Diving deeper into the BIF portfolio
As part of our review of the BIF portfolio, we selected eight projects across all five BIF counties to investigate more deeply and develop into detailed case studies. Selecting eight projects from a portfolio of over 100 vastly different but equally exciting projects was no easy task, but our final sample is a good representation of the BIF portfolio as a whole, with both large and small companies represented in a range of sectors and with a good mix of consumer-focused and producer-focused business models. We developed a methodology in partnership with the Institute of Development Studies and selected talented MBA students from the Said Business School, Oxford to perform field research over the summer and write case studies on some of our selected projects.
As a member of the BIF team, I travelled to Nigeria in August with Tom Harrison to carry out field research into a project led by Stanbic Bank called “The smallholder farmer finance scheme”.
Through its agricultural finance scheme, Stanbic aims to reach 5,000,000 smallholder farmers in Nigeria. Stanbic’s business model is based on combining access to technical assistance and quality agricultural inputs with with commercial financing to link famers to formal markets.
We met and held interviews with all stakeholders involved within the inclusive business model including the bank, major produce buyer, agricultural input supplier and smallholder farmers.
We were interested to see that what we had understood the business model to look like from our initial work with the bank over a year ago had changed. What we found was the partnerships we thought were involved initially had been replaced with new organisations. It was clear that the bank was taking a more formal approach to these new partnerships through the implementation of agreements and a tripartite Memorandum of Understanding. This was all part of the banks plan to ‘close the loops’ within the model in order to mitigate the risks involved.
What strikes me as most interesting about this scheme for BIF and for others working in the space of inclusive business is that this is a scheme that is successfully being driven by a private sector bank. This is an unusual model and in fact, it is the only one in our portfolio.
In our case study we detail the many reasons for the success of the scheme as well as the many risks involved. One of the reasons for success though is evident in the strong relationships between all the stakeholders involved. This is attributable to the efforts of the bank to maintain these links and ensure that the scheme has both commercial and developmental benefits.
All eight deep dives will be out later in the year. Each deep dive will no doubt tell a unique story, but hopefully they will also converge around some of the common challenges and opportunities for success in inclusive business.