Germany
Institutional Setup
The Federal Ministry for Economic Cooperation and Development (BMZ) is responsible for devising the strategies for Germany’s development policy. Beginning in 2008, the Ministry started to take up a wide range of initiatives specific to inclusive business models. Deutsche Gesellschaft für Internationale Zusammenarbeit (GIZ), a government-owned public-benefit enterprise, and KfW, Germany’s Development Bank are the main implementing partners for Germany’s technical and financial assistance projects respectively.
GIZ provides support to intermediary organisations, engages in development partnerships with inclusive businesses, and provides policy advice to partner governments. KfW’s key areas of focus include microfinance, agricultural finance, housing finance, and micro-insurance. Further, KfW provides equity finance and grants for technical assistance to social venture funds for small and medium size social enterprises. With developmental inclusion at its core, Germany’s development finance institution DEG offers development finance, environmental and social due diligence and monitoring, technical assistance and services to private sector enterprises operating in developing and emerging-market countries.
Inclusive Business in Private Sector Promotion
The German government recognises the private sector as an important lever for attaining self-supporting economic development, reduced dependency and poverty reduction. To further increase impact, private sector promotion measures are linked with complementary programmes in the fields of economic policy, financial systems development, (vocational) education, infrastructure, and good governance. German development cooperation aims to strengthen the private sector in cooperation countries, with a focus on MSMEs that account for the majority of private businesses and offer employment and income opportunities to poor segments of society. At the core of this strategy are measures to create an enabling regulatory environment for private investments, build competitive and sustainable economic structures, and promote sustainable corporate governance. Within the framework of the latter pillar, Germany provides long-term finance and advisory services for environmentally and socially sustainable private investment projects and promotes inclusive, broad-impact business models. The rationale is to boost development and reduce poverty in a financially sustainable way by integrating poor populations in value chains as consumers, employees, producers and entrepreneurs.
Regional Focus
Under the Marshall Plan with Africa and the G20 presidency, Germany reaffirms the focus of its development cooperation on Africa. Germany is committed to, inter alia, incentivising private investments in Africa, supporting the private sector in establishing fair and sustainable supply chains, and fostering the digitalisation of African business.
Publications
Inclusive Business
Grow – Scale – Impact. How to help inclusive businesses achieve scale (2016)
Green and Inclusive Business Toolbox (2019)
Inclusive business models – Options for support through PSD programmes (2013)
Policy measures to support inclusive and green business models (2012)
Promoting inclusive business models for sustainable development (2011)
Assessing the BoP approach from a development policy perspective (2009) (German)
Private Sector Promotion and Cooperation
SME Financing: Successful Cornerstone of Financial Cooperation (2017)
Free and fair trade as a driver for development (2017)
Sector Strategy on Private Sector Development (2013) (German)
Inclusive Business Action Network (iBAN)
Inclusive businesses
Objective: iBAN’s objective is to improve the conditions for the upscaling and replication of inclusive business models.
Activities: To achieve its objective, it develops new approaches to improve IB models, helps deepening the technical know-how and the managerial skills of high ranking managers, promotes the establishment of enabling framework conditions for IB models by high-ranking policy makers, and provides access to curated IB knowledge via iBAN’s online platform.
develoPPP.de
European private sector firms | Companies in developing and emerging markets, if European citizens own at least 25% of company shares.
Objective: To “foster the involvement of the private sector at the point where business opportunities and development policy initiatives intersect”
Activities: Development partnerships with private sector companies, which can last up to a maximum of 3 years. DEG, GIZ and sequa assist in planning, financing, and implementing projects in the partner countries.
BMZ contributes up to a maximum of EUR 200.000 to a project (the partner must contribute at least half of all costs).
There are also the options of strategic projects/ alliances with GIZ/DEG.
Innovation and Investment for Sustainable Economic Development (ISED)
Private sector: Established companies, MSMEs, Start-ups
Objective: To promote sustainable and inclusive economic development and employment by strengthening the capacities of public and private sector actors.
Activities: Enabling public actors to implement the TVET reform agenda; strengthening the supply side of the labour market at a sectoral and regional level; expanding the adoption of sustainable and inclusive business models through BDS; improving cooperation between the public and private sectors to support the development of sustainable and inclusive business models.
Responsible Enterprise Finance (REF)
Private sector and IB ecosystem: Early stage social enterprise, impact investors, financial institutions
Objective: To increase the supply of risk capital and loans for sustainability-oriented investments in MSMEs.
Activities: Supporting banks and investors in making environmental and social standards a central part of financing decisions; introducing tools to factor environmental and social risks into investment and lending decisions; introducing new lending products and services; facilitating start-ups’ and social enterprises’ access to risk capital; supporting the development of national voluntary guidelines for responsible financing.
Promotion of Small and Medium Size Enterprises in Egypt (PSME)
Inclusive business ecosystem: MSMEs, start-ups, entrepreneurs, public institutions
Objective: To foster the growth of Egyptian MSMEs and to create favourable framework conditions for employment-oriented innovation.
Activities: Support the MTI in developing and implementing its innovation strategy and enhancing employment; build capacities of start-up support centres for MSMEs in local manufacturing; improve the business establishment procedure; develop the existing focal point for MSMEs to access Business Development Services (BDS).
Promoting sustainable rural economic development (PRODES) Colombia
Inclusive business ecosystem: MSMEs, start-ups, entrepreneurs, public institutions
Objective: To provide livelihoods for victims of conflict and ex combatants in rural areas for a more inclusive economic development.
Activities: Working on the policy level – supporting the national strategy for IB and advising local governments; building partnerships between public and private institutions to increase opportunities for IB Models; organising trainings to enable the target population to participate in IB models.
Sector project Economic Policies and Private Sector Development
Inclusive business ecosystem: Through local GIZ projects: policy makers & intermediary organisations
Objective: Mainstreaming IB in the GIZ portfolio, develop new tools for GIZ projects, research.
Activities: Provide policy advice, author the IB toolbox and handbook for implementing accelerator programmes, study on making supermarket value chain more inclusive.
Aavishkaar India II Company Ltd.
Private sector: Social entrepreneurs in India
Objective: To promote social entrepreneurs in India.
Activities: The fund invests its equity capital in selected socially responsible companies from the beginning through to the growth phase, in addition to offering advisory services.
Aavishkaar Frontier Fund (AFF)
Private sector: Social entrepreneurs in South East Asia
Objective: To promote social entrepreneurs in Asia
Activities: The fund invests its equity capital in selected socially responsible companies from the beginning through to the growth phase, in addition to offering advisory services.
GIZ Sector project Innovative approaches in financial systems development
Inclusive business ecosystem: Microfinance institution (MFIs), their clients and the regulatory institutions
Objectives: To promote financial inclusion, focussing on (green & inclusive) SME in developing countries.
Activities: Market building activities such as market definition, data availability in impact investing market; promoting networks of impact investors; promoting joint learning for impact investing & community development; the mapping and development of impact investing policies.
Employment for Sustainable Development in Africa (E4D/ SOGA)
Private sector businesses, individuals.
Focus on following sectors: agriculture, construction, infrastructure; textiles
Objective: To improve the employment situation in the seven target countries in terms of quantity and quality through cooperation with the private and public sector partners. To contribute to economic growth. To reduce obstacles to the integration of women and girls into the world of work.
Activities: E4D designs vocational training measures in transferable job profiles and qualification standards, which can be used across all sectors of the economy, such that mainly women benefit from the employment potential. E4D works with businesses in public-private partnerships, as firms are pivotal in achieving employment objectives.
More Income and Employment in Rural Areas in Malawi (MIERA)
Inclusive business ecosystem and private sector: Smallholder organisations, MSMEs
Objective: “Promoting inclusive business models and strengthening the business capacity of smallholder farmers and MSMEs to increase income and employment”.
Activities: Improve cooperation amongst value chain actors; provide better business services and information for MSME owners; strengthen MSMEs and their functioning within the supply chain.
Africa Agriculture and Trade Investment Fund (AATIF)
Private sector: Small, medium and large scale agricultural farms as well as agricultural businesses
Objective: Financial services and access to markets for enterprises and smallholders in rural areas of Africa
Activities: Direct & indirect investments
Beneficiaries of the Fund may qualify for support from the Technical Assistance Facility (TAF)
Microfinance Enhancement Facility (MEF)
Inclusive business ecosystem: Microfinance institutions
Objective: To support global economic development and prosperity through the provision of additional development finance for micro-enterprises, via qualified financial institutions.
Activities: Providing microfinance institutions with much needed financing when investments are in high demand but in low supply.
European Fund for Southeast Europe (EFSE)
Inclusive business ecosystem: Central banks, microfinance and banking associations, and debt advice centres
Objective: To provide micro- and small enterprises with sustainable funding, helping them to grow and generate additional income; to create employment; to assist low-income families in improving their housing conditions.
Activities: EFSE operates through partner lending institutions (commercial banks, MFI, non-bank financial institutions, and leasing companies) in Southeast Europe & European Neighbourhood Region. These partners on-lend the funds to micro and small enterprises and to low-income households in a sustainable manner. The EFSE works cross-sectorally to transform and improve the financial infrastructure.
Lending for African Farming Company (LAFCo)
Private sector: Agricultural SMEs that work directly with smallholder farmers, with constrained access to working capital
Objective: To generate positive social and economic impacts on the agricultural sectors in sub-Sahara Africa, for both SMEs and smallholder farmers.
- higher and more stable incomes
- improved farm productivity
- reliable markets
- increased food security
Activities: LAFCo provides loans to agricultural businesses that work directly with smallholder farmers in sub-Saharan Africa.
Regional investment Funds for micro, small and medium-sized enterprises in Africa (REGMIFA)
IB ecosystem: Lending institutions serving MSMEs
Objective: To foster economic development and prosperity as well as employment creation, income generation and poverty alleviation in Sub-Saharan Africa (SSA).
Activities: Providing innovative financial products and, to the extent necessary, technical assistance support to eligible Partner Lending Institutions (PLIs) which serve micro-entrepreneurs and small and medium sized businesses (MSMEs).
SANAD Fund for MSME
IB ecosystem and Private sector: MFIs, MSMEs
Objective: Maintain and create employment, especially for the youth; Reduce poverty; Build inclusive financial systems.
Activities: Support SMEs by providing partners with financial instruments adapted to their respective refinancing needs; facilitate self-employment through microfinance; cooperate with banks, microfinance institutions and other institutions to facilitate access to financial services. Beneficiaries of the Fund may qualify for support from SANAD’s Technical Assistance Facility (TAF).
ProEcon
Private sector: MSMEs
Objective: Better framework conditions for inclusive MSME growth, increasing employment and incomes while reducing poverty.
Activities: Development partnerships with both national and international companies to integrate SMEs into agricultural value chains, the tourism sector as well as upstream and downstream commodities industries. Advise and support the MIC, as well as the Central Bank of Mozambique, and selected municipalities in the creation and implementation of the national strategy to improve the business climate through training, workshops and organisational advice. Development of financial services with innovative sales models for SMEs in rural areas, advise the central bank on improvements in consumer protection and financial literacy.
Tech-Entrepreneurship Initiative Make-IT Africa
Private sector: IT start-ups
Objective: Strengthen tech entrepreneurship in sub-Saharan Africa for sustainable, inclusive growth in the digital economy.
Activities: Strengthen innovative IT start-ups in sub-Saharan Africa through cooperation with the digital sector.
www.bmz.de/de/zentrales_downloadarchiv/Service/Flyer_CeBIT_MakeIT_EN.pdf
Innovation Promotion in Micro, Small and Medium-sized Enterprises (MSME)
Private sector: micro, small and medium-sized enterprises
Objective: With support from the programme, selected MSMEs have enhanced their capacity for developing inclusive and sustainable innovations.
Activities: Provide advice on methods and instruments, used to identify opportunities for improving business operations and the supply chain of large companies.
Creating perspectives for youth in Kosovo
Young Kosovars aged between 15 and 35 years
Objective: The employability of young Kosovars aged between 15 and 35 years is improved, taking into account the specific needs of returned migrants, all ethnic groups and minorities.
Activities: enhance the employability of young people by improving the quality of Vocational Education and Training and also strengthening matching mechanisms between labour market supply and demand.
Youth Employment Promotion
Children and young people under 24
Objective: Young people in disadvantaged regions of Serbia are able to establish themselves on the labour market.
Activities: support cooperation between national partners, carry out studies and helping Serbian partners to make strategic moves.
Promotion of Social and Environmental Standards in the Industry (PSES)
Private sector, the government and civil society
Objective: supporting the government and actors of the private sector as well as civil society to pursue a course of sustainable economic growth in the textile, garment and leather industries in Bangladesh.
Activities: work together with all stakeholders, assist government representatives and factory managers to improve working conditions and to implement environmental standards, support workers to know their rights and responsibilities.
LPED – Local and Provincial Economic Development
Municipal government, private and cooperative sectors
Objective: Framework conditions for local economic development in selected municipalities and value chains at local and provincial levels in Nepal are improved.
Activities: conduct various feedback, dialogue and upscaling activities at provincial and federal levels.
www.giz.de/en/worldwide/17956.html