The Business Innovation Facility supports companies as they develop and implement inclusive businesses. Inclusive business is profitable, core business activity that also expands opportunities for people at the base of the economic pyramid: either as producers, suppliers, employees, distributors, or as consumers of affordable goods and services.

NigeriaZambiaMalawiIndiaBangladesh

Inclusive business initiatives, which are innovative in nature, can be challenging. But the rewards can be considerable: successful inclusive business combines solid commercial returns with long-term development impact.

Inclusive business offers the potential to scale up commercial solutions to development challenges. When a pro-poor opportunity is also a business opportunity, it can grow, evolve, and adapt in new markets. With the right creative drive and commercial impetus, an inclusive business can bring benefits thousands, if not millions of disadvantaged people in the developing world.

Inclusive business ventures are diverse. They can range from large companies looking for ways to make a particular component of their operations more inclusive, to small businesses whose whole business model is built around producing a social impact through a commercial approach.

Whatever the model, the project is always based on a commercial proposition and core business opportunities: increasing revenue and market share, ensuring the security of supplies, reaching new markets, driving new sources of profitability and staying ahead of the competition.

Innovation is often achieved through engagement with non-traditional business partners such as producer associations, non-profits or unconventional business-to-business partnerships that enable stakeholders to pool financial investment, skills, networks and technologies. Much inclusive business activity also contributes to low carbon and climate-resilient growth.

The Business Innovation Facility was created to ensure that these initiatives have an improved chance of success, by offering practical, ‘hands-on’ advice and technical expertise.

A unique approach The Business Innovation Facility offers a creative approach to supporting companies. Unlike some other business-focused donor programmes, the Facility does not provide finance. Support comes as advice and technical assistance, sourced from a vast network of international experts, with ‘on-the-ground’ knowledge and insight. The Facility engages with companies in-country, in a practical, ‘hands-on’ way from early engagement – defining the bottleneck to be tackled together – through to provision of expert inputs and deliverables, such as a revised business plan or growth strategy.

Business Innovation Facility

The Business Innovation Facility is a three year pilot programme running from July 2010 to June 2013. Funded by the UK Department for International Development (DFID), we work with inclusive businesses in five countries: Bangladesh, India, Malawi, Nigeria and Zambia.

“ Over the years we have worked with so many donor organisations. I think its the first time that we’re working with a donor organisation that understands business”

Jacques Taylor, Director of Agricultural Banking, Stanbic IBTC Plc, Nigeria

Technical support is focused on helping companies unblock bottlenecks – such as developing new systems and technologies or understanding different markets – and take their inclusive business venture to market and scale.

Developing routes to market for affordable products

Consumers with low disposable income are often ‘hard to reach’ – both logistically and commercially. Many are based in rural areas with poor transport networks and they seek affordable products on a day-to-day basis. The Facility can help by assessing routes to market, mapping value chains and bringing in distribution partners and marketing expertise.

mKRISHI India

mKRISHI offers personalised services in local languages to small farmers on their mobile phones. This includes rapid-response agronomic advice, links to suppliers and buyers, information on pricing and other essentials for improving yields. The Facility is helping to assess the challenges to scaling up and identifying appropriate distribution networks.

Sharpening business plans

Creating a commercially sustainable inclusive business is crucial to the success of every project. The Facility supports many companies as they develop their business plans by helping them to identify constraints and options, use modelling tools which can assess and balance the development and commercial impacts of their project and set key performance indicators (KPIs).

iSchool Zambia

iSchool offers equipment, curriculum material, connectivity and teacher training for schools, focusing on enquiry-based learning. Children from low-income families gain access to improved education. The Facility is supporting iSchool in setting up a sustainable and scalable business model to offer services on a commercial basis, by finding the optimal revenue-generating model.

Improving links to smallholder farmers

Around 2.5 billion people at the base of the economic pyramid live in rural areas. Sixty percent depend directly on their small farm and the other forty per cent usually make a living trading agricultural inputs or outputs. They are amongst the poorest people in the world but offer vast business potential. The Facility supports projects which engage them as producers, consumers and entrepreneurs.

Tata Tannery Zambia

Tata aims to integrate small-scale farmers into their value chain by creating incentives to produce and supply more and higher quality hide. Currently farmers merely sell their cattle for slaughter but do not receive compensation for their hides. The Facility’s support is focused on developing a sustainable supply chain strategy and developing partnerships to build capacity and incentives for the farmers.

Pupils at Kalingalinga Basic School, Zambia, learning with the iSchool laptops

> innovative > led by the private sector > have a good chance of commercial success > have the potential for a significant development impact > driven by promoters who demonstrate strong commitment to the project > committed to sharing their story and the lessons they learn.

Above all, it has to be clear that the involvement of the Business Innovation Facility will add the impetus and expertise required to take the project forward. By the end of the pilot, the Facility will have supported around 120 inclusive businesses across a wide range of sectors.

In order to be eligible for support from the Business Innovation Facility, projects need to be:

A start-up company:

Malawi Mangoes Malawi

Malawi Mangoes plan to implement the first large scale fruit processing facility in Malawi. A processing plant, powered by solar and biomass/biogas, will be constructed to convert the fruit, sourced from a mixture of smallholder farmers and its own Rainforest Alliance certified plantations, into concentrate and pureé. The company aims to generate over 1,000 jobs in farm work and at their processing plant. The Facility is supporting this start-up with consultancy for their farm planning work.

An established retail chain:

Agora stores Bangladesh

Agora is an expanding chain of retail outlets in Bangladesh, run by Rahimafrooz Superstores Ltd. As it expands, the company aims to build the capacity of small and medium fresh produce suppliers and develop robust supply chains and trading relationships. Many of these suppliers procure produce from some of Bangladesh’s poorest districts. In collaboration with the Facility, Agora is building a capability model for fresh produce suppliers and assessing the current capability of suppliers against this model.

Businesses supported by the Facility cut across sectors and types of company in our five pilot countries. We support projects that range from small start-ups and established domestic firms (mainly small and medium-sized enterprises) to large, multinational companies.

A multinational energy company:

Oando Marketing Plc Nigeria

The energy services company Oando is launching a low-cost liquid petroleum gas cooking stove. It is seeking active collaboration with partners to develop this market to reach those at the bottom of the economic pyramid. The Facility is supporting Oando by identifying and approaching relevant stakeholders from different sectors, brokering partnerships between them and designing an initial plan for an industry-wide social marketing campaign to make the case for consumers to switch from cooking with wood or kerosene to LPG.

The Impacts of inclusive business

The projects supported by the Business Innovation Facility are already providing confirmation that the impacts of inclusive business are likely to be widespread and far-reaching. Indeed, for some of these ventures, there is ready evidence of a ‘ripple effect’ that could go beyond the immediate intended beneficiaries, to the relevant markets and possibly even the global development and business communities. Some of these are highlighted here.

The impact on people and systems – both direct and indirect – will not be straightforward to measure and will take time to emerge. But the Facility is committed to this process of monitoring and evaluation so that we can learn and adapt, account for and understand the return on funds, reduce risks and speed up development.

input

Increase in inclusive business: seeing is believing,

what works and what doesn’t,lower risk and transaction costs for IB

Changes to market behaviour: increased investment, development of the sector,

improved business practices

Benefits to BoP: consumers, distributors,

producers, employees, entrepeneurs

Commercial success:

Company with BusinessInnovation

Facility input

and strategic gain growth, profit

Aparajitas, Bangladesh

The Practitioner Hub

As a three year pilot, the Business Innovation Facility is generating a wealth of knowledge and experience – all of which is highly valuable to individuals working across the programme and to other practitioners and experts. The Practitioner Hub has been developed by the Facility, in partnership with Innovations Against Poverty, as a platform where we share this information and understanding. Practitioners and interested individuals are encouraged to join the Hub. Members can access key resources, share knowledge, discuss issues, receive updates and gain practical insights from the growing inclusive business community.

Experts and NetworksThe Hub blog is where you will find the latest updates and reflections on our work and the work of others. We receive contributions from our growing network of experts and practitioners. You can contribute to the Hub blog and share your experiences on inclusive business. You can also join one of our five country networks or our ‘topic’ networks to connect with peers in your country or specific field of interest.

Inclusive Business ‘Know-how’Our know-how pages look at particular challenges, themes and approaches in inclusive business. Drawing on project experience, we point you to the most relevant resources – to give you the know-how you need to implement your venture. The information is clustered around ten key knowledge themes including, inclusive supply chains, distribution channels for hard-to-reach markets and climate-smart solutions.

Join the Practitioner Hub to share your insights, ask questions and connect with others in the field. As a Hub member you will receive our monthly newsletter with updates on our projects, a bulletin of the latest activity on the Hub and links to blogs, articles and more.

Go to: www.businessinnovationfacility.org

What’s on the Hub:

Project Information The Hub provides a profile of every project supported by the Business Innovation Facility and Innovations Against Poverty, along with access to relevant resources, blogs and information on other, related projects.

Email: info@businessinnovationfacility.org

For further information and to join the discussion on inclusive business, go to: Practitioner Hub on Inclusive Business: www.businessinnovationfacility.org

This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers LLP and the other entities managing BIF (as listed above) do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. The views presented in this publication are those of the author(s) and do not necessarily represent the views of BIF, its managers, funders or project partners. Des

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The Business Innovation Facility is a pilot project funded by the UK Department for International Development (DFID). It is managed for DFID by PricewaterhouseCoopers LLP in alliance with the International Business Leaders Forum and Accenture Development Partnerships. It works in collaboration with Imani Development, Intellecap, Renaissance Consultants Ltd, The Convention on Business Integrity and Challenges Consulting.