Inclusive Business Action Network

The Inclusive Business Action Network (iBAN) is a global initiative supporting the scaling and replication of inclusive business models. Through its strategic pillars iBAN blue and iBAN weave, iBAN manages an innovative online knowledge platform on inclusive business (inclusivebusiness.net) and offers a focused Capacity Development Programme for selected companies and policymakers in developing and emerging countries. iBAN creates a space where evidence-based knowledge transforms into learning and new partnerships. With its focus on promoting the scale-up of inclusive business models, thereby improving the lives of the poor, iBAN is actively contributing to the achievement of the United Nations Sustainable Development Goals. iBAN is funded by the German Federal Ministry for Economic Cooperation and Development and the European Union. It is implemented by the Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ) GmbH.

More than money matters! The rise and range of non-financial enterprise support

June 2017 Blog Series in partnership with USAID and AAF TAF
Global
17. Jun 2017

Impact entrepreneurs and their backers are increasingly looking beyond the finance that enterprises need. Different types of non-financial support or advisory support for inclusive business have mushroomed in recent years and this is increasingly seen as fundamental to success at scale.

In this thematic series, we share findings from a USAID review of the landscape of advisory support, reflections from an in-depth review of the first five years of the African Agricultural Fund’s Technical Assistance Facility (AAF TAF), blogs and lessons from seven different providers of advisory support, stories of success from entrepreneurs who put their technical support to good use, and reflections on key trends in this space. Our theme is produced in partnership with USAID and the AAF TAF, both of which deliver advisory support and have new analysis just launched (AAF TAF) and forthcoming (USAID), along with Endeva and Ashley Insight, whose teams worked on the reports.

To kick us off, Editor Caroline Ashley shares her take-aways from our blogs and her reflections on this fast-evolving sector.

Understanding the landscape of advisory support: who, what and why?

Mapping the landscape of advisory support for inclusive business shares the categorisation of support providers developed in the USAID research. Five types are explained: incubators, accelerators, donor funded programmes and facilities, investors, and consultancies.

What do they provide? One-to-one technical support to specific enterprises, face-to-face cohort events for whole groups of entrepreneurs, or online training. Types and tools explains more on these mechanisms and the topics covered, which range from basic business development services (BDS) from accounting to marketing, to support on inclusion, innovation, and scaling.

Why is advisory support burgeoning? Simply, to help on the journey to scale. It is no longer assumed that finance alone is enough to straddle the pioneer gap. The need to overcome barriers to scale is well explained by Courtney Miller Calardo. Her blog assesses the top seven challenges to scale experienced by 900 innovators supported by USAID and the different non-financial support that can be used to address each.

Greater social impact via commercial investments is the goal of AAF’s Technical Assistance Facility, focused on agribusiness in Africa. This unusual beast - an insider/outsider facility, sitting alongside two equity funds - is introduced by Karen Smith and Carolin Schramm.

What works for effective support?

Our blog contributors provide many answers on 'what works' for effective advisory support.

  • Drawing on analysis of scores of providers, and over 20 interviews for the USAID report, Carolin Schramm argues there is no blueprint, but every support provider needs to find the right solution to five key operational issues, from sourcing enterprises and providers of support, to working out who pays.
  • We can't say that one tool is better than another, says Christian Pirzer, but five lessons on how to make support tools more effective include ensuring honing in on business needs, blending tools, and helping entrepreneurs make new linkages.
  • Brokering linkages is flagged by Karen Clune, explaining how USAID’s Saving Lives at Birth (SL@B) sets up over 300 personalised partnering and mentoring meetings for their innovators at XChange events, as well as providing on-going Xcelerator support.
Man on stage
Pitch Competition at the Saving Lives at Birth DevelopmentXChange
  • A combination of brain and brawn is key to adding value, argues Benjamin Cousin. AAF TAF deploys brain to add the big picture that the business might not be seeing, and brawn to get stuck in on the ground. His colleague Andrew Kouderis, explains how this is done with SMEs, getting into nitty-gritty to work effectively with pressurised African CEOs and lift SMEs to the next growth phase.
  • 'Do it with them not for them' and provide a fresh perspective says MDF Training and Consultancy in Ghana, sharing examples from support to a poultry business.
  • Secondment of qualified staff into the management team is the top tip from David Loew. Open Capital Advisors find this is a way to help African businesses thrive despite the talent gap.
  • Consider B2E models, says Alexandra Knezovich of the Toilet Board. Multinationals can provide valuable technical advice to smaller enterprises, so long as roles and expectations are clear.
  • Quality needs to be assured. Not all technical support is good, so minimum professional standards are being developed in South Africa, explain Rest Kanju and Jona Liebl, of SEED.
Meridian employee
AAF TAF beneficiary Meridian

Needs and views of entrepreneurs

Two entrepreneurs who have turned support to very good use share their stories:

  • Claire Reid explains how technical assistance from Saving Water for Food helped her reach her goals, and grow her seed business despite lacking a formal business background.
  • Muhammad H. Zaman and Katie Clifford share how PharmaChk was able to tackle the considerable barriers to scale in the health sector as accelerator support from SL@B helped him to develop new business models and partnerships, and rethink scaling strategy.

The needs of inclusive entrepreneurs are different from conventional entrepreneurs, and vary by stage, concludes Eugenia Rosca from a recent GIZ survey of inclusive entrepreneurs. She calls for greater specialisation in the messy landscape of hubs, networks and programmes that support inclusive business.

Dual objectives, blended finance, hybrid mechanisms, and a role for donors.

The balance between commercial and social goals, so common to inclusive businesses, also pervades the landscape of non-financial support. Achieving the right blend of commercial traction and social impact depends on how the support is allocated.

  • Abigail Thomson, Program Director of AAF’s Technical Assistance Facility, tackles head on the question of whether and why donor money should be used to subsidise technical assistance for established companies. AAF TAF's experience shows it can be used not so much to minimise risk, as to help them push boundaries which help deliver development objectives through commercial means.
  • Tom Schumacher discusses the challenge of deciding how to allocate resources between innovators, and the principles USAID uses to optimise impact.
  • Sarah Marchand describes CDC’s Technical Assistance Facility supporting two CDC impact-oriented funds, and argues that input must be additional and build sustainability.
Man and woman with eggs
Goldenlay, a beneficiary of AAF TAF´s technical assistance

Inputs from the donor and commercial world are needed.

  • Brokering relationships between development organisations, fund managers, companies, and BoP actors is core to delivering success, and is core to the day job of Melanie Machingawuta, of AAF TAF.
  • From Australia, CEO of B4D, Mark Ingram, explores the risks and benefits of commercially and donor funded technical assistance, concluding that a combination of both is best.
  • Amy Sticklor of USAID explores the role that donors should play in the space, arguing they should fill the gaps that others don't.
USAID Graph
Image credit: USAID

Understanding the Value of Advisory Support

In this month's Editor's Choice, Caroline Ashley reviews the latest report on accelerator performance from the Global Accelerator Learning Initiative (GALI) and puts it in context of what is and is not known about the real impact and value for money of advisory support. Despite rich pockets of data, she flags big questions still to address.
Technoserve, explaining their approach to tracking data on inclusive business, reveals how many millions in additional smallholder revenue and wages have been generated through AAF TAF support to businesses. The landscape of advisory support is messy, immature, not easily codified, but as it takes shape as a 'sector', key challenges, and trends for its future emerge. Caroline Ashley and Aline Menden highlight the top trends, including the quality, affordability, and scalability.

Smiling Woman
AAF TAF´s technical assistance beneficiary Meridian

BROWSE YEARS OF INCLUSIVE BUSINESS KNOWLEDGE

Don’t miss all the reports mentioned in this series and many more at SearchInclusiveBusiness.org, an online searchable database with over 1,600 case studies, reports, toolkits, guidance material, market intelligence and interviews in English and Spanish.