small successes in the big market translate to thousands of Nanays helped in bringing themselves up the ladder of poverty. Additionally, some of our projects touches climate-smart agriculture, like for example muscovado sugar processing wherein MNLI teaches the Nanays to apply best practices in organic farming.

On the down side, before you get the business on track, you need to invest a significant amount of time and patience in communicating with the community what products need to be improved or products that need to be developed because it is what the market wants. In our cultural context, the hardest thing to do is to be brutally honest and tell the communities that you cannot help them because you know that in the channels you are trying to penetrate, their products will be very difficult to market.

 

February 15, 2018

manilatimes.net

https://www.manilatimes.net/integrating-bds-microfinance-operations-another-pathway-poverty/380251/