This page offers a collection of stories which illustrate the great potential of the private sector to improve the living conditions of the poor by creating jobs and income at scale (nominally more than 10,000 beneficiaries). Most stories are based on results that are self-reported and broadly credible. More submissions are welcome.
For robust research and evidence on results, please refer to the DCED Evidence Framework; private sector development programmes which underwent an external audit of their results measurement system are listed here. Further insights into how to achieve results at scale can be found in Getting to Scale: Lessons in reaching scale in PSD programmes, by Gareth Davies, 2016.
Featured story: Multinational buyers co-funding sustainable cocoa production in Indonesia
The Indonesian cocoa sector has experienced a steep decline over the past decade; its share of the global cocoa production has dropped to around 8%. Nonetheless, about 1 million farmers depend on the cocoa sector as their main source of income.
What has been done? The Sustainable Cocoa Production Programme is a partnership implemented by Swisscontact, with support from SECO, IDH, IFAD, MCA and several large international companies. Started in 2012, it aims to improve the competitiveness of the Indonesian cocoa value chain through a variety of interventions.
What has been achieved? By end of 2017, 140,331 smallholder cocoa farmer households had increased their annual income from cocoa farming on average by 60% per year after being trained by SCPP on Good Agricultural Practices. This generated a gross farm revenue increase of over $36m in 2017, and a cumulative gross farm revenue increase of approximately $146m since SCPP started in 2012. See more from Swisscontact.
- M-Pesa is a mobile banking service in Kenya whose launch was jointly funded by Vodafone Safaricom and DFID’s Enterprise Challenge Fund in 2007. By 2015, M-Pesa has had 20 million customers, and data from 2011 suggest that M-Pesa has directly led to the creation of 30,000 jobs. The positive impacts have reportedly been more pronounced for female-headed households. Read more about M-Pesa.
- FSD Kenya worked with the Commercial Bank of Africa and Safaricom to launch a combined savings and loans mobile-based product called M-Shwari in 2013. Within two years, there were over 9 million accounts, with 30% of account holders living below the national poverty line. The full case study from 2016 is here, and the presentation at the DCED 2016 Seminar is here.
- IFC used $37 million in financing to Coca-Cola Sabco in East Africa to help expand its operations, including an inclusive delivery scheme which relies on informal entrepreneurs as local distributors. Between 2002 and 2008, the scheme created more than 12,000 jobs. Read more here or here (IFC, 2010).
Market systems development
Market systems development aims to first understand the market system in which the poor operate locally, and to identify ways to improve that system for the poor. Such projects typically work with small to medium-sized local companies. More Impact Stories around market systems can be found on the BEAM website as ‘Snapshots’.
Featured story: Increasing productivity of small-scale livestock farmers in Pakistan
Pakistan has the fifth largest livestock population in the world, 80 per cent owned by smallholder farmers, typically with 5 – 10 animals. However, smallholder production and income is low, and massively hampered by scarcity of animal fodder during the two annual dry seasons causing productivity to crash. Animals may lose weight and milk-production literally dries-up for several months. Previous efforts to promote year-round access to fodder through ‘silage’ (green foliage crops preserved through fermentation in air-tight bale) focused on commercial farmers with large herds and missed the potential for smallholders to participate and benefit.
What has been done? The Market Development Facility (MDF) in Pakistan focused on engaging suppliers of silage baling equipment and local entrepreneurs to produce and market smaller 60 kg silage bales to smallholder farmers. Once the new silage technology, product and business model were proven, MDF looked to engage banks and agri-machinery rental services to further scale up.
What has been achieved? By 2017, over 100 small-bale silage enterprises had started operations (copying the initial 12 businesses that MDF supported). These businesses had created approximately 300 new full-time equivalent jobs, just in silage production. They also reached 11,000 smallholders (with annual benefits valued at US$15m) and the benefits were projected to reach 100,000 farmers by 2020. MDF uses the DCED Standard for results measurement and had a successful audit. More information: BeamExchange.org
- In Bangladesh, the Katalyst programme enabled half a million small farmers to step up vegetable production in Bangladesh between 2008 and 2013 by addressing last-mile distribution hurdles for vegetable seeds. This was done by facilitating three innovations among major seed suppliers: packaging of quality seed in small packs; integration of mobile seed vendors in product delivery; and formalising of agricultural training for seed vendors. Aggregate income of poor farmers increased by USD 14 million in just 18 months, while 4,500 mobile vendors became part of the system by 2018. Sources and more information: BeamExchange.org
- In Georgia, the ALCP programme enabled more than 400,000 smallholder farmers to step up livestock production in Georgia between 2011 and 2017, with the cumulative income increases valued at US $11 million. The initiative aimed to re-build accessible veterinary services in remote areas. This involved investments and innovations in distribution of livestock health inputs, services and access to critical information from mini-pharmacies, driven by engagement with a leading veterinary input manufacturer and importer. Sources and more information: BeamExchange.org
- In Malawi, the MOST programme worked with government agencies and private input-supply businesses to improve access to oil-seed inoculants. The initiative benefited over 38,000 farmers in 2017 (with annual benefits valued at US$3.7m) and was projected to reach over 65,000 farmers in 2018. MOST uses the DCED Standard for results measurement and had a successful audit.
- In Indonesia, the PRISMA programme worked with animal feed firms to promote better pig-rearing practices. The initiative improved the incomes of almost 50,000 farmers in 2017 (with annual benefits valued at US$26m) and its impact was projected to double in 2018. PRISMA uses the DCED Standard for results measurement and had a successful audit.
- In the Democratic Republic of the Congo, Élan RDC targets six sectors: specialty crops, branch-less banking, SME finance, grains and horticulture, renewable energy, and transport. In its 2017 Annual Report, Élan RDC reports that over 400,000 poor people, of whom 124,000 are women, have experienced a net positive income change, with over £11m in cumulative net additional income attributable to the project. A story about Élan RDC’s role in improving coordination in river transport is available on the BEAM Exchange website, here.
- In Nigeria, GEMS1 developed a model for improving the productivity of small-scale farmers. The model was multi-pronged, including market-based activities to improve feed quality, de-worm livestock, and train farmers, and worked through assistant veterinarians to reach rural communities. In the five years to 2016, GEMS1 reached over 220,000 people and generated an additional income of over £14m for poor farmers. GEMS1 has also been the subject of a DCED case study on measuring systemic change. Achievements of the project at that time are available here.
- In Uganda, the Uganda Value Added Maize Alliance (UVAMA) worked with AgroWays, a grain trading company, to supply Nile Breweries with more locally-sourced cereals; previously, these had been of poor quality and in limited supply. In 2012, AgroWays became an approved supplier of Nile Breweries; by 2015/16, it had increased sales from 480 MT in 2012 to 12,000 MT and sourced directly from 7,000 farmers. UVAMA has reached about 27,000 farmers with training in good agricultural practices. Median yields increased by 65% between 2012 and 2015 and household incomes increased by 118%. Source and more information: Palladium, 2017.
- In Uganda, the FIT SEMA project worked with Ugandan radio stations to establish programmes meeting the needs of small businesses with information and advocacy. By 2004, 12 radio stations were broadcasting such programmes as a result of the project. 7 million adults across the country were found to listen regularly to the programmes, 96% of whom stated that the information has benefited their businesses. More information: Springfield Centre, 2007.
Business environment reform
Business environment reform aims to reduce the costs and risks of business activity by improving poor government policies, laws and regulations, and by stimulating competition through new market entrants (DCED, 2008).The stories below outline how such reforms have helped to create better conditions for business growth, employment and economic development in practice.
Featured story: Reducing regulatory burdens for businesses in Nigeria
Nigeria has had average annual GDP growth of 4.4% for the last decade and gained the status of the largest African economy in 2014. However, about 70% of the population live below the poverty line, and there are still widespread constraints for business activity and growth.
What has been done? Starting in 2011, GEMS3 sought to make it easier to do business in Nigeria. One of the successes of this project has been the cooperation with the Nigerian government’s Corporate Affairs Commission (CAC) in making it easier for micro, small and medium enterprises (MSMEs) to do business.
What has been achieved? In 2013, the CAC requirement to use professional intermediaries (lawyers, accountants etc.) to register a business was removed and a complementary “Running a business in Nigeria” campaign was run to spread awareness of these changes. The campaign has been instrumental in enlightening MSMEs on the benefits of registration, such as setting up a corporate bank account, benefiting from international trading opportunities and gaining access to investment capital as well as government loans. As a result, Nigeria has seen a rapid growth in company registrations. At time of writing, 5,700 full-time jobs had been generated, and over 21,000 enterprises had benefited from £2.3m in additional income or savings. Source: ASI.
- In Peru, the creation of a one-stop business registry and reduction of registration requirements created 577,770 formal jobs in newly registered firms and allowed the government to increase tax revenues by $1.2 billion between 1991 and 1994. Read more or access the full story (CIPE, 2009).
- In the western Balkans, the IFC launched alternative dispute resolution projects to help businesses avoid slow and expensive litigation in court. Between 2004 and 2010, over 3,000 mediations had effectively reduced the backlog of court cases and released over US$100 million to local businesses. Source: IFC.
- In Uzbekistan, reforms to the burdensome business inspection system facilitated by the IFC helped businesses save about US$21 million between 2003 and 2005, mainly from avoiding shut-downs for minor infractions. Read more or access the full story (IFC, 2005).
Featured story: Sustainable Rattan production in Cambodia, Laos, and Vietnam
The harvesting and pre-processing of rattan in Laos, Cambodia and Vietnam is unsustainable and wasteful. The processing industry is over-exploiting the rattan plant, has little environmental awareness, and is currently responsible for pollution, health risks to its workers, and poor global competitiveness.
What has been done? Starting in 2009, the EC/WWF SWITCH-Asia ‘Establishing a Sustainable Production System for Rattan Products in Cambodia, Laos, and Vietnam’ project has built capacity across supply chains, fostered links with national and international buyers, and targeted policy-makers to improve the framework for better rattan forest ownership and easier export.
What has been achieved? By 2011, SME sourcing from responsibly-managed forests and new contracts with international retailers has led to 22,000 villagers increasing their incomes by 5-45%. The project has led to the first Forest Sustainability Council certification of rattan (1,142 ha) and 19,000 ha are under responsible forest management. 120 SMEs are applying cleaner production techniques. Source and more information: Switch Asia, 2011.
- Many people living in rural and peri-urban areas of Kenya, Tanzania and Uganda do not have access to sustainable, affordable and appropriate energy. The Developing Energy Enterprises Project (DEEP) in East Africa was a five year capacity building initiative (2008-13), funded by the European Union and the Dutch Ministry of Foreign Affairs. It aimed to increase energy access and employment opportunities in rural and peri-urban areas by providing technical support to the development of quality energy products and services (e.g. briquette production, improved cook-stoves, solar, battery charging and biogas), facilitating access to finance, and addressing marketing challenges. As a result of the project, more than 4 million beneficiaries have received access to sustainable and affordable energy in rural and peri-urban areas, almost 900 energy enterprises have received support and over 1,500 people have found permanent jobs in energy enterprises (DEEP, 2013).
Featured story: Assets and Training for Ultra-Poor Women in Bangladesh
The Bangladesh-based development NGO BRAC developed a programme targeted at the ultra-poor that used a ‘big-push’ approach, combing both a large-scale asset transfer and skills training.
What has been done? The programme offered women a range of productive assets, such as livestock, or assets for cultivating vegetables and making and selling handicrafts. Most beneficiaries (97%) chose livestock and the livestock received was valued at approximately US$140, nearly double the average baseline wealth of households eligible for the programme. A training programme of equivalent value was also provided over two years to support recipients in working with their new assets.
What has been achieved? According to a 2007-2014 evaluation of 1,300 villages and 21,000 households, the programme has triggered long-term and large-scale benefits for the poor. Though the programme ended after two years, the benefits have continued to accrue; After four years, the ultra-poor increased hours devoted to livestock rearing by 361% and earnings increased by 37%. The programme resulted in increased ‘non-durable’ (i.e. food) consumption, household savings, and value of household assets. Further, it led to a decline of 8.4 percentage points in the number of households living on less than $1.25 per day. Sources: Oxfam, 2015 and IGC, 2015.
- Bandhan is working to transform the lives of the poorest in India—particularly women and their dependent families—through its evidence-based Targeting the Hardcore Poor (THP) “graduation model.” This programme provides a productive asset, a temporary allowance, mandatory savings, and 24 months of training/mentoring to a female in each participating household. THP has been proven to improve women’s financial inclusion, income, and household food security. Since launching THP in 2006, Bandhan has lifted more than 150,000 households out of extreme poverty.
Featured story: Market-based sanitation in Cambodia
Sanitation in rural Cambodia is poor, with serious repercussions on health, income and productivity. The Asian Development Bank estimates that 7% of Cambodia’s GDP is lost due to its lack of sanitation.
What has been done? iDE conducted supply and demand studies to better understand sanitation markets in Cambodia. iDE then commissioned the design of low-cost latrines which local businesses, with a little training, could make and sell.
What has been achieved? More than 300,000 improved latrines have now been purchased, which has led to an increase in households with improved latrine, from 29% in 2012, to 67% in 2018. In particularly poor households, ownership of an improved latrine increased from 12% in 2012 to 52% in 2018. Source: iDE, 2019.
- In Burkina Faso, Mali, Tanzania, Kenya, and other countries, KickStart has sold 335,000 human-powered irrigation pumps at low cost to farmers since 1991. KickStart’s pumps have enabled these farmers to increase their productivity and increase of annual household incomes by 100-200%. Farming households have also created about 230,000 jobs. In total, Kickstart has helped about 1.3 million people move out of poverty. Source: KickStart, 2019.
- In Nepal, USAID’s Smallholder Irrigation Market Initiative (SIMI) focused on promoting low-cost micro-irrigation technologies, combined with capacity building and value chain development activities for high-value crops.Between 2003 and 2009, the project helped generate more than $30 million in additional agricultural sales, and increased the incomes of nearly 500,000 people by an average of $209 annually through the sale of vegetables. Access full impact story (USAID, 2013).