Download Lathund *att byta färgschema - The Practitioner Hub For Inclusive

Innovations Against Poverty
Supporting entrepreneurs for global solutions
Addressing the underserved markets
1.4 bn people living below the poverty line, $1.25 a day
A challenge to the private sector
• A programme within Sida’s
Business for Development
• Mobilising resources and
encourage companies to develop
their core activities in ways that
benefit poor
• The triple bottom line
Partners being key to success
• Some companies leading the way
• Examples of how to
» bring local suppliers into value chain
» empower women
» innovate in products and services
» new ways of doing business
Investing in INNOVATIVE and GOOD
IDEAS to fight poverty
• Support to create and develop commercial opportunities in
underserved (developing) markets
• Funding and financial assistance
• Exchange of experiences and knowledge in a global
network
FUNDING & FINANCIAL
ASSISTANCE and ADVISORY
SUPPORT
Who can apply?
• Companies and other commercially
driven organisations
• Any origin of company – but project
should benefit poor in developing country
• Not involved in weapons, tobacco or
gambling industry
• Environmentally and socially responsible
For business and project ideas with…
• Potential for commercial viability
• Positive development effects
• Innovative aspects
• Additionality - would not have
happened without IAP support
Financial Assistance
• Large grants (up to Euro 200,000) – application process in
two steps
• Small grants (up to Euro 20,000) – simplified application
process
The IAP grant covers up to 50% of the cost - should be
matched by equal amount from applicant.
Large grants
Small grants
Sida guarantees
• Separate Sida scheme to share risks and enable financing
solutions for projects with developmental impact.
• IAP will support companies in elaborating inclusive
business ideas, but applications for guarantees are
administered by Sida.
Reporting, monitoring and audit
• Baseline
• Completion report
• Progress reporting
• Annual financial reporting
• Annual project audit
Advisory support
• When developing IB projects and applications for grant
funding
• For fine-tuning IB projects after having been selected for
IAP grants
• “Stand-alone” advisory support to businesses who are not
applying for grant funding
Important dates
Each year, two opportunities to apply for grants.
For 2011:
• First cycle deadline: May 31
• Second cycle deadline: November 25
Inclusive Business
What is “Inclusive Business” all about?
• Profitable core business
activities that generate
development impacts
• Creating win-wins
• A common concept but an
array of different terms and
definitions
IAP defines IB as…
…“profitable core business activity
that also tangibly expands
opportunities for the poor and
disadvantaged in developing
countries. Such business models
can engage the poor as
employees, suppliers, distributors,
consumers and/or innovators”.
How is IB different to ‘business as usual’?
INNOVATION
Inclusive business usually goes further than
‘business as usual’ in creating new economic
opportunities for people living in poverty.
IB in practice
IB in practice: 3 examples
AfriNut
Afri-Nut:
Improving productivity and farmer’s income
Company
Region
(Country)
Industry Sector
Poor people
mainly benefit
as…
Afri-Nut
Malawi
Agribusiness (Peanuts)
Producers
Key
objective(s)
Establishing Afri-Nut as an inclusive pro-poor peanut processing
business
Key
challenges/
questions
• New start up business based on a blend of commercial and social
investors
• How to pay farmers more while remaining competitive with
consumers
• How to establish direct and reliable relationships with farmers
• How to achieve quality levels required for export into international
markets
What are the benefits?
For business
• Established profitable groundnut processing and
distribution business
For development
• Expanded market opportunities for Malawian producers
• Increased income for smallholder farmers/ organisations
• Increase in Fairtrade certified cooperatives
• Environmental and health benefits through Aflatoxin
management
The Coca-Cola Company:
Enabling jobs and opportunity
Company
Region
(Country)
Industry Sector
Poor people
mainly benefit
as…
Coca-Cola
Sub-Saharan Africa Agribusiness (Beverages)
(Multiple)
Key
objective(s)
Implement a manual delivery approach ‘Manual Distribution Centres’
working with small-scale distributors to deliver products to remote areas
difficult to reach with traditional distribution models.
Key
challenges/
questions
• How to reach local entrepreneurs and foster business and
entrepreneurial skills?
• How to assess the needs and locations for MDCs?
• How to develop appropriate finance and financial services models?
Distributors,
Retailers
What are the benefits?
For business
• Increased sales and delivery in areas hard to serve with
conventional trucks
• Reduced costs associated with distribution
• Better customer service by supplying products on demand
to meet the needs of retailers
For development
• Income and job creation
• Women empowerment
Oando: Providing households with affordable
and accessible clean cooking fuels
Company
Region
(Country)
Industry Sector
Poor people
mainly benefit
as…
Oando
Marketing
PLC
Nigeria
Household Energy
Consumers
Key
objective(s)
Develop a low cost Liquefied Petroleum Gas (LPG) cooking stove to
provide Nigerian households with affordable and accessible clean
cooking fuels
Key
challenges/
questions
• Profitability depends on scale
• How to change consumption patterns of consumers?
• How to realise a wider industry drive for fuel switch whilst realising
first mover advantage?
What are the benefits?
For business
• Reach low income households with an innovative product
in the currently underserved gas market
• Realise first mover advantage
For development
• Access to affordable and accessible clean cooking fuels as
an alternative to conventional fuels such as kerosene,
firewood, electricity or charcoal
• Reduced negative health and environmental impacts
Some lessons…
IB models
– provide opportunities for win-win
– can be developed anywhere in the value chain
– can be implemented across different sectors/ industries , countries and businesses
But often…
– involve higher risks and/or higher initial transaction costs than normal business
– face challenges on how to reach low-income groups at scale
The IAP team at the Sida exhibition stand